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March 10, 2017 at 10:58PM
Category: Uncategorized
OPEC Is Losing The Shale Battle
via The Global Warming Policy Forum (GWPF)http://www.thegwpf.com
The prospect of rising US shale production threatens to undermine the efforts of OPEC, which now looks at risk of having ceded market share for no substantial price gain.
The feeling of restrained optimism that imbued a major energy conference last week was short-lived.
Oil and gas executives in Houston for CERAWeek, an annual conference that draws thousands of energy professionals, expressed confidence in their ability to drive down operating costs to counter lower commodity prices.
The mood, though still cautious, was much lighter than a year earlier when prices were hurtling toward US$30 per barrel.
Now, it seemed, oil markets had entered a period of relative stability amid output declines in some regions.
But on Wednesday, as if in cruel jest, oil prices took their steepest single-day dive in months.
Higher-than-expected inventory data in the U.S. helped push down futures contracts for West Texas Intermediate by five per cent, settling at a 2017 low of US$50.28. On Thursday prices dipped below the US$50 threshold, wiping out hopes that an agreement by OPEC and non-OPEC countries to curb supplies had put a “floor” on prices above the US$40 range.
The drop in prices underscored the seemingly endless uncertainty that has hobbled the industry in recent years, causing companies to dramatically reorient their corporate structures.
“You have to put a business model in place that embraces the volatility,” said ConocoPhillips Co. CEO Ryan Lance.
“We know what to do when prices are higher—the real question is what do you do when prices are back in the US$40-or-so level.”
The lowering of break-even costs dominated discussion. In particular, executives focused on the economics of oily shale basins in the U.S., where production has boomed in recent years despite stubbornly low prices.
“Turning to the U.S. oil and gas industry, it’s just as important to note that our [OPEC’s] collective efforts to reduce global market volatility directly benefit the U.S. industry, which is the bellwether of the global industry,” Khalid Al-Falih, Saudi minister of energy, industry and mineral resources, told energy executives at the conference.
With less capital, Lance said his company is keeping its production flat. Like other oil giants Exxon Mobil Corp. and Chevron Corp., Conoco has focused their portfolios around big projects in U.S. shale basins with faster return cycles.
Many, however, are speculating how much U.S. shale would continue to grow—and whether that growth could adversely impact producers. Continental Resources Inc. CEO Harold Hamm said increasing shale output could “kill” oil markets if producers continue to efficiently pump out more and more crude.
That discussion was particularly focused on the Permian Basin in northwest Texas and southeast New Mexico.
Vicky Hollub, the CEO of Occidental Petroleum Corp., speculated that Permian production could in coming years reach as high as four or five million barrels per day, up from around 2.2 million bpd today.
The prospect threatens to undermine the efforts of OPEC, which now looks at risk of having ceded market share for no substantial price gain.
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via The Global Warming Policy Forum (GWPF) http://www.thegwpf.com
March 10, 2017 at 08:07PM
EPA Chief Calls Paris Agreement ‘A Bad Deal’ Amid Internal White House Struggle
via The Global Warming Policy Forum (GWPF)http://www.thegwpf.com
Environmental Protection Agency (EPA) Administrator Scott Pruitt weighed in on an issue the Trump administration has been silent on since taking the reins of government in January. Pruitt said the Paris climate agreement was “a bad deal” that should have been treated by the Obama administration as a treaty, instead of an executive agreement.
“I happen to think the Paris accord, the Paris treaty, or the Paris Agreement, if you will, should have been treated as a treaty, should have gone through senate confirmation,” Pruitt told CNBC’s “Squawk Box” Thursday morning. “That’s a concern.”
Pruitt’s comments, first reported by Reuters, is the first time a top Trump administration official has weighed in on the agreement since January. Most reporters, however, focused on Pruitt’s remarks that carbon dioxide is not a “primary contributor to the global warming that we see.”
One former EPA transition team member was pleased with Pruitt’s remarks. Chris Horner, a senior fellow at the Energy & Environment Legal Institute and the Competitive Enterprise Institute, has long been a critic of the Paris agreement.
Pruitt’s remarks come amid reports of an internal struggle over whether or not to stay in the United Nations global warming pact, which President Barack Obama made the U.S. party to in 2016 without Senate consent.
One one side, Ivanka Trump, White House adviser Jared Kushner and Secretary of State Rex Tillerson are urging Trump to stay in the Paris agreement, sources told Politico and The New York Times.
Such reports came on the heels of news Kushner and Ivanka “intervened to strike language about the climate deal from an earlier draft of the executive order” on the EPA’s climate regulations, The Wall Street Journal reported.
Ivanka and her husband Kushner “have been considered a moderating influence on the White House’s position on climate change and environmental issues,” WSJ reported.
White House adviser Steve Bannon opposes staying in the Paris pact, according to reports. Bannon wants to exit the deal, fulfilling a major promise President Donald Trump made on the campaign trail.
“We’re going to cancel the Paris Climate Agreement and stop all payments of U.S. tax dollars to U.N. global warming programs,” Trump said in a May campaign speech.
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via The Global Warming Policy Forum (GWPF) http://www.thegwpf.com
March 10, 2017 at 08:07PM
G-20 Poised To Signal Retreat From Paris Climate Pledge
via The Global Warming Policy Forum (GWPF)http://www.thegwpf.com
Finance ministers for the U.S., China, Germany and other members of the Group of 20 economies may scale back a robust pledge for their governments to combat climate change, ceding efforts to the private sector.
Citing “scarce public resources,” the ministers said they would encourage multilateral development banks to raise private funds to accomplish goals set under the 2015 Paris climate accord, according to a preliminary statement drafted for a meeting that will be held in Germany next week.
The statement, obtained by Bloomberg News, is a significant departure from a communique issued in July, when finance ministers urged governments to quickly implement the Paris Agreement, including a call for wealthy nations to make good on commitments to mobilize $100 billion annually to cut greenhouse gases around the globe.
“It basically says governments are irrelevant. It’s complete faith in the magic of the marketplace,” John Kirton, director of the University of Toronto’s G-20 Research Group, said in an interview. “That is very different from the existing commitments they have repeatedly made.”
Mnuchin’s Debut
The shift in tone comes as U.S. President Donald Trump’s Treasury Secretary, Steven Mnuchin, prepares for his first G-20 meeting, scheduled for March 17 to 18 in the spa town of Baden-Baden. While European nations including Germany have been at the forefront of combating global warming, Trump has called climate change a hoax.
The Republican president vowed during his campaign to “cancel” the Paris agreement but has said little about the deal since taking office. His cabinet members, meanwhile, have sent mixed signals. U.S. Secretary of State Rex Tillerson said the U.S. should keep a seat at the table for international climate talks. Scott Pruitt, the head of the Environmental Protection Agency, on Thursday expressed doubt that humans were to blame for global warming and called the Paris agreement a “bad deal” for the U.S.
Several leaders of G-20 nations have expressed strong support for combating climate change and upholding the Paris accord since Trump’s election, including China and the U.K. The annual summit of G-20 heads of state is scheduled for July in Hamburg. It’s unclear what countries pushed for the new language in the finance ministers’ draft statement, which is likely to undergo revisions before being formally adopted.
The most notable element of the draft is what’s missing. The statement issued after the G-20 finance ministers and central bank governors meeting in July dedicated 163 words to the Paris Agreement, pushing nations to bring the deal into force, meet emissions targets and fulfill financial pledges. This current draft dedicates just 47 words to the agreement, focusing exclusively on development banks raising private funds, without mentioning government financial support.
Full story
via The Global Warming Policy Forum (GWPF) http://www.thegwpf.com
March 10, 2017 at 07:37PM
