The Gulf Coast oil spill’s Dr. Doom (interview with Matt Simmons)
What do you think is in store for the future of BP?
They have about a month before they declare Chapter 11. They’re going to run out of cash from lawsuits, cleanup and other expenses. One really smart thing that Obama did was about three weeks ago he forced BP CEO Tony Hayward to put in writing that BP would pay for every dollar of the cleanup. But there isn’t enough money in the world to clean up the Gulf of Mexico. Once BP realizes the extent of this my guess is that they’ll panic and go into Chapter 11.
BP’s Shares Plunge on Spill Liability Fears
BP’s New York-traded shares headed sharply lower at about 1:30 p.m. EDT (1730 GMT), after an article appeared on Fortune magazine’s website quoting high-profile oil analyst Matthew Simmons, who raised questions about the company’s liability for the oil spill and its ability to survive the crisis.
PetroChina May Gain From Acquiring BP, StanChart Says
(Bloomberg) — PetroChina Co., vying with Exxon Mobil Corp. as the world’s biggest company by value, would have “persuasive” reasons to seek a takeover of BP Plc, according to Standard Chartered Bank.
Has US bloodlust at BP gone too far?
With something close to relish, financial pundits are mooting a BP bankruptcy. A New York Times columnist, Andrew Ross Sorkin, guessed that the cost of the gulf disaster could reach a staggering $40bn (£27bn), making corporate collapse a real possibility (calmer industry experts put the cost at $5bn to $15bn). A prominent, albeit retired, oil analyst, Matthew Simmons, has been touring television studios to declare that the oil spill was “entirely BP’s fault” and that the company will be bust within months. Predictions of doom are self-perpetuating in business and BP’s stock price has duly plummeted by 40%. The company’s market value has fallen by nearly £50bn, even though BP makes a profit of more than £11bn annually.
UK government says ready to help BP over spill
(Reuters) – Prime Minister David Cameron said on Thursday that the British government stood ready to help BP (BP.L) with its clean up efforts following the Gulf of Mexico oil spill.
Obama Scolding BP on Dividend Favors Fishermen Over Retirees
(Bloomberg) — Miriam Sullivan may lose about $10,000 a year of her retirement income if BP Plc suspends its dividend because of the Gulf of Mexico oil spill.
“It’s a nice amount of money to have coming in,” said Sullivan, the 74-year-old wife of a retired schoolteacher in Haddonfield, New Jersey, and one of the 39 percent of BP shareholders who live in the U.S. “They’re penalizing people that are innocent by cutting the dividend at this point, when they don’t even need to. It seems very political.”
Chaos in the Gulf Has Only Just Begun
Little attention has been paid to other companies dunked in the soup by the BP mess. As you know, President Obama has slapped a six-month moratorium on gulf drilling at depths in excess of 500 feet, idling 33 deepwater-capable rigs in various stages of exploration or production.
But did you know that fully five of those rigs were being operated by Royal Dutch Shell? And if that weren’t enough, along with the gulf pullback, the feds have put at least a temporary kibosh on Shell’s plans to spend most of this summer drilling five exploratory wells in the Beaufort and Chukchi seas off Alaska.
Mary Landry Sees Game Changer as Oil Awaits Atlantic Hurricanes
(Bloomberg) — Coast Guard Rear Admiral Mary E. Landry was up early on Saturday, April 24, preparing to brief news reporters on the deadly explosion at the Deepwater Horizon drilling rig when BP Plc called with bad news: The well was leaking oil into the Gulf of Mexico, 5,000 feet below the surface.
She dashed off an e-mail to inform several admirals about the leak that was destined to become the biggest offshore oil spill in U.S. history. In the subject line she typed, “GAME CHANGER.”
Coast Guard Toughens Oversight of BP’s Effort
With oil continuing to leak Wednesday from a runaway well in the Gulf of Mexico despite BP’s success in capturing some of the flow, a top Coast Guard official ordered the company to come up with a plan “to ensure that the remaining oil and gas flowing can be recovered.”
Gulf disaster ‘a game-changer’
The Gulf of Mexico oil spill is a potential “game changer” for oil supply, which could restrict future subsea oil development and limit supply, the International Energy Agency (IEA) said today.
The disaster at the Macondo wellsite, in BP-operated Mississippi Canyon Block 252, would raise costs, delay new projects and bring a thorough review of offshore regulation, the IEA said.
“April’s sinking of the Deepwater Horizon drilling rig and the ongoing oil spill might … prove to be a supply-side game changer,” the IEA said in its monthly Oil Market Report.
“Costs are going to go up, projects are going to be delayed and some sort of regulatory overhaul is likely in the United States in the aftermath of this terrible accident,” David Fyfe, head of the IEA’s oil industry and markets division, told Reuters Insider television.
Fyfe said the spill had “the potential to change the dynamic on the supply side of the equation” in the oil market.
Poll: Support plunges for offshore drilling; regulators blamed for Gulf spill
Just a quarter of Americans back expanding offshore drilling in the wake of the BP oil spill, and most fault federal regulators for the environmental disaster in the Gulf of Mexico, according to a new Washington Post-ABC News poll.
Before the spill, the Obama administration lifted the moratorium on drilling in U.S. coastal waters as a way to address the country’s energy needs. But most Americans now want fewer offshore wells (31 percent) or the amount kept at current levels (41 percent).
Perhaps as a consequence of the spill, public support for oil and gas drilling in general is also significantly lower than it was a year ago. And as Americans have become increasingly skeptical about such exploration, some elected representatives are now questioning what the government is doing to ensure that offshore exploration can take place safely.
The new oil risk: peak regulation
The regulatory system totally failed. Let’s try more regulation. We’ve seen this pattern before, and we’re about to see it all again in the oil industry. In the wake of the Gulf of Mexico disaster, governments all over the world, led by U.S. President Barack Obama, are now gearing up thousand-page rule books and new bureaucracies to oversee the global oil industry. Canada and Norway have already imposed curbs on deep water and Arctic exploration.
The result is certain to be declining reserves of oil around the world, reduced supply and messed-up markets. Much as many people would like to believe that fossil fuels are a filthy nuisance that can be replaced by wind, sun and other forms of green energy, the fact is that the world’s people are increasingly dependent on oil and will continue to be for decades to come.
‘Bow down to Peak Oil!’ says BBC’s Cthulu-worshipping Newsnight
Yesterday on the BBC’s flagship news analysis programme Newsnight Britain’s gravest, most distinguished and hard-hitting political interviewer Jeremy Paxman asked the vital questions an eager world most wants to hear: Cthulu – Are we worshipping him enough? Will it be necessary to sacrifice our children to appease him? Or will he be content if we just all erect a shrine to him, perhaps involving candles and teddy bears and Jo Malone scented oils?
No, it wasn’t really Cthulu that Britain’s gravest, most distinguished and hard-hitting political interviewer was addressing but something just as warped and obsessive – and undoubtedly a lot more dangerous: the cult of Peak Oil.
Bill McKibben: Missing the Real Drama of the Deepwater Horizon Blowout
When a well started spewing oil off Santa Barbara in 1969, it spurred the first Earth Day, which in turn launched the environmental movement and a fundamental questioning of the balance between humans and the rest of nature. It turned out, in other words, to be a real Moment.
It makes one wonder if there really shouldn’t be a little more depth to the endless coverage of the Deepwater Horizon blowout in the Gulf. (Which, just to be semantic for a moment, isn’t really a “spill,” or a “leak,” unless you’d also call a knife wound a “bloodspill,” or a gunshot to the carotid a “bloodleak.” BP has punched a hole in the bottom of the sea.)
Never let a good oil spill go to waste
NEW YORK (CNNMoney.com) — Never let a good crisis go to waste.
That’s paraphrasing White House Chief of Staff Rahm Emanuel’s supposed argument for sweeping reforms to the American economy amid the meltdown.
Now many say lawmakers are doing just that with the oil spill: failing to enact sweeping energy reform to wean the nation off fossil fuels while the public is fixated on events in the Gulf.
The lessons of the Gulf of Mexico crisis
Could it happen here? The environmental disaster that followed the blow-out of the Deepwater Horizon rig in the Gulf of Mexico has shown that deep-water drilling is indeed a hazardous activity. Perhaps for too long we have taken for granted the extraordinary achievement that is the North Sea project. Forty years ago, when a startled nation first became aware that the UK might be on the verge of an oil bonanza, it was seen as one of the great engineering wonders of the world; never before had oil been extracted from such inhospitable surroundings.
The Strange Case of Station 01
When the government and university researchers confirmed the existence of underwater plumes, or layers of dispersed oil in the Gulf of Mexico, on Tuesday, their report included a puzzling piece of information.
Bayou’s 232-Year-Old Isleno Culture Threatened by BP Oil Spill
(Bloomberg) — Louis Molero says the oil he’s fighting in the marshes of Louisiana’s St. Bernard Parish threatens his home, his livelihood and the survival of a bayou culture that’s one of a kind.
Molero, 47, is an oysterman and an Isleno, a descendent of Spanish-speaking Canary Islanders who came to Louisiana beginning in 1778. Hurricane Katrina destroyed all but a few of the parish’s 27,000 homes, scattering the residents. Now those who returned face an economic disaster from the BP Plc spill that may be more devastating, he said.
James Hamilton: How The Oil Spill Is A Replay Of The Subprime Crisis
In some ways the Gulf of Mexico oil spill seems like a replay of the subprime lending disaster. Clever technological innovations blew up in a mess that nobody knew how to control, wreaking devastation on those innocently standing by. The actors and the scenes have changed, but you can’t shake the feeling you’ve been through this nightmare before.
It’s time for progressives to rethink their messaging on climate change and America’s use of fossil fuels.
World needs Gulf of Mexico’s oil, says BP
Oil production in the Gulf of Mexico has become a much more significant part of meeting the world’s energy needs, raising the stakes for decisions on the future of deep-water drilling in the region in the wake of the biggest oil spill in history.
BP, the embattled oil giant, on Wednesday launched its BP Statistical Review of World Energy 2010, in which it announced that the global recession drove energy demand lower in 2009 than the previous year, the first such decline since 1982, as the world economy contracted for the first time since the Second World War. Global reserves are sufficient to meet 2009 production for 45.7 years.
IEA Raises 2010 World Oil Demand Estimate on Recovery
(Bloomberg) — The International Energy Agency raised its forecast for global oil demand this year as economic recovery in the U.S. bolstered fuel consumption, and increased its outlook for supplies from outside OPEC.
Worldwide oil use will rise by 1.7 million barrels a day, or 2 percent, in 2010 to a record 86.4 million barrels, the Paris-based agency said in its monthly market report today. The increase of 60,000 barrels from last month’s estimate is driven by an acceleration in North American demand. The IEA bolstered its projection for supplies from outside the Organization of Petroleum Exporting Countries by 65,000 barrels a day.
Peak oil is blowin’ in the wind
There are people on YouTube who believe peak oil has already arrived. Yet, in their annual reports, many oil companies continue to state every year that they are finding at least as much oil as they are producing. If you believe such data, reserve bases aren’t shrinking and peak oil could even be receding.
Six years of data show that global production of oil started to plateau in 2005. But there are other ways to measure the world’s faltering ability to increase oil supply. We can show the increase in cost structure, as the capital required to bring on the new barrel rises. We can show the decline rates from existing fields. We can quantify how much oil comes from expensive, technically challenging fields such as tar sands or global offshore. And, we can also show oil’s share as a percentage of total world energy consumption.
Given that the annual BP Statistical Review was released yesterday, I made up the following chart to show oil’s contribution to world energy use, on a BTU basis:
Crude Oil Futures Rise in New York, Trade Near Two-Week High
(Bloomberg) — Oil rose to trade near a two-week high in New York as the dollar weakened and the International Energy Agency raised its demand forecast.
Saudi Aramco to Supply Full July Oil Volumes to Asia
(Bloomberg) — Saudi Arabian Oil Co., the world’s largest state-owned oil company, will supply full contractual volumes of crude to Asia for loading in July as prices remain within its preferred range.
Saudi Aramco, as the company is known, will provide 100 percent of cargoes sold under long-term contracts for an eighth month, according to a survey of three refinery officials in Japan and one in China, all of whom asked to remain unidentified, citing confidentiality agreements with the Middle East producer.
Qatar, Russia Shutter Gas Supply as Prices Sag
(Bloomberg) — Qatar, the world’s largest producer of liquefied natural gas, will idle 66 percent of its export plants this year, reversing earlier plans and joining Russia in curtailing supply amid a global glut.
China does another big energy deal in the global fight for resources
Will there be any oil and gas left for the West by the time the Chinese have finished buying it all up? Richard Orange, our correspondent in Central Asia, alerts us to this announcement that China is buying another 10 billion cubic metres of gas a year from Uzbekistan.
Nigeria militants say clash with army in oil delta
(Reuters) – Nigeria’s main militant group said its fighters clashed with soldiers in the creeks of Delta state in the oil-producing Niger Delta on Thursday, the first report of such unrest in the OPEC member nation in months.
UN sanctions ‘won’t hit Iran pipe plan’
The $.7.6 billion Iran-Pakistan gas pipeline will not be hit by fresh United Nations sanctions imposed against Tehran, Pakistan’s Foreign Ministry said today.
Arab states: Israel blocking Mideast from becoming nukes-free
Arab countries singled out Israel at the International Atomic Energy Agency on Thursday for blocking the establishment of a Middle Eastern zone free of nuclear arms, at the first IAEA board meeting since 1991 to deal with Israel.
Funding crisis for nuclear fusion project ITER
A multi-billion euro international research project has run into deep financial trouble as EU governments scramble to find money to meet spiralling costs. However, with European credibility at stake, officials say there is no question of abandoning the project despite the yawning funding gaps.
Local tracks are motorsports meccas for thousands of fans
Remember, this summer, that life is short. So make a trip to the pump and fill ’er up. Then drive out of town and get out and cheer your head off for a bunch of daredevils racing in circles for little more than the sheer fun of it. It’s a guilty pleasure that will give you memories that’ll last a lifetime.
And those memories will be all the more special once we pass peak oil, and start driving around in strange looking vehicles powered by the sun.
Avoiding Environmental Disaster through Sustainable Accessibility
Yesterday in my post about sustainable accessibility, I included a link to this lecture by Dr. John Sterman. The lecture, part of MIT’s series of seminars about transportation, provides a great introduction to the concept of accessibility as an alternative way to consider transportation system design.
To design a sustainable and successful accessibility system, Sterman says, we need research across areas, including technical innovation; policy and business practices (i.e. new business models, policies, economic issues, price externalities that are currently not priced at all); and human behavior (i.e. taking full account of idiosyncrasies and irrational aspects of human behavior). All of this must be integrated.
I’m impressed by her point that it’s normal for people to use times of plenty to prepare for lean times, because people with historical memory know that good times never last — but we find ourselves in a culture in which people who wish to do that, and to encourage their neighbors to do that, find themselves associated with crazies who expect the Apocalypse. Do those people exist? Sure they do. But how representative are they of the “transition” community? Anyway, it’s a neat trick how, if we can associate self-sufficiency, responsibility, thrift and sustainability with wackadoodlism, we don’t have to change a thing about the way we live today, because who wants to be like those nutters? Let’s just keep going as we are, and wait for science to save our bacon.
The Best And Worst Of Times For China’s Environment
There’s great progress afoot. Just don’t breath the air or drink the water.
Carriers Criticize German Air Fare Tax
BERLIN — Germany’s plan to introduce an environmental tax of 1 billion euros a year on air travel tickets met with fierce resistance on Tuesday from airlines, which accused Berlin of making a shortsighted “cash grab” at the expense of an industry still struggling to return to profitability.
A Clash in Texas Over Air Pollution
HOUSTON — For 16 years, a showdown has been brewing between Texas and federal environmental officials over the state’s unique way of regulating industrial air pollution, which many critics complain is lax and has led to some of the dirtiest air in the country.
Now, President Obama’s new regional director of the Environmental Protection Agency in Dallas has forced the issue. The new environmental sheriff is Al Armendariz, a 40-year-old chemical engineer from El Paso, and two weeks ago, he took the unprecedented step of barring Texas from issuing an operating permit to a refinery in Corpus Christi.
US senator offers scaled-back climate bill
WASHINGTON (AFP) – A Republican senator Wednesday offered a scaled-back plan to fight global warming, saying it was politically unrealistic for the United States to mandate cuts on carbon emissions in tough economic times.
The proposal by Senator Richard Lugar would not create a “cap-and-trade” system requiring curbs in carbon — a signature part of European efforts and a Democratic-led bill backed by President Barack Obama.
Senate votes on blocking EPA greenhouse gas regs
WASHINGTON – In the absence of congressional action on climate change, the Senate is heading toward a much-watched vote on whether the Obama administration should be allowed to go ahead with regulations curtailing greenhouse gas emissions from power plants and other major polluters.
Legally Binding Climate Deal Likely in 2011, UN’S De Boer Says
(Bloomberg) — An international treaty to fight climate change is likely to take shape during United Nations talks in December and be completed a year later, the UN’s top climate official Yvo de Boer said.
Global warming spells doom for Asia’s rivers
BEIJING (AFP) – The livelihood of thousands of Tibetans living on China’s highest plateau is under threat as global warming and environmental degradation dry up water sources for three mighty Asian rivers, experts say.
Dwindling glaciers and melting permafrost in the mountains surrounding the fragile Qinghai-Tibet plateau are leading to erosion of grasslands and wetlands, threatening the watershed of the Yangtze, Yellow and Mekong rivers.
One prominent US environmental campaigner has even warned that the looming water crisis could trigger a major regional food shortage, as the rivers help irrigate vast wheat fields and rice paddies in China and southeast Asia.
