There are violent protests taking place in Bucharest, Romania, which carry with them the threat of destabilizing the government, as we have seen in countries which lie further south. But while countries involved in the “Arab Spring” have oil and natural gas that are being exported, Romania is no longer a leader in production and export of petroleum products, and now imports them. Yet back in 1837, it was reportedly the first country to have an oil industry, reaching a production of 1719 barrels a year. It was also, in 1900, the first country to export gasoline, at a time when it was producing some 5,000 barrels a day. That made it the then third largest producer in the world. But by the 1930’s the country had fallen to seventh place, even though Romania was still the second largest producer in Europe, behind the Soviet Union.

By the time of the Second World War, the oil fields of Ploetsi were underpinning the operations of the German military machines, providing an estimated third of that country’s need. Attempts to bomb the fields were prolonged and, though they were not always successful and the fields and refineries continued to provide fuel for most of the war, the continued bombing finally got production down to 7% of capacity.

Location of Romania and Ploiesti (Home of Heroes)

Following the war, the region fell into the Soviet zone of influence. Production picked up and rose until 1980, following which, it has declined until fairly recently.

Annual production and discovery (Jean Laherrere)

More recently, as demand has continued to rise, the country has had to rely increasingly on imports.

Recent Romanian oil balance (Energy Export Databrowser)

Similarly, peak natural gas production was also around 1980, with the country barely keeping a declining supply in tune with falling demand since then.

Recent Romanian natural gas production (Energy Export Databrowser)

(The country started nuclear production in the late '90s and has significant coal production.)

The nine oil fields in the Ticleni region, one of the older oil producers in the country, has just changed management hoping thereby to increase production of 4,500 bd from some 300 wells to over 6,000 bd.

Seismic exploration, introduced after WW II, helped make the majority of the discoveries that led to peak oil production in 1976. It has been the use of 3-D seismic that revealed much of the potential not developed in the past.

Romanian oil production and peak (Petrom)

Petrom was privatized in 2004, and began paying a dividend in 2010. Exploration offshore began in 1975, with oil production starting in 1987 from the Lebada East Field. By the end of 2010, total production from a total of 250 fields had risen to 174 kbd.

Encouraged by recent activity, Melrose has begun investing money in the offshore Black Sea. This follows a recent trend in which the Deepwater Champion entered the Black Sea to drill off Turkey, last March. Just this month it has moved off the Romanian coast, after having terminated work at two sites off Turkey. Drilling is under an ExxonMobil/Petrom partnership, with Exxon Mobil providing the funds. If the initial well proves out, plans are to invest more than $3 billion in developing the prospect.

The historic fields have all been onshore around Torcesti for oil and Mamu for natural gas, while the new fields offshore are in deeper water, such as the Delta. It is currently anticipated that crude oil reserves are around 420 million barrels, with some 2 Tcf of natural gas, though there is potential for more.

Map of the Black Sea showing the relative position of Romania. (World Atlas)

There is still an ongoing effort to redevelop mature oilfields in the country; steam injection will be tried this year using long horizontal holes, rather than the vertical used to date, in the heavy oil SUPLAC field in the west of the country. Water injection is to be tried in the OPRISENESTI field in the East, and polymer injection is being considered for the VIDELE field in the South. VIDELE was earlier the site for a successful World Bank funded project that used in-situ combustion to try and reverse the declining production of this and the BALARIA fields. The treatment was intended to increase ultimate oil recovery from 15% to 39% of the OIIP. In 1998, Supalcu de Barcau was the largest in-situ combustion project in the world, with about 9,000 bd of production.

More recently, the discovery of a new reservoir in the TOTEA gas field, and a new well currently on test, has the potential to be the largest gas find on shore in six years.

However, much of the future looks deep offshore in the potential of fields such as the NEPTUN. (Though the company is hedging its bets by also building a wind farm).

Romanian oil and gas fields (USGS)

The new exploration and development is shared between Petrom and Romgaz, who have 55% of the natural gas sites in the country.

Romanian concession holders (Romanian National Agency for Mineral Resources)

Offshore production from the Histeria Block

While the current production from the Delta IV field is on the Continental Shelf, the new exploration is ranging into the deeper waters of the NEPTUN field, where the Deepwater Champion program is scheduled to last some 90 days. Water depth fluctuates from 160 ft to 5,500 ft over the field, but the first hole has been spudded in 3,200 ft of water. The field is a hundred miles offshore, and has undergone the largest 3-D seismic survey in Romanian history prior to the drilling program.

Deepwater Champion (Transocean)

The maritime dispute with Ukraine was settled in 2009, setting up the bidding offshore, and estimates for the Neptun field run up to 3 Tcf of natural gas and 73 million barrels of oil. Unfortunately, even if these discoveries pan out they are unlikely to have much impact on the problems in Bucharest, although perhaps by the time that oil is brought ashore, they will be over and production might be sufficient to help with the country's budgets. But that thought includes a lot of possibly wishful thinking . . . and that future will not be here for several years yet, even if it should come to pass.

During the past seven years, TheOilDrum.com has hosted analysis and discussion surrounding the possibility and implications of a near term peak in global oil production and importance of energy to society in general. Out of the ~8,500 articles posted here (all searchable by keyword in upper left), the list below comprises what each author considered some of their most relevant content.

The list is in alphabetical order, by last name of Oil Drum contributor. Click on the author's name to go to their list of selected articles. At the end of each section, a link is given to the complete list of all articles by that author.

List of Authors Gail the Actuary Ugo Bardi Art Berman Jason Bradford Joules Burn François Cellier David Clarke Samuel Foucher Nicole Foss Big Gav Prof. Goose Nate Hagens Phil Hart Rembrandt Koppelaar Rune Likvern Euan Mearns David Murphy Heading Out Jérôme à Paris Engineer-Poet Robert Rapier Luis de Sousa Stuart Staniford Jeff Vail Chris Vernon List of Articles Gail the Actuary

Oil Limits, Recession, and Bumping Up Against the Growth Ceiling.
Write up of an introductory presentation, explaining our how limited oil supply is causing recession and lower economic growth.
Are We Reaching Limits to Growth?
Looks at our current financial and other problems, in relationship to Limits to Growth (from the 1972 book by that name).
IEO 2011: A Misleadingly Optimistic Energy Forecast by the EIA
Explains why the latest official forecast of the US Energy Information Administration appears optimistic.
Kidding Ourselves About Middle East/North Africa Oil Production.
Why claims about future high oil production from Middle East/North Africa are likely overstated.
The Link Between Peak Oil and Peak Debt - Part 1
Why limited oil supply is likely to be associated with declining debt availability.
What's Behind Egypt's Problems?
Explains the connection between declining oil exports and Egypt's "Arab Spring."
Is It Really Possible to Decouple Energy Growth from GDP Growth?
Explores why growth in energy efficiency seems to have stopped after 2000. Also see Thoughts on Why Energy Use and CO2 Emissions are Rising as Fast as GDP
The US Electric Grid: Will it be Our Undoing? – Revisited
Why the US electrical transmission system has so many challenges, and the many obstacles to improving it.
Social Security and Medicare Funding Issues: Even Worse when One Considers Resource Constraint
Why Social Security and Medicare funding issues are even worse, when Peak Oil is considered.
What Can We Learn from Gift Economies?
Campfire post relating to a system where individuals gain status not by what they have, but by what they give away.
There is plenty of oil but . . .
There is a huge amount of oil that theoretically can be extracted, but the question is whether the cost will be cheap enough for us to be able to afford to extract it. If the oil is too expensive to extract, the shortage of oil seems to cause a recession, similar to what we are having now.
Scientific American's Path to Sustainability: Let's Think about the Details
Scientific American presents "A Path to Sustainable Energy by 2030" in its November 2010 issue. I explain why it wouldn't work.
Some Cautionary Thoughts about Wind
Offers ten reasons why wind is not as an attractive an option as many think it is.
Delusions of Finance: Where We are Headed
Explanation of why my financial forecasts at the beginning of 2008 turned out to be correct.
Peak Oil and the Financial Markets: A Forecast for 2008
A financial forecast for 2008 that in retrospect has proven accurate.
Our World Is Finite: Is This a Problem?
Post written before I became an Oil Drum staff member that lays out may of the major issues that I continue to write about.
Read more posts by Gail the Actuary. (Real name, Gail Tverberg)
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Ugo Bardi

"Peak Civilization": The Fall of the Roman Empire
A post attempting to apply system dynamics to the fall of the Roman Empire which - as far as I know - has not been done, so far.
Cassandra's curse: how "The Limits to Growth" was demonized
With its scenarios of civilization collapse, the book shocked the world perhaps more than Cassandra had shocked her fellow Trojan citizens when she had predicted the fall of their city to the Achaeans. Just as Cassandra was not believed, so it was for the "Limits to Growth" which, today, is still widely seen as a thoroughly flawed study, wrong all along.
The Universal Mining Machine
Why can’t we build a universal mining machine here, on Earth, and stop worrying about running out of mineral resources?
Mind-sized Hubbert
What is it, exactly, that causes production peaks for oil and for other non renewable resources?
The dark side of coal - some historical insights on energy and the economy
In this post, I start to tell the story of coal in Italy and how the fortunes of the country went in parallel with those of coal well until mid 20th century.
The church, the peak, and my old watch
A post about leaving something that lasts a long time and that doesn't need precious resources that can't be replaced.
The post-peak car
A fantastic account of how a 1970s Fiat 500 has been retrofitted with batteries and an electric motor to create the Post Peak Car.
How to Drive your Elephant - Dealing with Complex Problems
How elephant driving may be seen as as a metaphor for controlling complex systems.
Peak Minerals
A post taken from a report co-authored with Marco Pagani which examines the world production of 57 minerals reported in the database of the United States Geological Survey (USGS) and makes the case for the peak and decline of many of these minerals in the near future.
Peak Caviar
"Peak Caviar" is another confirmation of how common the "Hubbert" behavior is. It doesn't matter if a resource is theoretically renewable, as sturgeons and whales are. If sturgeons or whales are killed much faster than they can reproduce, then they behave as a non renewable resource; just as crude oil.
Read more posts by Ugo Bardi
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Arthur E. Berman

Arthur Berman talks about Shale Gas
McMoRan Davy Jones Gas Discovery
Co-written with Joshua H. Rosenfeld, this post looks at a significant discovery in the U.S. Gulf of Mexico by the McMoRan Exploration Company that may contain 2-6 trillion cubic feet (Tcf) of natural gas reserves.
Shale Gas—Abundance or Mirage? Why The Marcellus Shale Will Disappoint Expectations
Shale gas plays in the United States are commercial failures and shareholders in public exploration and production (E&P) companies are the losers. This conclusion falls out of a detailed evaluation of shale-dominated company financial statements and individual well decline curve analyses.
BP Macondo Blowout - Static Top Kill vs. Bottom Kill: Weighing the Risks
A post co-written with William Semple.
Is the Drilling Moratorium Long Enough? No, Not Really
The key issues around the drilling moratorium as I see them.
What caused the Deepwater Horizon disaster?
The blowout and oil spill on the Deepwater Horizon in the Gulf of Mexico was caused by a flawed well plan that did not include enough cement between the 7-inch production casing and the 9 7/8-inch protection casing. The presumed blowout preventer (BOP) failure is an important but secondary issue.
ExxonMobil’s Acquisition of XTO Energy: The Fallacy of the Manufacturing Model in Shale Plays
Most analysts believe that the ExxonMobil acquisition of XTO Energy (XTO) represents a dramatic shift in strategy by the premier exploration and production (E&P) company, and a validation of shale plays. It is neither. The move represents a considered and deliberate choice that acknowledges diminished opportunities for the oil giant to add and replace reserves.
Read more posts by Arthur Berman
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Jason Bradford

The Thermodynamics of Local Foods
I wrote this in response to a slew of media attention that argued against local foods. However, based on thermodynamics, only a predominantly local food system will be sustainable in the long run.
Ecological Economics and the Food System
This is a summary of energy use in the U.S. food system placed in the context of ecological economics. Our current food system is structured inappropriately for long-term viability, and the kinds of shifts required to make it more enduring are discussed.
Save it for the Combine
Few people understand how critical certain technologies are to their survival and way of life. The combine allows one person to harvest the food for hundreds, saving enormous labor while using liquid fuels. I argue that any rationing of liquid fuels or use of biofuels be prioritized for the combine.
The Food System and Public Policy
Many in the U.S. like to think we live in a free market economy. But when it comes to development of the food system public policy explains much of what we see.
The Food System and Resilience
Resilience is a concept from ecology that can be applied to any complex system. When the current food system is examined using a resilience framework it is found to be very fragile. The essay concludes by outlining the possible emergence of more resilient food systems given new economic and energetic realities.
Energy Descent and Agricultural Population
This article includes a graph that combines data on energy use and percent rural population, showing that more energy in a society lowers the proportion engaged in farming. Given the shape of this relationship, can we make some educated speculations about shifting labor demographics in highly industrialized nations during energy descent?
Scenario 2020: The Future of Food in Mendocino County
I believe there’s the possibility of a near-term collapse of complex societies given a financial shock, perhaps precipitated or exacerbated by political and energy crises. This photo essay conveys this potential from an imagined future, with an emphasis on the food system.
I have an interest in economics, in the broad sense, of how and why people and societies chose to invest and consume, and what this means for resources and the environment. The following three essays share a common theme: resources are only constrained in a world with exponentially growing demand for more stuff. Reducing demand is more important than increasing supply, and ultimately we have no choice. However, conscientious curtailment comes up against both engrained pyscho-social reward systems, which are largely explored in the first two essays, and the structure of our financial system, which is touched upon in the third.
Finding Healthy Addictions
Dopamine Returned on Energy Invested (DREI)?
Advice to Pres. Obama( #6): Beware the Hungry Ghosts
Read more posts by Jason Bradford
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Joules Burn

Khurais Me A River
An early look at the development of the Khurais oilfield in Saudi Arabia using satellite imagery, reviewing past efforts to produce from the field.
Ghawar Numerology: Drilling in Uthmaniyah
An animated history of the drilling sequence in one part of the Ghawar oil field in Saudi Arabia.
Saudi Arabia's Ghawar Isn't Sinking (but has apparently moved)
A critical look at satellite imagery analysis which reached some faulty conclusions regarding the behavior of the Ghawar field upon depletion.
Abqaiq and Eat It Too
A look at recent developments in the giant Abqaiq field in Saudi Arabia using satellite imagery combined with published reports.
Local Scientist Splits Water, Saves World, Gets On TV
A skeptical look at recent claims of a breakthrough in water electrolysis to produce hydrogen.
Five Easy Leases: Ghawar's Discovery Wells
An in-depth look at the first wells drilled in the five operational areas for the Ghawar field, including their current status.
Who Killed the Electric Gas Tank?
A look at claims of a breakthrough in ultracapacitors for energy storage in electric vehicles.
Saudi Aramco Loses Count, Drills Too Many Wells In Ghawar
An satellite imagery analysis of Saudi drilling activity in the southern-most part of the Ghawar field, showing that more has been going on than publicly revealed.
Lessons Left Unlearnt From 2003 Gulf of Mexico Near-Spill
A look in the US Materials Management Service datafiles revealing a number of accidents and near misses which preceded the massive BP spill in the Gulf of Mexico.
Crude Confessions: Massive Saudi Oil Spill in 1993?
A look at how Saudi oil is transported out of the country in the context of claims of a secret oil spill.
Read more posts by Joules Burn
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François Cellier

Ecological Footprint, Energy Consumption, and the Looming Collapse
This article explores dynamic relations governing population growth, resource depletion, and world economics by means of a few simple modeling and simulation exercises.
Is the 2000 Watt Society Sustainable in Switzerland?
In this presentation, we discuss whether the 2000 Watt Society is at all sustainable, and if so, what it will take to keep energy supply at that level after the end of ample and cheap fossil fuels.
The Slavery of Oil
A review of a proposed methodology that would allow me to quantify the price level of crude oil at which our economies will stall.
Read more posts by François Cellier
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David Clarke

The Failure of Networked Systems: The Repercussions of Systematic Risk Revisited
Cascading collapse and why the corporate drive towards increasing efficiencies could be driving our interacting networked systems towards this mode of collapse.
The Networking of Resource Production: Do the Networks Give us Warnings when They are About to Fail?
The flaw in the techno-cornucopian dream: Modeling why and how a networked resource-extraction system fails.
Read more posts by David Clarke
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Samuel Foucher

Analysis of Decline Rates
This post offers a kind of reverse engineering of what numbers could be behind the long and detailed IEA decline analysis in their last report (2008 IEA WEO). A tentative decline structure for the post-peak Super-Giant and Giants oilfields is offered as well as a possible scenario for future production.
Peak Demand or Peak Consumption? A Look at OECD Oil Demand
In this post I show that the key driver behind the oil price increase since 2002 has been excess demand combined with unresponsive supply.
Peak Oil Update - July 2009: Production Forecasts and EIA Oil Production Numbers
An update on the latest production numbers from the EIA along with graphs/charts of different oil production forecasts.
Estimating the World Production Decline Rates from the Megaproject Forecasts
Having a good estimate of the decline rate of the resource base (most estimates are ranging between 2 and 6%/year) is fundamental for the precision of supply forecasts derived from megaproject database.
Saudi Arabia: An Attempt to Link Oil Discoveries, Proven Reserves and Production Data
This article is an attempt to apply the Hybrid Shock Model (HSM) on Saudi Arabia's oil production. In a nutshell, the HSM is trying to model the observed production profile from the discovery curve by simulating the different phases involved in the development of oilfields (initial discovery, planning, build, maturity).
Why We (Really) May Have Entered an Oil Production Plateau
We know that some countries (around 56) have seen their production peaked (also called type III depletion). The remaining group consists of 17 countries that have the potential to grow or maintain their current production (the type II group). I propose to apply the HL technique only on the total production from the the type III group and try to assess the future production decline coming from that group.
An Update on Mexico's Oil Production--The Rapid Collapse of Cantarell by the Numbers
Last year, I expressed my concerns about the eventual impact of a rapid collapse of Cantarell on Mexico's oil production. The last production numbers from PEMEX seems to confirm the rapid decline of Cantarell as well as the inability of the Mexican to rapidly bring new production online.
The Loglet Analysis
Most peakoilers on this site have been introduced to the logistic curve through the famous prediction of King Hubbert on the Lower-48 production. Fewer maybe knows that curve fitting techniques have been extensively applied by people that we may qualify as cornucopians. Ironically, the logistic curve is also used as a prediction tool for market share and technology substitution.
A Different Way to Perform the Hubbert Linearization
A quick post about a different manipulation of the logistic differential equation. By using the first derivative, we get a new way to perform the Hubbert linearization. Some results are given on Norway and the US oil production.
Norway and the Parabolic Fractal Law
Norway can be considered as the poster child of the Hubbert curve modeling approach with a production profile that is remarkably close to the logistic curve.
Read more posts by Samuel Foucher
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Nicole Foss

Entropy and Empire This article is a discussion of the rise and fall of empire (in thermodynamic terms) and the process of imperial succession.
The Resurgence of Risk Resurgence of Risk is a description of the developing credit crunch from its inception - an explanation of how we arrived at this financial crisis and where we are headed.
Smart Metering and Smarter Metering Electricity metering is a significant means of addressing excess demand, but the high-tech metering solutions being proposed miss many opportunities because they pay no attention to psychological drivers.
A MacKenzie Valley Pipedream? This piece assesses the prospects for the construction of a MacKenzie Valley pipeline through the Canadian north.
Anaerobic Digestion in Ontario - A Regulatory Obstacle Course Renewable energy technologies wishing to connect to the grid face significant regulatory obstacles that add so much to project costs that project viability is threatened.
Read more posts by Nicole Foss
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Big Gav

Concentrating On The Important Things - Solar Thermal Power
While we spend a lot of time talking about traditional energy sources based on depleting resources that are extracted from the ground, I think its important to remember that the fastest growing sources of energy are solar and wind, and that these will never run out.
Tapping The Source: The Power Of The Oceans
A post examining the use of artificial islands to collect wind, wave, ocean current and solar power in the tropics, along with a more unusual energy source - harnessing the difference in water temperatures between the warm surface and the cold depths using a technique called OTEC (Ocean Thermal Energy Conversion).
Geothermal Energy: Geothermia
Crossposted from my blog Peak Energy as the subject of geothermal power has cropped up in the comments a few times lately.
Floating Offshore Wind Power
An update on a post I did last year on the potential for floating offshore wind power, which looked at a number of different prototypes at various stages of development.
The Limits To Scenario Planning
A review of some common misconceptions about the Limits to Growth book.
Iraq's Oil: The Greatest Prize Of All
In this post I'll outline why I believe that Iraq probably has the world's largest oil reserves - or, as Daniel Yergin once said of the middle east, it is "the greatest single prize in all history".
Natural Gas In Australia - How Long Will It Last?
In this post I have a look at how much gas Australia has and how long it will last under a variety of scenarios.
Coal Seam Gas In Australia
In this post I look at recent events in the gas industry and what they mean for Australian gas production in future.
The Hydrogen Economy and Peak Platinum
A comprehensive review of the issues involved in the "hydrogen economy".
Hubbert: King Of The Technocrats
In this post I explore the Technocracy movement and Hubbert's role in it.
Locabucks: Are local currencies a way to escape the liquidity trap?
I look at the concept of local currencies (or "locabucks" as I'm now dubbing them), an idea which has its roots in the Great Depression as a mechanism for escaping the liquidity trap - and thus might be relevant again in the not-too distant future if present trends continue.
Terra Preta: Biochar and the MEGO Effect
In this post I have a look at modern day techniques to produce terra preta (often called biochar or agrichar) which have the potential to increase soil fertility, generate energy and sequester carbon all at the same time.
Buckminster Fuller's Critical Path
A review of Buckminster Fuller's last work, Critical Path.
Is It Time For a 4 Day Working Week?
In this post I look at various proposals to reduce the amount of time we spend at work, as a way of addressing energy, environmental and other issues facing us.
Peak Oil And The Tea Party Movement
In this post I have a look at the boost this (peak oil) is likely to give to populist politics and some of the possibilities for addressing this.
Read more posts by Big Gav
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Prof. Goose

A Pretty Stunning Graph of World Cement Production (and China is Certainly Using It)
This post updates Stuart's post about this two years ago (and yes, it's still a graph that will blow you away!) with two more years of USGS cement data, 2006 and 2007.
From the Editor's Desk: Peak Oil, Heretical Thought, Complexity, and the Future of The Oil Drum
Lately, I have been thinking a lot about the direction of The Oil Drum. Much of my thinking on this set of ideas has been brought about by some soul-searching, trying to understand the problems we face as a community, and then figuring out how to "positively push the future."
Peak Oil, Persuasion, and the World Meme
What insights can we claim from psychology to get those we care about, and even those we don't, to dig deeper to get to an understanding of the pillars of the problems we face, instead of trying to buy aluminum siding for a house slowly falling in on itself?
Will Canada Fuel Fortress America?
Will Canada complacently allow the US to pillage her resources as energy supplies become more scarce?
Why the US Political System Is Unable to React to Peak Oil: Institutions
I thought I would bring some pieces of the political puzzle together into a post on why I believe the US, at least at the federal level, will be overly slow to react to the problems of peak oil in both the short and long term.
Was That Really Five Years?
A summary and some thoughts about the fifth year of the Oil Drum's existence.
The Oil Drum Celebrates Its First Year Today
Read more posts by Prof. Goose (Real name, Kyle Saunders)
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Nate Hagens

The Psychological and Evolutionary Roots of Resource Consumption A (longish) exploration of how our evolved neural wetware predisposes us to compete for status and also allows us to be hijacked by novelty items/activities, many of which use alot of energy.
A Net Energy Parable: Why is ERoEI Important? A story about how energy return on investment impacts an imaginary society of Sasquatches - highlighting the importance of biohpysical metrics for a civilization.
Peak Oil: A View from Planet Talos An alien perspective on the resource depletion/human nature intersection.
Living for the Moment While Devaluing the Future An examination of why we have evolved mechanisms to steeply favor the present over the future and why this is relevant to questions of resource depletion and environmental problems.
Peak Oil - Whom to Believe CERAiously-Part 1 Highlights of the main differences between the energy cornucopians and those predicting a near term peak in oil production.
Peak Oil - Why Smart Folks Disagree Part 2 More detail on the above post on supply side differences between energy optimists and realists.
Peak Oil - Believe it or Not - Part 3 An overview of human cognitive biases that contribute to disagreement on resource depletion/climate change.
Can We Be Happy Using Less Energy? Uhh Yes! An look at decreasing returns to more consumtion.
Old Sunlight vs Ancient Sunlight - An Analysis of Home Heating and Wood Measuring the scale of US standing forest relative to US fossil fuel use for heat.
".......Dammit - We Wasted a Day of Sunlight"
Peak Oil, IHS Data and The Broken Clock
Peak Oil and Reflexivity and Peak Oil Soros theory of reflexivity, in light of oil depletion.
Hedge Funds, Hurricanes and Energy Markets An overview of volatility and the small size of energy markets relative to financial capital.
The 2008 IEA WEO Review (#1 in a Series) The first in a series examining the claims of the IEA annual energy report.
Advice to Obama (#2) Yes We Can But Will We? A letter to the new President, outlining biophysical (supply) and evolutionary (demand) type thinking.
Campfire
What Do We Tell Our Children A letter I wrote to an 8 year old boy who asked about oil running out.
I Don't Know A short piece looking at why we are so confident, even when we know very little.
I Dream of GINI - Wealth Inequality During Resource Depletion
Peak Oil, Peak Credit and Investments - So What the Hell Does One Do? An initial pass at rewriting the Capital Asset Pricing Model assumptions
Whither The Oil Drum? An introspection on the purpose of sites like this, when the meme of peak oil has been generally accepted.
Enter the Elephant A look at why facts matter very little in changing peoples behavior.
2010: The Year for Making ContactNew Years resolutions for myself, in light of current conditions.
Dear Candidate-What Will You Do if Growth is Over?
Read more posts by Nate Hagens
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Phil Hart

Meet Trev: A two-seater renewable energy vehicle
I believe there is instead a bright future for a spectrum of 'micro' electric vehicles, from battery powered bicycles up to compact size cars, including this new concept car named Trev (Two-seater Renewable Energy Vehicle).
International Energy Agency calls 'Peak' on OECD Oil Demand
In World Energy Outlook 2009, the International Energy Agency seems to have dropped a bombshell that has been quietly (and politely) ignored.
The Economics of Volatile Oil Prices
Considering the fundamental nature of oil supply and demand provides a coherent explanation not just for the rapid rise in oil prices, but also the dramatic fall.
The 2008 IEA WEO - Oil Reserves and Resources
Despite significant changes, the 2008 IEA report still relies on inflated estimates of reserves from OPEC countries, overplays the contribution of reserves growth due to technology and predicts the reversal of a decades long trend of declining oil discoveries.
Oil, House Prices, Credit? Three parts of the same story
The long forgotten 'oil crisis' of just a few months ago has been replaced by a full blown 'credit crisis' - related events that represent the unravelling of half a century of unsustainable trends in oil consumption and debt.
High-Tech Hitchhiking
Could a hitchhiking scheme for the iPhone era work in practice and change attitudes to hitching a ride?
How Technology Increases Oil Production
How can you double something and still have ten times less than you started with? The answer to this question will help us reassess claims that advances in oil field technology will postpone the peak in global oil production.
Oil Reserves: Where Ghawar goes, the rest of OPEC follows
In May 2007, the work of Stuart Staniford and Euan Mearns culminated in a new and unprecedented assessment of oil reserves in Ghawar, the world's largest oil field. This article combines their assessment with additional information sources, to produce a revised estimate of reserves in Saudi Arabia and the other OPEC countries.
Read more posts by Phil Hart
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Rembrandt Koppelaar

Carbon Capture and Storage: Economic Costs Revisited
The effects on coal power plant economics of CO2 emissions capture.
Carbon Capture and Storage: Energy Costs Revisited
The effects on coal power plant economics of CO2 emissions capture.
A primer on reserve growth part 1
What is reserve growth and why it is so difficult to measure?
A primer on reserve growth part 2
A summary of various reserve growth studies.
A primer on reserve growth part 3
A discussion on the reserve growth figures in the USGS World Petroleum Assessment 2000.
Are Reserves of the Largest US Coal Field Overstated by 50%?
A summary of the USGS 2009 reserve assessment of the largest U.S. coal field, Gilette in Wyoming.
Read more posts by Rembrandt Koppelaar
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Rune Likvern

Europe and Natural Gas - Are Tough Choices Ahead?
In this post, I present some graphs showing European historical natural gas consumption and supply, along with my estimates of future consumption and supply.
Trends in World Oil Supply/Consumption and Net Exports/Imports
In this post I briefly present the results from my analysis of absolute and relative trends in world oil (all liquids) supply, consumption, net exports and net imports between 1980 and 2009.
Has OECD oil consumption peaked?
I examine similarities and differences in oil consumption patterns of OECD and Non-OECD countries and offer my view as to what the future may hold.
IEA WEO 2008 - NGLs to the Rescue?
In this post, I will document that there is good reason to believe that the IEA WEO 2008 projections in the reference scenario overshoots the likely world production of NGLs by as much as 35 - 50 % by 2030.
Has Fossil Fuel Consumption Within EU Peaked?
As this post will show the likelihood that the EU’s fossil fuel consumption has peaked, back in 1979, is now very real. It will also compare the degree of net fossil fuel self-sufficiency between the EU and the USA as of 2007.
Why UK Natural Gas Prices Will Move North of 100p/Therm This Winter
This post presents the development of the energy mix for the UK, and how the UK in less than a decade went from being a substantial energy exporter to a substantial net energy importer.
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Euan Mearns

Lies, Damned Lies and Government Oil Production Forecasts?
Back in 2005 the Norwegian Petroleum Directorate (NPD) forecast 2.84 mbpd oil production in Norway during 2009. I pointed out their forecast was rather optimistic. 2.3 mbpd was what actually came to pass. The NPD were 23% too high.
The architecture of UK offshore oil production in relation to future production models
This post, written in November 2006 provided a forecast for UK oil production employing bottom up and top down methodology. My forecast for UK oil production in 2009 was 1.53 mbpd. 1.45 mbpd was what actually came to pass. I was 6% too high.
Flesh on the bones of Mexican oil production
With Cantarell in free fall, this post tried to take a more holistic view of Mexican oil production, pointing out that nitrogen once destined for Cantarell would now be diverted and injected into neighboring Ku-Maloob-Zaap complex.
Saudi production laid bare
This post was written to counter Stuart Staniford who claimed "Oil production peaked in Saudi Arabia in 2005. Recent sharp declines in production are involuntary and Saudi Arabia has switched from swing producer to supply constrained producer."
GHAWAR: an estimate of remaining oil reserves and production decline (Part 1 - background and methodology)
GHAWAR: an estimate of remaining oil reserves and production decline (Part 2 - results)
Ghawar reserves update and revisions (1)
Estimates of the remaining reserves and future production in Ghawar, the worlds largest oil field, based on data gleaned from the internet by a host of eager bloggers.
Crisis, what energy crisis?
An overview of the best posts from the 12 months preceding July 2007.
UK Energy Security
A look at possible impacts of UK oil and gas production decline together with a range of appropriate energy policy responses.
Saudi Arabia - production forecasts and reserves estimates
An oil production forecast for Saudi Arabia using both bottom up and top down (Hubbert linearisation) techniques. Peak was forecast to be 2011.
The European Gas Market
A comprehensive look at where Europe gets its natural gas from (34 charts and maps) including forecasts that incorporate peak Norwegian gas production and decline of the supergiant gas field at Groningen in Holland.
Daddy, will the lights be on at Christmas?
A follow up to the European Gas market incorporating a forecast for Norwegian gas production produced by Rune Likvern.
Why oil costs over $120 per barrel
An examination of some of the fundamental causes of the run in oil prices that took place in 2008.
Why oil costs over $130 per barrel: the decline of North Sea Oil
An overview of North Sea oil production decline and its role in the oil price run of 2008.
A State of Emergency
An examination of the plunge in UK oil and gas production and its impact on the UK economy ahead of the 2008 crash.
The Global Energy Crisis and its Role in the Pending Collapse of the Global Economy
The slides I presented at a talk to the Royal Society of Chemists in Aberdeen, November 2008.
The energy efficiency of energy procurement systems
An overview of the energy return on a number of energy procurement systems together with a look at contradictory policies being pursued by OECD governments.
The energy efficiency of cars
A simple look at the energy efficiency of various vehicle propulsion systems including all electric, internal combustion, fuel cells and bio fuel.
The financial return on energy invested
An experimental examination of links between energy production, consumption, prices and GDP.
The Chinese Coal Monster
An examination of the phenomenal growth in Chinese coal production and consumption. How long can this go on?
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David Murphy

EROI, Insidious Feedbacks, and the End of Economic Growth
In this post I attempt to answer the following question: Is a return to long term economic growth possible?
The True Value of Energy is the Net Energy
"The true value of energy to society is the net energy, which is that after the energy costs of getting and concentrating that energy are subtracted.” - H.T. Odum (1973)
Energy Transitions and the Next Paradigmatic Image of the World
The most important question is “what is the next paradigmatic image of the world?”
The Net Hubbert Curve, what does it mean?
Cutler Cleveland of Boston University has reported that the EROI of oil and gas extraction in the U.S. has decreased from 100:1 in the 1930’s to 30:1 in the 1970’s to roughly 11:1 as of 2000. What does this mean?
Further Evidence of the Influence of Energy on the US economy
Gail, Jeff Rubin, and now James Hamilton of the University of California – San Diego have produced literature correlating either this financial collapse or recessions more generally with peak oil and oil prices. The take-away message of their work is that oil prices played a fundamental role in causing the current recession and many previous recessions.
The Energy Return on Investment Threshold Due to the asymptotic nature of the curve at high EROIs, extraction/conversion processes with EROIs below 8 result in vastly different flows of net energy than those with higher EROIs.
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Heading Out

Heading Out has written a long series of articles under the title of Tech Talks, running on Sundays. These recently deal with oil and gas resource availability in various parts of the world. Earlier, the articles dealt with techniques for extraction of oil and gas. After the Deepwater Horizon blow out, he wrote a series of articles dealing with the approaches to sealing the well.
Link to a listing of posts by Heading Out. (Real name, Dave Summers)
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Jérôme à Paris

Ukraine vs Russia: Tales of pipelines and dependence
I wrote the text below in late December 2005, i.e. just before the Russian-Ukrainian gas conflict, which had been simmering for a few weeks, blew open into the consciousness of the West.
New Iraqi oil law: some facts on PSAs
A post refuting some assertions about the new Iraqi oil law, which will allow foreign companies to invest in the oil sector via PSAs (production sharing agreements).
A review of the underlying fundamentals of nuclear energy
A review of the pros and cons of the nuclear industry.
How To Get A Pipeline Built
A primer on why and how pipelines get built - which essentially means how they get financed.
Countdown to $200 oil meets Anglo Disease
Oil has played a fascinating side role in my Anglo Disease series, allowing the debt bubble to go on for much longer than expected. But now, instead, it is accelerating the crash. Let me take you through the whole cycle.
Fierce pride - yes it works! (or, first ever bank-financed offshore wind farm inaugurated!)
A post about the windfarm which I helped finance two years ago which is now up and running.
Countdown to $200 oil: $140 oil and speculation
There are A LOT of good reasons why oil prices are going up. Let me show you just a few.
The cost of wind, the price of wind, the value of wind
In this post I try to clear some of the confusion that surrounds the economics of wind power, as this is an issue that is often used by the opponents of wind to dismiss it.
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Engineer-Poet

Sustainability, Energy Independence and Agricultural Policy.
If we are going to use biofuels, we need to re-think everything involved with them; the results may not look like anything we've ever seen.
One engineer's advice for energy policy.
An open letter to Obama on the path the country should take.
H2CAR: Another blind alley
We can make enough biofuel to replace oil, but at a price we cannot pay; this is NOT a solution.
The Cogeneration Stopgap
Generating electricity along with heat can stretch fuel supplies and bridge to the future.
Energetics of cultivation: draft animals vs. combustion engines and the Haber process
Tractors are more efficient than horses, and we don't have to breed or train them.
Analysis of the Hon. John Dingell's carbon-tax proposal
Talking back to a Washington insider who kept Detroit in the gas-guzzler business, who I voted against when my city became part of his district, yet who is making some sense.
EPA economy ratings vs. the GM Volt: A square peg in a round hole
Ruminations on why MPG loses its relevance in a world of watt-hours per mile.
Photovoltaics: From Waste to Energy-maker
How the dumps of phosphate mining can yield the material to power much of the world.
Weathering the storm: making it through a natural-gas crisis.
Lifestyle changes which may slash fuel demand by changing habits.
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Robert Rapier

We Won't Stop Global Warming
I lay out the case that there isn’t really much we will do to stop the accumulation of CO2 in the atmosphere.
Does the Hubbert Linearization Ever Work?
Debunking the use of the Hubbert Linearization as a tool for the prediction of peak oil.
Peak Oil Interview: Misconceptions, Replacing Oil, and False Solutions
An interview I did at that 2010 Global Footprint Network conference that discusses peak oil.
What If Gas Cost $100 a Gallon?
A thought experiment to see what people might really do in cases of extreme gasoline constraints.
A Critical Examination of Matt Simmons’ Claims on the Deepwater Spill
Debunking hyperbolic comments related to the deepwater spill.
The Switch to Winter Gasoline and a Primer on Gasoline Blends
Every year in late summer, you will start hearing references in the media about the conversion to winter gasoline. So what does this mean, and why does it make gasoline less expensive?
The Price of Energy
Just looking at the cost per BTU of many different energy sources. Sparking some interesting discussion.
The Case for Higher Gas Taxes (and Lower Income Taxes)
I make my case for why it would make sense to shift taxes from income to consumption of fossil fuels.
Ethanol Blend E85 Case Study: Iowa
Examines the question of why Iowa should use their own ethanol instead of exporting it.
The Next Five Years: Peak Lite and the Current Oil Picture
Seeking to explain why I think peak oil consequences would start to happen before peak oil.
Refining 201: The Assay Essay
Explaining what products are produced from crude oil, and how that relates to the assay of the crude.
Why Not Nuclear Power?
Exploring the case for expanded nuclear power.
The Future is Solar
Why I think solar power has to play a more important role in the future.
Cellulosic Ethanol vs. Biomass Gasification
Just explaining the difference in the two technologies that have seen the borderlines between them blurred.
German Military Study Warns of Potential Energy Crisis
A translation of major points from the Bundeswehr report.
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Luis de Sousa

World Oil Exports: A Comprehensive Projection
This article is a first simplistic (but comprehensive) assessment of World Oil Exports, here defined as the total amount of liquid hydrocarbons that are surpluses in producing countries.
World Oil Exports [00] Introduction
A 2008 update on the original 2006 assessment.
World Oil Exports [01] Angola
The next post in the series focussing specifically on Angola's oil reserves.
World Oil Exports [02] Libya
Same as above except Libya this time.
A New Energy Policy for Europe
Wednesday the European Commission released a series of Communications proposing a new revolutionary Energy Policy attempting to address EU’s energy challenges for the XXI century. This is a set of first comments to such proposals.
Dialoguing with Dr. Peter Jackson of CERA: Is the Future of Oil Resources Secure?
Some reflections follow regarding Dr. Jackson’s arguments and understanding of the Hubbert’s Peak.
From sweet on the table to fuel in the tank: the millenary history of Sugar Cane
A dive into the fascinating history of a plant that shaped the World.
Marchetti's Curves
This is a brief account of the Energy Substitution Model developed by Cesare Marchetti in the 1970s at IIASA.
A few more thoughts on Saudi and HL
There has been some discussion about how to apply the Hubbert Linearization (HL) to Saudi historical production in recent weeks at TOD. Trying not to fall into redundancy, let me have some loose thoughts on these models.
Olduvai revisited 2008
This work tries to assess how the decline of Conventional Fossil Fuels may unfold and how can Mankind avoid the Road that may take us back to the Olduvai Gorge.
IEA WEO 2008 - Fossil Fuel Ultimates and CO2 Emissions Scenarios
An assessment of the WEO climate change statistics, co-authored with Euan Mearns.
Energy Policy: SER-2
This log entry is the first of a series that will try to build a critical but constructive review of this crucial element of future Energy Policy in Europe.
SER-2 [02] Memo on the Security and Solidarity Action Plan
In the second installment of this series analysing the Second Strategic Energy Review (SER-2) by the European Commission, the focus is on to the Memo entitled “EU Energy Security and Solidarity Action Plan”.
SER-2 [03] Communication of the Security and Solidarity Action Plan
This post tries to highlight important aspects that aren't referenced in the Memo and presents the implementation steps proposed by the Commission to put the Plan into practice.
Planning for Europe's Energy Future: My Submission to the Commission's 2010 Consultation on Energy
This document is a response to the Energy Consultation launched by the European Commission in the first half of 2010. This consultation is part of a process that shall take the Commission to a new Energy Policy Programme a few years from now.
Interview with Jean Laherrère
Some comments on the general Fossil Fuels depletion picture and our future beyond them.
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Stuart Staniford

4%, 11%, Who the Hell Cares? A very early piece pointing out that the post-peak decline rate is really the critical variable in assessing the seriousness of peak oil - much more important than the date or height of peak, or the degree of warning of peak. This piece still seems pretty good to me.
Hubbert Theory says Peak is Slow Squeeze. The first piece I wrote looking at the evidence that the post peak decline rate will probably be slow, rather than rapid.
The Auto Efficiency Wedge A piece looking at the fact that at slow decline rates, it's reasonably forseeable that peak oil can be handled by ongoing efficiency improvements (not painlessly, but without complete disaster)
Depletion Levels in Ghawar A major forensic analysis of the state of oil depletion in the Ghawar field of Saudi Arabia, suggesting that Saudi official oil reserve figures are over-optimistic.
US Peak Oil Adaptation: Prognosis in a Credit Crunch Rather prescient piece from 2007 discussing the possibility that the credit crunch could collapse oil prices and slow adaptation to peak oil. This turned out to be pretty much what happened.
Fermenting the Food Supply An argument against continued growth in biofuel consumption as an alternative to oil, on the grounds that the implications for food prices are likely to be very problematic.
The Fallacy of Reversibility This piece argued that there is no evidence for the idea that peak oil will lead to a revival of local non-industrial agriculture. The reverse seems more likely - that industrial agriculture is being and will be strengthened by high oil prices.
Powering Civilization to 2050 The first of three posts laying out a scenario for how we could get to a fairly close to carbon neutral civilization by 2050, without major collapse or disaster (if I was in charge in of the world). This post looked at energy, and argued that extrapolating the learning curve of solar power, it was possible to see energy becoming cheap again by 2050, based primarily on solar.
Four Billion Cars in 2050? Second of the "2050" series: Guesstimates on how many cars there might be by 2050, and how they might be powered.
Food to 2050 The third in the "2050" series: Whether there are likely to be limitations on feeding the world's population to 2050 in a cautiously optimistic scenario.
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Jeff Vail

Theory of Geopolitical Disruptions to Oil Supply
Discusses several non-geological feedback loops that may have a dramatic impact on the course of resource depletion.
Mexico, A Nation-State Dissolves
Addresses the geopolitical instability in Mexico as a potential bellwether for the Nation-State structure generally, and its potential impact on oil production and exports.
The Problem of Growth
How the fundamental structure of our civilization demands perpetual growth and is therefore inherently unsustainable, as well as potential structural solutions.
Oil Demand Destruction and Brittle Systems
Argues that demand destruction tends to make remaining demand less elastic, and therefore makes systems more brittle and vulnerable to future supply shocks.
Predator-Prey Dynamics in Oil Prices
Argues that oil demand, supply, and prices can be modeled similar to predator-prey systems in nature.
A series of posts on the potential for suburbia post-peak.
A Resilient Suburbia? 1: Sunk Cost & Credit Markets
A Resilient Suburbia? 2: Cost of Commuting
A Resilient Suburbia? 3: Weighing the Potential for Self-Sufficiency
A Resilient Suburbia 4: Accounting for the Value of Decentralization
The Renewables Gap
Discussion of the challenges of a societal transition to renewable sources of energy, and especially the "gap" between the beginning of massive investment and the beginning of significant levels of renewable energy generation.
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Chris Vernon

Will Wartime Mobilisation Address Peak Oil?
A look at Lester Brown's call for wartime mobilisation.
Nuclear Britain
Reviews the history and future of civilian nuclear power in Britain.
Climate Change – an alternative approach
Rather than attempting to reduce emissions be reducing demand, can the same be achieved by limiting fossil fuel production?
Jonathon Porritt: Peak Oil and Climate Change
Prominent environmentalist brings together these two issues.
Goodbye Helium, Goodbye Brainscans
Non-Renewable resource scarcity, the case of Helium.
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Some Notable Guest Posts

Cutler Cleveland - Energy Transitions Past and Future
Herman Daly: Towards a Steady State Economy
Herman Daly on the Credit Crisis, Financial Assets, and Real Wealth
Jay Hanson: America 2.0
Walter Youngquist: Unique Times -- and the Future
Christopher Smith: Aviation and Oil Depletion
Nick Rouse: Will Nuclear Fusion Fill the Gap Left by Peak Oil?
Dave Pollard: It's Our Turn to Eat: How Politics Works and Why Activism is So Important
Lester R. Brown: The Oil Intensity of Food
Alan Drake: Multiple Birds – One Silver BB: A synergistic set of solutions to multiple issues focused on Electrified Railroads
Debbie Cook: How Will Local Governments Respond to Large Increases in Energy Bills?
Aaron Newton: The Four Day Work Week: Sixteen Reasons Why This Might Be an Idea Whose Time Has Come
Glenn Morton: Holding Daniel Yergin and CERA Accountable
Michael Vickerman: A federal energy policy: can it happen here?
Brad Lancaster - Eight Principles of Successful Rainwater Harvesting
Dave Rutledge: The Coal Question and Climate Change
Jeffrey J. Brown: The ELP Plan: Economize; Localize & Produce
Jean Laherrère: Arctic Oil and Gas Ultimates
Jean Laherrère: Hydrates updated
Jean Laherrère: Forecasts on Saudi Arabia liquids production
Jean Laherrère: Update on US GOM from MMS, EIA and Scout Data
Sterling Smith: Energy Vision 2050
Douglas B. Reynolds: Peak oil and the Fall of the Soviet Union: Lessons on the 20th Anniversary of the Collapse
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This list isn't exhaustive nor final but what the authors sent in (and we are still missing a few authors).

Japanese Struggle to Protect Their Food Supply ONAMI, Japan — In the fall, as this valley’s rice paddies ripened into a carpet of gold, inspectors came to check for radioactive contamination.

Onami sits just 35 miles northwest of the wrecked Fukushima Daiichi nuclear plant, which spewed radioactive cesium over much of this rural region last March. However, the government inspectors declared Onami’s rice safe for consumption after testing just two of its 154 rice farms.

Then, a few days later, a skeptical farmer in Onami, who wanted to be sure his rice was safe for a visiting grandson, had his crop tested, only to find it contained levels of cesium that exceeded the government’s safety limit. In the weeks that followed, more than a dozen other farmers also found unsafe levels of cesium. An ensuing panic forced the Japanese government to intervene, with promises to test more than 25,000 rice farms in eastern Fukushima Prefecture, where the plant is located.

Crude Oil Advances After European Union Agrees on Sanctions Against Iran Oil rose as the European Union announced a phased-in embargo of Iranian (OPCRIRAN) crude in an effort to contain the Islamic Republic’s nuclear program.

The ban will be implemented in stages by July 1, Dutch Foreign Minister Uri Rosenthal told reporters today in Brussels. The region bought 450,000 barrels a day of Iran’s oil in the first half of 2011, U.S. Energy Department data show. EU finance heads are meeting to craft a long-term plan to tackle the area’s debt crisis.

Price of gas up 3.5 cents in the past two weeks The average price of gasoline in the United States rose again in the past two weeks, gaining nearly 3.5 cents to about $3.39 a gallon, due in part to higher crude oil prices, according to the nationwide Lundberg Survey.

Natural Gas Picture Still Bleak The U.S. Energy Department's weekly inventory release showed a slightly lower-than-expected drop in natural gas supplies, as warmer-than-normal temperatures across the country have restricted the commodity’s requirement for power burn. In fact, gas stocks – currently 20.8% above the 5-year average and 19.6% higher than the same period last year – are at their highest level for this time of the year, reflecting low demand amid robust onshore output.

Suspected U.S. missile kills 4 DERA ISMAIL KHAN, Pakistan (AP) – A suspected U.S. drone fired missiles at a house and a vehicle in northwestern Pakistan on Monday, Pakistani intelligence officials said, killing four alleged militants in an attack that could signal the program is picking up steam after strained relations halted strikes late last year.

Nigerian Islamist Group Kills 165 in Bombings At least 165 people were killed in the northern Nigerian city of Kano in bomb attacks on government buildings, the biggest by the Islamist militant group Boko Haram.

Cedi blues: Central banks’ nightmare It observed that while oil production and exports may be positive for Ghana’s trade account, it implies an increase in payments to foreign service-providers, and in repatriated income -- both of which put pressure on reserves.

Iran Says Negotiations Can Resolve Standoff Iran’s Foreign Ministry spokesman said only negotiations and not sanctions can resolve the standoff over the Islamic Republic’s nuclear program.

Europe Will Ban Iran Oil Imports from July European Union foreign ministers agreed to ban oil imports from Iran starting July 1 as part of measures to ratchet up the pressure on the Persian Gulf nation’s nuclear program, Dutch Foreign Minister Uri Rosenthal said.

Iran renews Strait of Hormuz shutdown threats after EU joins U.S. in banning oil imports In Iran, one politician responded by renewing a threat to blockade the Strait of Hormuz, an oil exporting route vital to the global economy, and another said Tehran should cut off oil to the EU immediately.

That might hurt Greece, Italy and other ailing economies which depend heavily on Iranian crude and, as a result, won as part of the EU agreement a grace period until July 1 before the embargo takes full effect.

Unilateral sanctions on Iran 'do not help': Russia (MOSCOW) - Russia said Monday it viewed the European Union's oil embargo on Iran as counterproductive and would continue to defend Tehran against further sanctions over its nuclear programme.

"Unilateral sanctions do not help matters," Russian news agencies quoted Foreign Minister Sergei Lavrov as saying in response to the EU decision.

Iran's rial drops 10 pct as EU bans oil imports TEHRAN: Iran's rial currency plunged 10 percent to a new record low on Monday as the EU imposed a ban on Iranian oil imports, posing a major headache for President Mahmoud Ahmadinejad who has said sanctions will not hurt the economy.

BACKGROUND: EU trade with Iran Brussels - Iran provides a notable, but not decisive, quantity of oil to the European Union. Of the 896 million barrels of crude imported to the 27 EU member states in the first quarter of 2011, just 4.4 per cent came from Iran.

Over the whole of 2010, Iran supplied 5.7 per cent of the around 3.8 billion barrels (1 barrel = 159 litres) imported by the EU.

Iran Said to Seek Yen Oil Payments From India Amid Sanctions Iran has asked India to pay for oil partly in yen as the two nations seek an agreement on how to maintain trade amid tightening global sanctions, according to three people with knowledge of the matter.

At talks in Tehran last week, India proposed to pay its second-biggest oil supplier in rupees through a bank account in the South Asian nation, said the people, declining to be identified because the information is confidential. Iranian officials sought partial payment in yen because they’re concerned that they may not get sufficient value from the rupee, which isn’t fully convertible, according to the people.

Natural gas glut, low prices, prompt Chesapeake to cut exploration and production NEW YORK — Faced with decade-low natural gas prices that have made some drilling operations unprofitable, Chesapeake Energy Corp. says it will drastically cut drilling and production of the fuel in the U.S.

Chesapeake, the nation’s second largest natural gas producer, said Monday that its planned 8 percent production cut means the U.S. as a whole would produce the same or slightly less natural gas in 2012 than it did in 2011.

Halliburton Profit Grows as U.S. Fracking Surges Halliburton Co., the world’s largest provider of hydraulic fracturing services, said fourth-quarter profit rose as customers boosted spending on the technique for capturing oil in the U.S.

The Keystone - China connection is overblown In an effort to diversify its export base and sell to growing markets, Canada has been looking to build a pipeline to its West Coast long before the Keystone controversy even began.

And actually laying a pipeline to the West Coast will be just as hard as building one through the United States.

GM Faces Task of Rebuilding Volt Model’s Image After NHTSA Fire Probe Ends General Motors Co. begins the task this week of repairing the image of its Chevrolet Volt plug-in vehicle after federal regulators closed their investigation into a battery fire.

First series of Better Place cars hit roads A four-year venture in the making, the first fleet of several dozen Better Place Renault Fluence ZE electric cars drove in a procession down Tel Aviv’s Ayalon on Sunday afternoon. About 100 Better Place employees were the beneficiaries of today’s inaugural car shipments, and members of the general public will begin receiving their vehicles during the second quarter of 2012, the company said. Throughout the year, thousands of electric cars will be reaching the country’s roads, according to Better Place Israel CEO Moshe Kaplinsky.

A Smart Power Grid Begins With a Promise for the Future Substation No. 505 in Oak Park, with its nondescript cluster of bulky transformers and web of power lines, seems an unlikely place for Commonwealth Edison to start the $2.6 billion smart grid it says will prepare the region’s antiquated power system for the digital age.

Egyptian commitment starts to gather force Egypt, which has been touted as the region's front-runner in the adoption of wind power in the Middle East and North Africa, has contracted the turbine manufacturer Gamesa to equip a 200-megawatt wind farm.

GE Courts Turbine Customers for Solar Panels Before Wind ‘Crash’ General Electric Co. (GE) is trying to convince developers that have bought its wind turbines to double down on clean energy by purchasing its solar panels as well, said Vic Abate, who runs the company’s renewables unit.

Swiss-German partnership plans $2bn solar investment in Oman A partnership between Terra Nex and Middle East Best Select is poised to invest US$2 billion in solar plants and panel manufacturing in Oman.

Geothermal test will pour water into volcano to make power Geothermal energy developers plan to pump 24 million gallons of water into the side of a dormant volcano in central Oregon this summer to demonstrate technology they hope will give a boost to a green energy sector that has yet to live up to its promise.

Coalition to sue EPA over ash pond rules delay ASHEVILLE, N.C. – A coalition of 11 environmental and public health groups from seven states has announced plans to sue the government over the delay in finalizing rules to make coal ash ponds safer.

The numbers are grim: China's property bubble is heading for a spectacular burst, and its effect on the country's economy will be widespread. FORTUNE -- The Chinese government's announcement last week that growth for 2011 slowed only slightly to a still impressive 9.2% was greeted enthusiastically by the world's stock markets. Investors also remain buoyant on China's future. They appear to be buying the official line that the gigantic property price bubble is gradually and smoothly deflating, posing little risk to an engine that's so crucial to the future of global trade.

But the math tells a different story. The housing frenzy has driven prices so high, so fast, that a crash on the scale of the real estate collapse in Japan in the 1990s is a virtual certainty. And China's already exaggerated official growth rate could take a pounding, all the way to the zone of the unthinkable, into the low single-digits.

A world in chaos? That may be a good thing. FORTUNE -- Too much is happening in the world. Politically, economically, and culturally momentous news is occurring on every continent seemingly every day, and it's overwhelming for the hapless citizen striving to stay on top of it all. If you want to impose order on the chaos, at least in your own mind, here's a suggestion: Just remember a, b, c, d. Four large, interrelated forces are driving the action globally, and they conveniently begin with those letters.

Joe Oliver's Desperate Hour Oliver would no doubt like to suppress the fact the tar sands are our last major oil reserve; that the easily extracted tar sands oil has been cherry-picked and the remaining reserves are subterranean and will be even more expensive to extract.

Eastern Canada is already heavily dependent on foreign oil imports.

Canada has exhausted most of our conventional oil reserves.

Why do we still ignore threats to our survival? Resource depletion is the other side of the global warming coin; raw materials and energy sources are being over-exploited. Has the "peak oil" point been reached? Will "peak water" be the next focus? Giddens gives a concise history of energy use. Up to the 17th Century, wood was the source of fuel in Britain. Declining stocks forced the change to coal, a move which spawned the Industrial Revolution. Now, each of us in the West employs the equivalent of 150 energy slaves working full time. In recent decades the focus has shifted to oil. The history of its exploitation is the modern history of imperialism; oil and authoritarianism are bedfellows. Nor is the current supply situation clear. Saudi Arabia, for example, may be exaggerating the extent of its reserves, while the strategic hold of the United States on the Middle East is breaking down.

Apple shows us why manufacturing will never return from China Reports such as SACOM's from May of 2011 have shown us of the stresses, low wages, and unsafe conditions of plants such as those used for manufacturing iDevices and other electronics. Yet, on the surface, a New York Times reports seems to point to more than just cheap labor as being the reason just about everything is manufacturered overseas. They're right too; it's not just cheap labor; it's virtual slave labor.

Urban gardens: The future of food? It's easy to make fun of, but as more and more farming moves downtown, eating local is taking on a new flavor.

Getting food on the table - the plea for a greener revolution The converging threats of population growth, climate change, volatile markets and unsustainable use of resources are now being shouted loud by leading scientists urging governments to work together to transform the way food is produced, distributed and consumed.

They want food on the table at international forums - on the agenda, not the buffet. There is, they insist, little time to waste in ushering in a new agricultural revolution, one which echoes the bumper yields of 1960-90, but without the associated environmental costs.

Geoengineering may improve rather than threaten global food security London: Reflecting sunlight away from the Earth to combat global warming will more likely have a positive impact on global food production rather than negative, a new study has revealed.

Food Waste Denounced by Ministers as Almost 1 Billion People Go Hungry Food waste was denounced by farm ministers and policy makers gathered in Berlin as almost 1 billion people in developing countries go hungry.

Consumers in rich countries dispose of 220 million metric tons of food waste every year, equal to the entire food output of sub-Saharan Africa, Jose Graziano da Silva, the director general of the United Nations’ Food and Agriculture Organization, told 64 agriculture ministers meeting in Berlin over the weekend.

City Grazing The 60 goats living in the rail yard near Pier 96 at the Port of San Francisco contribute to the city of San Francisco in their own way, clearing brush as fire prevention and offering a green alternative to toxic herbicides. Perched on the edge of Bayview-Hunters Point, an industrial area, these hard workers avoid the busy roads and — incredibly — return home when called.

Putting plankton before people In fact, debates around big dams expose greens for the self-contradictory people they are: they tend to oppose dams on the basis of their damage to biodiversity, but advocate dams when asked for examples of renewable energy sources that actually work. Big dams appear on the list of both the good and the bad.

Climate skeptics gathering influence in Tory Senate seats OTTAWA — Some of Prime Minister Stephen Harper’s newly-appointed senators are emerging as global-warming skeptics in the wake of aggressive government positions to abandon the Kyoto Protocol, slam environmentalists and downplay potential damage caused by Canadian oil and gas exploration.

“I felt like it is kind of an insult to be a denier for a long time,” said Sen. Bert Brown, last month at a parliamentary committee studying energy policies. “It feels pretty good this morning.”

Climate scientists back call for sceptic thinktank to reveal backers Leading climate scientists have given their support to a Freedom of Information request seeking to disclose who is funding the Global Warming Policy Foundation, a London-based climate sceptic thinktank chaired by the former Conservative chancellor Lord Lawson.

Home, Home … on Less Range Significant amounts of forage — nature’s free “service” to the cattlemen — will either be dessicated (under the warmer and drier projection) as the arid conditions in southeastern California inch northward or will be replaced by less-digestible scrub and brush (under the warmer and wetter projection), the study projects.

The loss will cost California ranchers tens of millions of dollars annually if it is warmer and wetter over the next 60 years or so, and $123 million to $209 million a year if it is warmer and drier, the article suggests.

Growing U.S. energy output a threat to Canada While the media fixates on the political spin around the Obama government’s rejection of TransCanada’s Keystone XL pipeline, there’s another, more important element to this story that has been grossly underplayed: growing domestic U.S. oil production, which will slash U.S. dependence on imported oil in the years ahead.

After decades of decline, U.S. oil output is growing rapidly again, thanks to the use of fracking (hydraulic fracturing) technology to open up previously untapped tight oil or shale oil deposits. (So much for Peak Oil theory.)

Oil Declines to One-Month Low on Chinese Manufacturing, Europe Concern Oil fell to the lowest level in a month as Chinese manufacturing contracted and negotiations to resolve Greece’s debt crisis entered a third day, fanning concern that Europe’s economy will slow.

Oil declined 1.9 percent as the preliminary January reading of a Chinese purchasing managers’ index showed the country’s manufacturing declined for a third month. The euro weakened as talks in Athens on debt swaps resumed. Prices extended losses after sales of previously owned U.S. homes grew less than expected.

Gasoline Supplies at 10-Month High The U.S. Energy Department's weekly inventory release showed an unexpected decrease in crude inventories on the back of lower imports, though product demand continues to be weak. Gasoline supplies rose for the third straight week to reach their highest level since early March 2011. The agency’s report further revealed that distillate stocks posted another build. Meanwhile, refinery utilization rate was down by 1.9%.

China Cuts December Gasoline Exports, Imports More Diesel Before Holiday China cut gasoline exports to the lowest level in almost three years in December and diesel imports reached their 2011 high as fuel was stockpiled to meet increased demand for transport around the Lunar New Year break.

Net gasoline exports fell to 164,392 metric tons last month, the lowest since March 2009, and net purchases of diesel were around 210,000 metric tons, according to data released by the General Administration of Customs today.

China's Dec Saudi crude imports 4th highest on record BEIJING (Reuters) - China's crude oil imports from Saudi Arabia rose to 1.12 million barrels per day in December, the fourth-highest on record on a daily basis, Chinese customs data showed, as the world's top oil exporter pumped just under the 10 million bpd mark.

Congress has legal clout on Keystone pipeline: study (Reuters) - The Congress has the constitutional right to legislate permits for cross-border oil pipelines like TransCanada's Keystone XL, according to a new legal analysis released late on Friday.

The study by the nonpartisan Congressional Research Service could give a boost to Republicans drafting legislation to overturn a decision this week by President Barack Obama to put the $7 billion Alberta-to-Texas project on ice.

BP joins in £250m gas storage project in North A unit of oil giant BP has secured an option to acquire over a 50pc stake in a planned £250m (€300m) gas storage project in Co Antrim. The facility would be the largest of its kind on the island if construction proceeds.

Gulf comeback bodes well for oil field services The resurgence of deep-water drilling in the Gulf of Mexico has the region on track to return to normal by year's end, boosting profits for oil field services companies, analysts say.

The Gulf comeback improved year-end financial results for Schlumberger, the world's largest provider of oil field services and equipment. The company reported a 36 percent increase in its fourth-quarter profit Friday.

China Urges Sudan, South Sudan To Resolve Oil Dispute With Talks, Respect CNPC Rights BEIJING – China on Saturday urged the governments of Sudan and South Sudan to remain calm and restrained and resolve their differences over oil exports through "negotiation at an early date".

"Oil is the economic lifeline shared by Sudan and South Sudan," Chinese Foreign Ministry Spokesman Liu Weimin said in remarks posted on the ministry's website, adding that the Beijing government "hopes that the two governments will fulfill their commitment to protecting the legal rights of Chinese enterprises and those of other partners."

Yemeni President Saleh granted immunity Sanaa, Yemen (CNN) -- Yemen's parliament approved a controversial law Saturday that ensures President Ali Abdullah Saleh complete immunity from prosecution.

The law was delayed for weeks as Saleh insisted on specific changes guaranteeing his aides partial protection from legal actions.

In return, Saleh will step down from power in Yemen next month after ruling the country for more than 33 years.

Police: Dynamite bomb explodes near bridge in oil-rich Nigeria delta, no casualties LAGOS, Nigeria - Police say unknown bombers detonated locally made dynamite near an important bridge in Nigeria's oil-rich southern delta overnight, though no one was injured.

The blast happened Friday night in Yenagoa, the capital of Bayelsa state, the home of President Goodluck Jonathan. Bayelsa state police spokesman Eguavoen Emokpae said the bomb targeted a bridge, but caused little damage.

After threats, Iran plays down U.S. naval moves (Reuters) - Iran's Revolutionary Guard Corps said on Saturday it considered the likely return of U.S. warships to the Gulf part of routine activity, backing away from previous warnings to Washington not to re-enter the area.

The statement may be seen as an effort to reduce tensions after Washington said it would respond if Iran made good on a threat to block the Strait of Hormuz - the vital shipping lane for oil exports from the Gulf.

OPEC head to hold talks in Tehran on oil export via Gulf Tehran - OPEC head Abdul-Kareem Luaibi will on Saturday hold talks in Tehran with Iranian officials on oil exports via the Gulf, the Mehr news agency reported.

Luaibi decided to visit Tehran after warnings by Iranian generals that the country might close the Gulf's Strait of Hormuz - a vital international oil shipping route - if oil sanctions were imposed on the Islamic state.

Iran oil to be sanctioned by Europe Monday NEW YORK (CNNMoney) -- The European Union will announce tough new sanction on Iran's oil industry Monday.

According to a source familiar with the matter, the sanctions will ban the import of Iranian oil and also restrict Iran's trade in gold and precious metals, as well as freeze certain Iranian financial assets.

China tells Iranian delegation to return to talks BEIJING - China told a visiting Iranian delegation that returning to nuclear talks was a “top priority,” the Xinhua news agency said on Saturday, in a meeting highlighting Beijing’s efforts to reduce tensions that could threaten its oil supply.

The delegation, led by Supreme National Security Council deputy secretary Ali Baqeri, visited Beijing as lawmakers in the United States moved to detail punishment of foreign banks that do business with the Iran’s central bank, the clearinghouse for its oil exports.

China Hedges Mideast Oil Bets Amid Iran Tensions China has become increasingly concerned about all the threats of conflict with Iran in the Persian Gulf, which supplies China with a great deal of its oil.

In fact, China is Iran's biggest customer. But Iran was not a stop on the Chinese itinerary — Saudi Arabia and the United Arab Emirates were.

U.S. Holds Military Talks With Israel on Iran as EU Readies Bank Freeze Israeli leaders held talks with the top U.S. military commander, General Martin Dempsey, following the postponement of a joint exercise that was to be the biggest ever for the two allies.

ENI says Libya oil output back to pre-war levels TRIPOLI (Reuters) - Italian group Eni's oil output in Libya is almost back to its pre-conflict levels at 260,000 barrels per day, Chief Executive Paolo Scaroni said on Saturday.

"Output has now gone back to its pre-war levels. It was 270,000 bpd (before the war), now it's 260,000 bpd," Scaroni told journalists in Tripoli.

Chevron appeals $18 billion ruling in Ecuador lawsuit SAN FRANCISCO/QUITO (Reuters) - Chevron Corp has filed an appeal with Ecuador's Supreme Court to review a judgment that the U.S. oil company pay $18 billion in damages for polluting the Amazon jungle.

Toronto Hydro to ask energy board again for rate hike Toronto Hydro will be asking the Ontario Energy Board to reconsider a request to increase hydro rates, which was turned down earlier this month.

On Friday, a letter signed by the chairman of Toronto Hydro’s board of directors was sent to the energy board, outlining why it says an increase is necessary.

Tepco to be nationalised for 10 years-Kyodo TOKYO (Reuters) - Tokyo Electric Power Co will in effect be nationalised for at least 10 years and is expected to become profitable in its 2013 business year, under a plan by a government body for funding nuclear disaster compensation, Kyodo news agency reported on Saturday.

The public fund is expected to inject 1 trillion yen ($12.97 billion) into the operator of the crippled Fukushima Daiichi nuclear power plant in a de facto nationalision of the firm, the news service said, citing sources close to the matter.

First Round: Entergy 1, Vermont 0 Wherever the case goes from here, Vermont Yankee’s recent history demonstrates some of the benefits and the pitfalls of a current trend in the nuclear industry in which a handful of companies specialize in owning and operating plants. Entergy operates 12 reactors at 10 sites, including Vermont Yankee’s.

U.S. Ends Chevy Volt Battery Fire Probe U.S. regulators, who ended their investigation yesterday into the Chevrolet Volt, said electric- powered vehicles do not pose a greater risk of fire than gasoline cars.

“Based on the available data, NHTSA does not believe that Chevy Volts or other electric vehicles pose a greater risk of fire than gasoline-powered vehicles,” the National Highway Traffic Safety Administration said in an e-mailed statement.

Let’s ban electric cars I’ve been thinking very, very hard about this, but at the end, there can be only one conclusion. We have to ban electric cars.

No, honestly, we do. And I have a very valid reason for this, let’s face it, somewhat controversial assertion.

The future of diesel, gas and electric cars Here’s the big picture in terms of gas, diesel and electric cars that came out of the just completed Detroit auto show.

Car Batteries Are Not Just For the Car Coda Automotive is supposed to start selling its electric sedan next month. On Friday, its parent company announced that it was also moving into a related line: stationary batteries for electricity storage.

Matt Simmon's Wind Dreams When Matt Simmons retired he undoubtedly realized that of the fifty states, Maine was the most highly dependent upon petroleum for its energy needs. Over 75% of Maine’s households heat with fuel oil, no doubt he found we were completely dependent on others for our energy needs. Simmons established the Ocean Energy Institute (OEI) and brought his expertise and contacts in the off-shore oil industry to jump start a renewable energy industry in Maine. This state, settled by people who used wind and water for their transportation and trade, has a tremendous wind resource. Looking at wind maps of the continental US, the proximity of abundant offshore wind resources to densely populated areas is clearly evident.

China’s Goldwind Expanding in U.S. as Rival Vestas Plans Cuts Xinjiang Goldwind Science & Technology Co., China’s second-largest wind-turbine maker, indicated it’s picking up market share in the U.S. as falling prices and expiring subsidies force rivals to pare back.

Goldwind bought two 10-megawatt wind farms in Montana to showcase its equipment and has taken orders in seven other U.S. states since it started sales in the region in June 2010, according to a company statement released yesterday.

U.S. Wind-Farm Boom Set to Bust in 2013 as Obama Tax Breaks End A U.S. boom in wind farm projects is poised to bust in 2013 as tax breaks by President Barack Obama’s administration prompt developers to rush through construction of new sites this year, according to Bloomberg New Energy Finance.

Some idle solar energy projects may soon connect to grid Two federal agencies and Southern California Edison say they're close to ending a long impasse that has made renewable energy projects sit unused. Negotiations with a third agency are tougher.

Solar Stocks Plunge as Germany Vows to Quicken Subsidy Cuts Solar stocks plunged around the world after Germany, the largest market for panels, said it will make quicker cuts to subsidized rates and phase out support for the industry by 2017.

India Misses Solar Target With 20-Fold Jump in Capacity in Year Indian solar power capacity expanded 20-fold in the past year to at least 356 megawatts, a third of the targeted level, after infrastructure, financing and weather- related delays, according to Bloomberg New Energy Finance.

Why the Clean Tech Boom Went Bust Anyone who has heard the name Solyndra knows how this all panned out. Due to a confluence of factors—including fluctuating silicon prices, newly cheap natural gas, the 2008 financial crisis, China’s ascendant solar industry, and certain technological realities—the clean-tech bubble has burst, leaving us with a traditional energy infrastructure still overwhelmingly reliant on fossil fuels. The fallout has hit almost every niche in the clean-tech sector—wind, biofuels, electric cars, and fuel cells—but none more dramatically than solar.

Breakthrough in seaweed biofuel reported Energy experts believe that seaweed holds enormous potential as a biofuel alternative to coal and oil, and US-based scientists say they have unlocked the secret of turning its sugar into energy.

A newly engineered microbe can do the work by metabolizing all of the major sugars in brown seaweed, potentially making it a cost-competitive alternative to petroleum fuel, said the report in the US journal Science.

The Man Who Fell for Fusion Whipple blithely notes that working units would probably emit gamma rays but that Rossi expects Underwriter's Laboratories to certify the e-Cat for home use.

Summer school inspiring sustainability Books have been bound, bees kept, tools sharpened, bicycles adjusted and seaweed eaten at the Transition Oamaru and Waitaki District Sustainable Skills Summer School which started on January 14.

Official Pack shot for Oil Rush revealed Today, videogame publisher Iceberg Interactive and game developer UNIGINE Corp., reveal the official pack shot of the naval strategy game Oil Rush. The global war for oil in the flooded post-apocalyptic world of “Oil Rush” starts with the digital release on January 25th 2012. The boxed version is set for a release date of February 24th in the UK, Benelux and Scandinavia and in Germany on February 23rd 2012.

Interior Candidate Bows Out The nomination of Rebecca Wodder, a longtime environmental advocate and former head of the conservation group American Rivers, expired at the end of last year. Expecting a bitter battle with an uncertain outcome, she asked that she not be renominated, according to an Interior Department spokesman. She was originally nominated last June.

With Keystone, it's Harvard vs. the heartland In the larger scheme of things, Keystone isn’t that big a deal. Energy expert Vaclav Smil says the entire Keystone system would move just over 6 per cent of current U.S. crude oil consumption. The new pipeline would add just 1 per cent to the quarter of a million kilometres of existing oil pipelines that criss-cross North America. “Why, if pipeline safety is a key concern, have we not seen waves of civil disobedience?” he asked in a recent commentary. As for the biggest objection to Alberta’s “dirty oil” – the fact that it produces more carbon dioxide than other oil sources – he says that, in 2010 alone, China’s carbon dioxide emissions rose by 780 million tons. That’s more than 40 times the annual emissions of all the oil that would flow through Keystone.

Bill McKibben: Keep Alberta's oil in the ground Put simply: Just as the planet’s physical stability depends on Brazil's guarding its rain forest, so it depends on Canada's keeping that carbon in the ground. Put even more simply: The carbon in the tar sands can wreck the future. Start burning them on a grand scale, says Dr. Hansen, and it’s “essentially game over” for the climate.

“Cold Front: Conflict Ahead in Arctic Waters,” by David Fairhall. On Aug. 27, 2008, a NASA satellite hovering above the North Pole captured images that stunned climate-focused scientists around the world. Both navigable passages linking the eastern and western hemispheres were clear of ice at the same time, a first in recorded history. Based on the rare occurrence, climatologists began making bold predictions about the future of the far north. Some scientists claimed a new northwest passage would be reliably open for ice-free sailing in the summer months as soon as 2013. In David Fairhall’s evocative new book, “Cold Front,” the issue is not whether the polar ice sheet will melt — because in his mind it surely will — but what happens then.

Scientists fire salvo in Canada's bid to control Arctic seabed In the midst of a Cold War-esque spy scandal involving a Canadian naval officer accused of passing secrets to a foreign entity, Canadian scientists have quietly accomplished something likely to prove far more effective than espionage or military posturing in affirming — and extending — Canada's sovereignty in the North: They've published two academic studies about Arctic Ocean geology that lend solid support to the country's ambitious claims for new undersea territory in the region.

Feeding The World Gets Short Shrift In Climate Change Debate Food is getting elbowed out of the discussion on climate change, which could spell disaster for the 1 billion people who will be added to the world's population in the next 15 years. That's the word today from scientists wondering why food and sustainability get such short shrift when it comes to thinking about how humans will adapt to climate change.

In the past year, we've seen drought in Texas, floods in Australia and massive drought and wildfires in Russia, all of which have had a big impact on global food supply and prices. Those are good examples of the extreme weather events and changes in weather patterns that scientists expect to see with climate change.

In the United States, we have been working on scaling up wind energy but not getting very far. In 2010, wind energy supplied only 2.3% of electricity purchased.

Figure 1. Wind energy (dark green) is barely visible in a graph of US energy consumption by source. Based on EIA data.

Such slow progress seems strange for a product that seems to have such great promise. It can reduce CO2 emissions. It doesn’t require fuel. It is at least partly US made. It seems to have promise for protecting against rising fossil fuel prices.

In this post, I discuss a few of the obstacles facing wind energy in the United States and their implications for the expansion of wind energy.

Obstacle 1: Wind energy is dependent on large subsidies.

According to the EIA’s report, Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2010, wind energy received subsidies of $4.986 billion from the federal government for Fiscal Year 2010. This amount is equal to approximately half the cost of new wind power installed during that period. State and local subsidies would be in addition. (The US Wind Energy Association shows that 6034 megawatts of new capacity was installed between October 1, 2009 and September 30, 2010, so the subsidy per megawatt was $826,318. This compares to an average cost per megawatt of about $1.4 million, excluding construction and connection costs.)

Wind energy’s largest subsidy, the Production Tax Credit, is set to expire on December 31, 2012, unless Congress acts to extend it, so there is now a big rush to get orders filled before that date. A study by Navigant Consulting forecasts a large drop in wind investment, if the Production Tax Credit is not extended (Figure 2).

Figure 2. Annual Investment in Wind Energy in $ Billion, according to Navigant Consulting.

Needless to say, the US Federal Government is not flush with money for subsidies, so there is the possibility that subsidies will not be renewed or will be cut back.

Obstacle 2: Wind energy is more variable than electricity produced by fossil fuels and by nuclear energy.

Wind blows when it chooses, which is often not when it is needed most. In theory, this problem could be resolved with robust long-distance transmission of electricity and with adequate electrical storage, but in the US, these are not available. Bill Richardson, energy secretary under Bill Clinton has said, “We’re a superpower with a Third World grid.” This means that even in locations where wind energy makes up a relatively large share of the fuel mix, other types of generations must be available to supply almost the full level of demand, if the wind is not blowing.

As a result, the role of wind energy is fairly limited. What wind energy does is permit electricity generating plants, particularly those fueled by natural gas, to use less fuel. Consequently, the price of wind energy tends to compete with the price of fuel, rather than with the wholesale price of electricity.

Chis Namoviz, who is in charge of renewable energy forecasting at the EIA, explained this to me in an e-mail in 2009:

Because of its relatively low “capacity value” (a result of usually not blowing very regularly during peak load hours), wind largely competes as a “fuel saver” resource, and can generally be compared against the fuel cost of what ever mix of fuel it is displacing (whether from existing capacity or from alternative investments in future capacity). In the U.S., this is typically some mix of relatively inexpensive coal and somewhat expensive natural gas, depending on the location of the wind plant, and the resulting seasonal/daily wind and load profiles . . .[Note from Gail: Natural gas is now cheaper than when this statement was made.]

We can see the result of this situation in Figure 3, from Annual Report on U. S. Wind Power Installation, Cost, and Performance Trends: 2007. The price of wind generation tends to trade a below the wholesale band for other types of wind generation, more at the price of the fuel that is saved (frequently natural gas) than at the usual wholesale price.

Figure 3. Comparison of prices of wind generated electricity with electricity generated by other means, from US Department of Energy report, "Annual Report on U. S. Wind Power Installation, Cost, and Performance Trends: 2007."

This lower price for wind-generated electricity helps explain some of the need for subsidies.

A related issue is the confusion caused by a comparison of the “levelized cost of wind” with the levelized cost of other types of generation, such as is shown in Figure 4 by the US Energy Information Administration.

Figure 4. EIA's exhibit showing Estimated Levelized Cost of New Electricity Generation Resources, from Annual Energy Outlook 2011.

Because wind acts as a fuel-saver, Figure 4 represents an “apples to oranges” comparison, if one makes the standard comparison of amounts in the last column. Instead, since wind energy only replaces fuel, what needs to be compared is:

• “Total System Levelized Cost” for wind relative to
• “Variable O&M (including fuel)” for other sources of production

In Figure 4, the Total System Levelized Cost of Wind is 97.0, and of Wind-Offshore is 243.2. These might be compared with the Variable O&M (including fuel) of coal (Advanced coal is 25.7) or of natural gas (Conventional Combined Cycle is 45.6), for example. On this basis, wind energy comes out badly, and is one reason it requires such high subsides.

Another related issue is that a person would normally want to substitute a less-scarce fuel for a more scarce fuel, but to some extent this works in reverse for wind power. At least some petroleum is used in manufacturing, transporting, installing, and maintaining wind turbines, but the energy that is provided as an output is mostly replacing natural gas, and perhaps some coal. Coal and natural gas are much cheaper (and more abundant) than oil, so even a small input/output substitution in this direction can quickly hurt the economics of the process.

While one intent of wind energy was to protect against rising fossil fuel prices, in the US those prices are not rising evenly. Oil is particularly high priced, but it is not oil that is being saved, it is other fuels.

Obstacle 3: Natural gas is now very cheap in the US, and there is a huge amount of natural gas generating capacity already built.

Since wind energy tends to compete with the cost of fossil fuels used to produce electricity (mostly natural gas and coal in the US), a low price for natural gas is a problem because even greater subsidies will be required for wind energy to be competitive.

Furthermore, natural gas generating capacity is no issue, because a great deal of natural gas generating capacity has been added in recent years.

Figure 5: US Generation Capacity by Year and Source, based on EIA Data. (The amount of electricity generated is not proportional to capacity, however. Nuclear is used at over 90% of capacity, coal a little below 70%, and wind at a little under 30% of capacity.)

Obstacle 4: In the US, we do not have an electrical grid that can provide very much long distance transport of electricity, and there are several reasons why changing this situation is very difficult.

Growth in wind energy requires very good long distance transmission capability, partly because wind resources are often located a long way from prospective users, and partly because the variable nature of wind can be “evened out” if wind energy is shared over a large area. Unfortunately, the US electrical system has grown up under a system where each locality has been expected to generate its own electricity. Under such a system, electrical transmission from city to city was originally designed to handle only occasional emergencies, and thus is very limited. I have written more about US electrical grid issues in The US Electrical Grid: Will it Be Our Undoing? and Upgrading the Grid – Many Pluses but Some Minuses Too.

The way the US electric transmission system was set up produces many anomalies. Electrical rates vary greatly from state to state. We needlessly burn large amounts of oil transporting coal to where it will be burned for electricity, rather than burning it near where the coal is mined, and then transporting the electric power over transmission lines. Nuclear-fueled power plants are sometimes located near large cities.

The problem is very difficult to fix for many reasons. Any improvement in electric transmission would tend to even out electricity rates, but this would be to the detriment of customers who currently have low electric rates. To the extent that new transmission costs more, and these higher costs are charged back in electric rates, such a change could result in higher electricity costs for more than half of the population–something most politicians would find unacceptable.

If better transmission were readily available and free, no one would want to build a power plant in their back yard, making it even harder to site new power plants than it is now.

Another issue is that a good mechanism for paying for the installation and maintenance of new long distance transmission lines has not been established. Under current procedures, a determination must be made as to which electric generating companies will benefit from new transmission lines, and the costs allocated among the beneficiaries. The government in the past has not funded long distance electrical transmission. No one really “owns” the long distance lines.

The only partial fix I can see would be to create a separate organization to build and maintain a few new long-distance transmission lines. Wind energy and other users seeking to use these lines would be charged for the use of these lines, similar to a toll road. It might be possible that more coal fired-power plants would be built near these lines, because wind usage by itself could not support these lines. Even this arrangement would likely require a change to current laws. The net effect might be more CO2, rather than less.

The cost of long distance electric transmission is likely to be fairly high–at least several cents per kWh, for wind energy transported over long distances. Over time, the price can be expected to rise as the price of oil rises. Some maintenance may become very difficult, such as that currently done by helicopters in remote locations.

Obstacle 5: A high proportion of funding for wind energy is up front.

Oil, coal, and gas all started out as fairly high EROEI investments, and much of the investment took place as the fuel was extracted. In such a situation, the investments threw off a high level of profit which could be used to fund further investment.

Fossil fuels are gradually shifting away from this model, with higher up front investment, and lower profit available to fund further investment. Wind turbines represent the extreme end of this continuum with most of the investment up front, and the return trailing many years behind.

As a result of this shift in timing, it is becoming more difficult to fund projects with huge up-front investment. In the “good old days,” we had the low price of fossil fuels which made other investments easier to afford. We also could count on a being always able to add more debt, but we are reaching limits on sustainable debt. I wrote two posts on The Link Between Peak Oil and Peak Debt (Part 1 and Part 2). More recently, I talked about how Net Savings is dropping dramatically in the US, so that non-debt sources of funding are also disappearing.

Figure 6. US Savings and Investment Ratios, based on US Bureau of Economic Analysis Data.

The net of all of this is that if we are reaching limits with respect to finite resources, it is going to be increasingly difficult to fund projects that require large up-front investment and provide a return later. We will likely have to give up some investments we really need (such as replacing worn out roads, pipelines, and school buildings) in order to ramp up investments in projects that require large front-end funding, like wind turbines.

Obstacle 6: Adding wind energy to the electric grid adds complexity which may be difficult to manage with declining resources.

The job of balancing supply with electrical demand and keeping all sources of electricity “in synch” becomes more difficult, as more variable sources of supply come on line. While it is theoretically possible to find technical solutions to these issues, it is not clear that we will in practice.

Furthermore, one approach that is being tried in order to avoid the cost of adding new electricity generating capacity and new electric transmission is to use the Smart Grid to help limit demand when at times when demand would normally be high, such as when temperatures are high or low. In the words of Smart Grid R & D: 2010-2014 Draft 2, “Smart grid can improve asset utilization and thereby avoid the need for new capacity.“

The expected effect of avoiding new capacity is that components are operated at closer to maximum capacity. Since adding new capacity is avoided, assets will over time tend to be older as well. While theoretically everything should go well, operating older units at closer to their theoretical capacity adds stresses to the system. Because of these factors, Smart Grid enhancements add efficiency to the system, but may reduce resilience.

According to the same report, the Smart Grid is being built as it is being planned. The amount of funding is not clear; costs must be recovered from customers based on cost recovery laws which vary by state. There are a huge number of details that need to worked out, such as necessary cyber security measures. It would be easier to rest easy if the Smart Grid had all been planned out in advance, tested on a small scale and pre-funded.

The grid with the new enhancements will work until at some point it doesn’t work–for example, an unplanned event causes a major failure within the system, or a needed system upgrade is too expensive to afford, or a replacement part from overseas is unavailable. Hopefully, failures of this type will be temporary and local, but if resources are limited, the time may come when the high cost of maintaining the system becomes unsustainable.

Further Thoughts about Wind Energy

I have not been able to touch on more than a few issues in this post.

One of the big issues with wind is that hopes have been raised for its widespread use, without really working through feasibility issues. If we are already having trouble with the electrical grid not being able to accept more wind energy in popular wind-generating areas when wind energy constitutes only 2.3% of total electricity supply, then wind energy is going to be difficult to scale up quickly. The issues I point out in this article suggest that the cost problem is still large, and the fixes needed to add long-distance transmission are likely to make the cost problem even worse.

The government needs to be able to show it is “doing something” about our energy problem, so it makes statements such as “Wind generation added 30% of all US generating capacity in 2007.” (See Figure 5 above.) Few people are energy literate enough to realize that even this progress is very slow, because relatively little new capacity is added in a year, and because wind, with its low-capacity factor, requires a disproportionate share of total new generation capacity, to make much progress. If wind turbines have an average life of 20-30 years, and other types of generation last for 40+ years, this will also affect the amount of new generation needed for wind, compared to other units.

It is easy for readers to become confused, when confronted with the many technology possibilities available, when they don’t understand the time, cost, and scale involved. Dr. Robert Hirsch, in the January 9, 2012, issue of the ASPO-USA Peak Oil Review writes:

The foregoing are realities that many people fail to understand, which means that they can be trapped into advocating energy changes that are not practical in the short term. Examples of some of the current common traps: 1) Assuming that wind and solar systems – electricity producers – can be a near-term solution to high gasoline prices; 2) Assuming that natural gas from shale is a near-term solution to our dependence on foreign oil; 3) Assuming that wind and solar can be a near-term means to lower the emissions from vehicles now powered by oil products; etc.

If transitions to new energy sources and new technologies could be made cheaply and quickly, then many options that appear to be feasible in fact would have a reasonable chance of working out. But there is another issue as well. Based on technology today, we need fossil fuels to make wind energy, and we need fossil fuels to transport wind turbines to the locations where they are to be installed. We also need fossil fuels to repair wind turbines and to maintain transmission lines. So wind energy and other proposed replacements for fossil fuels are deeply imbedded in the fossil fuel system, and dependent on it.

I expect that at some point grid problems will become overwhelming, so at least the long-distance portion of the grid will be lost. It is possible that adding more wind energy to the grid will make that date come sooner, rather than later, because of the complexity issues I mentioned. Unless the limiting factor on the life of the electric grid is the amount of coal and natural gas available, and wind energy somehow delays running out of these, I have a hard time seeing how wind energy will make the electric grid last longer.

There are so many obstacles for wind to overcome in the US that I am not sure that we should even try to push for higher wind penetration levels. The only exception might be in areas where wind energy is cheap to produce and the grid can readily accept the electricity.

Since the world is finite, there is a good chance that at some point we are going to have to get along with less electricity as well as less oil. Instead of focusing on delaying the inevitable, perhaps we should start thinking about preparing people for simpler lives that use less energy of all types. Such an approach might solve multiple problems at once–too much CO2, too little oil, and too little capital to tackle all the problems that need to be tackled at once.

This post originally appeared on Our Finite World.

Fossil fuel subsidies: a tour of the data One of the most surprising and alarming issues in the climate and energy arena is the fact that the fossil fuels causing global warming continue to receive substantial government support, making them artificially cheap and encouraging more of them to be consumed. It's a form of madness that my colleague Damian Carrington put his finger on recently when he wrote that "the house is ablaze and we are throwing bucket after bucket at it – buckets of petrol."

What's particularly baffling is that while government support given to environmentally beneficial renewable power sources is subject to seemingly endless media and political scrutiny, the 500% larger subsidies given to oil, gas and (to a much lesser extent) coal rarely get much attention.

Crude Futures Trim Weekly Gain as Greek Risk Offsets U.S. Rebound Hopes Oil declined in New York, trimming a weekly advance, as protracted negotiations to resolve Greece’s debt crisis fanned concern that the region’s turmoil will harm fuel consumption.

West Texas Intermediate futures dropped as much as 0.9 percent as talks in Athens on debt swaps entered a third day, with Greek officials and private creditors struggling to agree on a plan. Still, prices are up 1.1 percent this week on signs of recovery in U.S. employment and manufacturing, and concern that tensions between Iran and Western nations will lead to a disruption in Middle East exports.

$4-a-gallon gas likely this spring, analysts say New York (CNN) -- Get ready to pay $4 or more at the pump this spring: Analysts say gas prices could hit a record high.

Fred Rozell, retail pricing director at Oil Price Information Service, says he expects the national average for a gallon of regular unleaded gasoline to reach $4 to $4.25 per gallon for regular gasoline when the market peaks, sometime in between April and early May.

Global LNG-Asian LNG prices weaker on ebbing demand PERTH (Reuters) - Asian liquefied natural gas spot prices dropped lower for the seventh straight week to just above $15 per million British thermal units (mmBtu) LNG-AS due to low demand from well-stocked buyers in North Asia.

The world's top two LNG buyers, Japan and South Korea, had stocked up well ahead of the winter and prices may even dip further as spring approaches, according to market sources.

Canadian Inflation Down To 2.3% For 2011, Gas Prices Fall Further In December (RTTNews.com) - Canadian inflation eased in December as consumers continued to pay lower prices at the pump, official data showed Friday. Consumer prices rose 2.3 percent in the 12 months to December, following a 2.9 percent increase in November, according to Statistics Canada.

C.bank chief: Saudi to keep oil price stable (Reuters) - Saudi Arabia's central bank chief said on Friday that his country would offer excess oil production capacity if needed to balance oil prices, and that he expected prices to stay stable.

Barrelling towards fuel shortages Tension between Western powers and Iran, which has been simmering for decades, has heated up considerably in recent weeks and is in danger of boiling over into full-scale military conflict.

Because South Africa sources about a quarter of its crude oil imports -- about 100 000 barrels a day -- from Iran and another quarter from neighbouring Saudi Arabia, geopolitical events involving these countries could seriously knock the local economy.

Strikes, Protests Paralyze Sicily Heralded as the “Five Days of Sicily,” members of the Pitchforks Movement of farmers, and the Shock Force truck drivers’ consortium have paralyzed the Italian island, Sicily.

Striking transportation workers are blocking main roads with their trucks to protest against Italy’s Prime Minister Mario Monti’s cutbacks. The drivers, belonging to the Association of Sicilian Businesses, have also been joined by farmers and fishermen.

The main complaint of the protesters is the excessive rise in fuel costs. According to the organizers, the five-day strike that will last until Friday night.

Iran warns region against "dangerous" stance on Hormuz (Reuters) - Iran's foreign minister warned neighboring states not to put themselves in a "dangerous position" by aligning themselves too closely with the United States in the escalating dispute over Tehran's nuclear activity.

Confrontation is brewing over Tehran's nuclear work, which Washington and other powers say is focused on developing atomic weapons. Iran dismisses the accusation.

U.S. Holds Military Talks With Israel on Iran as EU Readies Asset Freeze Israeli leaders held talks with the top U.S. military commander, General Martin Dempsey, who arrived after the postponement of a joint exercise that was to be the biggest ever for the two allies.

Japan offers U.S. support on Iran, less clear elsewhere in Asia (Reuters) - Japan pledged on Friday to keep cutting purchases of Iranian crude in the clearest public offer of support yet among Asia's big buyers for U.S. efforts to tighten an international noose around Iran in an escalating dispute over its nuclear ambitions.

EU's Iran oil embargo held up by Greek call for guarantees (BRUSSELS) - European Union talks to agree an oil embargo against Iran were held up Friday as the bloc sought new suppliers for Greece who could match the conditions offered by Tehran to the cash-strapped nation.

Diplomats said Greece, which relies on Iranian oil for more than a third of its total oil imports, had concluded "good financial arrangements" with Iran that included 60-day payment and no financial guarantees.

French President Sarkozy urges much tougher sanctions on Iran, including oil embargo PARIS — French President Nicolas Sarkozy is urging stronger, more decisive sanctions against Iran over its nuclear program.

France wants the entire European Union to impose an embargo on Iranian oil and freeze the international assets of Iran’s central bank to force it to halt the suspected development of nuclear arms.

How US strategic oil reserve might fill Iran gap The new US and European Union sanctions targeting Tehran’s oil exports would surely hit the country’s economy and, conceivably, force a change of course over its nuclear programme. But they are also likely to push oil prices up, hurting the west.

Philip K. Verleger, a veteran oil economist and a visiting fellow at the Peterson Institute for International Economics, has proposed an imaginative – and most likely controversial – solution to the problem: Washington should release a significant chunk of its strategic petroleum reserve (SPR) because, according to his estimate, it is holding much more oil than is necessary.

Syria says lost $2 billion from oil sanctions (Reuters) - Western sanctions on Syrian oil exports have cost the country $2 billion since September, Oil Minister Sufian Alao was quoted as saying on Friday.

The official SANA news agency quoted Alao as saying that Syria was still trying to replace European Union crude oil contracts with new customers, but was having trouble securing shipping insurance and trade credit.

Bahrain protesters greet air show with black smoke from burning tires MANAMA, Bahrain — Anti-government protesters in Bahrain have set off pillars of black smoke from burning tires in apparent attempts to embarrass officials on the opening day of the country’s air show.

The plumes were visible by people attending the aviation event, which includes American warplanes.

'Unemployed graduates' set themselves alight in Morocco The Moroccans were part of the "unemployed graduates" movement, a loose collections of associations across the country filled with millions of university graduates demanding jobs. The demonstrations are often violently dispersed by police and in some towns and cities have resulted in sustained clashes.

While the official unemployment rate is only 9.1 percent nationally, it rises to around 16 percent for graduates.

Oil Grab in Falkland Islands Seen Tripling U.K. Reserves Thirty years after Margaret Thatcher fought a 74-day war with Argentina over the Falkland Islands, the prospect of an oil boom is reviving tensions.

Oil explorers are targeting 8.3 billion barrels in the waters around the islands this year, three times the U.K.’s reserves. Borders & Southern Petroleum Plc (BOR) will drill the Stebbing prospect next month, one of three Falkland wells that Morgan Stanley ranks among the world’s top 15 offshore prospects this year. Meanwhile, Rockhopper Exploration Plc (RKH) is seeking $2 billion from a larger oil company to develop the Sea Lion field, the islands’ first economically viable oil find.

Abu Dhabi in delicate dance over oil Western oil companies such as ExxonMobil and Shell have reason to put on a good showing at the summit.

Schlumberger Profit Rises as Drilling Booms Schlumberger Ltd. (SLB), the world’s largest oilfield-services provider, said fourth-quarter profit rose 36 percent as higher crude prices pushed oil companies to boost exploration and production spending around the world.

Where Will Exxon Mobil Be In 2040? Investors can be confident that there will be supplies as well as demand well into 2040 and later. Those invested in Exxon Mobil and other oil companies can stay invested for decades to come.

Wildcatter Finds $10 Billion Drilling in North Dakota Hamm is the man who bought the Bakken, the shale formation that’s the biggest U.S. oil find since Alaska’s Prudhoe Bay in 1968. The Bakken stretches from central North Dakota into the northeastern corner of Montana and up into southern Saskatchewan and Manitoba in Canada. He leased his first acres and drilled his first wells in North Dakota nearly 20 years ago, and stayed with it when others gave up.

Today, Continental, with a stock market value of $14 billion, vies with oil giants such as Hess for the most Bakken acres under lease -- more than 900,000 -- the most drilling rigs -- 24 -- and the most wells -- more than 350.

Europe gas supply vulnerable to Qatar shipments LONDON (Reuters) - Europe's energy supply may be more vulnerable this year as shipborne gas, relied upon to ease dependence on pipelines from suppliers like Russia or Libya, is likely to sail to more lucrative fast-growing Asian markets, analysts said on Friday.

North-west Europe, especially Britain, depended on Qatar for nearly all of its liquefied natural gas (LNG) last year.

Gazprom To Start South Stream Construction In December 2012 MOSCOW – Russian state-controlled gas producer OAO Gazprom (GAZP.RS) said Friday it will significantly speed up the South Stream gas pipeline to Europe and plans to begin construction in December.

Australia's LNG boom fizzles Just a few years after it started, Australia's liquefied natural gas bonanza may be drawing to a close, throttled by swelling costs, tightening credit and mounting foreign competition to supply Asian buyers.

EPA Providing Water to Homes Near Pennsylvania Fracking Site The Environmental Protection Agency will deliver water to four families in Dimock, Pennsylvania, where residents say their water has been contaminated during hydraulic fracturing by Cabot Oil & Gas Corp. (COG)

The EPA will also test water at 60 homes to assess whether any residents are being exposed to hazardous substances, the agency said in a statement.

Chevron rig fire on 5th day off Nigeria’s coast; 2 foreign workers presumed dead LAGOS, Nigeria — Chevron Corp. says it is still trying to extinguish a five-day old fire on its rig off Nigeria’s coast after presuming two foreign workers dead.

Chevron said Friday it is preparing to drill a relief well to fight the fire.

Republicans Look for Alternatives After Keystone XL Rejected Congressional Republicans who tried to force President Barack Obama’s hand on the Keystone XL pipeline now want to take away his authority on the issue altogether, extending a debate with the administration over jobs and the environment.

Keystone XL Pipeline Seen Moving Ahead on Alternative Route TransCanada Corp.’s $7 billion Keystone XL oil pipeline still will move ahead with an alternate route after President Barack Obama’s decision to deny a permit, investors, public officials and analysts say.

Obama's Keystone pipeline nix worries small business NEW YORK (CNNMoney) -- The hopes of some small business owners in the Nebraskan towns of Fairbury and Steele City were crushed when the Obama administration rejected a proposed expansion of the Keystone oil sands pipeline.

The Keystone Pipeline Is No Victory for Environmentalism And at most, it's merely a symbolic and short-lived win. To ensure the end of tar sands oil, the government will have to enact measures to make high-carbon fuel unprofitable.

US oil pipeline: Storm in a barrel? As the US shelves the TransCanada project, we ask if the real reason is environmental concerns or a political ploy.

Canada's Oil Sands: Are We Exporting Canada's Energy Security? Now that the Keystone XL pipeline project looks like it’s future is up in the air, I thought that it was timely to take a look at a recent paper by J. David Hughes of Global Sustainability Research Inc. entitled "The Northern Gateway Pipeline: An Affront to the Public Interest and Long Term Energy Security of Canadians". This paper provides an interesting look at the rationale behind the building of the Northern Gateway Pipeline (NGP). To assure you that Mr. Hughes is qualified to speak on the issue, he was employed as a petroleum geologist for the Geological Survey of Canada for 32 years.

Exxon to pay Montana $2.4 million in spill accord (Reuters) - Exxon Mobil Corp. would pay more than $2 million in penalties and cleanup costs to Montana for a pipeline rupture in July that spilled an estimated 1,500 barrels of oil into the Yellowstone River, according to a proposed legal settlement unveiled on Thursday.

A Judge Rules Vermont Can’t Shut Nuclear Plant WASHINGTON — A federal judge on Thursday blocked Vermont from forcing the Vermont Yankee nuclear reactor to shut down when its license expires in March, saying that the state is trying to regulate nuclear safety, which only the federal government can do.

Railroad companies fight safety rules, with help from GOP and Obama Less than four years after a California train disaster spurred passage of major safety legislation, railroad companies are pushing hard to relax the law’s chief provision.

They have won over key Republicans, and extracted a major concession from the Obama administration, in their bid to scale back and delay a system to prevent crashes such as the head-on collision that caused 25 deaths and 135 injuries in Chatsworth, Calif.

The Peak Oil Crisis: Cold Fusion Update With LENR we seem to be dealing with a new natural phenomenon which is not as yet understood although there are numerous theories which attempt to describe what seems to be happening. These theories involve the dense mathematics of nuclear theory and are for the most part incomprehensible to the layman.

ISU pushes sustainability, several projects in progress Indiana State University's new institute for Community Sustainability continues to implement sustainable solutions while raising awareness.

"There are a number of problems building to a head right now: global climate change, peak oil and job issues are a few among them," executive director for the Institute of Community Sustainability, Jim Speer said, "all of which can be solved with sustainable solutions."

Dancing On History’s Edge: Why This Is An Amazing Time To Be Alive If you are reading this, you are alive today, and that means you are part of this Great Unraveling/ Great Turning, or whatever name we choose to call it. If you, like me, are middle aged or beyond, we have lived through the apex of a global empire now passed irrevocably into decline.

Thank God for the Jobs Crisis! Even the oil industry is sun setting. Imagine what that means for an entire economy and lifestyle absolutely dependent on oil. Here I'm not just referring to "Peak Oil Consumption" or to "Peak Oil" itself. Again according to Rifkin (this time in The Empathic Civilization) the new technology will soon turn every building into a energy power plant. Surplus energy will be stored in hydrogen cells. And the energy produced will be shared person-to-person across a "smart grid". The model here is file-sharing and the way it transfers information today. Think of the jobs that will be eliminated as a result -- including those required by the energy wars that will be rendered superfluous.

This is not a pipe dream. The European Union has already committed to the model Rifkin describes. We are kept from discussing it only because our "drill, baby, drill" politicians have their heads so firmly stuck in the tar sands. Consequently, the U.S. economy is being left in the dust.

Greedy Lying Bastards: US filmmaker attacks oil industry Craig Rosebraugh's new documentary highlights the 'influence, deceit and corruption' of fossil fuel industry.

The Military’s Push To Green Our Explosives But while some branches of government have displayed a penchant for caution, the United States Department of Defense has been more assertive in its intentions. One DoD research request, for example, asks synthetic biologists to create greener explosives and rocket fuels. In the "statement of need," the Strategic Environmental Research and Development Program (SERDP), which seeks to green the military, argues that microbes could eliminate the heavy-metal and toxic solvents in conventional explosives production.

UNL research shows high-input agriculture systems are better It was previously believed that using high-input agricultural systems to produce crops would also produce more greenhouse gases and was dangerous for the environment.

Cassman and Grassini say that is not true.

According to their research, high-input farming is the most efficient way to produce crops because it results in the highest crop yield.

Two groups of Cornell University scientists disagree on impact of hydrofracking on climate change ALBANY, N.Y. (AP) — Two groups of scientists at Cornell University are dueling over whether natural gas from shale is better or worse than coal when it comes to global climate change.

It’s a significant question because proponents of shale gas development using the controversial practice of high-volume hydraulic fracturing argue that natural gas is a cleaner-burning “bridge fuel” from the age of coal to an era of wind, solar and other sustainable energy sources.

U.S. announces climate change strategy WASHINGTON, Jan. 19 (UPI) -- The U.S. Interior Department has announced a strategy to help reduce climate change impacts on species, ecosystems and people and economies dependent on them.

Working with state, tribal and federal agency partners, the department has created a first draft national strategy to help policy makers and resource managers prepare for those impacts, a release from the Interior Department said.

Come Hell With High Water DHAKA, Bangladesh — Earlier this month, Bangladesh’s foreign minister chided the world’s developed nations for failing to honor their pledge to help this low-lying, water-logged nation adapt to the effects of climate change. Of the $30 billion that poor countries were promised three years ago, just $2.5 billion have been disbursed. “Our achievements — social, economic, environmental — of the past decades” are at risk, Dipu Moni told the Guardian.

Bangladesh, much of which sits less than 20 feet above sea level, may be asking for the wrong thing. Clamoring for funds to mitigate the effects of a changing climate isn’t enough. If greenhouse gas emissions aren’t reversed in the next few decades, it may be impossible for some countries to adapt to global warming. Rather than rattling its cup, Bangladesh should be pounding tables in Washington, Beijing, Brussels and Delhi.

Oil demand falling, IEA warns Oil demand is falling for the first time since the global economic crisis of 2008-2009, the International Energy Agency said.

The IEA warned in its monthly report on Wednesday that mild weather, high oil prices and a rising likelihood of a global recession will depress demand in 2012, Reuters reported.

Although worries about disruptions to Iranian oil exports have supported prices, consumption fell in the last quarter of 2011 year-on-year due to mild winter weather in the northern hemisphere and the overriding fears about an impending recession in the euro zone, the IEA said.

Oil Rises to Three-Day High in New York as Iran Tension Counters Economy Oil rose to the highest level in three days in New York as speculation supplies from Iran will be disrupted countered concern that economic growth will slow.

Iran called on Saudi Arabia to be “more wise and responsible” after the kingdom said it could make up for any supply loss resulting from a European ban on imports of Iranian crude. The International Energy Agency reduced its 2012 global oil demand forecast, after consumption fell in the fourth quarter for the first time since 2009, warning it may cut estimates further.

Gas prices may get close to $5 in some spots NEW YORK (CNNMoney) -- The new year has greeted Americans with the highest January gas prices ever, and some analysts say prices could get close to $5 a gallon in some areas during the warm-weather driving season.

The average price for a gallon of regular unleaded gasoline in the United States on Monday was $3.39, according to motorist group AAA. That's nearly 30 cents higher than a year ago.

Electricity Declines 50% as Shale Spurs Natural Gas Glut A shale-driven glut of natural gas has cut electricity prices for the U.S. power industry by 50 percent and reduced investment in costlier sources of energy.

With abundant new supplies of gas making it the cheapest option for new power generation, the largest U.S. wind-energy producer, NextEra Energy Inc., has shelved plans for new U.S. wind projects next year and Exelon Corp. called off plans to expand two nuclear plants. Michigan utility CMS Energy Corp. canceled a $2 billion coal plant after deciding it wasn’t financially viable in a time of “low natural-gas prices linked to expanded shale-gas supplies,” according to a company statement.

Natural gas plunges to lowest since 2002 SAN FRANCISCO (MarketWatch) — Natural gas futures plunged to their lowest in nearly a decade on Tuesday, pressured by forecasts of unseasonably warm winter weather in the U.S.

Gas prices rebound after touching 2012 lows (Reuters) - British prompt gas prices rebounded slightly on Wednesday due to a relief rally after prices slumped to a three-week low on Tuesday and supply fell short of demand.

Commodities Rise Most in Two Weeks Amid Speculation China May Ease Policy Commodities rose the most in two weeks amid speculation that China may ease monetary policy, boosting prospects for raw-material demand, after its economy expanded at the slowest pace in more than two years.

BP says oil to be slowest-growing fuel to 2030 (Reuters) - World oil demand will rise by 18 percent from 2010 levels to 103 million barrels per day (bpd) by 2030, making it the slowest-growing fuel in the next 20 years, BP Plc said on Wednesday.

Natural gas to be fastest growing fossil fuel-BP (Reuters) - Natural gas is projected to be the fastest growing fossil fuel globally to 2030, with production growth in every region in the world except for Europe, BP said on Wednesday.

Saudi Arabia is not ‘targeting’ $100 oil Commentators identifying a new Saudi “price target” at $100 per barrel are wide of the mark.

Saudi Arabia’s views on what constitutes a reasonable price for oil have less influence than analysts would like to believe.

Past experience suggests the kingdom is unwilling or unable to influence prices by adjusting production policy, except in extreme circumstances, and normally allows the market to set the price of crude with little intervention.

Inflation Strangles Argentine Provincial Finances Santa Cruz province in southern Argentina has major oil and natural gas reserves, promising deposits of gold and silver and a population of barely one person per kilometer. Yet it lives on the verge of bankruptcy.

Last month, the local legislature tried to pass an austerity plan that included pension cuts and lay-offs among state employees. The initiative failed when hundreds of angry protesters swarmed the building.

Gazprom Price Retreat Offers EON Hope OAO Gazprom’s decision to cut prices for five customers signals a weakening position for Russia in Europe’s gas market as the economic crisis erodes energy demand.

Russia’s gas-export monopoly said yesterday it revised the price formula for clients including Germany’s Wingas, GDF Suez (GSZ) SA of France and Sinergie Italiane Srl to reflect “changing gas market conditions.” Germany’s largest utilities EON AG and RWE AG are embroiled in arbitration with Gazprom over prices and volumes after losing billions of euros buying fuel at above- market rates.

Gazprom, Ukraine have 'constructive' talks MOSCOW (UPI) -- Russian natural gas company Gazprom said it was ready to resume negotiations with Ukraine following a "constructive" meeting with the country's energy minister.

Gazprom Chairman Alexei Miller met with Ukrainian Energy Minister Yuri Boiko in Moscow to discuss a natural gas deal for Ukraine.

Kazakh bid to avert strikes costly for oil firms -IEA (Reuters) - Kazakhstan's efforts to provide employment and avert a repeat of last year's strikes by oil workers are likely to raise costs for the national oil company and foreign firms operating there, the International Energy Agency (IEA) said on Wednesday.

Uncertainty troubles Nigeria after fuel subsidy strike is halted Lagos, Nigeria (CNN) -- An uneasy calm returned to Nigeria's cities Tuesday, a day after two Nigerian labor groups suspended their nationwide strike over the elimination of the country's fuel subsidy.

An embarrassing climbdown UNIONS in Nigeria have announced that they will suspend the strike over the removal of fuel subsidies that paralysed the country last week and threatened to shut down oil production. The decision came as the president, Goodluck Jonathan, on Monday bowed to pressure and reduced petrol prices which had risen steeply.

Chevron says Nigeria rig fire still burning (Reuters) - Chevron Corp reported early indications that equipment failure may be the cause of a fire still burning on a drilling rig off the coast of Nigeria more than a day after it broke out.

Two contractors missing after the fire aboard the K.S. Endeavor, operated by FODE Drilling Nigeria Ltd, had not yet been found, the company said in a statement on Tuesday.

Saudi Aramco targets China amid $200 billion spending spree DHAHRAN // Saudi Arabian Oil Company plans to build refineries in China and Indonesia as part of a $200 billion spending programme to double refining capacity and explore for oil and natural gas during the next decade.

China unlikely to prise open Saudi oil vault (Reuters) - Saudi Arabia is unlikely to reverse its decades-old policy of prohibiting foreign involvement in oil exploration and production, despite a plea from China for the world's leading crude exporter to open up.

Chinese Premier Wen Jiabao has called on Saudi Arabia to open its huge oil and gas resources to more Chinese companies, including its upstream oil industry, which has remained under sole Saudi control for decades.

Hovensa oil refinery run by Hess, Venezuela’s PDVSA in US Virgin Islands to shut down ST. CROIX, U.S. Virgin Islands — The president of the giant Hovensa LLC refinery in the U.S. Virgin Islands says the refinery will close and become an oil storage terminal.

Brian Lever says the shutdown on the island of St. Croix will occur by the middle of next month. He said in a statement Wednesday that losses at the refinery have totaled $1.3 billion over the past three years.

Oil rights for Abu Dhabi to go to tender Abu Dhabi will put the rights to some of its biggest oilfields out to tender, shaking a partnership with major oil companies that dates to before the Second World War.

Iran warns against "adventurism" in global oil market Tehran - Iran's representative to the Organization of Petroleum Exporting Countries (OPEC) has warned of the economic consequences for the European Union if an oil embargo is imposed on Tehran, the Fars news agency reported Wednesday.

'The US and some European countries should avoid adventurism in the world's oil market as any sanctions against Iran's energy sector will make the EU plunge deeper into recession,' Mohammad Ali Khatibi, Iran's OPEC governor was quoted as saying.

New Iraqi OPEC president to seek assurances from Iran (Reuters) - Speaking in his new role as president of OPEC, Iraq's Oil Minister Abdul-Kareem Luaibi said he will visit Iran on Thursday to discuss oil market stability and would ask Tehran for assurances that all countries will work to protect waterways and oil supplies.

His comments on Wednesday were a reference to threats from Tehran that it would stop oil moving through the Strait of Hormuz if sanctions are imposed on Iran's oil exports.

India says not seeking Iran oil waiver from U.S. (Reuters) - India is not seeking a waiver from the United States that would protect buyers of Iranian oil from a fresh round of sanctions, and New Delhi continues to import from Tehran, Indian Foreign Secretary Ranjan Mathai said on Tuesday.

Turkey Said to Tell India Help on Iran Oil Payments May End (Bloomberg) -- Turkiye Halk Bankasi AS told Indian oil refiners it may no longer be able to be an intermediary for their purchases of Iranian crude, four people with knowledge of the matter said.

Iran's Salehi visits Turkey for nuclear talks Iran's Foreign Minister Ali Akbar Salehi arrived in Turkey on Wednesday for talks with Turkish leaders expected to focus on Tehran's controversial nuclear programme, an embassy spokesman said.

U.S. Envoy Einhorn Says Japan Agrees on Need to Increase Pressure on Iran A senior U.S. official said Japan agrees on the need to increase pressure on Iran to prevent the Mideast nation from developing nuclear weapons, and sought to ease concerns that doing so will drive up oil prices.

Will oil and globalisation continue to keep the peace? With Iran threatening to close the Strait of Homurz – through which 32 per cent of global oil supplies and 28 per cent of the world's liquefied natural gas supplies pass every day - because of tighter European Union sanctions on the country's fossil fuel exports, and fears that any blockade of the vital ocean corridor could trigger both military conflict and global economic stability, the stage is set for 2012 to be just as much of a game-changer as 2011.

Truth About Middle East is Spreading Zero Hedge has published an article, "Are The Middle East Wars Really About Forcing the World Into Dollars and Private Central Banking?" that mentions my theory that Muammar Gaddafi was overthrown because he wanted to set up a private gold-currency in Africa.

Crews Use Hose to Send Fuel to City in Alaska ANCHORAGE (AP) — Crews on Monday began transferring 1.3 million gallons of fuel from a Russian tanker to the iced-in western Alaska city of Nome.

Norway says Arctic gas pipeline could open by 2020 OSLO (Reuters) - A pipeline extension of 1,000 kilometres (621 miles) to bring natural gas to European markets from Norway's Arctic waters could be built in eight years at a cost of more than $4 billion, pipeline operator Gassco said on Tuesday.

"A potential pipeline from the Barents Sea could be in service in 2020 and should have a relatively large capacity to accommodate potential new volumes and thus lay the foundation for continued growth in the High North as a petroleum province," Gassco said.

CNOOC says no timetable to resume production at Penglai 19-3 (Reuters) - CNOOC Ltd, China's largest offshore oil and gas producer, said on Wednesday that it has no timetable for resuming production at its Penglai 19-3 oilfield, which was hit by a spill last year.

Exxon boring holes for Montana pipeline BILLINGS, Mont. (UPI) -- Exxon Mobil is drilling deep holes under the Yellowstone River in Montana to meet federal requirements for its Silvertip pipeline, the company said.

Exxon spokeswoman Claire Hassett told the Billings (Mont.) Gazette the company was drilling holes for replacement sections of the Silvertip oil pipeline that are, in some parts, 50 feet below the bottom of the river.

Pipeline tribunal must hear Canadian voices The Enbridge Northern Gateway pipeline, running from the Alberta tar sands to Kitimat, B.C., is in the first phases of public feedback, and already we have seen a storm of spin doctoring from the Conservative government.

They have called any opponents of the pipeline “radicals” and have claimed that they are “foreign backed.” The have chosen to ignore that of the 19 non-Canadians speaking to the tribunal on the pipeline most are representatives of the oil companies, all foreign-backed. Our government seems to think that foreign oil companies have our best interests in mind, while anyone else who doesn’t agree is against all things Canadian.

Oil sands money trail Last week, on the eve of the environmental review for the $5.5billion Northern Gateway pipeline project that would carry Alberta oil to Kitimat for export to Asia, Canada's Minister for Natural Resources, Joe Oliver, expressed concern that foreign-funded environmentalists would jeopardize the review and block the pipeline. Oliver didn't mention my name, but the research that raised concerns about the foreign funding of environmentalism in Canada is apparently mine.

Gas Fracking Ban Debated in Bulgaria After Chevron Loses Permit Bulgarian lawmakers started debating a ban on hydraulic fracturing today, threatening Chevron Corp.’s plans to explore shale gas deposits in the Balkan country.

The government withdrew a previously granted exploration license from Chevron yesterday after hundreds of Bulgarians marched in central Sofia last week to protest the drilling technique known as fracking, fearing it will pollute the water and soil in Bulgaria’s most fertile farm region of Dobrudja where Chevron was planning to drill.

32,100 and Counting: New Yorkers Speak Out on Fracking Officials with the New York State Department of Environmental Conservation say they have counted 32,100 statements so far since the close of a public comment period on Wednesday on their proposal to allow hydrofracking in the state.

Is drilling causing Ohio earthquakes? YOUNGSTOWN, Ohio (CNNMoney) -- In what may be the nation's next boomtown, the ground is, literally, booming.

Residents here in northeastern Ohio are receiving up to $5,000 an acre from energy companies that lease their land -- plus monthly royalties. But they have also experienced at least 11 earthquakes since last March, state officials say.

Tough economy curbs clean energy investment: experts A global economic slowdown and the eurozone debt crisis have curbed government investment in renewable energy, experts warned Tuesday.

"There are already some signs that government support may be slowing down in Europe," chief economist at the International Energy Agency, Fatih Birol, warned participants in the World Future Energy Summit in Abu Dhabi.

Government rejects latest “flawed” report on cost of renewable energy policies Patience is obviously wearing thin. Following the release today of the third major report in the last two months criticising the cost of the Department of Energy and Climate Change's (DECC) renewable energy policy, officials have hit back branding the latest report from the Policy Exchange thinktank as "flawed" and "not credible".

New Gas Economy Rules Generate Wide Support DETROIT — Writing new regulations that will require cars and trucks to have significantly higher fuel economy by 2025 prompted years of fighting among automakers, environmentalists, regulators and consumer groups.

N.M. Joins Push for Natural Gas Vehicles DENVER (AP) — Eight states have now signed up in an effort to encourage U.S. automakers to develop affordable vehicles that run on natural gas.

The governors of Colorado and Oklahoma announced in November that their states, along with Pennsylvania and Wyoming, intended to seek proposals to replace vehicles in their state fleets with ones that run on natural gas.

Trump May Scrap Scottish Hotel, Housing on Wind Farm Ruling Donald Trump will scrap plans for a hotel and housing at his golf resort in Aberdeenshire, Scotland, if the government approves an offshore wind farm in sight of his championship course due to open in June.

Wind Turbines and Health Hazards There is no conclusive evidence so far that wind turbines are responsible for health problems ranging from balance problems to diabetes, an independent panel of health experts reports.

The (Solar) Light at the End of the Tunnel A consultant for the Defense Department reports that introducing solar installations on nine military bases in the Mojave and Colorado Desert could generate 7,000 megawatts of power.

Depending on which yardstick you prefer, that amounts to the output of seven average nuclear plants or six large coal-fired plants. It would also amount to 25 percent of the renewable energy that California will require its utilities to produce by 2015, according to the 13 authors of the report, prepared by the consultancy ICF International.

Solar power takes giant strides No one can accuse the renewables industry of lacking creative impetus. Solar-powered aircraft, cars and boats have featured at this year's World Future Energy Summit (WFES) in Abu Dhabi, and in the MS Tûranor PlanetSolar, the event hosts the largest solar-powered boat to brave the oceans.

Energy policy shapes today - and tomorrow Change, relentless change, sometimes seems to be the modern world's only constant. And yet the changes the world needs most can be agonisingly slow to arrive.

Pentagon still can't define 'energy security,' much less achieve it While diesel generators kept critical missions going during Katrina, the storm provided a wakeup call for Pentagon leaders concerned about terror attacks on the electric grid, which provides 99 percent of the energy that bases consume. Could bases withstand a power outage that outlasts their three-to-seven-days' supply of diesel for backup systems? Is it wise for the military to rely on the same power plants and transmission lines that feed homes and businesses?

Your burning energy questions answered: Part III How can the world move quickly to a fossil-fuel free economy, and what is the role of businesses in the transition to clean energy?

In this final segment of the Global Energy Prize series, nuclear energy expert Tom Blees from the United States answers these questions from Eco-Business readers with a discussion on whether or not solar and wind energy can support a carbon-free economy on their own. And finally, what lessons are to be learned from islands, whose isolation begs for innovative solutions such as energy production from the surrounding seas?

Is there a peak of consumption? If one were to characterize it in mathematical terms, the trajectory of our civilization is an exponential curve. Throughout the twentieth th century, energy and natural resources – and logically emissions of greenhouse gases – has increased with population growth.

But today, would we have reached a plateau? Would we have begun to reduce our consumption, or at least stabilize? Parsimony would it becoming the new luxury? This is what a crowd, who believes that Britain, a country behind the Industrial Revolution and one of the richest nations in the world, have reached a maximum of objects owned by each person before see this much decline. This is the “peak stuff” (“peak of Things”), in the vein of peak oil (peak oil) or gas peak (peak gas).

The Limits to Growth at forty: Is collapse now inevitable? A particularly realistic aspect of these models was that it factored in the delayed response of individuals to the signs of imminent limits, as it accounted for the probability that people would continue to consume and pollute past the sustainable limits of the particular model. Of course, in the real world, many people will continue to consume until it is no longer possible. Could the models have predicted the true extent of the inaction that we have witnessed in the face of the grave threats of climate change, peak oil and bio – diversity loss?

Problems plague cleanup at Hanford nuclear waste site HANFORD SITE, Wash. – Seven decades after scientists came here during World War II to create plutonium for the first atomic bomb, a new generation is struggling with an even more daunting task: cleaning up the radioactive mess.

Nearly 7 million bats may have died from white-nose fungus, officials say “We’re watching a potential extinction event on the order of what we experienced with bison and passenger pigeons for this group of mammals,” said Mylea Bayless, conservation programs manager for Bat Conservation International in Austin, Tex.

“The difference is we may be seeing the regional extinction of multiple species,” Bayless said. “Unlike some of the extinction events or population depletion events we’ve seen in the past, we’re looking at a whole group of animals here, not just one species. We don’t know what that means, but it could be catastrophic.”

China’s New Strategic Target: Arctic Minerals As policymakers in Washington focus on China’s expanding presence in Africa and growing assertiveness in the South China Sea and Indian Ocean region, Danish diplomatic assistance is opening the gate for China to establish a strategic foothold in the Arctic.

Bill McKibben: Burning America's future An energy policy outlined by the head of the U.S. Chamber of Commerce in which we use all of the nation's coal, gas and oil is beyond dumb.

Growing Doubts in Europe on Future of Carbon Storage MADRID — The European Union’s long-term energy plans to abate global warming while still burning fossil fuels hinge on proposals to capture carbon dioxide emissions and store them in deep underground rock formations. Yet weak support for the untested technology is putting Europe in the rear ranks of its development.

Climate Proposal Puts Practicality Ahead of Sacrifice The current issue of the journal Science contains a proposal to slow global warming that is extraordinary for a couple of reasons:

1. In theory, it would help people living in poor countries now, instead of mainly benefiting their descendants.

2. In practice, it might actually work.

Climate and the statistics of extremes (PhysOrg.com) -- Swiss mathematicians have shown that the risk of extreme climate events is largely underestimated. They are developing a model for better understanding the impact of climate change.

Sea temperature changes can forecast South American wildfires, study finds Randerson and Chen proved that tiny temperature changes on the surface of distant oceans can be used to predict the severity of upcoming wildfire seasons in Amazon rainforests. These blazes often generate huge plumes of air pollution that can warm the climate and ocean waters even further, creating a vicious cycle.

“I’ve always viewed the Amazon as a giant pump that affects the global climate,” says Chen, an assistant project scientist and lead author of the paper. “There are so many processes going on that any perturbation in this ‘pump’ is worthwhile to study.”

Study: global warming related sea level rise poses big threat to Washington, D.C. Global warming-related sea level rise constitutes a major threat to the nation’s capital, with the potential to inundate national monuments, museums, military bases, and parts of the Metro Rail system during the next several decades and beyond, according to a recent study published in the journal “Risk Analysis.” The study helps localize a problem that is more typically discussed at the global level, and makes clear that public officials must make decisions in the near-term in order to minimize future losses.

Global warming threatens China's advance Global warming threatens China's march to prosperity by cutting crops, shrinking rivers and unleashing more droughts and floods, says the government's latest assessment of climate change, projecting big shifts in how the nation feeds itself.

The warnings are carried in the government's "Second National Assessment Report on Climate Change," which sums up advancing scientific knowledge about the consequences and costs of global warming for China - the world's second biggest economy and the biggest emitter of greenhouse gas pollution.

This is a guest post by Tom Murphy. Tom is an associate professor of physics at the University of California, San Diego. This post originally appeared on Tom's blog Do the Math.

The Earth started its existence as a red-hot rock, and has been cooling ever since. It’s still quite toasty in the core, and will remain so for billions of years, yet. Cooling implies a flow of heat, and where heat flows, the possibility exists of capturing useful energy. Geysers and volcanoes are obvious manifestations of geothermal energy, but what role can it play toward satisfying our current global demand? Following the recent theme of Do the Math, we will put geothermal in one of three boxes labeled abundant, potent, or niche (puny). Have any guesses?

The Physics of Heat

Thermal energy is surprisingly hefty. Consider that putting a room-temperature rock into boiling water transfers to it an equivalent amount of energy as would hurling it to a super-sonic speed! We characterize the amount of heat an object can hold by its specific heat capacity, in Joules per kilogram per degree Celsius (or Kelvin, since one degree of change is the same in either system). Tying some energy concepts together, the definition of a kilocalorie (4184 J) is the amount of energy it takes to raise 1 kg (1 liter) of water 1°C. So we can read the specific heat capacity straight away as 4184 J/kg/K. This is a rather large heat capacity, on the scale of things. As a rule of thumb, 1000 J/kg/K is a marvelously convenient universal number for most substances: it works for wood, air, rock, etc. Liquids tend to be higher (typ. 2000 J/kg/K), and metals tend to be lower (150–500 J/kg/K). Rocks—relevant for geothermal energy—range from about 700–1100 J/kg/K, and although I would be happy enough to use the convenient 1000 J/kg/K for crude analysis, I will be somewhat more refined and use 900 J/kg/K for rock in this post—although I feel silly for it.

As an example, to heat a 30 kg dining room table by 20°C, we need to supply 600,000 J. Just multiply specific heat capacity by the mass and by the temperature change. A 1000 W space heater could do it in ten minutes (600 seconds), if all of its energy could be channeled directly into the table.

The next property to understand is thermal conductivity: how readily heat is transported by a substance. Differing thermal conductivity is why different materials at the same temperature feel like different temperatures to our touch. It’s because high thermal conductivity materials (metals) slurp heat out of our hands much faster than plastic or wooden objects would. Copper has a thermal conductivity of 400 W/m/K, while stainless steel has an abysmally low value (for a metal) around 15 W/m/K—which is one reason why stainless steel is the preferred metal in kitchens: we can tolerate holding the spoon or pot handle even when another part of the item is quite hot. Plastics are around 0.2 W/m/K, and foam insulation tends to be around 0.02 W/m/K. Rock falls between 1.5–7 W/m/K, with 2.5 W/m/K being typical.

How do we apply thermal conductivity? Imagine a flat panel of stuff with area, A, and thickness, t. Using the Greek letter kappa (κ) to represent thermal conductivity, the rate at which thermal energy flows across the panel given a temperature difference ΔT across it is κAΔT/t, which comes out in Watts.

Sources of Heat

Two sources contribute to the Earth’s heat. The first, contributing 20% of the total, derives from gravity. As proto-planetary chunks fell together under the influence of gravity, the kinetic energy they carried (converted gravitational potential energy) ended up heating the clumps that stuck together. If this were the only contributor, Earth’s center would have cooled significantly below its present levels by today. The other 80% of heating is the gift that keeps on giving: long-lived radioactive nuclei given to us by ancient supernovae (as with most of the other elements comprising Earth and ourselves). Specifically—in order of significance to heating—we have 232Th, 238U, 40K, and 235U, with half-lives of 14, 4.5, 1.25, and 0.7 billion years, respectively. Ironically, one can view the radioactive contribution as gravitational in origin also! This is because supernovae result from fusion losing the fight to gravity, and the heavy elements are created in the resulting gravitational collapse.

In total, the radioactive decay produces about 7×10−12 W/kg; in the mantle. The mantle occupies 85% of the volume of the Earth at an average density about 5 times that of water, having a mass of about 4.5×1024 kg. Multiply these together to get 34 TW of heat flow in steady state. If radioactivity is 80% of the story, this implies 42 TW total. Averaging over the area of the Earth, we get 0.08 W/m². Because of the decaying nature of radioactive materials, the heat generation was much higher a few billion years back, making Earth a more geologically active place (e.g., more volcanoes).

We can work up another estimate of the total geothermal heat flow by observing that the temperature gradient in the crust is 22°C/km. This gradient can be used as the ΔT/t part of the thermal conduction heat flow rate, κAΔT/t. Taking a square meter for A and 2.5 W/m/K for κ, we calculate a geothermal “loading” of 0.055 W/m². Indeed, Wikipedia reports a land-based heat flow of 0.065 W/m² while the ocean (due to thinner crust and thermally greedy water) averages 0.1 W/m².

Compared to Human Use

Using the Wikipedia value of 0.065 W/m² over land, multiplying by land area yields 9 TW. Humans use 13 TW currently. So if we managed to catch every scrap of land-based geothermal flow (and could use it efficiently), we would not fully cover our present demand. Needless to say, we’re not remotely capable of doing this.

Diffuse Use vs. Hotspots

Naturally, some places are better than others for tapping into geothermal energy. A map of the continental U.S. in heat flow (below) reveals that the west has more flow than the east. A similar map for North America (including oceans) can be found on the SMU website. On a large regional basis, some spots in the U.S. dip down to 0.03 W/m², while some of the better regions reach up beyond 0.1 W/m².

Note that Yellowstone, in northwestern Wyoming, is the hottest zone.

Even so, we’re talking thermal gradients that are at most in the neighborhood of 35°C/km. In order to produce electricity in a heat engine, we are stuck with a maximum thermodynamic efficiency of (Th − Tc)/Th, where “h” and “c” subscripts refer to absolute temperatures of the hot and cold reservoirs, respectively. At 1 km depth, this amounts to only 10% (and in practice we tend to only get about half of the theoretical maximum efficiency). One needs to drill at least 3 km down before being able to take advantage of steam (at 27% max efficiency). A depth of 5 km reaches 38% maximum theoretical efficiency—so perhaps 20% practical efficiency. Making a 1 GW electricity plant operating on the steady-state geothermal flow would require canvassing an area 200 km on a side buried 5 km deep even in the better regions having 0.1 W/m². Realizing that we’re stuck with thermodynamic inefficiency, a geothermal network covering every scrap of land area on the globe would get less than 2 TW of power at 20% end-to-end efficiency.

So rather than mess with the pathetically impractical commonplace thermal gradients for the purpose of electricity production, we look to hotspots like the Yellowstone region, or places where hot springs and geysers can be found at the surface. Indeed, The Geysers in California hosts 1.5 GW of installed geothermal electricity, but the power output has declined by almost a factor of two in recent decades (it is possible to draw out heat faster than it is replaced by conduction).

Part of the Geysers plant, in Calif. Source: EERE

The U.S. has about 3 GW of geothermal electricity installed, out of the worldwide total of 10 GW. Surprising to me, Iceland has just 0.6 GW installed, but this is 30% of their national electricity production. Another surprise to me was that the Philippines also derive about 30% of their electricity from geothermal sources, amounting to 1.9 GW.

I don’t have any handy back-of-the-envelope way to estimate the abundance of hotspots. Out of the 9 TW of diffuse land-based heat flow, I might guess that something like 1% (90 GW) may be available in the form of geyser-like surface steam. In short, these are rare beasts.

Direct Use

Rather than try to generate electricity, we could use direct heat from geothermal, or use the thermal mass of the ground as a push-point for heat pumps. The latter should not be called geothermal, since it is not tapping into the geothermal heat flow. As such, I will ignore it here and return to it at some later time together with a discussion of heat pumps for controlled climate applications.

The difficulty with extracting heat from the ground is that the gradient is rather small. For instance, hot water in the home generally wants to be about 45°C. This requires drilling 1.5 km (about a mile) down to get this warm—certainly impractical for individual homes. It could possibly be effective for communities or cooperatives that distribute hot water to a number of houses/businesses. Using geothermal energy for home heating faces similar distribution challenges.

Sustainable Extraction

When drawing heat out of a region in the ground, that region will cool relative to its surroundings if heat is extracted at a rate faster than the nominal flow—leading to a depletion of thermal capacity. The replacement heat must ultimately come primarily from radioactive decay. Let’s ask how much rock volume needs to supply thermal energy for one house on a sustainable basis.

The average American household used 80 thousand cubic feet of natural gas in 2001 (apologies for old data and Imperial units). The gas is predominantly used for heating of one form or another: house, water, and food. 80,000 cf translates to about 800 Therms of energy per year, or 2700 W of continuous thermal power. Using our number from before that the mantle generates 7×10−12 W/kg, the average American home would need a rock mass of 4×1014kg, or a cubic volume 5 km on a side at a crustal density of 3.3 times that of water.

Can you believe this? All that volume for one house! This does not mean that the collection network needs to be this large. After all, heat is flowing from deeper down all the time. In this context, the average house needs to intercept an area 200 meters on a side at 0.065 W/m². Still quite a large outlay of piping 1.5 kilometers deep.

Thermal Depletion

What if we cheat and use a smaller collection network, relying on conduction to fill in with surrounding heat? How long will our resource be useful? I’ll spare you the derivation, but the recharge time via thermal conduction is proportional to density times specific heat capacity divided by thermal conductivity. Most importantly, it scales as the square of the dimension (think radius of the depleted zone). Using numbers for an egg (typical food will have values like: ρ ≈ 1000 kg/m³; κ ≈ 1 W/m/K; cp ≈ 2000 J/kg/K; R ≈ 0.02 m), I get a timescale of 800 seconds, or about 13 minutes. This is how long it would take an egg to cool down (or heat up in boiling water). Not to bad, as estimates go. Using numbers for rock, I get a one year time constant when R ≈ 5 m. Crudely speaking, this means we’d have access to a yearly “sustainable” volume—recharging in summer, for instance—around 500 cubic meters, holding 45 GJ (cpρVΔT) of thermal energy at a ΔT of 30°C. Used over a year, this provides something like 1400 W of average power—about half of the typically desired amount.

The danger is that once you try to go larger scale than this, the depletion volume gets larger, and the time to recharge scales up accordingly. Fundamentally, thermal depletion is a dimensional problem. You can draw out energy according to volume, but it is recharged according to area. So the problem is dimensionally stacked to come up short, leading to thermal depletion. This analysis deals with straight conduction. An underground fluid flow would change the story, and developed geothermal sites usually have this feature.

Damn the Depletion!

Still, if we don’t care about sustainable use of geothermal, we can just keep drilling new holes to deplete one region after the other. In this sense, we could evaluate the thermal endowment in the upper 5 km of crust under land. The average temperature in this layer is about 60°C above the surface value, so that each cubic meter (3300 kg) contains 180 MJ of thermal energy. Summed over 1.4×1014 m², we get about 1026 J. This is 250,000 years of our global appetite. A quarter-million years might seem close enough to indefinite that we’re willing to call it sustainable. Truly it is a substantial endowment. It’s the practical considerations that hold us off from rushing into this resource.

The energy derived is mostly useful for heat, being inefficient at producing electricity. It won’t fly our planes or drive our cars. And it’s buried under kilometers of solid rock, making it very difficult to access. Each borehole only makes available the heat in its immediate surroundings—unlike drilling for oil or natural gas, where a single hole may access a large underground deposit. So my guess is that we’ll burn every tree and fossil fuel on the planet before we start drilling through ordinary rock to stay warm. In other words, there is little incentive to dig deep for heat. By the time we run out of the easier resources—having burned every scrap of wood not bolted down—are we going to be left in a state to drill through rock at a massive scale?

In short, even though the thermal energy sitting under our feet is enormous in magnitude, it does not strike me as a lucky find. No one is racing to dig in. Perhaps it is simpler to say that it’s economically excluded, at present. And will it ever be cheaper to drill? For me, this falls into a category similar to space resources. Sure, they exist, but getting to them means that they might as well not be there, for practical purposes.

Geothermal In Perspective

Abundant, potent, or niche? Hmmm. It’s complex. On paper, we have just seen that the Earth’s crust contains abundant thermal energy, with a very long depletion time. But extraction requires a constant effort to drill new holes and share the derived heat among whole communities. Consider that two-thirds of our fossil energy goes up as waste heat, and often in cold environments. Waste is an appropriate word, in this context. But distributing the heat into useful places is a practical challenge to which we seldom rise.

Once we move to the steady flow regime, we get 9 TW across all land. This might qualify it as potent, except that practical utilization of the resource fails to deliver. For one thing, the efficiency with which we can produce electricity dramatically reduces the cap to the 2 TW scale. And for heating a home, we saw that we would need to capture zones well over 100 meters on a side. Recall that in similar fashion, the 1200 TW scale for wind dissipation was knocked way down to a handful of terawatts to account for the practically extractable portion—but still leaving it in the potent category. So realistically, steady-state geothermal fails to deliver, and lands in the “niche” box.

Clearly, geothermal energy works well in select locations (geological hotspots). But it’s too puny to provide a significant share of our electricity, and direct thermal use requires substantial underground volumes/areas to mitigate depletion. All this on top of requirements to place lots of tubing infrastructure kilometers deep in the rock (do I hear EROEI whimpering?). Even dropping concerns about depletion, the practical/economic challenges do not favor extraction of geothermal heat on a large scale. So geothermal is not giving me that warm, fuzzy feeling I seek. It’s certainly not riding to the rescue of the imminent liquid fuels crunch.

We’ll see nuclear fusion next week.

Why oil prices will stay high I saw some striking numbers this week: Look at the "break-even" costs for the world's top oil producers. That is the minimum price at which these countries need to sell oil so that they can balance their budgets.

Russia now needs oil at $110 a barrel to manage its finances. For Iraq, the number is $100. Even Saudi Arabia now needs oil to trade around $80 a barrel just to balance its budgets. The numbers are also high for Algeria, Qatar, and Oman. Only a decade ago Saudi Arabia was able to balance its budget with oil prices averaging around $25 a barrel.

So now it is in these countries' interest to keep oil prices high, which they do by curtailing supply in one way or the other. This is perhaps the most lasting impact of the year of global protest: High oil prices.

Oil Climbs From Four-Week Low as Iran Warns of Hormuz Supply Disruption Oil climbed from the lowest price in almost four weeks as Iran said that a disruption to crude supplies through the Strait of Hormuz would cause a shock to markets that “no country” could manage.

Futures rose as much as 0.9 percent after sliding 2.8 percent last week. Iran has threatened to shut the strait, a transit route for about a fifth of global oil trade, in response to international sanctions on its exports. Any disruption will harm the world’s crude markets, Iran’s governor to OPEC said, according to the state-run Mehr news agency. Nigerian labor unions suspended protests after saying they would consider shutting down oil output in opposition to higher fuel prices.

OPEC sees downside risk to oil demand from euro crisis LONDON (Reuters) - A worsening of the euro zone debt crisis would further reduce the region's oil demand and could impact consumption in emerging economies that are driving the increase in global fuel use, OPEC said on Monday.

In a monthly report, the Organization of the Petroleum Exporting Countries (OPEC) trimmed its forecasts for world oil demand growth in 2012 by 10,000 barrels per day (bpd) to 1.06 million bpd.

Saudi Arabia wants oil around $100/bbl - oil min (Reuters) - Saudi Arabia, the world's top oil exporter, said on Monday it favours an oil price of $100 per barrel, identifying an ideal oil price for the first time in more than three years.

In an interview with CNN the Kingdom's oil minister also said the country could raise production quickly if necessary.

"Our wish and hope is we can stabilise this oil price and keep it at a level around $100," Dow Jones Newswires quoted Saudi Oil Minister Ali al-Naimi as telling CNN in an interview.

The Saudi oil chief said Riyadh could increase production by about 2 million barrels per day (bpd) "almost immediately".

OPEC oil production rises to 3-year high Vienna - The Organization of the Petroleum Exporting Countries (OPEC) in December raised its total oil output to the highest level since October 2008, as Libya revamped its production, the group said Monday.

OPEC countries produced 30.82 million barrels per day (bpd) in December, 171,000 bpd more than in the previous month, the Vienna-based group said in its monthly market report.

Triple digit oil prices to hamper growth The global economy depends on oil as the human body on blood. It is because oil is the major source of energy to drive the wheels of production across the globe. Interestingly, it is the converging point of economics and politics. That is why it is sold in a world market in which every barrel, regardless of its source, competes with every other barrel. The United States, with about 5 per cent of the world’s population, is responsible for 25% of the world’s oil consumption. Every US President since Richard Nixon has openly expressed his fears about dwindling oil reserves predicting problems. Saudi Arabia, termed the world’s oil superpower, possesses both the world’s largest known oil reserves, which are 25 per cent of the world’s proven reserves, and produces the largest amount of the world’s oil. It ranks as the largest exporter of petroleum, and plays a leading role in OPEC; its decisions to raise or cut production almost immediately impact world oil prices. The country is capable of producing up to 12 million barrels of oil a day.

Volatile gas prices predicted for 2012 CHICAGO — Volatile gasoline fuel prices are the order of the day. With the U.S. average price of gas at the highest level ever recorded at this time of year, GasBuddy.com on Thursday, Jan. 12 released its 2012 projections and analytics for the U.S. and major metro markets.

Norway sees oil output down, gas up STAVANGER, Norway (Reuters) - Norway's oil production will decline despite major discoveries made last year, while gas production will continue to rise, Norwegian authorities said on Monday.

The oil prospects of Norway, the world's eighth-largest oil exporter and the second-largest for gas, have brightened up over the past year as a giant oil find was made in the North Sea and three major ones were made in the Norwegian Arctic.

Norway to narrow estimate for giant N.Sea oil find by end 2012 The uncertainty around the size of a giant North Sea oil find is high and it will take until the end of 2012 for estimates to be narrowed down, the head of the country's oil directorate said on Monday.

Nigerian Unions Suspend Strike After Jonathan Agrees to Cut Gasoline Price Nigerian labor unions suspended strikes and protests in Africa’s top crude producer after President Goodluck Jonathan limited gasoline-price increases.

Chevron: Offshore rig near Nigeria’s oil-rich delta catches fire; search for workers ongoing LAGOS, Nigeria — Chevron Corp. says an offshore rig being run for its subsidiary near Nigeria’s oil-rich southern delta has caught fire and officials are still trying to account for all the workers there.

Chevron spokesman Scott Walker said the fire started early Monday morning. He said the rig was just off the coast of the country’s Niger Delta.

China turns to Middle East for oil (video) China's premier, Wen Jiabao, has begun a three-country tour of the oil-rich Gulf nations.

The industrial giant's own oil fields do not produce enough crude to keep its economy at full steam - so Beijing has to import half of all its supplies.

Iran warns of consequences if Arabs back oil sanctions (Reuters) - Iran warned Gulf Arab neighbours on Sunday they would suffer consequences if they raised oil output to replace Iranian crude facing an international ban.

In signs of Tehran's deepening isolation over its refusal to halt nuclear activity that could yield atomic bombs, China's premier was in Saudi Arabia probing for greater access to its huge oil and gas reserves and Britain voiced confidence a once hesitant European Union would soon ban oil imports from Iran.

Defiant Iran says Asia oil customers stay loyal TEHRAN (Reuters) - Iran said on Monday it was business as usual with Asia's leading oil buying countries, despite growing pressure on its customers in the East from a tightening mesh of sanctions hampering its crude exports.

Asian leaders are touring the Middle East to secure supplies, as tension over Iran's nuclear work builds, while European buyers may rely more heavily on Arab oil producers should an EU ban come into effect.

U.S. Coordinating Iran Policy With Israel More Closely Amid Rising Tension U.S. coordination with Israel on Iran policy is intensifying as the Obama administration’s top military adviser prepares for his first trip to Tel Aviv since taking office in September.

President Barack Obama spoke to Israeli Prime Minister Benjamin Netanyahu by phone on Jan. 12 about Iran and reaffirmed the “unshakable” U.S. commitment to Israel’s security, according to a White House statement.

Indian delegation to visit Iran to resolve oil payment issue NEW DELHI: A high-level Indian delegation comprising officials of the Finance Ministry, RBI and the Oil Ministry will be visiting Tehran shortly to work out an alternative mode of payment for oil in wake of fresh sanctions imposed by the US on Iran.

Turkey to enter arbitration on Iran gas prices (Reuters) - Turkey expects to enter arbitration over the price paid for gas imports from neighboring Iran, Energy Minister Taner Yildiz said on Monday, after Tehran rejected Ankara's complaint that the price is too high.

Iran sits on the world's second-largest natural gas reserves and is Turkey's second-biggest supplier of gas after Russia, sending 10 billion cubic metres of gas each year.

Iranian oil embargo As efforts continue to impose sanctions on Iran , I thought it would be helpful to discuss the possible implications of these developments for oil-consuming countries.

The most likely outcome of an embargo on oil purchased from Iran is that the countries participating in the embargo buy less oil from Iran while other countries not participating in the embargo by more oil from Iran. While this would produce some dislocations, if total world oil production doesn't change, it would have little effect on either Iran or oil-consuming countries, and would basically be a symbolic gesture.

Not that again Dear oil has, in recent years, given a big boost to domestic fossil-fuel production in America, which is increasingly providing a meaningful if modest contribution to GDP and employment growth. Good as that is for the American economic outlook, there isn't remotely enough domestic supply to offset serious production losses elsewhere. To really insulate itself from these kinds of geopolitical hazards, America needs to dramatically improve its ability to substitute away from oil consumption. Progress is being made there, but not enough and not sufficiently quickly.

Iraq signs $235 mln power deal with Turkey's Enka (Reuters) - Iraq signed a $235 million electricity deal with a subsidiary of Turkey's Enka Isaat to install a 500-megawatt plant in southern Iraq to help boost generation in the power-starved nation, the minister of electricity said on Monday.

Car bomb kills 8 in northern Iraq BAGHDAD (AP) – A car bomb killed at least eight people outside the northern city of Mosul on Monday, Iraq officials said, in the latest in a series of attacks to target the country's Shiites since the U.S. withdrawal last month.

Al-Qaeda fighters capture Yemen town SANAA, Yemen (AP) – Al-Qaeda militants seized full control of a town south of the Yemeni capital on Monday, overrunning army positions, storming the local prison and freeing at least 150 inmates, security officials said.

The capture of Radda in Bayda province, some 100 miles south of Sanaa, underscores the growing strength of al-Qaeda in Yemen as it continues to take advantage of the weakness of a central government struggling to contain nearly a year of massive anti-government protests.

Russia's Rosneft considers loan -bankers (Reuters) - Russia's top crude producer Rosneft is looking to tap the international lending market for a sizeable syndicated loan only six weeks after agreeing an increased $2 billion loan, bankers close to the borrower said.

Rosneft is considering its options to prevent a liquidity squeeze if Europe's unpredictable economic outlook worsens, the bankers added.

China targets green energy sales Wen Jiabao, the Chinese premier, flies into Abu Dhabi for the World Future Energy Summit (WFES) today.

Having emerged as the factory of the world, China is now throwing considerable resources behind clean forms of power.

Salmond leaps at chance to warm Scottish green energy with Masdar Millions of dirhams are expected to be invested in renewable energy projects in Scotland after the signing this week of an agreement between Masdar and the Scottish government.

The agreement will mark the start of a research partnership between Abu Dhabi's Masdar Institute and the Energy Technology Partnership (ETP) - an umbrella organisation of 12 Scottish universities cooperating on renewables. It is also expected to lead to direct investment flowing from the emirate to Scotland.

US Navy tests genetically modified algal fuel The US Navy and the shipping company Maersk have successfully tested a form of algae-based biofuel, it has been announced.

Maersk tested 30 tonnes of oil from genetically modified algae in collaboration with the US Navy last week.

Petrol taxes won't hurt the poor Higher petrol taxes don't hurt the poor but the use of fossil fuels should be made a crime against humanity as the world has only 50 years in which to mitigate the effects of climate change, says Thomas Sterner, a professor of environmental economics at Sweden's Gothenburg University.

Climate change skepticism seeps into science classrooms Reporting from Washington— A flash point has emerged in American science education that echoes the battle over evolution, as scientists and educators report mounting resistance to the study of man-made climate change in middle and high schools.

Although scientific evidence increasingly shows that fossil fuel consumption has caused the climate to change rapidly, the issue has grown so politicized that skepticism of the broad scientific consensus has seeped into classrooms.

Professor is happy with his message of doom He is one of the most vilified men in the highly vilified field of climate science, yet Professor Michael Mann is jolly. Despite being the focus of a brutal campaign orchestrated by the fossil-fuel industry and the US Republican Party, Mann's cheery stoicism is positively infectious.

"I've been the focus for attack by those who deny the reality of climate change for so long that it almost seems like forever," the professor of meteorology at Pennsylvania State University says. "I'm a reluctant public figure, but have embraced the opportunity to communicate the science."

How Will Global Warming Negatively Affect Water Supplies In The U.S.? According to Tetra Tech’s analysis, parts of Arizona, Arkansas, California, Colorado, Florida, Idaho, Kansas, Mississippi, Montana, Nebraska, Nevada, New Mexico, Oklahoma, and Texas will be hardest hit by warming-related water shortages. The agriculturally focused Great Plains and arid Southwest are at highest risk of increasing water demand outstripping fast dwindling supplies.

Once Hidden by Forest, Carvings in Land Attest to Amazon’s Lost World Huge geometric shapes in Brazil suggest that contrary to conventional understanding, parts of the rain forest may have been home to large populations.

In the last post on the oil and gas fields of the Northern Caucasus, I commented that one of the reasons that these older oil and gas fields were being further developed was due to the introduction of advanced Western techniques. As John Grace points out in “Russian Oil Supply, another reason that there are fields left to develop is due to the philosophy by which the Soviet government marshalled resources to keep the Union supplied with oil for domestic and export use. Because of its centralized nature, as the resources in one region declined, so the financial support and technical equipment were removed and taken to other parts of the country, where a more plentiful supply source was available. This frequently left smaller fields behind, and removed the incentive for further exploration in the older regions.

The first region to see that removal of support was around Baku, and then the North Caucasus, as more plentiful resources became evident up in the region around Almetyevsk, in what is now the Republic of Tatarstan. The region lies considerably north of Volgograd (Stalingrad) and further east, though it still lies on the banks of the Volga, though also just to the West of the Ural Mountains, and thus the more popular and general description is the Volga-Ural Basin.

Relative location of Almetyevsk, showing the Volga (black line) Stalingrad (now Volgograd), and the Caspian. (Google Earth)

The Volga-Urals Basin is now recognized to be extensive with the USGS estimating that there remain some 1.5 billion barrels of oil, and 2.3 Tcf of natural gas (at the mean) left to be discovered and produced.

Extent of the Volga-Ural Basin (USGS)

Prior to the Second World War, the region saw little development. Tar pits within the Basin had indicated the presence of oil, and Grace has pointed to outhouses exploding around the town of Orenburg as natural gas from the underlying field collected in the buildings, the first indicator of the field's presence. But the fields all appeared to be small and with enough production from Baku and Grozny to meet existing needs, there was little initial incentive to develop what seemed to be a series of small, shallow fields.

Oilfields of the Volga-Ural Basin (Russian Oil Supply)

With the German advances into the Caucasus, that oil became lost or more difficult to bring north, and the relative security of the Volga-Urals meant that a greater effort was made to bring those fields on line. Production had reached 55 kbd in this “second Baku” by the end of the war. The first break had come with the discovery of the relatively shallow oil field at Tuymazinskoye in 1937, but it was not until they deepened one of the wells into the lower Devonian layers in 1944 that they hit the more productive reservoirs and the potential of the region became evident. In 1943, a test well had been sunk at Shugurovo and flowed at 140 bd from a reservoir at 2,000 ft. With the knowledge of the deeper reservoirs, a third well in the region near the town of Romashkino was drilled down to 6,463 feet, penetrating the casing on July 10, 1948. Because of formation damage the well was slow to produce, but within a short while was up to 876 bd. Holding 17 billion barrels of oil, and thus the largest oil reservoir discovered at the time, the Romashkino field (which included the well at Shugarovo) had been tapped. In time another seven fields, each of more than a billion barrels, were added to the inventory for the Basin.

The deeper Devonian beds required a number of innovations to produce at the levels that Moscow required. The first of these was the development of the down-hole turbo drill. Russian steel making was not on par with that available in the West, and the torque requirements for drilling the harder and deeper rocks were a challenge, overcome by putting the turning motor at the bottom of the well. The second problem that arose was maintaining well pressure as the oil was removed. The use of contour water flooding evolved from the initial Master Plan in 1956 and was successively modified to perimeter flooding, so that by 1960 the basin was producing at 2.9 mbd, comfortably exceeding the target 1.2 mbd. Romashkino itself peaked at just under 1.6 mbd in 1968 and began to decline in production in 1976. As production declined, so the water cut also rose and by 1993, production was down to around 300 kbd, with about 85% water cut.

Production of oil from Romashkino (Russian Oil Supply)

Overall production from the Volga-Urals Basin includes some of the fields that lie outside of Tatarstan; as a result, the decline of the Basin was a little later than that of the main field within it. For example, further to the East lies the Arlan field in Bashkortostan, run by Bashneft. That too, however, is now in decline. In its 50-year life it has produced, with the Shkapovo field, over 4.7 billion barrels of oil. The overall basin produced from over 800 discrete fields.

Production history of the fields of the Volga Ural Basin (IHS via Dave Cohen)

More recently the EIA reported that the Volga-Urals Basin produced 2.03 mbd in 2009, while the Northern Causasus produced some 800 kbd.

Romashkino lies in Tatarstan, and the Tatneft Company had been formed to develop the oil in the Republic, of which some 6.3 billion barrels was in reserve. Realizing that their geography precluded independence, they became an associate subject of the Russian Federation, and Tatneft was privatized. Through helpful arrangements with the local government production, which had declined through lack of investment, production was brought back to 465 kbd for the region, and has held at that level, through the collapse of the ruble. As the economy was restored, the company began to expand, and has helped Kalmykia to develop their resources, for example. (The Caspian oilfields that are now being developed lie off-shore Kalmykia).

With over 15 billion barrels now produced from Romashkino , more advanced techniques are being used to improve recovery of the remaining oil. These include the use of carbon dioxide injection, which has improved some production by as much as 12%.

Because Volga Urals oil has a high sulfur content (around 2.5%) this has, in the past, led to it being blended with West Siberian oil prior to refining. As the resource has declined, the oil that is left is increasingly heavy, merging into the Melekess oil sands.

(Russia in total is estimated to have around 246 billion barrels of bitumen in sand formations, though most of it is in Eastern Siberia). The USGS has estimated that, at present, some 13.4 billion barrels of the Melekess oil is technically recoverable. Working with MicroPro GMBH, the bacteria Clostridiae has been tested as a means of improving production.
Improved flow conditions in the reservoir and increased gas/oil ratios led to an enhanced net oil production by 50% to 65% without changing production regime. The water content of the entire field was reduced from 74% to 57%. Between 1992 and 1995, the MEOR treatment resulted in an additional MEOR oil production of 4,200 ton (26,400 bbl)

Whether the small fields that remain in the Volga Ural Basin will be developed in the short term (as they likely would be by small independents were they in the West) appears to be currently less likely as both Tatneft and Bashneft see better returns by investing outside the region than within it. They are also reputed by Grace to retain a lot of Soviet-era infrastructure and thinking within the companies, which may also reduce the effort to invest in the smaller fields. It is difficult, therefore, to see the region have much increase in production from current levels, but rather it may continue a decline into the future.

In regard to natural gas, down by the border with Kazakhstan lie the natural gas deposits of the Orenburg field (of exploding outhouse fame). Production began in 1974, reaching a steady state of production in 1979, and holding a 48 bcm production per year until 1984. In order to maintain pressure, water flooding was used, and its influence on the production of a typical well can be seen below. Overall, production has since fallen to 18 bcm per year.

The use of water pressure to sustain production from a well in the Orenburg field (Ivanov)

More recently the field has changed to use initially horizontal wells, and since 2009, the use of multi-laterals in order to sustain production and increase reserves, still considered to be around 280 bcm of natural gas (9 Tcf). This is a little more than the EIA estimate. However, given the increasing cost of developing this, when set against the much larger volumes that can be found in other parts of Russia (not to mention Kazakhstan and Turkmenistan to the south) it is reasonable to assume that the region will continue to decline in natural gas production also.

Aramco aims to lift refining capacity to 8 mln bpd DHAHRAN, Saudi Arabia (Reuters) - Saudi Aramco expects to raise its refining capacity to 8 million barrels per day (bpd) as it increases downstream investments, its chief executive officer said, after signing a $10 billion refinery deal with China's Sinopec Group.

"Over the next decade our total global refining capacity is expected to approach 8 million barrels per day," Khalid al-Falih, Aramco's CEO, said in a speech at the signing ceremony.

The new figure exceeded a goal Falih cited last year for a 50 percent increase in capacity to over 6 million barrels per day (bpd). He has said repeatedly that, while other companies are reducing exposure to the refining business, Aramco sees it as a growth industry.

Saudi Aramco Sees Karan Gas Project Completion Ahead of Schedule (Bloomberg) -- Saudi Arabian Oil Co. increased output from its offshore Karan natural-gas deposit and expects to reach full capacity this summer, a year ahead of schedule, Chief Executive Officer Khalid al-Falih said.

The state oil company said in July last year that Karan would reach full capacity of 1.8 million barrels a day in 2013, and would feed into the Khursaniyah processing plant. Saudi Aramco, as the company is known, originally aimed to produce 1.5 billion cubic feet a day by June this year, according to the Dhahran-based company’s 2010 annual review.

Saudi, Chinese oil giants ink joint refinery deal RIYADH — Saudi state oil giant Aramco inked a deal Saturday with China's Sinopec to build an oil refinery in the Red Sea city of Yanbu that will process 400,000 barrels per day, state news agency SPA said.

Saudi Arabia to Continue Fuel Donation to Yemen Saudi Aramco will continue to donate fuel to Yemen in February, industry sources said, as the company looks to buy at least two shipments of petrol with at least one to be delivered to Yemen.

The impoverished southern neighbour of Saudi Arabia is reliant on fuel imports from abroad and donations as its main refinery has been shut for almost two months following consecutive blasts on its primarly oil pipeline.

A year on from Arab Spring, Tunisians protest lack of jobs TUNIS, Tunisia — As a symbol of how far Tunisia still has to go to fulfill the promise of the first Arab Spring revolution, Ammar Gharsallah's death this week could hardly have been more poignant.

The 40-year-old father of three, despairing at his poverty, died after immolating himself with petrol, echoing the act of the Tunisian vegetable vendor who last year ago set off a wave of revolt that has not yet abated.

Unlocking the Secrets Behind Hydraulic Fracturing Starting Feb. 1, drilling operators in Texas will have to report many of the chemicals used in the process known as hydraulic fracturing. Environmentalists and landowners are looking forward to learning what acids, hydroxides and other materials have gone into a given well.

But a less-publicized part of the new regulation is what some experts are most interested in: the mandatory disclosure of the amount of water needed to “frack” each well. Experts call this an invaluable tool as they evaluate how fracking affects water supplies in the drought-prone state.

Made in America: Trend against outsourcing brings jobs back from China Many companies, especially in the auto and furniture industries, moved plants overseas once China opened its doors to free trade and foreign investment in the last few decades. Labor was cheaper for American companies – less than $1 per hour according to the BCG report. Today, labor costs in China have risen dramatically, and shipping and fuel costs have skyrocketed. As China’s economy has expanded, and China has built new factories all across the country, the demand for workers has risen. As a result, wages are up as new companies compete to hire the best workers.

Oiling the wheels While the outrage may have been genuine, and frankly justified given BP’s miserable safety record in America, the problem it created was that less than two months after the accident, $89 billion had been wiped off BP’s value—far in excess of all but the direst forecasts of the costs of the spill. (Besides the $20 billion spent on the response, BP has also spent a similar amount on a trust to ensure that funds will be available for environmental and economic restoration.)

Geithner Gets China Snub on Iran Oil as Japan Discusses Cut (Bloomberg) -- U.S. Treasury Secretary Timothy F. Geithner’s efforts to tighten economic sanctions on Iran over its nuclear program won backing from Japan a day after China rejected limiting oil imports from the country.

Twitter generation fuels rage of Nigeria gas protests as users demand end of corruption LAGOS, Nigeria — A nationwide strike and demonstrations have unleashed years of pent-up frustrations in Nigeria over its kleptocratic leaders, and the rage has grown even stronger across social media this week.

Twitter users shared pictures of dead protesters while others broke down the oil-rich nation’s 2012 budget figures, comparing funds allocated to the president and vice president’s offices with the cost of living of the average Nigerian. Hackers have targeted government websites, while others criticized local news coverage of demonstrations in nation where journalists often accept bribes from those they cover.

Oil Falls to Lowest Level in Three Weeks on Plans to Delay Iranian Embargo Oil dropped to a three-week low after two European Union officials said an embargo on Iranian crude imports may be postponed for six months.

Crude fell 0.4 percent as officials said that the ban would be delayed to allow nations to find new supply. International Atomic Energy Agency inspectors will go to Tehran to discuss Iran’s nuclear program, two diplomats said. Futures also declined after French Finance Minister Francois Baroin said Standard & Poor’s is stripping France of its AAA credit rating.

Geopolitics heat up; oil price premium settles in SAN FRANCISCO (MarketWatch) — Flare-ups in geopolitical hot spots such as Iran are nothing new to the oil markets, so commonplace for the market that there may actually be a “permanent premium” built into the price.

That premium is particularly important for a market that, nowadays, struggles to balance global demand with shrinking spare production capacity from major oil producers.

EU Naval Forces Exchange Gunfire With Somali Pirates in Attack on Tanker European Union naval forces exchanged gunfire with Somali pirates yesterday in thwarting an attack on a Spanish navy oil tanker near Mogadishu.

Five of six suspected pirates detained on the ESPS Patino were injured and two required medical treatment, EU Navfor Somalia said yesterday in an e-mailed statement.

Egypt's ElBaradei pulls out of presidential race In Saturday's statement, ElBaradei says the military rulers who took over from Mubarak have governed "as if no revolution took place and no regime has fallen."

Iraq: Bomb kills at least 53 Shiite pilgrims ZUBAIR, Iraq (AP) – A bomb killed at least 53 Shiite pilgrims near the southern port city of Basra on Saturday, an Iraqi official said. It was the latest in a series of attacks during Shiite religious commemorations that have killed scores of people and threaten to further increase sectarian tensions just weeks after the U.S. withdrawal.

Statoil 'may exit West Qurna 2' Statoil reportedly may be looking to dispose of its stake in the West Qurna 2 field development project in Iraq as security in the country deteriorates following the withdrawal of US forces amid escalating political tensions.

US warns Iran to leave Persian Gulf oil route alone, clash shows risk of larger war WASHINGTON — Tensions rising by the day, the Obama administration said Friday it is warning Iran through public and private channels against any action that threatens the flow of oil from the Persian Gulf. The Navy revealed that two U.S. ships in and near the Gulf were harassed by Iranian speedboats last week.

Spokesmen were vague on what the United States would do about Iran’s threat to block the strategic Strait of Hormuz, but military officials have been clear that the U.S. is readying for a possible naval clash.

Cameron in Saudi says world will keep open oil route (Reuters) - Prime Minister David Cameron said the world would "come together" to prevent Iran closing the Strait of Hormuz oil shipment route and that Russia should take a tougher stance against Syria during his visit to Saudi Arabia Friday.

Iran last month threatened to blockade the strategically vital strait if it was subjected to any new international sanctions over its nuclear program, which it says is for civilian use, but which Western countries believe is aimed at building an atomic bomb.

Cameron calls for Saudi oil production rise British Prime Minister David Cameron has called on the king of Saudi Arabia to step up his country's oil production in the face of Iranian threats to block off the sea corridor through which one sixth of the world's oil supplies pass.

In private talks with King Abdullah during an official visit to Saudi Arabia yesterday, Mr Cameron expressed Britain's fears that a blockade could destabilise the world economy.

Saudi ready to meet a rise in oil demand: Naimi DHAHRAN - Top oil producer Saudi Arabia is ready to meet any increase in consumer countries’ demand for crude oil, oil minister Ali Al Naimi told reporters on Saturday.

Saudi Arabia is “always obliged” to meet demand, Naimi said when asked whether the kingdom has enough spare capacity to cover demand in light of possible oil sanctions by the West on Iran’s crude oil sales.

Saudis have enough oil to make up for Iran WASHINGTON - Saudi Arabia says it has enough oil output capacity to meet global customers’ needs if new sanctions keep Iran from exporting oil, a top US Republican lawmaker said on Friday.

Iran says not storing oil in Gulf due to sanctions (Reuters) - Iran has not stored oil on tankers in the Gulf, and its crude exports have not been disrupted due to mounting international pressure over its disputed nuclear program, an oil official told the semi-official Mehr news agency on Saturday.

Negotiating Iran: Can U.S. End the Standoff? “U.S. Not Keen On Negotiating With Iran”

That’s the headline of a recent news clip that featured a panel of experts discussing the economic sanctions against Iran and the Iranian threat to block the Strait of Hormuz, a key passage way for oil tankers. While each of the three experts had different opinions on the matter, the sentiment seemed to be same: negotiations are nowhere on the horizon.

China might think twice about Iran oil: US Speaking Friday in an interview with MSNBC, US Ambassador Susan Rice disputed the characterization that China had rejected Treasury Secretary Timothy Geithner’s appeal to help bring sanctions on Iranian oil in order to rein in that country’s nuclear ambitions

Middle East Trip Suggests Change in Policy by China BEIJING — Premier Wen Jiabao heads on Saturday to the oil-producing nations of Saudi Arabia, Qatar and the United Arab Emirates, a six-day tour of Iran’s Persian Gulf neighbors that is the first Saudi trip by a Chinese premier in two decades, and the first ever to the other two states.

But some experts find the trip notable for a different reason: It comes as China’s strategic alliance with Iran is less certain than before.

Japan Expresses New Caution About Cutting Iranian Oil Imports Japan's government has backed away from comments by its finance minister about reducing oil imports from Iran in support of U.S. sanctions against the Islamic republic.

Japanese Prime Minister Yoshihiko Noda expressed reluctance to make any quick decision on cutting oil imports from Iran. Speaking to reporters Friday evening in Tokyo, Noda said comments the previous day by his finance minister, Jun Azumi, were a personal opinion, not government policy.

Energy-hungry Japan in $34bn Australia gas deal TOKYO: Japanese energy firm Inpex and French giant Total on Friday announced a huge $34 billion gas project in Australia, as Tokyo looks for alternatives to nuclear power in the wake of the Fukushima disaster. Japan has virtually no hydrocarbon resources of its own and is the world’s biggest importer of liquefied natural gas (LNG) to drive its energy-hungry economy, the third largest on the planet.

Venezuela Closes Its Miami Consulate Venezuelan President Hugo Chavez has ordered the closure of the country's consulate in Miami, days after the United States expelled a Venezuelan diplomat.

Super Fracking Goes Deeper to Pump Up Natural Gas Production As regulators and environmentalists study whether hydraulic fracturing can damage the environment, industry scientists are studying ways to create longer, deeper cracks in the earth to release more oil and natural gas.

Energy companies are focused on boosting production and lowering costs associated with so-called fracking, a technique that uses high-pressure injections of water, sand and chemicals to break apart petroleum-saturated rock. The more thoroughly the rock is cracked, the more oil and gas will flow from each well.

Protester: Ruling Party Vowed to Ban Shale Gas from Bulgaria Bulgarian ruling center-right GERB party has taken a political commitment to ban the exploration and production of shale gas in the country, according to an environmentalist leader.

Sunday more than 1,500 people in Bulgarian capital Sofia rallied in front of the House of Parliament to protest against what they see as a highly hazardous technique.

Hoeven urges approval of Keystone pipeline WASHINGTON (UPI) -- Sen. John Hoeven, R-N.D., Saturday urged U.S. President Barack Obama to approve the controversial TransCanada Keystone XL oil pipeline.

Hoeven said in the weekly GOP media address the pipeline would create numerous jobs, strengthen the economy and reduce dependence on oil from the Mideast.

Shell’s Arctic Drilling Plan Clears Hurdle Royal Dutch Shell has been on a six-year crusade to drill in Arctic waters off Alaska’s coast, and has spent about $4 billion on the effort so far without drilling a single well.

But the company took one more bureaucratic baby step forward this week toward drilling in the Chukchi Sea later this year. An appeals board of the Environmental Protection Agency on Thursday rejected four challenges brought by Alaska Native entities and environmental groups like Earthjustice to block Clean Air Act permits covering airborne emissions from industrial operations.

Top Business Books “Oil’s Endless Bid” by Dan Dicker (Wiley). Petroleum prices have gone crazy, and a large share of the blame belongs to Goldman Sachs, Morgan Stanley and other banks, argues this Nymex trader.

“The Quest” by Daniel Yergin (Allen Lane/Penguin Press). The energy economist who brought us “The Prize” sets out to debunk peak oil theory.

Community sustainability requires community's support The real reason we should all care about local sustainability is the strength of our local economy. A strong local economy makes us more resilient to the ups and downs of the national economy.

It also creates a safety net for the future should we for some reason not have daily delivery of food and other essentials. If we are headed into peak oil, or a depression, we will find ourselves asking: “Why, in an area so perfect for growing food, don't we have any local farms?” and “Where did all those local shops and restaurants go?”

Farm To Fork Across America -- EcoFarm Conference: Sustainable Agriculture, Food, Love and Butterflies In a couple weeks I'll be attending the oldest and largest ecological agricultural gathering in the West. The EcoFarm Conference has been a centrifugal force for more than 30 years. It will be jam-packed with networking opportunities and information on the newest eco-ag developments and techniques. Hot topic Farm Bill 2012 lectures will focus on important policy concerns. Newly emerging topics are elbowing their way into the Farm Bill: local food, urban agriculture, farm-to-school and community gardens.

Carmaker Tesla Falls After Executives Leave Tesla Motors Inc. (TSLA) plunged a record 19 percent after saying two senior engineers on the new Model S luxury sedan left the U.S. electric-car maker just months before the auto goes on sale.

Second assembly of Irena aims to generate capital ideas Officials are gathering on Abu Dhabi's Saadiyat Island yesterday for the second assembly of the International Renewable Energy Agency (Irena).

More E-Mails Released on Failed Solar Company WASHINGTON — The White House has given House Republican investigators an additional 66 pages of internal correspondence relating to Solyndra, the solar equipment manufacturer that filed for bankruptcy after accepting a $535 million loan guarantee, and the e-mails reflect significant anxiety about the poor financial prospects of the administration’s flagship choice to demonstrate how federal help could add to building a clean energy economy.

But the new documents do not appear to support the Republicans’ contention that the White House steered the loan guarantee to Solyndra, a company whose investors included an Obama campaign donor.

Obama Aides Discussed Solyndra Layoffs White House officials knew before the 2010 midterm elections that Solyndra LLC planned to fire workers after winning a $535 million U.S. loan guarantee, according to e-mails released yesterday, a disclosure that might have embarrassed the administration.

Solar Capacity Rose 54% to 28 Gigawatts Last Year, BNEF Says New solar capacity around the world increased 54 percent to about 28 gigawatts last year driven by record installations in Germany and Italy, Bloomberg New Energy Finance data shows.

Rainy days power Scotland ahead Scotland can count on its inclement weather, and it is the prevalence of what the Scots call "dreich days" that is helping the nation develop a cutting-edge partnership with Abu Dhabi in green technology.

Germany Seeks Faster Offshore Wind Grid Connection, Roesler Says The German government wants to connect offshore wind farms to the power grid faster after utilities including RWE AG (RWE) complained that the process was taking too long.

China's renewables surge dampened by growth in coal consumption China tripled its solar energy generating capacity last year and notched up major increases in wind and hydropower, government figures showed this week, but officials are still struggling to cap the growth in coal burning, which is the biggest source of carbon dioxide emissions in the world.

The latest evidence of China's promotion of renewable energy has been welcomed by climate activists, but they warn that the benefits are being wiped out by the surge in coal consumption.

This is a guest post by Mike "Mish" Shedlock, who is an investment advisor representative with Sitka Pacific Capital Management. Mish blogs at Mish's Global Economic Trend Analysis, where this post first appeared.

A major part of the United States' misguided policy on ethanol usage came to an end as the $6 billion-a-year ethanol subsidy dies

America's corn farmers have been benefiting from annual federal subsidies of around $6 billion in recent years, all in the name of ethanol used as an additive for the nation's vehicles.

That ends on Jan. 1, when the companies making ethanol will lose a tax credit of 46 cents per gallon, and even the ethanol industry is OK with it -- thanks in part to high oil prices that make ethanol competitive.

Subsidized since 1979 as a homegrown fuel cleaner than gasoline, corn ethanol had plenty of opponents, environmentalists among them.

Environmentalists question the cleaner energy premise -- adding factors like tractor diesel emissions and fertilizer runoff make it dirtier, they say.

"Corn ethanol is extremely dirty," Michal Rosenoer, biofuels manager for Friends of the Earth, said in heralding the tax credit's demise. "It leads to more climate pollution than conventional gasoline, and it causes deforestation as well as agricultural runoff that pollutes our water."

Opponents also see corn ethanol, which now takes a larger share of the U.S. corn crop than cattle, hogs and poultry, as a factor in driving food prices higher.

"The end of this giant subsidy for dirty corn ethanol is a win for taxpayers, the environment and people struggling to put food on their tables," Rosenoer added.

But there's a nearer-term battle brewing over corn-based ethanol. A 2005 law requires that 7.5 billion gallons of renewable fuel be produced by 2012 -- 6.25 billion gallons were produced in 2011. A 2007 revision gradually increases that to 36 billion gallons by 2022.

AAA Predicts 4 Cent Rise in Gasoline Prices

Please consider End of ethanol subsidy expected to bring higher gas prices

In January, the federal government is stopping a 45-cent-a-gallon subsidy to ethanol producers, who will pass that extra expense to drivers who buy ethanol-supplemented gas, said AAA Carolinas spokesman Tom Crosby. Extra costs at the pump will amount to about 4 cents, he said.

Not So Fast

The Brazilian Sugar Cane Association reports Congressional recess means the end of three decades of US tariffs on imported ethanol

For the first time in more than three decades of generous US government subsidies for the domestic ethanol industry, coupled with a steep tariff on imports, the United States market will be open to imported ethanol as of January 1st, 2012, without protectionist measures. Today’s adjournment of the 112th Congress means both the US$0,54 per gallon tax on imported ethanol and a corresponding tax credit of US$0,45 per gallon for blenders, the VEETC (Volumetric Ethanol Excise Tax Credit), will expire as expected on December 31st.

“With Congress in recess, there are no opportunities for further attempts to prolong the tax credit or the tariff, so we can confidently say these support mechanisms will be gone at the end of 2011,” said the Washington Representative for the Brazilian Sugarcane Industry Association (UNICA), Leticia Phillips. This means that in 2012, the world’s largest fuel consuming market will be open to imports of less costly and more efficient ethanol, including sugarcane ethanol produced in Brazil, recognized since 2010 by the US Environmental Protection Agency (EPA) as an advanced biofuel because of its verified reduction of up to 90% in greenhouse gas emissions compared to gasoline.

If attempts in Congress to prolong the tax credit had been successful, the subsidy package now about to expire would continue to cost American taxpayers about US$6 billion per year. As for the tariff, meant primarily to keep Brazilian sugarcane ethanol out of the US market, its demise should reinforce fact-based assessments about the various feedstocks used around the world to produce ethanol, according to UNICA President Marcos Jank.

45 Cent Subsidy Ends, So Does 54 Cent Tariff

With the tariff ending, price of imported ethanol should drop by 54 cents per gallon. The net effect of the end of expiring bill, all thing being equal (which they won't be), should be a 9 cent drop in price of ethanol.

Federal and State Ethanol and Biodiesel Requirements

Please consider Federal and State Ethanol and Biodiesel Requirements

Minnesota, a major producer of ethanol, has required all gasoline to contain at least 7.7 percent ethanol since 1997. Hawaii requires 85 percent of its gasoline to contain 10 percent ethanol, effective on April 2, 2006. The intention of the law is to spur local production of ethanol from sugar, but the ethanol could also come from the U.S. mainland or from Brazil.

Minnesota was also the first State to require biodiesel blending into diesel fuel, at 2 percent by volume. The requirement became effective in mid-2005, when two new biodiesel plants, each with 30 million gallons per year capacity, began operation in the State. The law was waived several times because of quality problems with the biodiesel, but it is again in effect.

Washington requires 2 percent ethanol in gasoline and 2 percent biodiesel in diesel fuel no later than November 30, 2008. The requirement will increase to 5 percent once the State can produce biodiesel equal to 3 percent of its diesel demand.

Louisiana enacted a requirement for 2 percent ethanol in gasoline and 2 percent biodiesel in diesel fuel, once sufficient capacity is built in-State. Assuming that Louisiana’s 2-percent and Washington’s 5-percent requirements are triggered, Louisiana, Minnesota, and Washington will require 102 million gallons of biodiesel in 2012 and 146 million gallons in 2030.

State Mandated Ethanol Usage

As noted above, some states mandate its usage, others don't. Mandating various blends adds to the price, due to inefficiencies. Moreover, given that ethanol from corn makes no environmental sense, promoting the idea is absurd.

The California Energy Commission Consumer Energy Center states

Most ethanol used for fuel is being blended into gasoline at concentrations of 5 to 10 percent. In California, ethanol has replaced methyl tertiary butyl ether (MTBE) as a gasoline component. More than 95 percent of the gasoline supplied in the state today contains 6 percent ethanol. There is a small but growing market for E85 fuel (85 percent ethanol and 15 percent gasoline) for use in flexible fuel vehicles (FFVs), several million of which have been produced by U.S. automakers. But E85 is primarily found in the Midwest in corn-producing states. Ethanol is also being used to formulate a blend with diesel fuel, known as "E-Diesel", and as a replacement for leaded aviation gasoline in small aircraft.

All gasoline vehicles in use in the U.S. today can accept gasoline blended with up to 10 percent ethanol (sometimes called gasohol). Flexible Fuel Vehicles (VVFs) are cars and trucks that can use any level of ethanol up to 85 percent. They're built with special fuel system components designed to be compatible with higher ethanol concentrations.

Calculating the Savings

For California then, assuming Brazil supplies the ethanol 9 cents cheaper, and the ethanol content of gasoline is 6%, California prices might drop about a half-cent per gallon. In states where the ethanol content is 10%, the price should drop nine-tenths of a cent per gallon.

However, this assumes Brazil supplies 100% of US ethanol and that is not a realistic assumption even if it makes good environmental and economic sense.

More than likely costs go up a couple pennies rather than the 4 cents calculated by the AAA. However, any price hikes on gasoline would be more than made up for by the drop in corn prices which in turn will pass through to grain-fed beef, corn flakes, etc.

Regardless of what happens to prices, ending all tariffs and letting the free market set prices is a very good thing in and of itself. Unfortunately, inane state rules and still intact federal rules mandating ever-increasing amounts of biofuels in gasoline formulations are still in control even though the subsidies ended.

Error margins: forecasting energy demand While economic and demographic predictions are challenging to make at best, long-term forecasts on technological development enter the realm of science fiction. Even attempts to predict a single statistical development in the energy sector can prove problematic.

The debates over the timing of peak oil and the emergence of hydrogen as a mainstream, flexible source of energy are cases in point.

As Danish physicist Niels Bohr said: "Prediction is a very difficult art, especially when it involves the future."

Crude rises near $100 on Iran, Nigeria fears HONG KONG—Oil prices climbed near $100 a barrel on Friday on revived concerns over a possible embargo on Iranian oil and a strike in major oil producer Nigeria loomed.

Benchmark crude for February delivery rose 77 cents to $99.85 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2 to settle at $99.10 on Thursday in New York.

Petroleum Prices Set Records in 2011 Without much fanfare, the Energy Information Agency of the US Department of Energy released a report on 2011 energy commodity prices yesterday. It confirmed that crude oil and key petroleum products set annually averaged price records last year. This largely snuck up on us, because it occurred without the kind of dramatic price spike we experienced in 2008 or in the oil crises of the 1970s.

Heating homes with gas gets cheaper NEW YORK (CNNMoney) -- Good news for homeowners: Natural gas prices are the lowest they've been in years. And they're expected to fall even further, thanks to growing production and slack demand.

North American Oil Production On The Rise We've been talking a lot recently about North American oil- about new fracking technologies, new formations, foreign countries — namely European powers and China — rushing in to secure a piece of this newfound wealth.

Today, I want to make an important distinction.

Because with all the recent landgrabs and bullish sentiment and headlines about oil boomtowns, I want to make sure you see the forest for the trees.

Let's 'occupy' America's energy revolution Energy security in the United States may be an achievable goal for the first time in nearly 40 years. Credit largely goes to the shale boom; its epicenters are in places like Texas, Pennsylvania and North Dakota, not Washington, D.C.

The economic benefits -- jobs, royalty and tax revenues and lower natural gas prices -- reverberate nationwide. Forget Occupy Wall Street: This is a real revolution.

Petrobras Sees Quickening Growth in Reserves as Platforms Tap Offshore Oil Petroleo Brasileiro SA (PETR4), the state- controlled oil producer, will accelerate reserve growth over the next four years as it deploys more production equipment in deep waters of the Atlantic Ocean, the chief financial officer said.

Petrobras, as the Rio de Janeiro-based company is known, needs equipment at discovery sites to meet requirements to classify the oil as proven reserves, CFO Almir Barbassa said in an interview. The company expects to receive 19 production platforms by the end of 2015, he said.

Energy price war breaks out as more companies lower bills Following an announcement yesterday detailing that EDF Energy will cut its gas bills by 5%, after a decline in wholesale prices; a new energy price war has broken out between some of the major energy suppliers.

Nigeria megacity shows signs of strain amid strike LAGOS, Nigeria (AP) — Market stalls and food sellers can only return to the streets at dusk to do business or else risk the wrath of angry demonstrators for breaking the nationwide strike. ATMs are starting to run out of money, and gangs of young men have taken over some highways and overpasses.

As Nigeria's indefinite nationwide strike over spiraling fuel prices enters its fifth day Friday, there are growing signs of strain in Lagos, one of the world's largest cities where most subsist on less than $2 a day.

Nigeria fuel subsidy strike: Protests suspended Nigeria's trade unions say they are suspending protests for two days to allow more talks with the government.

The announcement comes on the fifth day of a general strike over the removal of a fuel subsidy, which has caused fuel prices and transport fares to double.

Ukraine says won't sell gas pipelines to Russia (Reuters) - Ukraine will not sell its gas pipeline network to Russia in exchange for supplies of cheaper gas, Ukrainian Energy Minister Yuri Boiko said on Friday, ruling out a solution long suggested by Moscow.

Ukraine, which depends heavily on Russian gas supplies, has sought for over a year to review a 2009 deal with Moscow, which it says sets an exorbitant price for the fuel. But talks have failed to produce any results so far.

No new 'gas war' between Russia, Ukraine - Ukrainian PM Ukrainian Prime Minister Mykola Azarov said on Friday he was sure there would be no new "gas war" between Russia and Ukraine.

"Why should we be in a [gas] war with our Russian brothers? It is an absurd question, we will never even talk about it," Azarov told reporters.

Lukoil lifts gas output, lowers oil production Lukoil's natural gas output rose 3.2% year-on-year to 22bcm, whereas oil output fell 5.5% to 90.7m tons in 2011, the oil and gas major said in a statement today following a meeting of the board of directors.

Kuwait activist: Police use tear gas to disperse stateless protesters KUWAIT CITY — A Kuwaiti human rights activist says riot police used tear gas and water cannons to disperse protesters who claim the Gulf nation is depriving them of citizenship and rights.

Iran pressing on with nuclear plans despite growing support for oil embargo TEHRAN — U.S. allies in Asia and Europe voiced support for Washington’s drive to cut Iran’s oil exports, although fear of self-inflicted pain is curbing enthusiasm for an embargo that Tehran says will not halt its nuclear program.

Russia warns US over Iran oil sanctions Russia has warned the US that moves to tighten sanctions on Iran would be perceived as an attempt at "regime change", as Tehran appeared to express readiness to return to negotiations and allow UN monitors to inspect its nuclear facilities.

U.S. acts against Chinese oil trader (CNN) -- The US has slapped sanctions on three firms including a major Chinese oil trader for selling refined oil products to Iran, just days after US Treasury secretary Tim Geithner travelled to Beijing to press for Chinese support on Iran sanctions.

The US State Department announced late Thursday night that penalties would be imposed on China's Zhuhai Zhenrong, the Singapore-based oil trader Kuo oil, and the UAE-based independent oil trader FAL.

China Gets Cheaper Iran Oil as U.S. Picks Up Tab for Hormuz Strait Patrols China stands to be the biggest beneficiary of U.S. and European plans for sanctions on Iran’s oil sales in an effort to pressure the regime to abandon its nuclear program.

As European Union members negotiate an Iranian oil embargo and the U.S. begins work on imposing sanctions to complicate global payments for Iranian oil, Chinese refiners already may be taking advantage of the mounting pressure. China is demanding discounts and better terms on Iranian crude, oil analysts and sanctions advocates said in interviews.

China’s Wen to Juggle Iran Oil Need With Saudi Ties on Persian Gulf Trip China’s Wen Jiabao must balance his country’s need for Iranian crude with its budding energy partnership with Saudi Arabia on his first visit to the Gulf kingdom, a U.S.-based specialist in Middle East security said.

Japan vows "concrete" steps to cut Iran oil reliance TOKYO (Reuters) - Japan pledged on Thursday to take concrete action to cut Iranian oil imports in response to an appeal for support from visiting Treasury Secretary Timothy Geithner, as Washington steps up efforts to sanction Tehran over its disputed nuclear program.

Japan yet to decide on Iran oil cuts TOKYO (AP) – Japan's prime minister said Friday the government has yet to decide on whether it will reduce oil imports from Iran in line with U.S. sanctions, saying businesses implications need to be considered.

Iran oil ban to put pressure on European supply lines European embargo on Iranian crude oil will lead to uncertainty over supply to the continent, with Gulf exporters expected to increase production as an alternative source, analysts say.

But higher output from Gulf producers could be limited, and their heavy grade of crude could pose problems for Europe's refineries.

EU Iran Oil Embargo Over Nuclear Work Said Likely to Be Delayed Six Months A European Union embargo on imports of Iranian (OPCRIRAN) oil will probably be delayed for six months to let countries such as Greece, Italy and Spain find alternative supplies, an EU official with knowledge of the talks said.

The embargo, which would need to be accepted by the 27- nation bloc’s foreign ministers on Jan. 23, also is likely to include an exemption for Italy, so crude can be sold to pay off debts to Rome-based Eni SpA, Italy’s largest oil company, according to the official, who declined to be identified because the talks are private.

Oil minnow Sri Lanka has most reasons to worry about Iran oil COLOMBO (Reuters) - Sri Lanka may be a minnow in the oil world, but a near total reliance on Iranian crude imports means it has more reason than most to find a way to avoid being caught in the clutches of U.S. sanctions.

The island's only refinery -- the 50,000 barrels-a-day Sapugaskanda refinery -- is almost entirely reliant on imports of Iran's crude. Switching to alternatives is not easy because the refinery has been configured to handle Iran's high-sulphur and high-density crude oil.

The Expert's Report that Damns the Northern Gateway Pipeline The Northern Gateway Pipeline will explosively increase the scale of oil sands production at a level not in the national interest, says David Hughes, one of Canada's foremost energy analysts.

By tripling oil sands production rates above 2010 levels, the project will "compromise the long term energy security interests of Canadians, as well as their environmental interests," charges Hughes.

How Much Would 'Huge Political Consequences' From the Oil & Gas Industry Cost? Of the 118 House members who have the Oil & Gas Industry amongst their top 10 contributing industry groups, only two representatives (Edward Markey and Charles Bass) voted against the deadline on the Keystone pipeline decision imposed in HR 1938.

Company cautions against linking well, Ohio quakes YOUNGSTOWN, Ohio (AP) — Boos, applause and the occasional outburst marked a gathering of about 500 Ohio residents seeking explanations for a series of earthquakes that has hit their area since deep injection drilling came to town.

Once Again, More Questions than Answers YOUNGSTOWN, Ohio -- Concerned citizens seeking confirmation that a brine-injection well located in Youngstown, Ohio caused 11 earthquakes to shake the Mahoning Valley in 2011 left the Covelli Centre disappointed last night after officials from the Ohio Department of Natural Resources were unable to provide the answers they sought.

State Gets 20,000 Comments on Its Gas Drilling Rules by Deadline After taking over 20,000 public comments, more than on any issue they have ever faced, New York environmental officials are getting ready for the final phase of work on their proposal to allow hydrofracking of natural gas in the state.

Vision for Affordable Energy Even if Indian Point Nuclear Plant Is Shut Down Mr. Brennan thinks that New York can get by without the electricity generated by Indian Point and that the city will not be putting itself at a financial disadvantage. Other cities actually make their own electricity, and do so at lower costs than some commercial suppliers, he noted at the hearing. Asked by a city official if he thought that the city should get into that business, Mr. Brennan paused for a minute. “Yes,” he said.

Certainly, the cost of making electricity has declined drastically in the last few years, in large part because the price of natural gas has been dropping. The decrease in price has made electricity from natural gas competitive with nuclear power. In 2008, the price of natural gas was $12 or $13 for a quantity known as a decatherm.

“Right now, it is $3 for a decatherm,” said Joseph P. Oates, a vice president at Con Edison.

Denmark’s Green Europe Meets Chinese Wall as Vestas Cuts Jobs Denmark’s push for a green Europe suffered a reality check as domestic wind turbine producer Vestas Wind Systems A/S cuts back one tenth of its workforce to survive Chinese competition and a slump in demand.

Vestas Jobs Threat Pressures Obama to Extend Tax Break Vestas Wind Systems A/S (VWS)’s threat to fire 1,600 workers in the U.S. undermines President Barack Obama’s goal of creating green jobs and adds to pressure on Congress to extend a tax credit that the industry relies on.

Chris Huhne fights solar subsidies ruling The Government has launched an urgent bid to overturn a High Court ruling that has hit its plans to cut subsidies for solar panels on homes.

Electronic atlas maps US renewable resources The US Department of Energy’s National Renewable Energy Laboratory (NREL) has developed a new geospatial application to allow for the accurate mapping of potential renewable energy resources in the US.

The interactive tool, RE Atlas, is free to use and available online at http://maps.nrel.gov/re_atlas.

Richard Heinberg: Geopolitical implications of “Peak Everything” From competition among hunter-gatherers for wild game to imperialist wars over precious minerals, resource wars have been fought throughout history; today, however, the competition appears set to enter a new—and perhaps unprecedented—phase. As natural resources deplete, and as the Earth’s climate becomes less stable, the world’s nations will likely compete ever more desperately for access to fossil fuels, minerals, agricultural land, and water.

Nations need increasing amounts of energy and raw materials to produce economic growth, but the costs of supplying new increments of energy and materials are burgeoning. In many cases, lower-quality resources with high extraction costs are all that remain. Securing access to these resources often requires military expenditures as well. Meanwhile the struggle for the control of resources is re-aligning political power balances throughout the world.

A Mining Law Whose Time Has Passed IN 1872, President Ulysses S. Grant signed a mining law to spur the development of the West by giving hard-rock mining precedence over other uses of federal land. But the law has long since outlived its purpose, and its environmental consequences have been severe.

Mining claims for copper, gold, uranium and other minerals cover millions of those acres, and the law, now 140 years old, makes it nearly impossible to block extraction, no matter how serious the potential consequences. Soaring metal prices are now driving new mine proposals across the West.

Toward a National Coastline Policy The White House will work with the states and various groups to develop plans for the "sustainable use and long-term protection" of oceans, coasts and the Great Lakes.

Online Map Shows Biggest Greenhouse Gas Emitters The agency unveiled a searchable computerized map on Wednesday that allows users to identify the nation’s major stationary sources of carbon dioxide and other climate-changing gases, including power plants, refineries, chemical factories and paper mills. The agency said the data, which was drawn from 6,157 sources and is current through 2010, covered nearly 80 percent of the country’s greenhouse gases from large industrial sources.

How Likely Is a Runaway Greenhouse Effect on Earth? Goldblatt and Watson have an answer: "The good news is that almost all lines of evidence lead us to believe that it is unlikely to be possible, even in principle, to trigger full a runaway greenhouse by addition of noncondensible greenhouse gases such as carbon dioxide to the atmosphere."

But there is an important caveat. Atmospheric physics is so complex that climate scientists have only a rudimentary understanding of how it works. For example, Goldblatt and Watson admit that the above conclusion takes no account of the role that clouds might play in this process.

Study: Simple measures could reduce global warming, save lives Simple, inexpensive measures to cut emissions of two common pollutants will slow global warming, save millions of lives and boost crop production around the world, an international team of scientists reported Thursday.

The climate-change debate has centered on carbon dioxide, a gas that wafts in the atmosphere for decades, trapping heat. But in recent years, scientists have pointed to two other, shorter-term pollutants — methane and soot, also known as black carbon — that drive climate change.

This is a guest post by Chris Cook, former compliance and market supervision director of the International Petroleum Exchange.

All is not as it appears in the global oil markets, which have become entirely dysfunctional and no longer fit for its purpose, in my view. I believe that the market price is about to collapse as it did in 2008, and that this will mark the end of an era in which the market has been run by and on behalf of trading and financial intermediaries.

In this post I forecast the imminent death of the crude oil market and I identify the killers; the re-birth of the global market in crude oil in new form will be the subject of another post.

Global Oil Pricing

The “Brent Complex” is aptly named, being an increasingly baroque collection of contracts relating to North Sea crude oil, originally based upon the Shell “Brent” quality crude oil contract that originated in the 1980s.

It now consists of physical and forward BFOE (the Brent, Forties, Oseberg and Ekofisk fields) contracts in North Sea crude oil; and the key ICE Europe BFOE futures contract, which is not a deliverable contract and is purely a financial bet based upon the price in the BFOE forward market.

There is also a whole plethora of other ‘over the counter’ (OTC) contracts involving not only BFOE, but also a huge transatlantic “arbitrage” market between the BFOE contract and the US West Texas Intermediate (WTI) contract originated by NYMEX, but cloned by ICE Europe.

North Sea crude oil production has been in secular decline for many years, and even though the North Sea crude oil benchmark contract was extended from the Brent quality to become BFOE, there are now only about 60 cargoes each of 600,000 barrels of BFOE quality crude oil (and as low as 50 when maintenance is under way) delivered out of the North Sea each month, worth at current prices about $4 billion.

It is the ‘Dated’ or spot price of these cargoes – as reported by the oil price reporting service Platts in the ‘Platts Window’– that is the benchmark for global oil prices either directly (about 60%) or indirectly, through BFOE/WTI arbitrage for most of the rest.

It will be seen that traders of the scale of the oil majors and sovereign oil companies do not really have to put much money at risk by their standards in order to acquire enough cargoes to move or support the global market price via the BFOE market.

Indeed, the evolution of the BFOE market has been a response to declining production and the fact that traders could not resist manipulating the market by buying up contracts and “squeezing” those who had sold forward oil they did not have, causing them very substantial losses. The fewer cargoes produced, the easier the underlying market is to manipulate.

As a very knowledgeable insider puts it….

The Platts window is the most abused market mechanism in the world.

But since all of this short term ‘micro’ manipulation or trading (choose your language) has been going on among consenting adults in a wholesale market inaccessible to the man in the street, it is pretty much a zero sum game, and for many years the UK regulators responsible for it – ie the Financial Services Authority and its predecessor - have essentially ignored it, with a “light touch” wholesale market regime.

If the history of commodity markets shows us anything, it is that if producers can manipulate or support prices then they will, and there are many examples of which the classic cases are the 1985 tin crisis, and Yasuo Hamanaka’s 10-year manipulation of the copper market on behalf of Sumitomo Corporation.

When I gave evidence to the UK Parliament’s Treasury Select Committee three years ago at the time of the last crude oil bubble, I recommended a major transatlantic regulatory investigation into the operation of the Brent Complex and in particular in respect of the relationship between financial investors and producers, and the role of intermediaries in that relationship.

I also proposed root and branch reform of global energy market architecture, which in my view can only come from producer nations and consumer nations collectively, because intermediary turkeys will not vote for Christmas.

A Meme is Born

In the early 1990s, Goldman Sachs created a new way of investing in commodities. The Goldman Sachs Commodity Index (GSCI) enabled investment in a basket of commodities – of which oil and oil products was the greatest component – and the new GSCI fund invested by buying futures contracts in the relevant commodity markets which were 'rolled over' from month to month.

The genius dash of marketing fairy dust that was sprinkled on this concept was to call investment in the fund a ‘hedge against inflation’. Investors in the fund were able to offload the perceived risk of holding dollars and instead take on the risk of holding commodities.

The smartest kids on the block were not slow to realise that the GSCI – which was structurally ‘long’ of commodity markets – was taking a long term position which was precisely the opposite of a commodity producer who is structurally ‘short’ of commodities because they routinely sell futures contracts in order to insure themselves against a fall in the dollar price; ie commodity producers are offloading the risk of owning commodities, and taking on the risk of holding dollars.

So, in 1995 a marriage was arranged.

BP and Goldman Sachs get Married

From 1995 to 2007 BP and Goldman Sachs were joined at the head, having the same chairman – the Irish former head of the World Trade Organisation, Peter Sutherland. From 1999 until he fell from grace in 2007 through revelations about his private life, BP’s CEO Lord Browne was also on the Goldman Sachs board.

The outcome of the relationship was that BP were in a position, if they were so minded, to obtain interest-free funding via Goldman Sachs, from GSCI investors through the simple expedient of a sale and repurchase agreement - ie BP could sell title to oil with an agreement to buy back the oil later at an agreed price.

The outcome would be a financial ‘lease’ of oil by BP to GSCI investors and the monetisation of part of BP’s oil inventory. Such agreements in relation to bilateral physical oil transactions are typically concluded privately, and are invisible to the organised markets. However, any risk management contracts which an intermediary such as Goldman Sachs may enter into as a counter-party to both a fund and a producer are visible on the futures exchanges.

Due to the invisibility of the change of ownership of inventory ‘information asymmetry’ is created where some market participants are in possession of key market information which others do not have. This ownership by investors of inventory in the custody of a producer has been termed ‘Dark Inventory’

I must make quite clear at this point that only BP and Goldman Sachs know whether they actually did create Dark Inventory by leasing oil in this way, and readers must make up their own minds on that. But I do know that in their shoes, what I would have done, particularly bearing in mind that such commodity leasing is a perfectly legitimate financing stratagem that has been in routine use in the precious metals and base metal markets for a very long time indeed.

Planet Hype

The ‘inflation hedging’ meme gradually gained traction and a new breed of Exchange Traded Funds (ETFs) and structured investment products were created to invest in commodities. In 2005, Shell entered quite transparently into a relationship with ETF Securities which enabled them to cut out as middlemen both investment banks and the futures market casinos, and with them the substantial rent both collect.

Other investment banks also started to offer similar products and a bandwagon began to roll. From 2005 to 2008, we therefore saw an increasing flood of dollars into the oil market, and this was accompanied by the most shameless and often completely misleading hype, and led to a bubble in the price.

There was (and still is) no piece of news which cannot be interpreted as a reason to buy crude oil. The classic case was US environmental restrictions on oil products, which led to restricted supply, and to price increases in oil products. Now, anyone would think that reduced refinery throughput will reduce the demand for crude oil and should logically lead to a fall in crude oil prices.

But on Planet Hype faulty economic logic – the view that higher product prices are necessarily associated with higher crude oil prices – was instead used as justification for the higher crude oil prices which resulted from the financial buying of crude oil attracted by the hype.

You couldn’t make it up: but unfortunately, they could, and they did.

More worrying than mere hype was that a very significant amount of oil inventory had actually changed hands from producers to investors. Only those directly involved were aware that below the visible part of the oil market iceberg lurked massive unseen ‘Dark Inventory’.

Greedy Speculators and Hoarding

The pervasive narrative among people and politicians, and which is spread by a campaigning press, is of ‘greedy speculators’ who are ‘hoarding’ commodities and ‘gouging’ consumers in search of a transaction profit.

There is no better example of this meme than the UK’s Daily Mail scoop on 20th November 2009.

Here we saw pictures of shoals of some 54 shark-like tankers loaded with oil and lurking off the UK coast with millions of barrels of ‘hoarded’ crude oil, some of them having been there since April 2009. The Mail’s story was that these tankers were full of hoarded oil whose greedy owners were waiting for prices to rise before gouging the public.

The reality was rather different.

The motivation of the investors involved was not greed but fear. The Fed had been busily printing another trillion in QE dollars to buy securities and the sellers, and other investors aimed not to make a dollar profit but rather to avoid a dollar loss.

So they poured $ billions into oil index funds and similar products and the oil leases/loans which accommodated these funds’ financial purchases of oil had the effect of raising forward prices and of depressing the spot price, thereby creating what is known as a market ‘in contango’.

When the forward price is high enough in a contango market, what happens is that traders will borrow money to buy crude oil now, and sell the oil at the higher price in the future. Provided the contango is high enough, they will cover interest costs and the cost of chartering and insuring the vessel and its cargo, and lock in a profit for the trader at the end.

This is exactly what traders did through the summer of 2009, until the winter demand by refineries for crude oil and a reduction in the flow of QE dollars into the market combined to see the stored oil gradually delivered to refineries and the sharks depart the UK shores.

The point is that the widely held perception of high oil prices being the fault of hoarders and greedy speculators is – apart from very short term ‘spikes’ in the price - entirely misconceived. And even when speculators do dabble in oil markets, they are almost always pillaged by traders and investment banks with much better market information, which is probably what is happening right now.

The Bubble Bursts

In 2008 there was an influx of genuine speculators in search of short term transaction profit. The motivation of inflation hedgers, on the other hand, is the avoidance of loss, which leads to different market behaviour and the perverse outcome that they have been responsible for causing the very inflation they sought to avoid.

The price eventually reached levels at which demand for products began to be affected and shrewd market observers began to position themselves for the inevitable bursting of the obvious bubble. But those market traders and speculators who correctly diagnosed that the price would collapse were unaware of the existence of the Dark Inventory of pre-sold oil sitting invisibly like an iceberg under the water.

Traders who had sold off-exchange Brent/BFOE contracts or deliverable WTI contracts found themselves ‘squeezed’ because title to the crude oil which they thought would be available at a cheaper price to fulfil their contractual commitment had been ‘pre-sold’ to financial investors. This meant that they had to scramble to buy oil at a higher price than they had expected.

The price spiked to $147 per barrel, and then declined over several months all the way to $35 per barrel or so, as many of the index fund investors pulled their money out of the market in late 2008 and joined a stampede to the safety of US Treasury Bills. What was happening here was that the Dark Inventory which had been created flooded back into the market, and overwhelmed the market’s capacity to absorb it.

Convergence and Futures Pricing

The oil market price is – by definition – the price at which title to dollars is exchanged for title to crude oil.

But there is very considerable debate among economists about the effect of derivative contracts on this spot market price, and whether it is the case that the futures market converges on the physical market price or vice versa.

Now, in the case of a deliverable exchange futures contract, a price is set for delivery of a standardised quantity of a particular specification of a commodity at a particular location within a specified period of time. If that contract is held open until the expiry date and time then there will indeed be a spot delivery and payment against documents at the original price. in accordance with the exchange’s contractual terms.

But the key point is that this futures contract will not be held open to the expiry date at the original price unless the physical market price – which is set by physical supply and demand – is actually at that price at that specific point in time. If the physical price is lower or higher, then the futures contract will be closed out through a matching purchase or sale and a profit or loss will be taken.

I managed the International Petroleum Exchange’s Gas Oil contract for six years, which was deliverable in North West Europe, and the final minutes of trading before contract expiry were Europe’s greatest game of ‘chicken’.

Moreover, no IPE broker in his right mind would dream (because the broker was responsible to the London Clearing House for defaults) of letting a financial investor with no capability of making or taking delivery hold a position into the last month before delivery. And if a broker was not in his right mind, it was my job to act under the exchange rules to ensure such positions were liquidated.

In other markets, the ability to own physical commodities – eg through ownership of warehouse warrants – is much more straightforward for investors. But the logistics of oil and oil products are such that financial investors are simply incapable of participating in the physical market. In my view, the use of position limits for financial investors in crude oil and oil products is of little or no use if the clearing house, exchange, and brokers are doing their job.

Finally, now that the US WTI contract is just the tail on the Brent/BFOE physical market dog, this discussion has moved on, since the ICE Brent/BFOE futures contract is in fact settled in cash against an index based on trading in the BFOE forward market, with no physical delivery. It is simply a straightforward financial bet in relation to the routinely manipulated underlying BFOE physical market price - ie, the question of convergence does not arise.

Anything but Dollars

With interest rates at zero per cent, and with the Federal Reserve Bank printing dollars through QE, a tidal wave of money flowed into equity and commodity markets purely as an alternative to the dollar, and they did so through a proliferation of funds set up by banks.

Note here that the beauty of such funds for the banks is that it is the investors who take the market risk, not the banks, and the marketing and operation of funds has become a very profitable use of scarce bank capital.

So a flood of financial purchasers of oil were looking for producers willing and able to sell or lease oil to them.

Producers in Pain

Producing nations who had massively expanded their spending in line with a perceived ‘sellers’ market’ paradigm where they had the whip hand, were badly hurt by the 2008 price collapse and OPEC took action to restrict production.

But might some OPEC members or other producing nations have gone further than this?

What is clear is that the price rose swiftly in 2009 and then remained roughly in a range between $70 and $90 per barrel until early 2011 when twin shocks hit the oil market. Firstly, there was the supply shock in Libya which saw 1.5m bbl per day of top quality crude oil leave the market, and secondly, the demand shock of Fukushima, which saw a dramatic switch from nuclear to carbon-fuelled energy.

My thesis is that Shell directly, and others indirectly, were not the only ones leasing oil to funds. I believe that it is probable that the US and Saudis/GCC reached – with the help of the best financial brains money can rent – a geo-political understanding with the aim that the oil price is firstly capped at an upper level which does not lead to politically embarrassing high US gasoline prices; and secondly, collared at a level which provides a satisfactory level of Saudi/GCC oil revenues.

The QE Pump Stops

In June 2011, the QE pump which had been keeping commodity and equity markets inflated and correlated stopped, and price levels began to decline. Consumer demand – as opposed to financial demand – for commodities had also been affected not only by high prices, but by reduced demand from developed nations for finished goods. In September 2011, more than $9bn of index fund money pulled out of the markets for the safe haven of T-bills.

What happened as a result was that the regular rolling over of oil leases, and the free dollar funding for producers of their oil inventory ceased. So the leased oil returned to the ownership of the producers, while the dollars returned to the ownership of the funds.

Since the ‘repurchases’ were no longer occurring, the forward oil price fell below the current price, and this ‘backwardation’ was misinterpreted by market traders and speculators. They believed that the backwardation was – as it usually is - a sign that current demand was high and increasing relative to forward demand, whereas in this false market the current demand is unchanged but the forward demand is decreasing.

As in 2008, speculators and traders were again suckered too soon into the market, and this led to profits at their expense to those with asymmetric information, and a ‘pop’ upwards in the price as they were forced to close speculative short positions. My information is that a major oil market trader was successfully able to ‘squeeze’ the Brent/BFOE market on at least two occasions in late 2011 precisely because they were aware of the true situation of inventory ownership, and the rest of the market was not.

As an insider puts it……

You can’t have proper price discovery when half of the inventory is being sold elsewhere at a different price. On exchange physical doesn’t even exist. Futures are converging to physical, but only the physical which is visible for Platts assessment.

….pointing out that transactions in respect of physical ownership of oil do not take place on an exchange, and that there is effectively a ‘two tier’ market. Only a proportion of spot or physical Brent/BFOE transactions therefore actually form the basis of the Platts assessment of the global benchmark oil price.

Enter Iran

In my view, there is little or no chance of military action against Iran, and having been to Iran five times in recent years, and as recently as two months ago, there is much I could write on this subject.

While financial sanctions have been pretty smart, and increasingly effective so far, the medium and long term effect of the proposed EU oil embargo – which will in fact affect only a pretty minimal and easily accommodated amount of demand which is evaporating anyway – is more apparent than real.

While there would undoubtedly be a short term price rise – cheered on by the usual suspects – in the medium and long term the embargo will act to reduce oil prices. This is because Iran will necessarily have to sell oil at below market price to China and others, and since the market is over-supplied, particularly in Europe, this will undercut market prices generally.

Mexico has routinely hedged oil production for years, and Qatar – who are very shrewd operators – began to do the same in November 2011 since they expect the price to fall this year. In the short term the Iran ‘crisis’ is in my view being hyped for all it is worth to entice yet more unwary speculators into the oil market so that other producers may sell their production forward at high prices while they last before the inevitable and imminent collapse.

Current Position

If you believe the investment banks – who all have oil funds to sell to the credulous – Far Eastern demand is holding up, supplies are tight, and stocks are low, so prices are set to rise to maybe $120 or above in 2012, even in the absence of fisticuffs involving Iran.

I take a different view. I see real demand – as opposed to financial demand and stock-piling, such as in the copper market – declining in 2012 as the financial crisis continues at best, and deepens at worst, particularly in the EU. Stocks are low because bank financing of stock is disappearing as banks retrench, and it makes no sense for traders to hold stocks if forward prices are lower than today’s price.

As for supplies, US crude oil production is probably higher, and consumption lower, than widely appreciated. Elsewhere, there is plenty of oil available now that much of the Dark Inventory has been liquidated, and this liquidation was probably why in November 2011 we saw the highest Saudi monthly deliveries in 30 years.

Finally, we see North Sea oil being shipped – for the first time since 2008 – half way around the world to find Far East buyers. We also see Petroplus, a major independent Swiss refiner, crippled by inflated crude oil prices, and shutting down three refineries because demand for its products has disappeared, and it can no longer finance crude oil purchases now that banks have pulled its credit lines.

In my world, refineries closed due to reduced demand for their products imply a reduction in demand for crude oil: but not, apparently, on the Planet Hype of investment banks with funds to sell.

History does not repeat itself, but it does rhyme, and my forecast is that the crude oil price will fall dramatically during the first half of 2012, possibly as low as $45 to $55 per barrel.

Then What?

As the price collapses we will see producer nations generally and OPEC in particular once again going into panic mode, and genuinely cutting production. We will also see the next great regulatory scandal where a legion of risk-averse retail investors who have lost most or all of their investment will not be pleased to hear that they were warned on Page 5, paragraph (b); clause (iv) of their customer agreement that markets could go down as well as up.

At this point, I hope and expect that consumer and producer nations might finally get their heads together and agree that whereas the former seeks a stable low price, and the latter a stable high price, they actually have an interest – even if intermediaries do not – in agreeing a formula for a stable fair price.

We can’t solve 21st century problems with 20th century solutions and I shall address the subject of a resilient global energy market architecture in my next post.

Whilst much of Iraq may be viewed as in a metastable social and political state, the semi autonomous northern region of Kurdistan has enjoyed relative peace for a number of years. This has enabled the regional government to develop oil exploitation laws and to lease much of the land to foreign exploration and production companies.

Regional operator Gulf Keystone Petroleum has been involved in the discovery of the Shaikan Field, believed to hold between 8 and 13.4 billion barrels in place with appraisal of this giant (potential supergiant) ongoing. Gulf Keystone Petroleum believes that Iraqi Kurdistan may hold 45 billion barrels of oil reserves (recoverable?) lending some credibility to Iraqi claims of 115 billion barrels reserves for the whole country. This compares with a total of 53 billion barrels of oil produced from the North Sea up to the end of 2010.

Figure 1 The Kurdistan semi autonomous region lies between Iraq (yellow), Turkey, and Iran (pink). The area is divided into oil exploration and production licence blocks numbered 1 to 46. The Kurdish people actually lay claim to a substantially larger area that extends beyond these borders into Iraq, Iran and Turkey and this may give rise to ongoing sectarian tension in the recently peaceful region. Slide from Gulf Keystone Petroleum presentation dated October 2011 (large pdf).

Disclaimer The author has recently purchased stock in Gulf Keystone Petroleum and Petroceltic whose company presentational materials provide the backbone of this post. Readers need to be aware that information contained in corporate presentations is not necessarily reliable, although companies listed on the London Stock Exchange are regulated and need to be cautious about what they say. For example, Gulf Keystone's reports on reserves on the Shaikan Field have been audited independently by oil and gas field auditors Ryder Scott and Dynamic Global Advisors.

During a recent review of the activities of small oil companies listed on the London Stock Exchange, I came across some interesting presentations on the oil exploration activity and potential of Kurdistan in northern Iraq. Everyone will know that Iraq has been in a state of unrest since the US led invasion of 2003 that has just recently come to an end. But in the North, the semi autonomous region of Kurdistan has been much more peaceful. Elections were held in 2005 and again, four years later, in 2009. The Kurdistan Regional Government has proceeded to divide the territory into license blocks, many of which have subsequently been leased to foreign oil exploration companies (Figure 1). The oil rights of the Kurdistan semi-autonomous region have not been recognised by the Iraqi government and operating in this area therefore carries significant political risk. Most of the blocks have been leased to small companies and until recently the oil majors have been shy of taking risks in Kurdistan that may compromise their relationship with the Iraqi government.

Geological setting

Kurdistan forms part of the Zagros Fold Belt that is a prolific oil province in Iran and Iraq to the south and west (Figure 2).

Figure 2 Map showing the oil and gas fields of the Zagros fold belt in Iran and Iraq. The Kurdistan area lies to the east of the supergiant Kirkuk field. Map from Greg Croft.

The reservoirs are of Triassic and Jurassic age and are deposited along the margin of the paleo Tethys Ocean, which closed owing to large scale plate tectonic movements during the Cretaceous and Tertiary, giving rise to the Alpine - Himalayan mountain belt. In the Zagros Fold belt, the deformation of strata is less severe and is characterised by gentle synclines and anticlines. Source rocks are depressed and warmed in the synclines and the oil formed may migrate up-dip to be trapped in the adjacent anticlines (Figures 3, 4 and 5).

Figure 3 Seismic image of anticline left and satellite image of surface anticline with 4 way dip closure right. Slide from Gulf Keystone Petroleum

Figure 4 Photograph of large surface anticline. It is rare to find a large oil province where the geology is so vividly expressed on the surface. Exploration companies should actually be able to map and drill these prospects without the aid of seismic data. Slide from Petroceltic presentation (large pdf) dated Dec 2011. Petroceltic have 20% gross interest in blocks 12 and 22.

Figure 5 Three massive prospects to drill in the Dinarta block. Slide from Petroceltic presentation (large pdf) dated Dec 2011.

Exploration history

An interesting slide from Irish independent minnow Petroceltic shows the exploration status in 2007 and 2011 (Figure 6). During the Saddam era, it appears that exploring for oil in Kurdish areas did not take place at all. The Kurdistan semi-autonomous region therefore represents virgin territory bang slap in the middle of one of the most prospective oil exploration territories on Earth. Licensing and drilling has only taken off since 2007 and activity is moving at an amazing pace with several major discoveries already made. ExxonMobil was the first supermajor oil company to accept the political risk with the award of 6 blocks in 2011. A total of 6 blocks remain unlicensed.

Figure 6 Comparing the status in 2007 with 2011 shows an amazing pace of exploration development and discoveries. There are indications that the southeastern end of the area is more gas prone and this will present separate export / sales challenges. Slide from Petroceltic presentation (large pdf) dated Dec 2011.

High resolution map of discoveries and prospects in Kurdistan (large pdf).

Oil export options

Getting the oil out of this landlocked territory surrounded by countries with unstable tendencies presents a major challenge. There is an existing pipeline route called the Kirkuk - Ceyhan pipeline that exports oil through Turkey to the Mediterranean coast (Figure 7). This pipeline crosses the Iraq - Turkey border within Kurd held territory giving them some control over access. There are in fact two pipelines with combined capacity of 1.6 mmbpd which have been the subject of repeated sabotage attacks. They are clearly exposed and difficult to guard (Figure 8). This export route is reported to currently carry around 0.5 mmbpd. There will be competition for access and ownership rights between Kurdistan and Iraq.

Figure 7 The route of the Kirkuk - Ceyhan pipeline.

Figure 8 The Kirkuk-Ceyhan pipeline is not easily guarded from sabotage.

A very recent development (14 Nov 2011) is the announcement that Vallares PLC, established by Nathaniel Rothschild and headed up by ex BP CEO Tony Hayward will merge with Genel Enerji AS and plan to build a new 400,000 bpd pipeline across Turkey to the Mediterranean. Both Genel and Vallares hold acreage in Kurdistan.

Concluding thoughts

While it is the early days, given the exploration success so far and the world class pedigree of this petroleum system, the estimate of 45 billion barrels reserves made by Gulf Keystone Petroleum does not seem unreasonable. It is reasonable to speculate that given peace, Kurdistan may export between 2 and 4 million barrels of oil per day within the next decade. With a population of 4 million, Kurdistan could expect to become wealthy like Norway and the Gulf emirates. That is if restless neighbors permit this to happen.

There are a growing number of new, very large, more or less conventional oil plays being discovered that include the sub-salt off Brazil, the Aldous Major - Avaldsnes field in Norway and most recently the news that sub-salt oil has been discovered by Maersk Oil in their first well off Angola. Combined, these vast discoveries promise to make the decline on the downside of Hubbert's peak a much more gradual affair, for a while at least.

Peak oil can fuel a change for the better The advent of peak oil means we should prepare for a downscaling of our highly energy and resource-intensive lifestyles.

What is peak oil and why does it matter? And what effect will it have on the Western lifestyles we take for granted? These are not questions that many people are asking themselves yet, but this decade is going to change everything. Peak oil is upon us.

The Peak Oil Crisis: Gasoline in 2012 A lot has happened in the past four years that will affect gasoline prices in 2012 so this year is unlikely to be a repeat of 2008. Europe and the Middle East are coming unstuck and at this stage, it is impossible to say which will have the most influence on prices. A European recession will moderate the demand for oil and possibly spread the contagion over much of the world. An interruption of oil supplies from the Middle East would instantly send prices higher to much higher depending on the nature and duration of the interruption.

Investing In The Future Of Oil: Offshoot Oil Plays There is a finite supply of oil on this world. Even as its population appears to awaken to this reality, there appear to be few viable solutions available in addressing the issue of Peak Oil, the period in which oil production begins to decelerate. One of the greatest problems this generation may soon face is the realization that the crisis over a sustainable future energy supply might be more dire than many might anticipate.

Why I’m saving and investing for the disaster to come Some people are preparing for the end of days. A fall or retreat of civilisation, linked to peak oil or the collapse of the global financial system or environmental disaster. Or whatever.

The solution is extreme diversification – up to and including buying your own remote and defensible farmstead, complete with independent water supply, power generation capabilities, and the ability to feed your nearest and dearest until the smoke clears.

Boom And Doom: Revisiting Prophecies Of Collapse New Scientist - Forty years ago, a highly controversial study , The Limits to Growth, warned that we had to curb growth or risk global collapse. Does the prediction still hold?

The return of "The Limits to Growth" On the whole, the article by McKenzie is very well done and it summarizes all the main points of the story: how Limits never made the mistakes it was accused to have made, how the study was demonized, and how its scenarios are still relevant to our situation today. The article has been extensively researched and it cites the opinion of most of the researchers who have been working on the reappraisal of the study and of its methods, including my book, "The Limits to Growth Revisited".

Unsustainable Population Growth Is The Elephant In The Room Whereas Morgan presents a relatively benign view of things, even wondering if there are ways to reverse stage 5 decline, Paul Chefurka in Population: The Elephant in the Room sees things quite differently, primarily because of oil usage.

Oil Falls From Near a One-Week High as German Economy Approaches Recession Oil fell from near the highest settlement in almost a week amid concern that a shrinking German economy may drag Europe into a recession, reducing demand.

Crude fell as much as 1 percent, equity markets retreated and the euro weakened against the dollar after Germany’s Federal Statistics Office said the biggest economy in the euro region contracted in the fourth quarter. Spanish factory output declined the most since 2009, a separate report showed.

Current oil prices are 'very reasonable: Kuwait KUWAIT CITY (AP) - Kuwait's oil minister said international markets need more oil, and that the Gulf country considers the current price of crude 'very reasonable.' The country's official news agency quoted Mohammed al-Busairi as saying that Kuwait's daily production exceeded 3 million barrels last month.

Saudi Aramco starts oil products trading firm (Reuters) - A new Saudi Aramco subsidiary for trading refined products started commercial operations on Jan. 1, the state oil giant said on Wednesday.

Romanian watchdog bares teeth at oil pact BUCHAREST (Reuters) - Romania's competition watchdog levied 880 million lei ($257 million) of fines on oil companies, including the country's largest firm Petrom , for breaking anti-trust rules, the agency's head said on Tuesday.

FP Energy Letters: ‘Shale reserves may soon be discounted’ An FP story on ExxonMobil’s long-term forecast highlighted the hydrocarbons’ continued dominance as an energy source over the next few decade.

But S. Donald Moore, President and CEO of Phoenix Canada Oil Company Ltd. says the energy industry may be over-estimating the oil reserves and suggests caution.

Chance for Qatar in US gas glut Qatar Petroleum could reconfigure its US import terminal to export gas in a bid to cash in on the US supply glut arising from the shale gas revolution, says Qatar's deputy prime minister.

Kiev must pay for unused gas says Gazprom boss Ukraine must pay for unused gas ordered under its 2009 contract with Russia, despite announcing its intention to cut imports to 27 bln cu m, below its contracted minimum of 33 bln cu.m. Gazprom head Alexei Miller said on Wednesday.

Are energy prices finally coming down? EDF Energy cuts gas bills for 1.4million customers by 5% EDF Energy has become the first of the major energy suppliers to cut gas prices today, raising hopes that rival firms will follow suit.

Norway pipes less gas to European clients in 2011 (Reuters) - Norwegian gas deliveries by pipeline to the rest of Europe declined by more than 3 percent in 2011 after a decade of rapid growth, North Sea pipeline operator Gassco said on Wednesday.

Cnooc Starts Its First Shale-Gas Project in Eastern China Cnooc Ltd. (883), China’s biggest offshore energy producer, started drilling at its first domestic shale- gas project, joining rivals including China Petroleum & Chemical Corp. (600028) in the search for unconventional natural gas.

Shell CEO Says the Potential for Shale Gas in Europe Is Limited Royal Dutch Shell Plc (RDSA) chief Peter Voser said the potential for shale gas development in Europe is limited by the region’s regulations and its dense population.

Cabot Cited for Faults in Fracked Well After Gas Fouls Water (Bloomberg) -- Cabot Oil & Gas Co., the best- performer last year in the Standard & Poor’s 500 Index, was cited by Pennsylvania officials in September for “improper” well construction after natural gas polluted drinking water.

Inspectors found defects in the liner intended to prevent oil or gas from leaking into groundwater at a Susquehanna County well, according to a Sept. 19 notice of violation from the Pennsylvania Department of Environmental Protection. The violation was reported earlier today by the Scranton Times- Tribune.

Group: Study Needed On Shale Gas Effects on Health The public health effects of shale gas development need to be rigorously studied as production rapidly spreads in the United States, public health professionals and advocates said on Monday.

Fracking risk is exaggerated Frack away, there's no reason not to. Two of the main objections to "fracking" for shale gas have been blown out of proportion, according to British geologists.

Drilling Critics Face a Divide Over the Goal of Their Fight With a deadline looming this week for the public to weigh in on gas drilling in New York State, the antifracking movement itself has become divided over what its goal should be: securing the nation’s toughest regulations, or winning an outright ban?

Hydrofracking energizes New York residents ALBANY — With only one day left to comment, input from those opposed to permitting hydrofracking in New York is overwhelmingly outweighing that of supporters.

Hinchey calls for New York to withdraw proposed fracking regulations Rep. Maurice Hinchey, D-Hurley, on Monday called for New York to withdraw its proposed regulations to allow the controversial natural gas extraction method of hydraulic fracturing or “fracking.” Such a move would indefinitely delay drilling permits for areas like Sullivan County, which sit above the gas-rich Marcellus shale.

Deep wells shaken; State not stirred As state regulators in Ohio ponder the role that deep injection wells have played in a series of earthquakes near Youngstown, Pennsylvania regulators have yet to express any serious concern about up to 25 such wells that the drilling industry might develop in the commonwealth.

Iranian ‘Bluster’ May Overstate Threat to Strait of Hormuz’s Oil Shipping “Do I really think that they’re going to go ahead and try to shut down the Strait of Hormuz?” Dennis Ross, who served two years on the National Security Council as Obama’s special assistant on Iran, said yesterday in an interview at Bloomberg’s office in Washington. “I do not. They will be the ones who suffer the most from that.”

Obama Ready to Use Military Force to Stop Nuclear Iran, Ex-Adviser Says No one should doubt that President Barack Obama is prepared to use military force to prevent Iran from acquiring a nuclear weapon if sanctions and diplomacy fail, the president’s former special assistant on Iran said.

Russia concerned about Iran's uranium enrichment MOSCOW (AP) — Russia expressed regret and concern Tuesday about Iran's launch of uranium enrichment up to 20 percent at an underground facility, but urged all parties involved in the nuclear standoff with Tehran to avoid hasty moves.

The Russian Foreign Ministry's statement mixed cautious criticism of Iran, an important trading partner, with a call for more talks — a fine line Moscow has walked in the past.

Iranian Nuclear Scientist Killed in New Attack An Iranian nuclear scientist was killed in a Tehran bomb blast, state media reported, in at least the third assassination targeting the nation’s atomic program which the U.S. and Israel have vowed to halt.

Saudi: 'Internal' matter if Japan buys Iran oil CAIRO (AP) — A Saudi oil official said that whether Japan or other countries continue to buy Iranian oil was an "internal matter," reflecting the unease in many nations after the latest U.S. sanctions on Tehran and Iran's threats to choke off the Strait of Hormuz in response.

China Balks as Geithner Presses on Iran Curbs BEIJING — Timothy F. Geithner, the U.S. Treasury secretary, pressed Chinese senior leaders Wednesday to join an American-led campaign to put pressure Iran over its nuclear program by sharply reducing Tehran’s lucrative oil export business. And as they had before Mr. Geithner’s arrival here Tuesday, Chinese officials said publicly that they wanted no part of it.

China defends Iran oil trade despite U.S. push BEIJING (Reuters) - China gave no hint on Wednesday of giving ground to U.S. demands to curb Iran's oil revenues, rejecting Washington's sanctions on Tehran as overstepping even as Treasury Secretary Timothy Geithner lobbied for Beijing's support.

US House leader meets with Saudi oil minister RIYADH, Saudi Arabia (AP) - The U.S. Congress' House majority leader has met with Saudi Arabia's oil minister, marking the latest stop by an official from a major oil importing nation to the OPEC kingpin since Iran threatened to shutter the vital Strait of Hormuz.

A statement released Wednesday by the Saudi Oil Ministry says Ali Al-Naimi and Rep. Eric Cantor, R-Virginia, discussed the importance of coordination between oil exporters and importers to stabilize oil markets.

EU Said to Weigh Iran Oil Embargo Exemptions for Member States European Union talks on an oil embargo on Iran are becoming bogged down over discussions on exemptions for existing supply contracts and the length of a planned phase-in period, according to four diplomats.

Investopedia: Possible Effects Of An Iran Embargo Iran is the third largest oil producer in the world and an integral OPEC producer. OPEC as an organization will face a dilemma if the EU embargo takes place. It can do one of two things: boost oil exports from other OPEC producers to cover the shortfall and stabilize prices, or allow a shortage and have prices skyrocket. It is a political decision as much as an economic one....

If other OPEC countries rush in to dam the shortfall, it will be seen by Iran as support for the EU and could cause further conflict in the organization and the Middle East in general. On the other hand, if overall production is not increased and prices rise precipitously, OPEC runs the risk of tipping Western countries over the edge into developing more efficient and domestic sources of energy.

India Said to Be Told Turkey May Stop Iran Oil Payments Help (Bloomberg) -- Turkiye Halk Bankasi AS told Indian oil refiners it may no longer be able to act as an intermediary for their purchases of Iranian crude, four people with knowledge of the matter said.

Executives from the crude-processing companies met with Indian oil ministry officials yesterday to discuss alternatives, including routing remittances through Russia, the people said, declining to be identified because the information is confidential. Other options include stopping purchases from Iran altogether and importLLHPCLing from other countries, they said. Indian officials are scheduled to visit Tehran for trade talks starting Jan. 16, two of the people said.

India to cut Iran oil imports, may not seek waiver NEW DELHI: Government has told refiners to reduce Iranian oil imports and find alternatives as New Delhi may not seek a waiver that would protect buyers of Tehran's oil from a fresh round of U.S. sanctions, two industry sources said on Wednesday.

North Dakota Surpasses OPEC Member Ecuador in Oil Production North Dakota oil production surged 42 percent to 510,000 barrels a day in November, exceeding the output of OPEC member Ecuador, as energy explorers accelerated drilling in the Bakken Shale formation.

The state’s daily crude output topped a half-million barrels for the first time during the month, North Dakota’s Oil and Gas Division said today in a statement. North Dakota’s 6,300 wells produced enough oil to displace imports from foreign suppliers such as Iraq or Colombia, Lynn Helms, division director, said in the release.

U.S. inspects Repsol for Cuban oil work WASHINGTON (UPI) -- U.S. regulators said they have examined an offshore drilling unit planned by Spanish energy company Repsol for Cuban waters.

Deadlock in dispute over fuel subsidies NIGERIAN President Goodluck Jonathan and striking unions are deadlocked over their demands the government reverse its decision to lift fuel subsidies, after petrol prices more than doubled.

Government: Ongoing Nigeria strike invites anarchy LAGOS, Nigeria -- Nigeria's government is warning that a paralyzing national strike risks "anarchy" in the oil-rich nation, as demonstrations over spiraling fuel prices and government corruption entered their third day Wednesday.

Nigeria strike threatens oil halt Nigeria's biggest oil trade union said it would decide on Wednesday whether to shut down output from Africa's largest oil producer as part of an ongoing protest against the government's removal of popular motor fuel import subsidies, according to a report.

China warns US to be 'careful' in military refocus on Asia BEIJING — China's Ministry of defense warned the United States on Monday to be "careful in its words and actions" after announcing a defense rethink that stresses responding to China's rise by shoring up U.S. alliances and bases across Asia.

Delay for UAE crude oil pipeline A pipeline that will allow Abu Dhabi's oil exports to bypass the Strait of Hormuz is facing a six-month delay. The disclosure by a Federal Government minister comes amid growing diplomatic tension over the strategic waterway that carries a third of the world's seaborne crude supplies.

Canada seeks alternative route for Keystone XL pipeline While President Obama wants to delay a decision on the controversial Keystone XL pipeline until after the 2012 election, Canada's Prime Minister Stephen Harper is stepping up efforts to explore an alternative pipeline that would allow Canada to ship their tar sands oil to China.

Congress dirtied by tar ... sands You might ask: “What in the world does approval of a tar sands pipeline have to do with avoiding a tax hike on working Americans?” The logical answer is nothing — unless you’re one of the congressional pipeline supporters who has received campaign contributions from the oil industry (which stands to make billions if approval is granted). Some members of Congress even hold stock in TransCanada, the pipeline company.

Washington Governor Gregoire Seeks Refiner Fee to Fix Roads, Run Ferries Washington Governor Christine Gregoire, whose state ranks sixth in U.S. oil-refining capacity, wants to charge a fee on the industry to help maintain roads, bridges and ferries over the next decade.

ConocoPhillips: No decision on demolishing Trainer refinery ConocoPhillips says no decision has been made about demolishing its refinery in Trainer if the company cannot immediately find a buyer.

BP Seeks Recovery of All Gulf Spill Costs From Halliburton (Bloomberg) -- BP Plc seeks to have Halliburton Co., its cement contractor for the Macondo well project whose blowout set off the 2010 Gulf of Mexico oil spill, pay all of the oil company’s related costs and damages.

Embrace Cuomo's energy plans New Yorkers didn’t seem to mind so much when weekend temperatures soared into the 60s, but climate change, and the wild weather patterns it produces, is very much on the radar screen of Gov. Andrew Cuomo. Recalling the havoc and flooding from tropical storms Irene and Lee, and against the backdrop of the Republican presidential candidates’ anti-science preaching on the campaign trail, Cuomo is pitching new efforts to promote earth-friendly solar energy. New Yorkers should embrace the cause — for the energy and the related jobs.

Wind-power: inordinately expensive and ineffective at cutting CO2 emissions The focus on wind-power, driven by the renewables targets, is preventing Britain from effectively reducing CO2 emissions, while crippling energy users with additional costs, according to a new Civitas report. The report finds that wind-power is unreliable and requires back-up power stations to be available in order to maintain a consistent electricity supply to households and businesses. This means that energy users pay twice: once for the window-dressing of renewables, and again for the fossil fuels that the energy sector continues to rely on. Contrary to the implied message of the Government’s approach, the analysis shows that wind-power is not a low-cost way of reducing emissions.

Electricity Costs: the folly of wind-power, by economist Ruth Lea, uses Government-commissioned estimates of the costs of electricity generation in the UK to calculate the most cost-effective technologies. When all costs are included, gas-fired power is the most cost-efficient method of generating electricity in the short-term, while nuclear power stations become the most cost-efficient in the medium-term.

Fish and Wildlife Service Permit Would Allow Wind-Energy Company to Kill Golden Eagles According to KTVZ, the Interior Department's Fish and Wildlife Service has released a proposal that would give West Butte Wind Power LLC a permit to legally kill golden eagles in central Oregon. The permit is the first of its kind and in this case, West Butte's wind turbines would be able to kill up to three protected golden eagles over a five-year span as long as the company contributes to conservation efforts for the species.

A Fine for Not Using a Biofuel That Doesn’t Exist WASHINGTON — When the companies that supply motor fuel close the books on 2011, they will pay about $6.8 million in penalties to the Treasury because they failed to mix a special type of biofuel into their gasoline and diesel as required by law.

But there was none to be had. Outside a handful of laboratories and workshops, the ingredient, cellulosic biofuel, does not exist.

Solar lamps replace toxic kerosene in poorest countries While it might seem that the obvious solution is to expand electricity grids, in recent years more environmentally sustainable and immediately accessible alternatives have emerged. Chief among them is the solar-powered light emitting diode (LED) lamp.

"When we started out 15 years ago, there were no scalable solutions -- large energy-hungry fluorescent bulbs required large, expensive solar panels and complicated installation" says Mills. "Now, LEDs the size of a cherry can generate light 100 times brighter than a kerosene lamp at a very low wattage, while solar cells have become much more efficient."

Daimler's Dr. Zetsche talks about internet-connected electric cars at CES It's clear that Dr. Zetsche intends to address the looming problems with fossil fuel supply many know as "peak oil". Electrified vehicles, a.k.a. electric mobility, offers not just a method to clean up automobiles and reduce emissions, but additionally offers freedom of the source of energy to drive the vehicles. Electrons can come from any source, many of which do not involve burning fossil fuels and mucking up the environment. Battery and electric drive technology has reached a tipping point of usefulness where electrified vehicles are beginning to be capable of replacing the usefulness of gasoline powered cars. Note, that is "beginning to be capable", not "are capable".

Study: Car supersizing explains modest mpg gains Cars haven't improved their miles per gallon much in recent decades despite technological advances. A new study quantifies the culprit: supersizing.

Can a hotel room ever be too big? A GM in Asia says yes I would never expect an American to complain that the "room is too big." In nine years as a General Manager, I have never met an American who has turned down an upgrade or who has asked for a smaller room.

Culturally, Americans seem to be subconsciously pre-programmed from birth with a "bigger is better" mentality. Frankly, as an American I am also always happy to be upgraded, whether it is on a flight or in a hotel.

A Crisis of Civilization? Live Chat with Security Analyst Nafeez Mosaddeq Ahmed Back in December I posted a trailer for The Crisis of Civilization. Based on the work of security analyst and political scientist Dr Nafeez Mosaddeq Ahmed, this new documentary explores the interconnections between climate change, peak oil, terrorism and our ongoing financial crisis. Mat has also written about Ahmed's work on the connections between peak oil and the Egyptian revolution.

Given the increasingly convincing evidence that no government is prepared for peak oil; that worst-case climate scenarios are looking more and more realistic; and that the Global economic order as we know it may be coming to an end, we thought it might be a good time to talk to Dr Ahmed in a little more detail about how this all fits together.

Resilience Has Not Been Lost (It's Been Willfully Ignored) As I noted in my post on why "hipster" urban farmers are doing nothing new, there are many communities—both rural and urban—for whom resilience has always been a way of life; where the trickle down economics has never really trickled down at all; and where sharing, collaboration and an informal economy are the primary forms of organization—not a fancy new idea for saving the world.

The trouble is that these communities are the ones who have been economically, socially and politically marginalized. For whatever reason, their voices have rarely been heard in any discussion, and we as a culture are not used to viewing poor communities as anything other than charity cases, objects of derision or a cause for suspicion.

EPA reach too far? Justices hear case of interest to big business, Ron Paul WASHINGTON -- The Supreme Court on Monday heard arguments in a case that sounds small but could have huge implications for property owners, corporations and federal regulations.

Some of the justices were clearly critical of the Environmental Protection Agency, calling its actions in the case heavy handed.

Obama Drops by the E.P.A. President Obama, who has been both applauded and jeered for his record on environmental issues, paid a brief visit to the headquarters of the Environmental Protection Agency in Washington on Tuesday to try to raise spirits at an agency that has been under siege for the past year.

Elections no threat to global climate deal - U.N. (Reuters) - Leadership changes this year among some of the world's heaviest polluting countries should not undermine progress towards setting up a new global legally binding climate deal by 2015, the United Nations' climate chief said on Wednesday.

An online model of methane in the atmosphere I’ve put together an easy-to-play-with online model of methane in the atmosphere. I’m going to use it for teaching along with the rest of the Understanding the Forecast webmodels, but it was designed to be relevant to the issue of abrupt new methane burps as we’ve been ruminating about lately on Realclimate.

When the topic of Peak Oil is raised, one of the first responses often heard from those trying to explain why a peak isn't going to happen, at least in the short term, is that technology will come up with new answers. These innovations will allow greater production of oil through access to previously unavailable reservoirs, and an increase in the amount of oil that can be economically recovered from them. This is an argument that has had demonstrable success in the past. An earlier post showed that innovations in technology allowed the region around Baku in Azerbaijan to remain one of the centers of oil production since the time of the first Russian oil pipeline in 1878 through today. The argument is unfortunately not universally or ultimately true, but it does provide an introduction to today's topic.

The change from cable-tool drilling to rotary drilling resurrected production in the Caucasus after the Soviet Revolution. The growth of production, including the areas of the North Caucasus, also brought other fields on line. These were initially the fields around Grozny and Maykop, and in combination they raised production to around 622 kbd at the start of the Second World War. In more recent times, it is the introduction, once again, of the latest Western technology that has helped to sustain Azeri production, and new technology is starting to improve and sustain production in the North Caucasus.

The countries, and some key locations, in the North Caucasus (after a map from the BBC News)

Georgia, through the port at Batoum (now Batumi), was one of the early exporters of oil from Russia to Europe.

The production of the northern Caucasus increased from 100,000 poods in 1877 to 1,656,000 poods in 1889. In the latter year, Terek furnished 275,731 poods, Elisabetpol 3,000 poods, and Daghestan 3,955 poods, while in the Signakh field near Tiflia, 55,296 ppods were obtained.

Note: poods were the early Russian measure of production and there are 8.33 poods per barrel.

In the period from 1884 to 1914, Georgia exported a total of around 165 million barrels of oil. This oil increasingly came from the fields around Grozny (now in Chechnya, Russia) and later from the fields around Maykop (now in the Republic of Adygea in Russia), even though there were considerable signs of oil in Georgia (oil sands near Signakh west of Tbilisi and gilsonite in the Guria district). The Grozny fields were producing about 18% of Russian oil (with the rest coming from Baku) in 1915.

Following the collapse of oil production with the Revolution and the end of Western ownership, it was the use of rotary bits that allowed production to ramp back up, supplying a seventh of Western European imports (John Grace – Russian Oil Supply), and providing needed income to the Kremlin.

During the Second World War the region became a target for German occupation, given that oil from the region was providing a third of German imports in 1940 (Daniel Yergin – The Prize.) However, although Operation Blau reached Maykop, the smallest of the three main oil concentrations, the oil fields had been destroyed, so only around 70 barrels per day were left available. The German Army soon became bogged down in the siege of Stalingrad to the north and did not reach Baku.

The oilfields around Grozny were first developed in 1893 and grew steadily, with 386 wells by 1917. The Grozny field peaked at around 154 kbd in 1932, while the output from the entire Chechen-Ingushettia region, which fed to the three refineries at Grozny, fell to around 148 kbd by 1980 and to106 kbd by 1985. Grozny then became more of a pipeline terminal.

The first major pipeline running from Grozny to the refinery at the port of Tuapse, had been built in 1927. The pipeline was later extended to also pick up oil from the Maykop fields, and fell into disuse in 1968 when it was replaced with more modern pipelines to the rail terminals and oil terminal at Tikhoretsk, and that pipeline is now being increased in size to carry 250 kbd of oil. The terminal, which takes oil from the North Caucasus and Kazakhstan and forwards it to Novorossiysk, on the Black Sea, has a maximum throughput of 640 kbd overall. Part of the pipeline carried oil initially from Grozny to Baku, but with the onset of the Azeri-Chirag-Guneshli project, flow is now reversed.

Grozny has had an unfortunate history with the surface structures being largely destroyed, first in the Revolution and then by German bombers. The town and facilities were rebuilt and became the center of the local oil business. The Chechen wars of 1994-96 and 1999-2000 then largely destroyed the center of the city. Similarly the oil wells in the region were impacted; in the 1994 war only 100 wells, out of 1,500, were operating by the turn of the year.

The more recent finds, that are resurrecting the promise of the North Caucasus come, however, as do many recent discoveries, offshore. Lukoil carried out a series of explorations in the North Caspian between 1999 and 2005, finding six large fields off the Dagestan and Kalmykian coasts. These were Khvalynskoye, Yuri Korchagin (50 kbd) , Rakushechnoye, Samatskoye and Filanovsky. The fields were initially assessed at around 4.7 billion barrels of oil, with the Valdimir Filanovsky being claimed as the largest new oil reserve discovered in Russia in 20 years. The initial well flowed at 6,400 bd with reserves estimated at 600 million barrels, with 34 billion cu. m. of natural gas. Overall, North Caspian production was anticipated to peak in 2013 at 170 kbd, but Filanovsky alone, due on line in 2014, is now anticipated to reach 210 kbd with production initially coming from 11 directional wells with horizontal completions. To reach these levels Lukoil will be investing some $22 billion.

Location of the Korchagin field (Lukoil)

Looking further into the future, Lukoil is expecting to be able to further develop the North Caspian to reach a production capacity of 320 kbd of oil and 13 billion cu m of natural gas per year, by 2020. Lukoil expects that the increase in production will be able to offset declines that are anticipated from Western Siberia by that time.

The introduction of modern technology is thus helping to increase production from regions that were, at one time, thought to be exhausted. It should, however, be remembered that horizontal wells have now been around for some 30 years. One wonders what, so far unpublished, new technologies will appear to help within the decade, since to have an impact they must be widely accepted and adopted, and I don’t hear of much.

Design of the Filanovsky platform (CNGS Group)

With Work Scarce in Athens, Greeks Go Back to the Land CHIOS, Greece — Nikos Gavalas and Alexandra Tricha, both 31 and trained as agriculturalists, were frustrated working on poorly paying, short-term contracts in Athens, where jobs are scarce and the cost of living is high. So last year, they decided to start a new project: growing edible snails for export.

As Greece’s blighted economy plunges further into the abyss, the couple are joining with an exodus of Greeks who are fleeing to the countryside and looking to the nation’s rich rural past as a guide to the future. They acknowledge that it is a peculiar undertaking, with more manual labor than they, as college graduates, ever imagined doing. But in a country starved by austerity even as it teeters on the brink of default, it seemed as good a gamble as any.

Oil hovers below $102 ahead of Europe meeting SINGAPORE – Oil prices hovered below $102 a barrel Monday in Asia amid investor concern that a meeting between the leaders of Germany and France won't yield a plan that will keep Europe from recession this year.

Cost of gas rises for the first time since October The average price for a gallon of gasoline in the United States increased for the first time since mid-October, rising by 12 cents to about $3.36 over the last three weeks due to higher crude oil prices, an industry analyst said on Sunday.

"The higher crude prices pulled up wholesale prices by about 19 cents a gallon, but retailers have passed through only 12 cents of that so far," said Trilby Lundberg, editor of the Lundberg Survey.

Shale Bubble Inflates on Near-Record Prices Surging prices for oil and gas shales, in at least one case rising 10-fold in five weeks, are raising concern of a bubble as valuations of drilling acreage approach the peak set before the collapse of Lehman Brothers Holdings Inc.

Chinese, French and Japanese energy explorers committed more than $8 billion in the past two weeks to shale-rock formations from Pennsylvania to Texas after 2011 set records for international average crude prices and U.S. gas demand. As competition among buyers intensifies, overseas investors are paying top dollar for fields where too few wells have been drilled to assess potential production, said Sven Del Pozzo, a senior equity analyst at IHS Inc. (IHS)

Gulf Coast working to fill a fuel void in Northeast Northeastern states are slated to lose half of their regional capacity for fuel production by midyear as financial woes push refineries there to idle, a trend likely to increase the region's dependency on Gulf Coast supply.

A Houston-to-New York pipeline is making major expansions to accommodate growing demand to transport gasoline and other fuels up north from the Gulf Coast to fill the potential supply void.

Speculators Raise Wagers on Price Gains by Most in 17 Months: Commodities Hedge funds raised their wagers on higher commodity prices by the most since July 2010 after signs of accelerating U.S. growth bolstered optimism that demand for raw materials will strengthen.

Forget inflation: Is deflation the real threat? Prices of raw materials have plunged this year. The prices of copper, coffee, aluminum, cotton, nickel, natural gas, wheat and silver are all down more than 20% since the end of April, according to Bloomberg. Gold, widely viewed as a barometer of inflation, has fallen 11% since its September high of $1,900 an ounce.

Inventories of commodities have gotten so high that metals dealers have had to buy extra warehouse space for them.

In November, copper warehouses in New Orleans were 98% full, and aluminum inventories in the U.S. are at an all-time peak, according to FastMarkets.com.

Statoil makes large oil discovery in Barents Sea OSLO, Norway (AP) -- Norway's Statoil said Monday it has discovered a large oil reserve in the Barents Sea, its second major oil find in the Arctic region in less than a year.

The state-controlled oil company said a well drilled in the Havis prospect in the Barents Sea proved both oil and gas at an estimated volume of between 200 million and 300 million barrels of recoverable oil equivalents.

Thai energy demand seen up almost 5 pct in 2012-ministry (Reuters) - Thailand's energy demand is expected to rise almost 5 percent in 2012, driven by economic growth and restoration work after last year's flooding plus work on flood defence systems, the Energy Policy and Planning Office of the Ministry of Energy said on Monday.

Bangladesh to build new pipeline for Chevron gas (Reuters) - Bangladesh will build a new gas pipeline to bring output from Chevron Corp fields to the capital Dhaka and to western regions as it combats shortages.

Statoil Wants Access To New Norwegian Acreage Despite Oil Finds OSLO -(Dow Jones)- While recent Norwegian oil discoveries by Statoil ASA (STO) are exciting, the Norwegian oil sector needs access to new acreage to avoid a substantial production fall after 2020, Statoil Chief Executive Helge Lund said Monday.

Lund revived the call for Norway to open up new acreage where development has been blocked because of environmental concerns.

Angered by gasoline prices and corrupt government, Nigeria begins strike paralyzing nation LAGOS, Nigeria — A national strike paralyzed much of Nigeria on Monday, with more than 10,000 demonstrators swarming its commercial capital to protest soaring fuel prices and decades of government corruption in the oil-rich country.

Some protesters pulled metal barriers into the street, while others took gasoline from motorbikes to set tires ablaze. Others waved placards bearing an effigy of President Goodluck Jonathan with devil horns and fanged teeth, and showing him pumping fuel at a gas station.

Nigerian Fuel Price Strike May Disrupt Shell’s Oil Production, Close Ports Nigerian workers began a national strike after fuel costs more than doubled, threatening to shut ports and disrupt output from Royal Dutch Shell Plc and Chevron Corp. in Africa’s largest crude producer.

Kazakh leaders face a testing time as trouble looms Recent events in oil-rich Kazakhstan seem at first sight reminiscent of last year's Arab Spring revolutions. Is this Tripoli on the Caspian?

Iran nuke work at bunker is confirmed Vienna— Diplomats on Monday confirmed a report that Iran has begun uranium enrichment at an underground bunker and said the news is particularly worrying because the site is being used to make material that can be upgraded more quickly for use in a nuclear weapon than the nation's main enriched stockpile.

Iran Has Ability to Block Strait of Hormuz, U.S. General Dempsey Tells CBS Iran has the ability to block the Strait of Hormuz “for a period of time,” and the U.S. would take action to reopen it, Joint Chiefs of Staff chairman General Martin Dempsey said.

“They’ve invested in capabilities that could, in fact, for a period of time block the Strait of Hormuz,” Dempsey said in an interview aired yesterday on the CBS “Face the Nation” program. “We’ve invested in capabilities to ensure that if that happens, we can defeat that.”

Hormuz Bypass Oil Pipeline Is Delayed A pipeline that would allow crude oil from the United Arab Emirates to bypass the Strait of Hormuz separating it from Iran has been delayed because of construction difficulties, two people with knowledge of the matter said.

Iran confirms has $2 bln oil debt with Italy's Eni (Reuters) - An Iranian oil official has confirmed that Iran owes Italian energy major Eni some $2 billion worth of oil that Rome is concerned could be put at risk by a European Union embargo on crude imports from the Islamic Republic.

Oil speculators stay cautious on Iran risk: John Kemp (Reuters) - Escalating tensions between Iran and the West have so far drawn only a small amount of extra speculative money into oil-linked futures and options contracts.

Far fewer hedge funds and other money managers are wagering on a big price increase than after the Libyan civil war last year, according to position data released by the U.S. Commodity Futures Trading Commission (CFTC) and exchanges.

Indian refiners, govt meet on Iran oil payments (Reuters) - Indian refiners and oil ministry officials are meeting on Monday to discuss alternative methods to pay for Iranian oil imports should an existing mechanism via Turkey's Halkbank be halted under U.S. sanctions against Tehran.

Syrians mourn protesters amid tension Damascus, Syria (CNN) -- Tens of thousands turned out Monday for funerals in the Syrian capital of Damascus, holding up pictures and lining the streets in tearful processions.

At one funeral, crowds chanted, "overthrow Assad, overthrow the regime!" as they blamed the man's death on government forces.

Venezuela Won’t Accept World Bank Ruling on Exxon, Chavez Says Venezuela won’t accept any verdict from the World Bank’s International Centre for Settlement of Investment Disputes, including Exxon Mobil Corp.’s claim for its nationalized Cerro Negro project, President Hugo Chavez said.

The Washington-based court is considering Exxon’s claim in one of about 20 suits filed there against the Venezuelan government. Chavez, a self-professed socialist revolutionary, has taken over assets in the energy, metals, cement and telecommunications industries.

An Oily Case: Chevron’s Never-Ending, Record-Breaking Lawsuit in Ecuador How long has the legal battle between indigenous groups in the Ecuadorean Amazon and the oil giant Chevron been going on? So long that Texaco—the company originally accused of dumping 18 billion gallons of toxic sludge in and around the Ecuadorean town of Lago Agrio—no longer exists, having been acquired by Chevron in 2001. So long that six separate Ecuadorean judges have been involved in the case, and one federal judge in New York died before he could make a ruling. So long that former President Bill Clinton had just moved into the White House when the lawsuit was first filed in 1993. And until recently, it looked like it could easily go on for another 18 years—as a Chevron spokesperson once said: “We’re going to fight this until Hell freezes over—an then we’ll fight it out on the ice.”

Shale Game New York State is a lonely holdout against the natural-gas revolution.

Locals call BP's feel-good Gulf ads 'propaganda' NEW ORLEANS — Nearly 20 months after its massive Gulf of Mexico oil spill — and just as Americans focus on New Orleans, host of the college football championship game — BP is pushing a slick nationwide public relations campaign to persuade Americans that the Gulf region has recovered.

Battery cars face an uphill climb to acceptance A spectacular flop, or just a slow start?

One thing is certain, the battery car is going to have to gain some serious momentum if it’s going to have a real impact on the U.S. automotive market -- or come anywhere close to meeting the White House’s target of putting 1.5 million battery-powered cars on the road by mid-decade.

Battery Warning: Why Electric Vehicles Have Yet to Take Off But as electric vehicles moved from the showroom to the driveway, certain facts became hard to ignore—facts that could slow down the adoption of EVs even more. In a piece for the website Jalopnik—which, to be fair, seems to really dislike EVs—Joel Johnson explained why Americans aren’t going electric. It essentially boils down to cost: electric cars cost too much and deliver too little, especially for Americans who don’t live in dense urban areas.

Congressional Inaction on Extending Commuter Benefits Leads Public Transit Riders to See Taxes Increase More Than $550 in 2012 Due to Congressional inaction during last month’s tax deliberations, the new year ushered in a tax increase to public transit riders. Currently, commuters who use public transit, commuter buses and van pools may see their annual commuting costs increase by more than $550 based on a bias in the tax code that benefits driving over taking public transit. In addition, the failure to extend the benefit has resulted in a tax liability increase for companies offering the benefit.

Possible U.S., China trade dispute looms The U.S. government will decide whether China-made solar cells, high-pressure steel cylinders, galvanized steel wires and steel wheels from China are dumped, or sold below cost, in the U.S.

If so, it could impose tariffs that impair Chinese companies' ability to sell those products in the U.S. China's Ministry of Commerce, meanwhile, has launched its own investigation of American solar cell makers, and is also probing such U.S. industries as photographic paper. The agency could decide to impose duties as early as this year.

Could Saudi Arabia Become the Next Solar Market Hotspot? Oil’s more than likely the first thing that pops into your mind when Saudi Arabia is mentioned. Sunlight might follow close behind, though, and for good reason. Located within the equatorial “Sun Belt,” where more solar radiation hits the earth than any other part of the globe, best available measurements are that Saudi Arabia receives an average 2,200 thermal kilowatt hours (kWh) of solar energy per square meter of land area every day. That’s an abundant amount of freely available solar energy just waiting to be harnessed. Crafting policies that would stimulate adoption of solar energy systems and development of a solar energy economic value chain could also make significant contributions to critical social and environmental challenges the country faces.

Dubai launches $3.27 bln solar energy project DUBAI (Reuters) - The emirate of Dubai on Monday unveiled plans to build a 12 billion dirham solar energy park, with potential capacity of 1,000 megawatts as part of its efforts to reduce its energy reliance.

Under Dubai's Integrated Energy Strategy 2030, it plans to reduce energy imports and climate warming carbon dioxide emissions by 30 percent by 2030, using its own solar power and nuclear power imported from neighbouring emirate Abu Dhabi to reduce reliance on gas.

Renewables making inroads in emerging global energy mix Renewables are to be a significant pillar of the global energy balance of tomorrow. This is where the future lies, insist the green lobby, the environmentalists and indeed the peak oil pundits. Most agree, if this crude driven civilization has to keep making strides, then renewables have to make a bigger and significant contribution to the global energy mix over the next decades or so.

Can a cleaner environment create jobs? NEW YORK (CNNMoney) -- The tactic du jour for environmentalists trying to sell a skeptical public on tighter regulations is this: spin the thing as a job creator.

Liberty for Light Bulbs -- The Next Battle In America's Fight for Freedom Two hundred and thirty six years ago, in January 1776, Thomas Paine published Common Sense, the wildly popular pamphlet that made the case for American freedom and helped to spark a revolution.

This year, the Tea Party hopes to turn the 2012 elections into a fight for American freedom. Their first salvo -- the electric light bulb. Last month, they threatened to shut down the government unless new energy efficiency standards for light bulbs were delayed. They succeeded and the final budget deal prohibits the Deparment of Energy from spending on the new rules.

Americans make up half of the world's richest 1% NEW YORK (CNNMoney) -- The United States holds a disproportionate amount of the world's rich people.

It only takes $34,000 a year, after taxes, to be among the richest 1% in the world. That's for each person living under the same roof, including children. (So a family of four, for example, needs to make $136,000.)

One step closer to local food security How close are meat producers to having a working mobile abattoir in the Boundary region?

In January 2011 Boundary meat producers met with government representatives to discuss the future of the meat industry in the Boundary. At this meeting livestock producers said their number one priority was a licensed mobile abattoir, or mobile processing unit (MPU), with processing and marketing facilities a close second.

Sahel's looming food crisis gets swift response but no long-term answers Late rains mean trouble for the "lean season", when food from the last harvest runs out. This year's lean season could begin in some countries as early as March, three months earlier than usual. Brown sounded the alarm in October and since then there has been a flurry of warnings about the looming crisis in the Sahel.

Carbon emissions 'will defer Ice Age' In the journal Nature Geoscience, they write that the next Ice Age would begin within 1,500 years - but emissions have been so high that it will not.

"At current levels of CO2, even if emissions stopped now we'd probably have a long interglacial duration determined by whatever long-term processes could kick in and bring [atmospheric] CO2 down," said Luke Skinner from Cambridge University.

The Next Ice Age and the Anthropocene If you’ve wondered where to look for signs that Earth is entering a geological epoch of our own making, the Anthropocene, what’s a good place to start?

I’d suggest the growing body of research concluding that what was once seen as an inevitable descent into the next ice age has been put off for a very long time by the building blanket of greenhouse gases generated by humanity’s burst of fossil fuel combustion.

Study: Rising sea levels will hit hard in South Florida A sea-level rise of just a few inches will bring flooding to South Florida cities, contaminate sources of drinking water and lead to sharp increases in utility bills over the next 20 or 30 years, according a study released Wednesday by Florida Atlantic University.

The study found that projected sea level increases of 3 to 6 inches by 2030, due to global warming, could overwhelm flood-control systems that in many areas are more than 50 years old. The authors provided a list of steps to be taken in the coming decades, from moving drinking-water wells inland to installing more pump stations, that could help the region cope with the higher water.

Pumping Up TAPS: Four years of stability The economic, political and technological forces that have always driven oil prices will continue to do so in the future, but with a difference, longtime oil industry analyst Roger A. Herrera told Petroleum News Nov. 28.

“In 2008 the first recent economic recession, I could argue, was triggered by the high price of oil. It was affecting everything we were doing,” Herrera said. “However, today oil is a follower, not a leader. That was forcefully demonstrated during the battle in Libya a few months ago when 1 billion barrels per day of oil production effectively dried up and there was virtually no effect on world oil prices.”

IEA Has No Immediate Plan to Release Oil Stockpiles on Iran (Bloomberg) -- The International Energy Agency, the adviser to U.S., Germany and Japan, isn’t planning an immediate release of emergency oil stockpiles in response to the tension in the Middle East.

“We remain prepared to respond to any significant oil supply disruption, but as no specific supply disruption is under way, we are not actively considering any action at the present time,” the Paris-based adviser said on its website today.

Iran accuses US and EU of trying to wage 'economic war' IRANIAN OFFICIALS have struck a defiant posture in response to a proposed oil embargo by the European Union, calling the intensified efforts to halt Iran’s nuclear programme, including new sanctions by the United States, tantamount to “an economic war” and vowing to conduct a new round of military drills near the Strait of Hormuz.

Tensions rise in Gulf as key powers plan new war games TENSIONS on the shipping lanes in the Persian Gulf have escalated amid threats of an EU embargo on Iranian oil, with the announcement of new naval exercises by Iran and news that Israel and the US are planning to carry out their most extensive joint manoeuvres.

Britain is also sending its most formidable warship to the Gulf for its first mission as tensions rise in the strategically vital region.

India exploring ways of making oil payments to Iran India is exploring all options to find a way out to make oil payments to Iran as there are chances that Turkey, through which it is making payment, may come under pressure after a fresh round of U.S. sanctions imposed on Iran.

India currently pays Iran about $1 billion every month through Turkey for the 370,000 barrels a day of crude oil it buys from the world's fourth-largest oil producer.

EU Iran Oil Sanctions Likely to Be Phased In Over Time, Official Says A European Union embargo on Iranian oil will probably be phased in to protect countries with the greatest reliance on imports from the country, according to an EU official familiar with the talks.

Shipowner Bombed in 1980s Says Gulf Crude Flow to Withstand Hormuz Crisis A Greek shipowner whose family’s oil tankers were hit by missiles during the 1980s Iran-Iraq war said he expects Persian Gulf crude exports to continue after Iran’s threats to block shipments through the Strait of Hormuz.

Japanese foreign minister in Saudi Arabia for talks on oil Riyadh - Japanese Foreign Minister Koichiro Gemba arrived in the Saudi capital of Riyadh Saturday for talks on securing his country's oil needs in light of an Iranian threat to close shipping through the vital Strait of Hormuz, said sources in the Japanese embassy.

Iran state firm says it owes no oil to Italy (TEHRAN) - The state-owned National Iranian Oil Company said on Saturday that it does not owe some $2 billion in oil shipments as claimed by Italy, in remarks that could be aimed at undermining EU unity over banning oil purchases from Iran.

Tiny port, new energy battleground CALGARY — In a remote Aboriginal recreation centre on the shore of the Douglas Channel in British Columbia’s North Coast, Canadian regulators are kicking off historic hearings on Tuesday on the proposed $5.5-billion Northern Gateway oil sands pipeline. By the time they are finished in two years, thousands of Canadians will have had their say on the giant project.

Improving economy: More jobs, higher pump prices NEW YORK – As the U.S. economy recovers and adds more jobs, Americans are paying the price at the gas pump.

The government said Friday that the nation's unemployment rate dropped to 8.5 percent, the same day that gasoline prices hit an average of $3.35 a gallon, the highest ever for this time of year.

Gasoline prices are rising again after falling in the last months of 2011. Motorists are buying less gas than they did a year ago, but pump prices are rising with higher oil prices.

Exxon Settles Lawsuit Over Gulf of Mexico Offshore Oil Lease Against U.S. Exxon Mobil Corp. (XOM), the largest publicly traded oil company, settled its lawsuit against U.S. Interior Secretary Kenneth Salazar over the government’s decision to cancel offshore leases that may yield “billions of barrels of oil.”

The accord “will allow ExxonMobil to develop this very large, but technically challenging, resource as quickly as possible using a phased approach,” Patrick McGinn, a spokesman for Irving, Texas-based Exxon, said in an e-mail yesterday.

Hugo Chavez has reason to smile Talk of foreign companies cancelling Venezuelan oil projects abounds in some business circles. But aside from Exxon and ConocoPhillips, western multinationals have stayed, perhaps because the stakes of leaving are so high.

"ChevronTexaco is still there. European oil companies are there from Italy and France; the Russians, Chinese, Indians and Brazilians are there," Golinger told Al Jazeera. "Foreign companies shouldn’t try to use their political and economic power to undermine local laws."

Tanker encounters ice near Bering Sea island ANCHORAGE, Alaska — A Russian tanker carrying fuel for an iced-in Alaska city that without a delivery could run out of crucial supplies before winter’s end encountered ice early Friday in the eastern Bering Sea.

The ice was not a surprise. The 370-foot tanker Renda will have to go through more than 300 miles of sea ice to get to Nome, a city of about 3,500 people on the western Alaska coastline that did not get its last pre-winter fuel delivery because of a massive storm.

Second Tunisian man sets self on fire in 2 days TUNIS, Tunisia (AP) — A hospital official says a second man has set himself on fire in Tunisia, two days after a similar case.

13 killed in attacks in northeast Nigeria MAIDUGURI, Nigeria—Members of a radical Muslim sect attacked a church in northeast Nigeria during a worship service, part of a series of assaults that killed at least 13 people, authorities said Saturday.

Is Ed Markey Fracktracking? Wait, did Rep. Ed Markey really just give a shout out to hydraulic fracturing? Back in July, the ranking member of the House Natural Resources committee was warning that “fracking” — a technique for unlocking natural gas and oil held in dense rock — could “turn stretches of forest into lifeless dunes.”

Natural gas price drop won't derail shale drilling Because of a warm winter and the expansion of shale gas drilling, the price of natural gas is as low as its been in a decade or more. The development of the Utica Shale in eastern Ohio isn't threatened by these rock-bottom prices because energy producers never were solely, or even primarily, focused on natural gas anyway.

2012 – Welcome to the Jungle As I mentioned earlier, there is no way – the math doesn’t add up – to make the collective solar, wind, hydrogen and other energy sources we have make up for the lack of oil. The only aircraft which run on electricity are the kind my neighbor’s kid runs with a radio-control joystick. The only cars which run on electricity have a short range and take forever to recharge – and it’s not like you can sell them used; either – not when replacing a battery array is somewhere north of $10,000.

Japan makes new rules for nuclear plants TOKYO (AP) – Japan says it will soon require atomic reactors to be shut down after 40 years of use to improve safety following the nuclear crisis set off by last year's tsunami.

Concern about aging reactors has been growing because the three units at the Fukushima Dai-ichi plant in northeastern Japan that went into meltdown following the tsunami in March were built starting in 1967. Among other reactors at least 40 years old are those at the Tsuruga and Mihama plants in central Japan, which were built starting in 1970.

U.S. to Block New Uranium Mines Near Grand Canyon The Obama administration is set to announce on Monday that it will block new uranium mining on one million acres in northern Arizona near the Grand Canyon, lobbyists and Interior Department employees who had been informed about the decision said on Friday.

Welcome windfall for an industry in need Saudi Arabia's commitment to industrial-scale solar power represents a windfall to an industry that is in need of cash.

Chinese Companies Prefer Dying to Being Bought, JinkoSolar Says Chinese solar-panel makers, which supply more than half the world market, will respond to the supply glut by shutting factories or their entire businesses rather than merging, a JinkoSolar Holding Co. (JKS) official said.

Acid test for 'evil twin' of climate change ABOARD THE AURORA AUSTRALIS: They call themselves Team Acid and are trawling the Southern Ocean with fine nets to see if the shells of tiny marine snails are thinning because of ocean acidification.

Scientists label this acid trend "the evil twin of climate change".

An Arctic methane worst-case scenario Let’s suppose that the Arctic started to degas methane 100 times faster than it is today. I just made that number up trying to come up with a blow-the-doors-off surprise, something like the ozone hole. We ran the numbers to get an idea of how the climate impact of an Arctic Methane Nasty Surprise would stack up to that from Business-as-Usual rising CO2.

The Peak Oil Crisis: Closing Out the Year The peak oil story changed little last year. Global oil production hung in around 88 million barrels a day (b/d) despite the Libyan uprising which took nearly 1.6 million b/d out of production for several months. For much of last year global oil production was below consumption resulting in a gradual drawdown of world reserves. With OECD stockpiles of about 2.6 billion barrels, plus the new reserves being accumulated in China, a slight shortfall in production is not a problem for the time being.

Crude Oil Futures Head for Weekly Gain on U.S. Economy, Iranian Tensions Oil headed for a weekly gain in New York on signs that the U.S. economic recovery is gaining momentum and concern that tensions with Iran may lead to a disruption in Middle East exports.

West Texas Intermediate futures have advanced 3.4 percent this week. Hiring in the U.S. probably accelerated in December for a second month, pointing to a strengthening labor market heading into 2012, economists said before a report today. The European Union is working to halt oil purchases from Iran, said Victoria Nuland, a U.S. State Department spokeswoman. European foreign ministers aim to announce harsher penalties on the Persian Gulf nation’s energy and banking industries at a meeting Jan. 30, according to EU spokesman Michael Mann.

Petroplus Closures to Boost Oil-Refining Profits The closing of three Petroplus Holdings AG refineries in northwest Europe may increase first- quarter profits from processing crude as fuel supplies are curtailed.

What is behind Nigeria fuel protests? The government is attempting to deregulate the oil sector in the country and believes subsidizing consumption of oil is a drain on public finances that will prove unsustainable in the long term. Many argue that the only people the subsidy benefited were fuel importers. The government says the move will save the Treasury more than 1 trillion naira ($6.13 billion) in 2012.

Reuben Abati, spokesman for President Goodluck Jonathan, told CNN the money saved from removing the subsidy will help to improve public amenities and build much-needed infrastructure in a country with poor roads, lack of power and non-functioning refineries.

Sinopec Says Ministry of Finance Raises Oil Windfall Tax Threshold to $55 China raised the threshold on a windfall tax paid by crude oil producers including PetroChina Co. and China Petroleum & Chemical Corp. (600028) in a move that analysts say may spur exploration of the nation’s energy resources.

Kazakhstan cancels vote in troubled oil town ASTANA (Reuters) - Residents of a mutinous Kazakh oil town will be excluded from a parliamentary election this month due to a state of emergency imposed after the deadliest riots in the Central Asian state for decades, the Central Election Commission said on Friday.

Cyprus Can Be Reunified Before Natural Gas Exports to EU, Minister Says Cyprus, the divided Mediterranean island that announced its first offshore gas find last week, said revenues will benefit Greek and Turkish Cypriots because reunification will be achieved before the fuel is shipped.

“Revenues are not envisaged to start accruing before a number of years pass because we need a number of years to develop the necessary infrastructure,” Praxoula Antoniadou, minister for commerce, industry and tourism, said in an interview in Nicosia. “Our vision is that the Cyprus problem will be solved much sooner, within months.”

Trading oil on Iran: untangling rhetoric from reality LONDON (Reuters) - How does an oil trader play the market when Iran threatens to shut the Strait of Hormuz and strangle Middle East oil supplies?

"Buy!" some would say.

But "Sell!" could come from cooler heads, the grizzled veterans who can cut through the bellicose rhetoric and who remember the 1980s Gulf "tanker war" in the Iran-Iraq conflict.

Iran did not block the Strait then, nor during decades of tensions with the West.

"There's a lot of rhetoric," said Rob Montefusco, trader at Sucden Financial. "Some people who have been around a long time are saying 'we've seen it all before', so they are using the recent price spikes as an opportunity to sell."

Iran plans more war games in strait as sanctions bite (Reuters) - Iran announced plans on Friday for new military exercises in the world's most important oil shipping lane, the latest in weeks of bellicose gestures towards the West as new sanctions threaten Tehran's oil exports.

Asian Refiners Seek Iran Oil Alternatives Refiners in Asia, the destination for 65 percent of Iran’s oil exports, are seeking alternative sources of crude in the event of a supply disruption from the world’s fourth-largest producer.

Japan to Express Concerns to U.S. Over Possible Iranian Oil Ban Foreign Minister Koichi Gemba “expressed our concerns to the U.S. government in December, including our worries about the impact of a possible import ban on the Japanese and global economy,” Fujimura told reporters in Tokyo today. “We are maintaining that position.”

EU governments consider delay on any Iran oil ban BRUSSELS (Reuters) - A European Union embargo on Iranian crude oil imports could take a few months to come into effect because of a push by some EU capitals for a delay that they say is necessary to shield their debt-stricken economies, EU diplomats said on Friday.

Europeans paddle in troubled waters This week, as the European Union inches closer to imposing a total oil embargo on Iran, thus escalating tensions to dangerous new levels, it is important to scrutinize the causes of what is rapidly turning into a major international crisis with unforeseen consequences, and to ponder the potential option of alternative Western policies that would prevent yet another crisis of choice, rather than necessity.

New sanctions on Iran pose problem for India's crude oil payments NEW DELHI: India may face problems in making payments for crude oil it buys from Iran because of recent moves by the US to curb Tehran's nuclear programme, a top government official said today.

Iran accused of diplomacy offensive in US backyard IRAN is quietly seeking to expand its ties with Latin America in what US officials and regional experts say is an effort to circumvent economic sanctions and gain access to much-needed markets and raw materials.

Want to Put Iran Out of Business? Here's How If you want bloodless regime change in Iran, then do one thing: drop the price of oil to $25/barrel. Yes, it's entirely possible.

Italy Last for Potential Libya Oil Concessions Libya’s new leaders will remember who provided the most help in overthrowing Muammar Qaddafi when it comes to new oil concessions. Italy, the biggest investor in the country, may find itself at a disadvantage.

Libya has the world’s ninth-largest proved reserves of oil, estimated at more than 46 billion barrels, according to the Central Intelligence Agency’s World Factbook. Much of the oil is prized for its high, low-sulfur quality.

Libya opens door to UAE oil companies UAE oil and gas companies are positioning themselves for a move into Libya, encouraged by assurances that they will receive preferential treatment as payback for the Government's support of anti-Qaddafi forces during last year's civil war.

25 dead in Syrian 'terrorist' blast, state media says (CNN) -- A suicide bomber blew himself up in the heart of the Syrian capital Friday, killing at least 25 people and wounding 46 others, Syrian state media reported.

The incident took place in the al-Midan quarter of Damascus. Casualties included mostly civilians and some law enforcement personnel, the Syrian Arab News Agency said.

Witnesses: Blasts strike Iraq's Army Day parade in Baghdad Baghdad (CNN) -- At least three explosions struck Friday near Baghdad's Green Zone, where a parade to mark Iraq's Army Day was taking place, witnesses said.

Tepco to Boost Capacity of Natural-Gas Power Plant Near Tokyo Tokyo Electric Power Co. (9501) will expand the capacity of gas turbines at its Chiba power station near Tokyo as part of measures to make up for the loss of atomic power following the Fukushima nuclear plant disaster.

A Shale-Fuelled Economic Miracle for 2012 Amidst the doom and gloom headlines presaging dire prognostications for the Western economies in 2012 there is the very real promise of a global economy re-directing miracle in the making. The impact and promise of shale gas and shale oil is probably the good news story as we step into 2012. Not that you would know it, given the media’s predilection for bad news.

Fidel Castro says world marching into abyss with shale gas (Reuters) - Former Cuban leader Fidel Castro said on Thursday the world was on an "inexorable march toward the abyss," which he blamed in part on the discovery and exploitation of vast reserves of so-called "shale gas" around the world.

Pennsylvania Fracking Site Gets U.S. Scrutiny After Complaints Water from wells in a Pennsylvania town near a gas-drilling site that used hydraulic fracturing will be collected and sampled by U.S. regulators after residents complained, the Environmental Protection Agency said.

Exxon’s Shale Driller Tightens Drug Testing for Rig Workers Union Drilling Inc., the rig owner hired by Exxon Mobil Corp. to explore U.S. shale rock formations for natural gas, toughened drug testing of rig workers in an attempt to cut down on accidents.

Why "But We Walked On the Moon!" Doesn't Mean What They Think It Does Going to the moon was impressive, but it wasn't a case of taking an extant need, determining to fill it, and doing so rapidly and in response that need. Instead, it was about creating a need and moving a sideshow (the space race) to the center of things (this is, of course, normative in politics and always has been). It was an important sideshow for any number of historical reasons but not in any way parallel to facing a national crisis and engendering a technological response that prevents disaster. Indeed, it involved us acknowledging, with the case of the space station, that time was inadequate to complete many desired projects.

Daniel Yergin: A perilous and crucial quest The author and policy advisor on peak oil, shale gas and how climate change will impact where people get their energy from

Why Rising Debt Will Lead to $10,000 Gold These events gave me the confidence to title my new book $10,000 Gold. The book connects the many trends that will be directly and indirectly responsible for both the rising debt and the rising gold price over the next five years. It will be published this year.

To make matters worse, the irreversible macro trends I discussed in last year’s Empire Club speech are still very much in place today. These include the added costs of retiring baby boomers, systemic unemployment due to outsourcing of Western jobs through globalization and rising oil prices due to peak oil. These irreversible trends will increase unemployment, lower GDP, reduce tax revenues, increase deficits further and force governments to borrow even greater amounts.

Oil Prices: Moving to Red Alert Peak oil is moving back fast as permitted dinner time talk - and even office time action on futures and options. And the reasons are multiple, well known, but heavily discounted until now. Through late 2011, many times, the IEA's chief economist Fatih Birol has outlined how radically the IEA sees the oil price outlook. Lost in the climate crisis talk however, the oil price message was often sidelined. Birol's agency in November said this: "If fossil fuel (energy) infrastructure is not rapidly changed, the world will lose for ever the chance to avoid dangerous climate change", but the oil price punch line came later. Birol has many times provided the IEA's estimate of how oil prices levered up through 2011, despite the European crisis, near-recession in the US, recession in Japan and falling growth in China and India.

Trying to beat the oil addiction Her children. They’re the reason Karen Andreassen became involved in the Transition Town movement.

As the world faces diminishing oil reserves, an unstable climate and unpredictable food production, the Transition movement is a worldwide network of communities working to move away from dependency on oil and create a more sustainable future.

Truck sales revving despite high gas prices Ford Motor, casting itself as a fuel-economy champ emphasizing small cars, nevertheless sold three trucks in December for every car. For all of 2011, the ratio was two trucks for every car. Overall, Ford truck sales were up and car sales were down despite new Fiesta and Focus fuel-sipping small cars.

Honda, likewise known for fuel-efficient small cars, reported that its Fit subcompact was the only car with improved sales in December and that its Insight hybrid hatchback almost disappeared from the December tallies, attracting just 690 buyers, a drop of 57.8%.

At the same time, sales of Honda's Pilot SUV and Odyssey family van both were strong.

GM recalls Volts to fix fire risk NEW YORK (CNNMoney) -- General Motors is recalling the Chevrolet Volt to make changes that it says will help prevent fires from coolant leaks which may follow a severe side impact.

Weather 'doubles' UK wind farm output Wind farms across the UK have seen their electricity output double as a result of the recent weather, industry body Scottish Renewables has claimed.

Illegal Fishermen 4, Enforcement 0 Even when suspected illegal fishermen are caught, penalties can be elusive, as two recent cases in Sierra Leone and Costa Rica show.

Water From Yosemite Is Still Cheap, for Now The going rent for a one-bedroom apartment in San Francisco is about $2,500 a month. That’s the same amount the city pays to use eight miles of Hetch Hetchy Valley in Yosemite National Park as a reservoir.

The $30,000 annual fee was set by federal law in 1913 and has not been changed since. But now, as the federal government struggles with budget problems, a Central Valley congressman is pushing to increase the city’s Hetch Hetchy rent by a thousandfold, to $34 million a year.

A Coal-Fired Plant That Is Eager for U.S. Rules BALTIMORE — As operators of coal-fired power plants around the country welcome a court-ordered delay on tighter pollution rules, the owner of a retrofitted plant here says that the rules cannot come too soon.

The company, Constellation Energy, says it is an issue of fairness. A little more than two years ago, it completed an $885 million installation that has vastly reduced emissions from two giant coal-burning units at its Brandon Shores plant here, within view of the city’s downtown office towers.

Depleted gas reservoirs can double as geologic carbon storage sites (PhysOrg.com) -- A demonstration project on the southeastern tip of Australia has helped to verify that depleted natural gas reservoirs can be repurposed for geologic carbon sequestration, which is a climate change mitigation strategy that involves pumping CO2 deep underground for permanent storage.

Economist: Recycling and Hybrids Won’t Save the Planet But Here’s What Will There's only one solution to climate change, warns Wagner. "Policy. That's what makes the difference."

Why investors need to act on climate change in 2012 The Intergovernmental Panel on Climate Change (IPCC) has long described investors as aggregators of risk from climate change. It can be argued that if governments fail to act sufficiently then investors have to do so in order to protect their assets.

Maldives warns of climate refugees The president of what could be the first country in the world lost to rising sea levels has urged Australia to prepare for a wave of climate refugees.