July 2011 Archives

heating oil futures contract as of August 21, effectively setting the end of the line for the world's first successful energy futures contract. It recorded its first trade in 1978. It's fascinating to look back through the history of how it came to be.

In recent years there has been a huge increase in production and sales of LNG, with a 23% increase in shipments last year alone, and LNG now accounting for 31% of global gas trade.

LNG links together markets that were once separate through global competition, with gas on a ship open to diversion to a higher-priced market in a way that gas in a fixed-route pipeline never was.

In the latest edition of "what was once old is new again," the oil industry brings you: the choo-choo train.

Trains were a primary means of moving crude oil around the US and other countries years ago; John D. Rockefeller's Standard Oil used trains to help solidify the power of his trust. (A paper written by two professors on the history of Standard Oil and rail put it this way: "The charge leveled most consistently against Standard Oil is that it secured unfair competitive advantages by negotiating advantageous rates with the railroads over which it shipped crude from the 'Oil Regions' of Pennsylvania and Ohio to its Cleveland refineries and sent kerosene and other refined petroleum products to markets on the East Coast.")

The first barrels of crude from the Strategic Petroleum Reserve have moved out of their hiding places, and it showed in this week's Energy Information Administration and American Petroleum Institute statistics. Linda Rafield's take on this week's numbers can be found here.

Al Gore's newly named Climate Reality Project (he's not giving up!) wants everyone to make September 14-15 "24 Hours of Reality," with people around the world sharing videos about climate change effects and local approaches to solutions.

Coal's role probably will be just one focus of the event, which aims at regular people, not so much at policymakers like members of Congress. It seems like the only thing to do right now for people who want to get at greenhouse gas emissions, because CO2 reduction might be last on the list of things that stand a chance of being done in Washington. It might even be first on the list of things that stand no chance of being done in Washington. It appears Michael Bloomberg agrees somewhat with the more grassroots approach.

Shale play holds a key to reversing the state's decades-old trend of declining production.

Call it a "California revolution," as does Phil McPherson, a senior research analyst with Global Hunter Securities.

Bakken and Eagle Ford, the all-stars of the U.S. shale crude plays, draw the headlines -- and the investment dollars -- but it is the Monterey that could hold the greatest potential.

He's worked as a garbage man, lawyer and bartender, but despite being called one of the most popular aides in the US Senate, little is known away from Capitol Hill about the man who will likely become the Commodity Futures Trading Commission's newest commissioner.

Anyone that had hopes for revealing insight on Mark Wetjen, Obama's pick to be the next CFTC commissioner, during this week's Senate confirmation hearing was probably left somewhat disappointed this week.

Start a discussion of energy storage for renewable energy, and almost inevitably the phrase "Holy Grail" will emerge: the search for a transforming technology that will put intermittent solar and wind power on par with baseload production.

This week's Energy Information Administration statistical report showed a significant upturn in US refinery activity, even as demand looked static. No mystery about what the result of that is: higher inventories. Platts' Linda Rafield discusses the numbers here.

In case you missed it Sunday, The New York Times ombudsman has come down solidly on the side of the critics who ripped into the paper's recent story about shale gas.

The Times' ombudsman is more formally known as the Public Editor; the current occupant of the job is named Arthur Brisbane. His pieces are generally nuanced, full of plenty of "on the other hand" type analyses. But by the end of his review of "Insiders Sound an Alarm Amid a Natural Gas Rush," there wasn't a lot of nuance.

If you're not familiar with the original story that spurred the critique, all you really need to know, as Brisbane notes, is that the terms "Enron," "ponzi scheme" and "dot-com" were all invoked as comparisons to the shale gas boom.

The first oil and gas major has come a-courting Australia's nascent shale gas industry, fuelling anticipation that it might eventually enjoy the kind of relationship that had the east coast coalseam gas sector swooning last decade.

US heavyweight ConocoPhillips was this week the first suitor to show its hand, flirting with farming into a shale gas play held by local minnow New Standard Energy in Western Australia's onshore Canning Basin.

Since announcing on June 23 a 60-million-barrel release of oil from emergency stocks, the IEA has attracted widespread criticism from pundits attacking the timing and motivation of the move, and even more questions over whether the amount of oil to be released will really match up to the headline figure.

So how big is a 60-million-barrel stock release? That's not a straightforward question to answer, as it depends to a large degree on your definition of "release."

When the US Commodity Futures Trading Commission last week unanimously approved its new anti-manipulation and anti-fraud rules, it marked the biggest rules the agency has finalized so far under the Dodd-Frank Act.

But there are still dozens of far more contentious rules left to finalize and if the comments of outgoing Commissioner Michael Dunn are any indication, the path to implementing these rules may be fraught with infighting, compromise and delay.

My journalism career started with writing food articles for the "Women's News" section of my local newspaper, but eventually ended up covering what might be called "Men's News": the energy sector.

Solid statistics on women in the energy field overall are scarce, but a glance around the room at any industry event will confirm it is probably not much higher than the 20% or so that has been bandied around as an estimate. To pick a random example, ExxonMobil says women make up 26% of its worldwide workforce.

There's an often-heard market view that the Brent-WTI spread -- which is now more than $20 in favor of Brent -- will come back to a more narrow range in the coming months or year. It won't go back to WTI being higher than Brent, which had been the norm for years, but it will get back to something that won't leave people with their mouths agape.

That's not a view held at Citi.

Opinions may be divided on this, but to all intents and purposes, OPEC's targets are dead and gone.

The oil producer club issued a short communique after the acrimonious June 8 meeting.

The communique did not say OPEC had agreed a rollover of the 24.845 million b/d target in place since January 2009. It said that "no formal decision was reached on a production agreement."

Rain or shine, it is business as usual for the Somalian pirates, as seen by the recent attempted hijacking of the fuel-oil laden Brillante Virtuso, a Liberia-flagged Suezmax vessel.

The attack, taking place at a time when the monsoon is at its peak in the Gulf of Aden and the surrounding region, saw a fire break out near the tanker's accommodation block as a result of RPGs fired at the vessel.

Two significant events this summer should help boost commercial production of bio-based jet fuel: the approval of a new fuel standard and the recent completion of a successful first trans-Atlantic flight.

In July, international standards developer ASTM gave a final nod to a new jet standard for hydroprocessed renewable jet fuel. The standard backs the use of up to a 50% blend of petroleum-based jet and biomass-based jet from feedstocks such as camelina, jatropha or algae. Hydroprocessed biojet goes through virtually the same process petroleum refineries use, creating a drop-in form of fuel that Honeywell UOP used recently in a flight from New Jersey to France for the Paris Air Show.

When it touched down at Paris-Le Bourget Airport early June 18, the Gulfstream G450 business jet became the first aircraft to fly from North America to Europe on biofuel, according to Honeywell.

Rekoske, vice president and general manager of renewable energy for Honeywell UOP, took time out from his schedule to answer a few questions via email:

Like Mark Twain, reports of Hugo Chavez's death have been greatly exaggerated during his 12-year presidency. A quick search churns up speculative postings by Chavez supporters and foes of a dead Chavez in 2005. In April 2008, groundless rumors again hit the ether, then kicked up again two years later.

Death may yet be far off for the strongman, who has survived prison, a brief political coup in 2002, other efforts at sabotage, and now, possibly, cancer.

In this week's Platts Oilgram News "New Frontiers" column, Leslie Moore Mira discusses the distintegration of Venezuela's once-proud state oil company, but how Colombia has been able to benefit from the exodus of its skilled employees.

As politicians in the US continue to talk about the pointless and unreachable goal of "energy independence," it's a good time on this Independence Day weekend to take a look at just how many gains have been made in that ultimately futile quest over the past six months, with an eye in particular on just the past month.

As we've discussed previously, what truly matters regarding import dependence is not total imports. It's net imports, in other words, imports less exports. And in that sense, there's been a sea change for the US position.

Here are a few highlights from the April report on net imports, released by the US Department of Energy late last week: