It appears Canada’s oil industry has had enough of being maligned. After months of attacks from environmentalists and campaigning shareholders, the Canadian Association of Petroleum Producers has drawn the line at designer soap.
As my colleague Bernard Simon in Canada writes, the industry has hit back after Lush, the UK cosmetics group, joined the campaign against the development of Alberta’s oil sands.
Has the US Energy Information Agency, traditionally one of the more bullish of the long-term forecasters on oil production, changed its tune? [Update: perhaps not so much. See after the jump.]
Steven Kopits of energy consultants Douglas-Westwood (and sometime FT ES reader), thinks so — particularly with its forecasts out to 2020.
In an interesting post on The Oil Drum, he points out that the agency’s latest annual International Energy Outlook significantly revised downwards its oil production forecasts, particularly out to 2020:
The divergence between the grey ‘actual’ production rate and the rates previously forecast by the EIA are fascinating – although the sharp divergence in 2009 could have been easily guessed at.
The Gulf oil disaster, as the FT writes today, has painfully exposed BP’s “shortage of native knowledge of America and how it responds to crisis”.
Notice anything about this video?
It’s pretty funny and er, catty — but along with taking a big swipe at BP (and consumers who might rail against the company while continuing to use oil), there’s some rather hammy British accents; not to mention all the marmalade.
The ferocity of the anti-UK sentiment in some of the criticism of BP have even worried the prime minister David Cameron and the country’s Foreign Office, according to The Telegraph.
This is despite the US being perhaps the country most important to BP.
The US government has issued stronger safety requirements for oil and gas producers in the Gulf of Mexico. Most of them did not come as a surprise to industry: the requirements will apply to deepwater and shallow drilling, and while the six-month moratorium on deepwater drilling remains in place, that for shallow drilling can proceed if drillers have fulfilled their blow-out preventer (BOP) reporting requirements by June 17 and submit the required safety certifications by June 28.
Many of the directives were recommended by the industry itself, by way of task forces set up to suggest ways to ensure another spill like that in the Gulf never occurs.
Aside from Obama’s kick ass comment, weighing on the share price this morning is news that 42 members of Congress have sent a letter to BP CEO Tony Hayward demanding the dividend be suspended until the spill in the Gulf of Mexico is cleaned up.
NOAA last month issued its worst May hurricane forecast in 10 years, adding to fears about the containment of the oil leaking in the Gulf of Mexico, and the efforts to drill relief wells. The issue is particularly pressing, in that the current LMRP cap is awaiting some improvements to make it easier to connect and disconnect in the event of a hurricane.*
But are the forecasts that useful? Bernstein Research looked at the early forecasts from both NOAA and the Colorado State University; the two most respected hurricane predictors:
BP’s latest update puts the amount of oil captured between midnight and midday on Tuesday at 7,850 barrels, a small increase on Tuesday, when it retrieved 7,541 barrels in the first 12 hours and 14,800 over the whole day.
Meanwhile the company also announced plans to donate the net revenues from the oil collected to create a new wildlife fund for the coastline habitats of Louisiana, Mississippi, Alabama and Florida – separate to commitments it has already made, and above its obligations under the Oil Protection Act.
Their existence has been disputed, but there is now more evidence of oil plumes deep below the water surface:
From the National Oceanic and Atmospheric Administration:
NOAA’s independent analysis of water samples provided from the May 22-28 research mission of the University of South Florida’s R/V Weatherbird II confirmed the presence of very low concentrations of sub-surface oil and PAHs (polycyclic aromatic hydrocarbons) at sampling depths ranging from 50 meters to 1,400 meters.
The samples came from three stations, 40, 45 and 142 nautical miles from the site of the Macondo well.
The hydrocarbon concentration was low: less than 0.5 parts per million, and PAH levels were even lower.
And only one of the three sites contained oil that appeared to come from the BP oil spill; one couldn’t be confirmed and the other may have been from another site. From NOAA:
Hydrocarbons found in surface samples taken at the Slick 1 source, 40 nautical miles northeast from the well head, were consistent with the BP oil spill source;
Hydrocarbons found in samples from Station 07—42 nautical miles northeast from the well head—at the surface, at 50 meters and at 400 meters are petroleum-derived but in concentrations too low to confirm the source; and
Hydrocarbons found in samples taken from Station 01, 142 nautical miles southeast of the well head, at 100 meters and 300 meters were not consistent with the BP oil spill source.