Now that crude oil prices are above $85 a barrel, how can we expect producing countries to react? For most, this is a no-brainer. As The National points out, Russia – currently the biggest exporter – recently achieved a post-Soviet record in crude oil production, while producers such as Syria and Mexico insist they are doing all they can to turn around their declining production. Most Opec members, meanwhile, have for the past year been steadily reducing their compliance to the production quotas agreed by the cartel in late 2008.
That leaves Saudi Arabia. Ali al-Naimi, Saudi Arabia’s oil minister and the unofficial leader of Opec, says many positive things about the $70 – $80 price range that oil futures have traded in over recent months. “Close to perfect“, “a very happy situation” a some of his comments on those prices in the past few weeks alone, and he has been talking about this range for much longer than that.
As the details emerge of president Obama’s proposals to open up more areas of the US coast for oil and gas development, the modest scale of his plans has become clear. Indeed, in Alaska the restrictions on access are being strengthened, not relaxed.
The industry has welcomed the proposals as a good start, but some majors are privately pointing out what more they would like to see done.
The plan as set out by the Department of the Interior supports the contention that the significance of the move is largely political.
Cries of derision aside, what came out of Copenhagen in terms of commitments to reduce greenhouse gas emissions – non-binding as they might be? More estimates are in, but few are optimistic.
The UN says that 110 countries, including all major emitters, have signed up for the accord. Andrew Light and Sean Pool at the Center for American Progress have updated their estimates, based on commitments made so far as part of the Copenhagen accord. They write that, if adhered to, those commitments would limit climate change to something like a 3 degree increase, as opposed to the 4.8 degrees that business-as-usual would imply. Still well short of the 2 degrees recommended by scientists.
Some are more optimistic – last month we wrote about a Peterson International Institute for Economics paper by Trevor Houser. This estimated that if the upper range of countries’ commitments are adhered to (many countries have given a range of emissions reductions targets, contingent on what everyone else commits to), and financing promised to help developing countries is delivered, then the reductions might come close to the 2020 total emissions target recommended to avoid an increase of more than 2 degrees.
Other estimates have been more pessimistic.
The mystery over how US natural gas production has increased while rig counts have decreased might be solved, in part because it might not actually have been rising that much. At least, not as much as EIA data had suggested.
Industry rig counts, although increasing for the natural gas industry in the past few months, crashed last year from their mid-2008 highs and remain more than 600 rigs short of the 1,600-rig high. Yet production levels as estimated by the EIA in its 914 report have only fallen slightly since then. And prices, of course, are low.
Natural gas futures have risen on news that the production data are being revised, and reports that it may be revised downwards. But how big will the impact be?
The US Chemical Safety Board (CSB), an independent federal agency charged with investigating serious chemical accidents, said at the weekend it was sending a four-member investigative team to the scene of an explosion and fire at a Tesoro refinery in Washington. Five workers died in the accident.
The agency noted it already was investigating an October 2009 flash fire at a Tesoro Refinery in Utah. The importance of this second incident was underlined by John Bresland, chairman and chief executive of the CSB:
The CSB has 18 ongoing investigations. Of those, seven of these accidents occurred at refineries across the country. This is a significant and disturbing trend that the refining industry needs to address immediately.
Bresland said the large-scale deployment to Washington State will further complicate efforts to complete other important cases, including the CSB’s investigations of the Caribbean Petroleum fuel terminal fire near San Juan, Puerto Rico; the CITGO refinery hydrogen fluoride release and fire in Corpus Christi, Texas; the Goodyear heat exchanger rupture and ammonia release in Houston, Texas; and the Exxon Mobil refinery hydrogen fluoride release in Joliet, Illinois.
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