Graph of the Day: Collapse of US shale oil industry
Giles Parkinson, Renew Economy
Since the collapse in oil prices began in the middle of last year, all eyes have been on how the oil industry responds. Already, some $200 billion of projects have been either axed or deferred, mostly because they cannot compete on costs. The US shale oil industry is also suffering. This graph below from industry analysts Baker Hughes shows the dramatic fall in the number of rigs operating in the US shale industry.
In just three months, the rig count has fallen by 24 per cent, or 389 from the all-time high of 1,609 recorded for the week of 10 October last year. As Mark Lewis, from Paris-based analysts Kepler Chevreux notes: “In all of the historical Baker Hughes data stretching back to July, 1987, there is no precedent for a drop of this speed or severity.”
The significance of this is that predictions of the shale bubble may now come true. As David Hughes, the the Post Carbon Institute, wrote in his analysis “Drill, Baby, Drill”, there were always questions about how sustainable the shale revolution was going to be…
Why we are at Peak Oil Right Now
Ron Patterson, Peak Oil Barrel
In this life nothing is certain. Therefore I am not declaring, absolutely, that we are at peak oil, only that it is a near certainty. But I am putting my reputation on the line in making the claim that the period, September 2014 through August 2015 will be the year of Peak Oil. Below are my reasons for making this claim.
First of all, Peak Oil is not a theory. The claim that Peak Oil is a theory is more than a little absurd. Fossil hydrocarbons were created from buried alga millions of years ago and they are finite in quantity. And as long as we keep extracting them in the millions of barrels per day, it is only common sense that one day we will reach a point where their extraction starts to decline. In fact most countries where oil is extracted are already in decline. So obviously if individual countries can experience peak oil then the world as a whole can also experience peak oil…
Biofuels are not a green alternative to fossil fuels
Andrew Steer and Craig Hanson, The Guardian
Powering cars with corn and burning wood to make electricity might seem like a way to lessen dependence on fossil fuels and help solve the climate crisis. But although some forms of bioenergy can play a helpful role, dedicating land specifically for generating bioenergy is unwise. It uses land needed for food production and carbon storage, it requires large areas to generate just a small amount of fuel, and it won’t typically cut greenhouse gas emissions…
In a new working paper, World Resources Institute (WRI) calculates that providing just 10% of the world’s liquid transportation fuel in the year 2050 would require nearly 30% of all the energy in a year’s worth of crops the world produces today…
Oil erases losses for 2015 as majors take action
Matt Clinch, CNBC
Oil prices rallied again Tuesday, with producers announcing spending cuts that added to a slew of positive factors helping to drive the commodity higher.
U.S. crude climbed more than $1.50 a barrel on Tuesday and was trading above $51 a barrel by 12:30 p.m GMT (7:30 a.m. EST). Brent crude for March delivery opened at $55 a barrel and had risen to $56.68 a barrel by the same time. Both have seen gains of around 3 percent in morning trade and have climbed around 16 percent since Friday.
It came as BP CEO Bob Dudley told CNBC on Tuesday that the number of U.S. shale rigs was "dropping like a stone," but added that it would be a while before excess supply worked its way out of the market…
We can’t bail out fracking if it turns into another housing crisis
Pavan Sukhdev, The Guardian
…The break-even level for fracking in the US has been estimated by the industry at about $75-80 per barrel. Of course, oil prices since 2010 had been comfortably above $100 most of the time, so oil and gas multinationals and their bankers eagerly placed their bets. Does this sound familiar? Heard of the housing bubble?…
Rise Of The Vulture Investing Class
Nick Cunningham, Oilprice.com
The oil markets are showing some life, having rallied 11 percent over a two-day period. But if a bigger rebound is not around the corner, it won’t just be oil companies that will be feeling the pain: their lenders will also face some steep losses if drillers can’t come up with the cash to cover debt payments. Drilling for oil is an expensive process. Until the oil begins to flow, companies have to shell out cash without seeing much in return. Without revenues from other wells already in production, oil companies have to take on debt to finance operations. Even for companies with big production portfolios, debt is a crucial source of funds to keep the treadmill of new drilling going. Between 2010 and 2014, the oil industry took on around $550 billion in debt, a period of time in which oil prices surged. Now with a crash, that volume that becomes especially hard to service…
But not all lenders are in trouble. Eyeing wounded animals, some financial vultures sense an opportunity. Hedge funds and private equity are stepping into the fray, providing credit to distressed oil companies at exorbitant rates. Shut out of traditional debt markets, oil companies drowning in debt have few other options. Particularly for smaller drillers, these emergency loans provide a lifeline to pay off other debt… The onerous terms on new debt obviously makes it even less likely that oil drillers will be able to get back on their feet. But these vulture investors know that they can seize assets in the event of a bankruptcy. And if oil prices do turnaround, then these financial institutions come away with potentially lucrative oil-producing assets that they obtained at fire sale prices…
Wales Says No To Fracking Until ‘Proven Safe’
Ari Phillips, Think Progress
On Wednesday, the Welsh parliament voted in favor of a measure calling on the government to prevent fracking from taking place “until it is proven to be safe in both an environmental and public health context.” The vote comes just one week after Scotland announced a temporary fracking ban in order to allot time for a full public health assessment of the process.
“It’s a historic day,” said North Wales assembly member Llyr Gruffyd, of the Plaid Cymru party. “This is a clear statement from the National Assembly for Wales that we want a frack-free Wales.”
The vote effectively makes it impossible for shale gas projects to receive planning permits in Wales. With the Irish Government also waiting to proceed with the controversial process, pressure is building in London for a British ban and possible U.K.-wide moratorium…
Oil Union Talks With Shell Suspended as White House Urges Accord
Lynn DoanAngela Greiling Keane, Bloomberg
Talks to end the first national walkout of U.S. oil workers in more than three decades were suspended after the United Steelworkers union rejected an offer from energy companies. The White House urged a resolution to the impasse…
The Fracking “Matrix”: Which “frame” gives the more relevant picture?
Brian Davey, FEASTA
In this presentation given to Derby City Council on January 13th, Brian Davey identifies some of the ways in which fracking has been framed in order to make it seem innocuous.
Link to presentation (PDF)
EPA Keystone Review Links Oil Sands to Carbon Emission Jump
Jim Snyder and Mark Drajem, Bloomberg
The U.S. Environmental Protection Agency said developing Canadian oil sands would significantly increase greenhouse gases, a conclusion environmental groups said gives President Barack Obama reason to reject the proposed Keystone XL pipeline.
“Until ongoing efforts to reduce greenhouse gas emissions associated with the production of oil sands are more successful and widespread,” developing the crude “represents a significant increase in greenhouse gas emissions,” the EPA said Tuesday in a letter to the State Department, which is reviewing the project…
World’s biggest sovereign wealth fund dumps dozens of coal companies
Damian Carrington, The Guardian
The world’s richest sovereign wealth fund removed 40 coal mining companies from its portfolio in 2014, citing the risk they face from regulatory action on climate change.
Norway’s Government Pension Fund Global (GPFG), worth $850bn (£556bn) and founded on the nation’s oil and gas wealth, revealed a total of 114 companies had been dumped on environmental and climate grounds in its first report on responsible investing, released on Thursday. The companies divested also include tar sands producers, cement makers and gold miners.
As part of a fast-growing campaign, over $50bn in fossil fuel company stocks have been divested by 180 organisations on the basis that their business models are incompatible with the pledge by the world’s governments to tackle global warming. But the GPFG is the highest profile institution to divest to date…
Most Republicans Say They Back Climate Action, Poll Finds
Coral Davenport and Marjorie Connelly, New York Times
An overwhelming majority of the American public, including half of Republicans, support government action to curb global warming, according to a poll conducted by The New York Times, Stanford University and the nonpartisan environmental research group Resources for the Future.
In a finding that could have implications for the 2016 presidential campaign, the poll also found that two-thirds of Americans said they were more likely to vote for political candidates who campaign on fighting climate change. They were less likely to vote for candidates who questioned or denied the science that determined that humans caused global warming…
Climate and Population are Linked = But Maybe Not the Way You Thought
Robert Engelman and Alexander Ochs, Worldwatch
It’s not a topic that comes up in high-level international negotiations on climate change. Yet who would disagree that when individuals and couples use modern contraception to plan childbearing according to a schedule that suits them, they tend to have fewer children than they would otherwise? Could it be that this aspect of family planning, multiplied hundreds of millions of times, might lessen the severity of human-caused climate change and boost societies’ capacity to adapt to it?
The Intergovernmental Panel on Climate Change, after all, recently noted that population and economic growth “continue to be the most important drivers of increases in CO2 emissions from fossil fuel combustion.” Not many analysts see “win-win” opportunities in reining in economic growth. Population growth, by contrast, might be slowed as a side effect of efforts that have multiple other benefits — such as education, empowerment of women, and the provision of reproductive health services including safe and effective contraception. And there’sreason to believe that slower population growth also makes societies more resilient to the impacts of climate change already upon us or on the way…
The Drought Fighter
Todd Oppenheimer, Craftsmanship
One afternoon last March, on a small vegetable farm that Paul Kaiser runs in a particularly chilly valley in Sebastopol, California, a group of agriculture specialists gathered around a four-foot steel pole. The experts had come to test the depth and quality of Kaiser’s top-soil, and one of them, a veteran farmer from the Central Valley named Tom Willey, leaned on the pole to push it into the dirt as far as he could. On a typical farm, the pole comes to a stop against infertile hard-pan in less than a foot. But in Kaiser’s field, the pole’s entire length slid into the ground, and Willey almost fell over. “Wow, that’s incredible,” he said, wondering if he’d hit a gopher hole. The whole group burst out laughing. “Do it again! Do it again!,” said Jeff Mitchell, a longtime professor of agriculture at the University of California at Davis.
The group repeated the exercise, over and over—for photo ops, and to make sure that Kaiser really had accomplished the various feats he talks about, which he does almost incessantly these days. It’s not the easiest sell. Kaiser, an ebullient former woodworker who is only 40, farms a mere eight acres, and harvests fewer than three of them. Nonetheless, his methods are at the forefront of a farming movement that is so new (at least in the U.S.), and so built for a climate-changed world of diminishing rains, that it opens up gargantuan possibilities. One might call this methodology sustainability on steroids, because it can generate substantial profits. Last year, Kaiser’s Sonoma County farm grossed more than $100,000 an acre, which is 10 times the average, per-acre income of comparable California farms. This includes Sonoma’s legendary vineyards, which have been overtaking farmland for decades, largely because wine grapes have become much more lucrative these days than food, at least the way most farmers grow it.
Kaiser manages all of this without plowing an inch of his ground, without doing any weeding, and without using any sprays—either chemical or organic. And while most farmers, even on model organic farms, constantly tinker with various fertilizer cocktails, Kaiser concentrates on just one: a pile of rotten food and plants, commonly known as compost, and lots of it. Kaiser adds this compost to a rare blend of farming practices, both old and new, all aimed at returning dirt to the richest, most fertile seedbed possible. “It’s unique,” Mitchell told me after his visit. “I’ve never seen anything approaching that kind of thing.”…
World has not woken up to water crisis caused by climate change: IPCC head
Nita Bhalla, Reuters
Water scarcity could lead to conflict between communities and nations as the world is still not fully aware of the water crisis many countries face as a result of climate change, the head of the U.N. panel of climate scientists warned on Tuesday.
The latest report from the U.N. Intergovernmental Panel on Climate Change (IPCC) predicts a rise in global temperature of between 0.3 and 4.8 degrees Celsius (0.5 to 8.6 Fahrenheit) by the late 21st century.
Countries such as India are likely to be hit hard by global warming, which will bring more freak weather such as droughts that will lead to serious water shortages and affect agricultural output and food security…
See also – India’s Food Security Threatened by Groundwater Depletion
Segregated cycle superhighways set for go-ahead in London
Peter Walker, The Guardian
Transport for London (TfL) is expected on Wednesday to confirm plans for a series of cycle superhighways that could revolutionise transport in the capital. Under consideration is a series of new or upgraded bike lanes, many of them based on the principle of fully segregating cyclists from motor traffic for the first time. Most ambitious is an 18-mile segregated route from Tower Hill in the east to Acton in the west, running through the centre of the city… Cycling groups say the lanes could significantly boost cyclist numbers, opening the way for more such routes, both in London and elsewhere in the UK…
For green, comfortable homes, Mali turns to mud
Soumalia T. Diarra, Reuters
Building a house in the poorest villages of southern Mali has for years involved cutting trees for timber frames and struggling to save cash for a corrugated iron roof.
Now families are turning to an alternative: Nubian-style domed mud-brick homes that are cheaper, protect fast-vanishing local forests and make homes cooler in the worsening summer heat, experts say.
Earthen homes with vaulted brick roofs – a style adopted from Nubia in northern Sudan – are being promoted across the Sahel, including in Burkina Faso, Senegal and Mauritania, as part of efforts to build resilience to climate change…
Farming Now Worse For Climate Than Deforestation
John Upton, Climate Central
The federal raids in Alta Floresta, Brazil surprised locals in 2005. The year before, nearly 60,000 acres of rainforest had been torn out of the municipality. Now farmers and loggers were being arrested by armed police, accused of environmental crimes. “It was a radical operation,” the newly elected mayor later recalled during an interview with a Princeton University researcher. “All our economic activity stopped.” A few years later, Brazil’s central bank made it harder for property owners there, and in 35 other blacklisted areas, to borrow money unless they proved they were protecting the rainforest. The campaign marked a sharp change from the 1970s, when the federal government, then a military dictatorship, had encouraged clearcutting. Now the federal government was cracking down on it — and doing so successfully. In 2010, fewer than 1,000 acres of Alta Floresta was deforested.
Efforts such as these to slow deforestation have delivered some of humanity’s few gains in its otherwise lackadaisical battle so far against global warming. A gradual slowdown in chainsawing and bulldozing, particularly in Brazil, helped reduce deforestation’s annual toll on the climate by nearly a quarter between the 1990s and 2010.
A new study describes how this trend has seen agriculture overtake deforestation as the leading source of land-based greenhouse gas pollution during the past decade. While United Nations climate negotiations focus heavily on forest protections, the researchers note that delegates to the talks ignore similar opportunities to reform farming…
How Trees Can Make City People Happier (and Vice Versa)
Sarah Laskow, Next City
ew days ago; now their bare branches are waving in the wind, against the gray-blue of the cloudy dusk sky. It’s nice to have them there. Without the trees, my view would be starker, nothing but flat roofs still white with snow and the rectangular outlines of overlapping buildings farther in the distance. They’re calming — something big and beautiful, that wasn’t made entirely by human hands, in a city full of people.
There’s plenty of evidence that hints of nature help us humans live in the urban spaces we’ve built. About five years ago, one major study showed that, across the world, living in cities is associated with higher levels of depression and other mental health problems; a rash of studies since have shown that people feel like green spaces — parks and community gardens, usually — help them deal with the stresses of urban life.
Mark Taylor, a public health researcher at the University of Trnava in Slovakia, wondered, though, if there might be a way to establish that connection between nature and mental health without relying on people’s own accounts of their well-being. “There’s been a fair bit of research that looks at different ways in which people say they feel some kind of benefit of being around natural spaces,” he says. “But nearly all of that was subjective.” You can ask people if they feel better, he says, and plenty might say they do. But how to know for sure?…
