On FT Energy Source:
- Get your resource war on
- Obama’s good move on energy
- China’s staggering appetite for coal imports, illustrated
- Storage just got more competitive
- US nat gas deals get more interesting
- Biofuels and more at BP‘s strategy presentation
- CCS grants and Kazakhstan oil routes in Energy headlines
- German property giant plans energy overhaul of its $4bn portfolio
- Wind power versus natural gas
- Energy policy: When second best will do
- Oil demand threatened by green shift
- Peak demand leaves refineries idle
- The environmentalist who switched to big oil
- Utilities getting ready for plug-in vehicles
- Mukesh Ambani should retire quietly to the field
The ways in which foreign companies can benefit from the boom in US onshore natural gas is growing beyond those drilling and producing the energy. StatoilHydro, the Norwegian oil and gas company, has already done a deal to get into the exploration and production side of things. And on Tuesday it said it had entered into deals to deliver gas produced in the Marcellus shale field to New Jersey and New York.
Statoil did these latest deals with Tennessee Gas Pipeline and Texas Eastern Transmission. Its earlier deal was with Chesapeake, one of the top exploration and production companies in the shale. Companies such as Statoil not only want to get in on the boom, which has raised projections of US gas supplies from 30 years worth at current usage rates to 100 years worth, but to learn from the US independents how to take the experience and expertise they have developed to get gas from shale rock and apply that overseas.
By Izabella Kaminska
If you don’t have access to storage in physical commodities trading, you’re nobody.
For banks trading physical commodities it’s a particular problem and one they’re keenly working to resolve.
The FT’s commodities correspondent Javier Blas, for example, reported on Wednesday how two top commodity banks, Morgan Stanley and JP Morgan, recently entered the metal warehousing business:
This is China’s ‘staggering’ (in the words of the analysts who put it together) appetite for coal imports:
In fact China’s massive demand for coal imports is almost making up for falling demand in other parts of the world – especially Europe, where ML-BAS analysts note that coal storage “has now become a rare commodity”, as some of the material going there is contracted and cannot be cut back. This, they add, is “keeping a lid” on API2 coal prices; though less so on API4.
The Obama administration has provided more details about how it plans to create jobs by encouraging American families to invest in energy saving home improvements. The $6bn programme, which requires Congress’ approval, is known as Home Star and nicknamed Cash for Caulkers. It is aimed at reducing the 25 per cent unemployment rate in the construction sector, and taking advantage of under-utilised manufacturing capacity, by having Americans make their homes more energy efficient.
The plan would be to make consumers eligible for rebates at the point of sale for energy-saving investments. Vendors, ranging from small building material dealers to utilities with energy efficiency programmes, would market the rebates, would provide them directly to consumers and then be reimbursed by the federal government.
Get ready for more forecasts of resource wars – virtually all of which, you can bet, will feature China and oil.
It’s not hard to find a starting point. China has for several years been a key – if not the key – determinant of international oil demand, boosted by the fact that oil demand has effectively peaked in the west.
China’s oil imports are now at a record high, it recently overtook the US as the biggest importer of Saudi oil, and it’s been forecast by Platts to overtake the US as the overall biggest importer of oil in the not-too-distant future.
It’s not just China – Saudi Arabia and India held meetings over the weekend which resulted in Saudi agreeing to almost double crude shipments to India. Asian imports from West Africa recently reached record levels. Saudi Arabia is ceasing shipments of two of its grades to Europe this year. Then there are last year’s loans-for-oil and other deals.