Quote of the Week

“OK, can we please stop pretending biofuel made from corn is helping the planet and the environment? The United Nations Intergovernmental Panel on Climate Change (IPCC) released two of its Working Group reports at the end of last month, and their short discussion of biofuels has ignited a fierce debate as to whether they’re of any environmental benefit at all.” – James Conca, Forbes

Graphic of the Week

Note: According to the EIA, US LNG export capacity is projected to triple by the end of 2019.

1.  Oil and the Global Economy

Oil prices currently seem on course to finish out 2017 with a second annual gain after the decision by OPEC to extend its production freeze through 2018. Last week Brent briefly climbed above $65 a barrel for the first time since 2015 due to the closure of the pipeline that brings some 455,000 b/d ashore from the North Sea fields. Moreover, several major financial institutions have raised their oil price forecast for the coming year.  While the year ahead looks bullish to some, there is major disagreement between OPEC and the International Energy Agency over where oil prices are going in the coming year. OPEC, bullish as usual, says that production curbs by the cartel and its allies will eliminate the oil glut that has kept oil prices low for the last three years. The IEA, however, does not expect the oil glut, which contracted by about two-thirds in 2017, will continue to shrink due to a rapid increase in US shale oil production. There are pros and cons on both sides of this disagreement so that it is difficult to see just how the situation nets out.

The key issues for 2018 will be how fast US shale oil production grows and whether OPEC and its associates can adhere to its agreement for the next 12 months and just what will be the OPEC exit strategy. Then we will have the unplanned outages, such as we are currently experiencing in the North Sea and Nigeria. There are also several geopolitical crises which could lead to major declines in oil exports, especially in the Middle East; however, the Venezuelan situation is also deteriorating rapidly. These three factors will determine just where global oil inventories go during the coming year. Should the inventory shrink to normal then prices will climb higher, possibly much higher should there be major supply disruptions. Should US production surge as some, particularly the EIA predict, then we could see a narrow trading range in 2018.

Last week saw a larger-than-expected drawdown in US crude stocks and, according to the EIA, a 73,000 b/d jump in US domestic production. The US rig count fell. These developments left the US oil futures at $57.28 at the end of the week, and Brent at $63.47, up only 16 cents from the previous week.

The OPEC Production Cut:  The cartel announced last week that its crude production fell by 133,500 b/d during November to 32.45 million b/d. The cartel also recognized for the first time that growing US shale oil production might be a problem for the group’s efforts to eliminate the oil glut. Non-OPEC oil production growth for 2017 will be about 810,000 barrels a day, an upward revision of around 150,000 b/d from the previous OPEC report. For 2018, the cartel now sees non-OPEC production growing by another 120,000 b/d to around 990,000 b/d. An increase of this size would counter a large part of OPEC/Russia’s 1.8 million b/d production cut. This would be especially true if world demand for crude does not grow as much as the 1.5 million b/d that OPEC is currently forecasting.

The protocol for ending the OPEC/Russian production freeze 12 months from now is already being discussed in the financial press. Many believe that a precipitous production increase of nearly 2 million b/d or more would send prices lower in a big hurry and that a slow increase in production and exports is the only way to prevent this from happening. Several major OPEC exporters are saying that it is too early to discuss any exit strategy but that the matter will be raised at the at the next OPEC meeting in July. Several participants in the agreement have hinted that they are already discussing the issue, but are afraid to do so in public for fear of spooking the volatile oil markets.

US Shale Oil Production: North Dakota oil production averaged nearly 1.19 million b/d in October, up more than 78,000 b/d from September and the highest average output since August 2015. This number was still 42,000 b/d below the all-time monthly output record set in December 2014, but was the highest month-to-month increase in state history. The jump in production came as a surprise as the state government had been expecting only a modest 10,000 b/d month increase during the next year or so.

Drillers have raised just under $60 billion in bond sales so far this year, a 28 percent jump from 2016. These bond sales have helped finance increased drilling in US shale reserves. The number of rigs drilling the horizontal wells used for shale oil production has more than doubled from its low of 248 in May last year to 652 last week. US exploration and production companies have raised more from bond sales in 2017 than in any year since the slump in oil prices began in 2014. Equity financing for the US E&P industry, however, which boomed in 2016, has slumped this year, but the debt market has accounted for the largest share of oil and gas E&P company fundraisings since 2009.

Wall Street keeps pouring cash into shale oil development, providing producers with a way to keep US shale oil production rising, at least in the immediate future.  The US is on track to deliver up to 80 percent of the world’s oil production gains through 2025, according to International Energy Agency estimates. Hedge funds and private equity firms have given producers a range of options needed to keep shale rigs drilling, according to interviews with financiers, advisers, and executives.

Current projections put the Permian Basin as the oilfield that will deliver the largest increase in shale oil to the global markets. However, recently ‘known unknowns’ have been surfacing such as higher gas-to-oil ratios in some wells, and the parent/child wells issue. Woods Mackenzie said last month that signs had started to show that intensified drilling in the Permian is not producing as much oil as hoped and that drillers may soon be testing the field’s geological limits. If drillers can’t overcome the geological constraints with technical breakthroughs, Permian production could peak in 2021, putting more than 1.5 million b/d of future production in question. There is also the question of shareholders demanding a reduction in the production of increasing quantities of oil at a loss.

Woods Mackenzie also is expressing new doubts that Eagle Ford and the Bakken oilfields, which combined represent nearly half of the current US tight oil production, can continue to increase production as drillers move out beyond the sweet spots. Therefore, their analysts downgraded the growth rates for both plays from the mid-2020s.

Extracting oil is usually easy at first as liquid gushes to the surface, but that fades as the pressure eases, so producers must rely on pumps that slowly extract the bulk of the reserves. The most common variety is a pumpjack — more commonly known as a nodding donkey — a technology that’s been in use for more than a century.  The nodding donkey is effective on vertical wells that go straight down, but is less so when used on horizontal ones. Pumpjacks on vertical wells can last five or six years without any problems.  These same pumps might not last two years on the newer horizontal wells. There are about 50,000 horizontal wells in the US and Canada that use nodding donkeys, compared with a total of 1.2 million production wells.  While horizontal wells have been central to a resurgence of North American output, some of those oil reserves may get stuck underground if the industry’s pumps keep failing, which boosts costs for shale deposits that were initially cheap to exploit and often remained profitable even when crude fell to $50.

2.  The Middle East & North Africa

Iran: There were several new developments concerning Tehran’s oil industry last week. The good news was that thanks to higher oil prices, Iran’s tax revenues increased by 80 percent from last year. The rest of the news dealt with the government’s efforts to circumvent the possibility of tougher sanctions that the Trump administration is threatening to impose on the country’s numerous machinations in the region.

The CEO of France’s Total said his country would have to review its participation in South Pars, the world’s largest gas field, if the US imposed sanctions. There are reports that the Chinese National Petroleum Corp may step in if the French leave the project which was to be the largest Western investment in Iran since the nuclear agreement was signed.

Tehran and Ankara are cooperating in a scheme to skirt the threatened US sanctions by exchanging natural gas to Turkey in return for hard currency that had been laundered to avoid the sanctions. A small gas field on the edge of the British North Sea could become a litmus test for US policy towards Iran. BP has agreed to sell to North Sea producer Serica Energy three offshore fields, including the Rhum field which is co-owned by a subsidiary of Iran’s national oil company. The $400 million deal will increase its production sevenfold. It nevertheless hinges on the British company receiving a license from US sanctions enforcement authorities.

Iran is pushing to retain customers for its oil in Asia, hoping that price reductions will boost the appeal of its crude compared with other Middle Eastern supply as the potential threat of further US sanctions on the country looms. The National Iranian Oil Company has in the last few weeks offered spot cargoes, ranging from light to heavy grades, to its buyers in Asia, after setting prices at the lowest in years against comparable Saudi grades. Iran could export its first cargo of LNG at the end of 2018. Iran’s Kharg Gas Refining Co. has begun talks with Belgian ship-owner Exmar to charter its floating LNG vessel Caribbean FLNG.

The Iraqis say they have signed a one-year deal with Iran to swap 30,000-60,000 barrels of oil a day from its Kirkuk oil field for a similar amount of crude delivered to Iraq’s southern ports. The crude would be shipped by truck across the Iranian border at first, but eventually, a pipeline will replace the trucks. This plan will allow Iraq to keep producing Kirkuk oil without the necessity of shipping it out to Ceyhan, Turkey through Kurdistan or the cost of reopening the northern pipeline to Ceyhan.

Tehran has denied that it had anything to do with blowing up Bahrain’s main oil pipeline that carries crude from Saudi Arabia.  The oil pipeline resumed operations in a matter of hours, but the war of words between Tehran and Riyadh is heating up. This incident came only days after a missile, which likely was furnished by Iran, was fired from Yemen into Saudi Arabia. As exchanges between the Saudis and Iranians heat up the oil markets are becoming nervous. Obviously, any open hostilities between the two countries would result in disruptions to the global oil markets like the world has never seen.

Iraq: Baghdad has begun work to rebuild it largest oil refinery at Baiji. The refinery which once refined up to 300,000 b/d has been shuttered since being overrun by ISIS in 2014. The initial reconstruction is aimed at enabling the facility to produce 70,000 b/d. Iraq’s Ministry of Oil has commissioned a 13,000-b/d distillation unit at its refinery in Kirkuk, lifting overall processing capacity at the site to more than 50,000 b/d. The unit, which entered operation in mid-December, follows commissioning of another 10,000-b/d CDU earlier in the year, the ministry said in a release. With the startup of the two units completed, the refinery is operating at a capacity of 56,000 b/d.

Oil and gas services company Petrofac said last week it had signed a $160 million contract to overhaul the southern Iraqi oil port. The company said it would build an expansion for a terminal about 40 miles off Iraq’s southern coast that’s responsible for nearly all crude Iraq exports. The contract involves more than 180 miles of new pipelines and a mile of associated hose infrastructure.

A mysterious armed group has emerged in remote areas of Iraq’s disputed territories, giving rise to anxieties that a new era of Islamic State-inspired insurgency is in the making. Local leaders and Iraqi intelligence and security officials claim they have identified some members of the new group as former residents of nearby towns, who are known to have been members of ISIS.

Saudi Arabia:  King Salman approved $19.2 billion worth of measures to stimulate growth in the private sector.  The measures include residential housing loans, a fund to support economic projects, and support for distressed companies. A government fund will be created to invest in smaller companies, while the government will adjust the fees which it charges for services. More money would be spent on projects such as developing the kingdom’s broadband infrastructure and promoting advanced construction techniques. The government also will begin cash transfers to low- and middle-income citizens, part of efforts to cushion the blow for families as the kingdom overhauls its oil-dependent economy. Monthly cash payments will start on Dec. 21 to compensate Saudis affected by measures including subsidy cuts and new taxes.

Saudis plan to raise domestic gasoline and jet fuel prices in January, part of a program to gradually eliminate energy subsidies as the kingdom seeks to overhaul its economy and balance the budget. Gasoline prices are set to increase by about 80 percent, while jet fuel prices will be raised to international levels. Too offset the hardship of higher gas prices, the government has lifted a decades-old ban on movie theaters in the kingdom, a move that opens the conservative kingdom to all sorts of entertainment.

Saudi Aramco aims to regain its lost market share after the OPEC-led supply-cut pact ends and plans to push ahead with a downstream expansion strategy to be on par with Big Oil, its chief executive said last week. Aramco is moving ahead with its refining and petrochemicals expansion strategy, and is in discussions with several potential partners in Asia, Europe and the United States.

Libya: Just two weeks after it pledged to cap its crude oil production at the level of 1 million barrels daily, Libya has sent a signal that it has plans to surpass this cap, according to media reports. In a rare meeting, the Prime Minister of the UN-recognized Government of National Accord met with the heads of the National Oil Corporation and the Libyan central bank to discuss funding for boosting crude oil production.

The Interfax news agency cited Russian Deputy Foreign Minister Gennady Gatilov as saying Russia is ready to consider easing an arms embargo for Libya. Libyan Prime Minister Fayez al-Sarraj said this month he was hopeful that a U.N.-imposed arms embargo would be partially lifted against some branches of the country’s military.

3.  China

Cold weather and the lack of sufficient natural gas to fuel newly installed furnaces across northern China is the number one energy problem facing Beijing at the minute. China’s coal miners and natural gas producers stepped up production last month at their fastest pace in months to meet winter heating demand as utilities and households scrambled for supplies amid a fuel supply crisis.  Producers pumped 12.6 billion cubic meters of gas in November, up from 12.4 bcm a month earlier and the highest monthly total since March. That likely marks a peak for monthly production with no new projects coming on stream and little room in existing operations to boost supplies further, analysts and experts said.

China’s manufacturing sector slowed last month as measures to curb winter pollution forced factories to cut production, a sign of policymakers’ increasing willingness to sacrifice economic growth in favor of cleaner air. Environmental inspections have prompted thousands of factory and mine closures across northern China. Hebei province, the center of the country’s steel industry, said it would cut production by as much as half in major cities.

Chinese coal imports rose in November from the month before during the winter heating season, even as Beijing encourages a shift to cleaner fuels in its battle against pollution.  Shipments into China reached 22.05 million tons in November, up 3.6 percent from October, but down from 26.97 million a year ago.

The Asian Development Bank has approved a $499-million loan to set up a regional emission-reduction and pollution-control facility as part of a program to improve air quality in the greater Beijing-Tianjin-Hebei region, which suffers from heavy air pollution. Cities in the region have consistently been reported to have the highest concentration of particulate matter and other air pollutants, following decades of emissions from pollution-intensive industries in the area, as well as the region’s heavy reliance on coal for energy generation.

China may launch a yuan-priced crude oil futures contract shortly to make its currency more international and challenge the dominance of the petrodollar. Many Chinese investors eagerly anticipate the start of yuan oil futures trading on the Shanghai International Energy Exchange, with the hope it will come just in time for Christmas when western markets will be either closed or calmer than usual. International investors may not be as eager to invest in China’s futures market because it is not clear yet how much freedom China would allow.

4. Russia

President Putin officially launched the Yamal LNG project in the Arctic—Russia’s second LNG plant in its push to challenge the dominance of Qatar, Australia and the US in the global LNG market. The first tanker from the US$27-billion project will be shipped to China’s CNPC, in what the majority holder of the project, Russia’s Novatek, said in October is “in recognition for their overall contribution to the project and the importance the Asian Pacific market represents as a key-consuming region.” Novatek is the majority shareholder of Yamal LNG with 50.1 percent, France’s Total has 20 percent, CNPC holds another 20 percent, and China’s Silk Road Fund owns the remaining 9.9 percent.

The opening of the project is being hailed as a victory for Russia over the US sanctions which had stalled the project. The Yamal LGN project meant shipping more than 5 million tons of materials to construct a plant of concrete and steel 600 kilometers north of the Arctic circle, where temperatures can drop to -50 degrees Celsius and the sun disappears for two months straight. Yet those challenges weren’t as tough as the US sanctions imposed in 2014, forcing a complete refinancing just as construction was about to start.

A US State Department official condemned Germany over the country’s continued support for a new Russian gas pipeline to Europe, while praising Denmark for passing a law that could hamper the project. President Putin is pleased that a combination of events has forced the desperate United Kingdom to turn to Russia for help with its current natural gas shortages.

Venezuela has awarded licenses to a unit of Russia’s Rosneft to develop two offshore gas fields. Venezuelan President Maduro signed the deal during a visit to Venezuela by Rosneft CEO Igor Sechin. During the visit, Sechin also discussed Rosneft’s cooperation with Venezuelan state energy company PDVSA. Under the agreement, which is valid for 30 years, wholly-owned Rosneft unit Grupo Rosneft will become the operator of the Patao and Mejillones offshore gas fields

5. Nigeria

Nigeria’s largest oil workers union launched a nationwide strike on Monday over the laying off of its members. The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), whose members mainly work in the upstream oil industry, started the industrial action after talks with government agencies ended in deadlock. If the strike continues, the strike will hit the country’s crude oil production and dent exports, as was the case in December 2016 during industrial action by the union against Exxon Mobil.

The Nigerian Government lost some $21 billion due to faulty agreements with international oil companies from 1993 to 2017. Minister of State for Petroleum Resources, Ibe Kachikwu, said the loss was due to failure to act on the provision of Section 15 of the Production Sharing Contracts of the Deep Offshore Act. The Act stipulates that once the price of crude exceeds $20 per barrel, steps would be taken to distribute “premium element” at an agreed premium level for the Federal Government for higher revenue. This has not been the case over the last 20 years. The minister said the Federal Executive Council now has approved a proposal to amend the Act in order to increase oil revenue by $2 billion.

Nigeria’s projected growth in refining capacity in the early 2020s would ‘substantially’ erode the country’s crude oil exports due to a ‘weak’ new project pipeline, according to a new report.  While the report hailed the projected startup of the 650,000 b/d Dangote and the potential for a second 250,000 b/d facility, Nigeria may struggle to increase its oil production to meet new demand from these facilities, as well as sustain exports.

6. Venezuela

Reuters is reporting that PDVSA is nearly paralyzed in the wake to the government’s crackdown on corruption, the arrest of at least 67 senior company officials and the replacement of the CEO by an army general with no knowledge of the oil industry.  Many of those detained have not yet been replaced, as the company, already struggling with a brain drain, needs qualified personnel. The executives that remain are so rattled by the arrests that they will not make decisions as they are scared they will later be accused of wrongdoing.

Decisions at joint ventures with foreign firms are delayed. A growing number of oil tankers sit idle because no one authorizes payments. Employees struggle to get approval for routine expenses.  The new CEO has decreed that all contracts with PDVSA be reviewed in a “cleanup.” While it is not clear what the review will entail, it has already spooked clients and partners who fear for the integrity of existing contracts.  PDVSA employees say boat shortages are so acute in western Lake Maracaibo that workers often cannot get to platforms. Late payments have led tanker operators to halt around 18 vessels needed to carry oil and refined products.

These developments are prompting analysts to question just how low Venezuela’s oil production will fall.  The International Energy Agency predicts output will fall at least 500,000 b/d to 1.5 million b/d in 2018. Analysis firm Medley Global Advisors forecasts a decline of as much as 550,000 b/d, citing risks including “PDVSA’s militarization and purge of what remains of its technical capacity.” A steep drop would heighten chances that cash-strapped Venezuela defaults on some $60 billion in foreign debt. Maduro’s government has sought to restructure the debt, but has continued to make payments, albeit with delays.

PDVSA said last Thursday it had initiated bank transfers to pay US$539 million in interest on four separate bonds, just hours before grace periods on those payments expire between Friday and Sunday. The company said that is still trying to service its debts and invoking every possible 30-day grace period to defer the final deadlines as much as possible, saying that it started the process of paying the interest on its bonds maturing in 2024, 2026, 2021, and 2035.

Citgo Petroleum may be a tempting target for bondholders of its parent company PDVSA, but the refinery operator’s complex debt structure could make its assets difficult for creditors to seize, legal experts said. Some holders of PDVSA bonds backed by a pledge of Citgo stock are preparing to go to US courts to foreclose on Citgo shares. That may not be easy. ConocoPhillips Co has gone to court alleging the pledge of 50.1 percent of Citgo stock is fraudulent, meaning the PDVSA bondholders will have a tough time getting hold of Citgo stock.

7.  The Briefs (date of article in Peak Oil News is in parentheses)

Biofuels battered: The new IPCC report on climate change challenges the status quo on biofuels worldwide and constitute a complete about-face on the issue for the United Nations. Groups like Oxfam and the Environmental Working Group oppose biofuels because they push up food prices and disproportionately affect the poor. In 2013 the US used 4.7 billion bushels of corn (40 percent of the harvest) to produce over 13 billion gallons of ethanol fuel (850,000 b/d).  In 2007, the global price of corn doubled as a result of an explosion in ethanol production in the US With more than 60 nations having biofuel mandates, the competition between ethanol and food has become a growing moral issue. (12/16)

World oil forecast: The US EIA on Tuesday cut its 2018 world oil demand growth forecast by 40,000 barrels per day to 1.62 million bd. In its monthly forecast, the agency raised its oil demand growth estimate for 2017 by 80,000 b/d to 1.39 million b/d. (12/13)

Climate worries investors: More than 200 institutional investors with $26 trillion in assets under management said on Tuesday they would step up pressure on the world’s biggest corporate greenhouse gas emitters to combat climate change. (12/12)

Forties pipeline closure: Exports of natural gas from one of the North Sea’s key fields have been halted for at least three weeks until early January, after the closure of Britain’s largest oil and gas pipeline, field operator Total said on Wednesday. Swiss-based chemicals company INEOS, which owns the Forties Pipeline System, said on Wednesday that it has not yet decided on repairing a pipeline crack that materialized during a routine inspection of onshore infrastructure last week. (12/13)

$$$ loss: Closing the Forties pipeline system in the North Sea, which sidelines almost half of the area’s production, means heavy industry losses. The resulting lost production is worth around $26 million per day at current oil prices to industry. Pipeline operator Ineos shut down the Forties crude network in the North Sea after discovering a “hairline crack” on a pipe near Aberdeen, Scotland, last week. The company said it could be a matter of weeks before repairs are made to the North Sea network. (12/14)

Pipeline force majeure: Ineos, the operator of a damaged North Sea crude pipeline has invoked force majeure, a clause that exempts it from fulfilling contracts if there are causes beyond its control, underlining the scale of the damage that has sent oil and gas prices surging. (12/15)

In Scotland, Ineos has shut the 110,000 barrels-per-day crude distillation unit at its Grangemouth oil refinery due to a lack of feedstock following an outage on Monday on the Forties crude pipeline. Ineos is looking at the option of bringing forward maintenance that was planned for the spring, but that option depends on finding the right crew, equipment and the length of the shutdown of Forties pipeline. (12/16)

The UK drying up? A report by Edinburgh University that predicted the UK’s oil and gas reserves could run out in as little as a decade, that fracking is not viable in Scotland and barely feasible in the UK thanks to a dearth of suitable geology, and that the UK will soon have to import all its oil and gas. Professor Roy Thompson of Edinburgh University’s School of Geosciences also concluded that only 10% of the UK’s original recoverable oil and gas remains, roughly 11% of oil and 9% of gas resources. (12/16)

In Austria, just before 9 a.m. Tuesday, the gray skies over the far eastern reaches of Austria lit up with an explosion at a natural gas switching station, killing one worker, injuring almost two dozen others–and sending shockwaves through Europe’s energy supply infrastructure. The blast in Baumgarten, a village about a mile from the border with Slovakia, generated a fireball so hot that it melted the plastic on cars parked half a kilometer away. With about 10 percent of Europe’s gas needs passing through the station, the wholesale price of the fuel spiked by 23 percent. (12/13)

In Austria, natural gas is flowing again to a compressor station and supplies are moving to nearby countries, a subsidiary of Austrian energy company OMV said. The incident caused ripple effects through the European energy market. Italy, which relies heavily on its neighbors for natural gas, said the market situation was in a state of emergency after the blast. (12/14)

OPEC has emerged as much more vulnerable to cybersecurity threats than its non-OPEC counterparts. An analysis of data collected from 134 countries by the International Telecommunication Union has revealed that some of the world’s biggest oil producers, including Iraq, Saudi Arabia, Venezuela, Iran, and the UAE, are lacking in the cybersecurity department.  (12/13)

Saudi Arabia will begin cash transfers to low- and middle-income citizens this month, part of efforts to cushion the blow for families as the kingdom overhauls its oil-dependent economy. Crown Prince Mohammed bin Salman is leading the push to reduce Saudi Arabia’s addiction to oil, but many of the reforms he’s implemented have hit the wallets of Saudis. The Citizen’s Account is designed to offset those measures. (12/14)

Syria plans to start gas exploration in its offshore areas in early 2019, and has signed contracts for five offshore blocks with “friendly countries.” It was not clear which countries and companies were involved in the contracts. (12/15)

Pakistan’s fuel oil demand is expected to fall 50% or more over the next three years as growing LNG imports help the country move to a gas-based energy economy. Fuel oil demand is likely to drop from 9.6 million mt in fiscal 2016-2017, running from July to June, to 4.5 million tons or less by fiscal 2019-2020. (12/14)

South Korea aims to boost the portion of LNG in its electricity generation mix to 18.8% in 2030 from an estimated 16.9% this year as part of efforts to reduce its heavy reliance on coal and nuclear. In its long-term supply blueprint, the Ministry of Trade, Industry and Energy said renewable sources would account for up to 20% of the power mix in 2030, up from an estimated 6.7% in 2017, by increasing investment in solar and wind power plants. (12/14)

Brazil has produced 3.3 million barrels per day (b/d) of petroleum and other liquids so far in 2017, according to data through August, up from 3.2 million b/d in 2016, making it the ninth-largest producer of petroleum and other liquids in the world. Brazil’s pre-salt oil production in 2016 reached a record 1.02 million b/d, surpassing the 2015 production level by 33%. (12/15)

Colombia has begun receiving is first sustained imports of bulk liquid propane gas, with volumes expected to rise significantly in the coming years as the country’s natural gas reserves and output continue to decline. (12/16)

Panama bottleneck: The US LNG boom is fraught with challenges, the latest among them, apparently, the Panama Canal. LNG producers and the Panama Canal Authority are locked in an argument about whose fault it is that not enough LNG tankers are using the freshly expanded channel that saves 11 days from the journey to Asia, which has become a key market for US LNG. (12/12)

The US oil rig count fell by 4 to 747, according to Baker Hughes Inc.  The gas rig count increased by 3 to 183.  The 930 total rig count is still up 293 rigs year over year. (12/16)

Premium fuel questioned: The benefit from using a premium blend of gasoline—improved fuel economy and better vehicle performance—in a vehicle that doesn’t require it may not be worth the extra cost for some US drivers, motor club AAA said based on its own research. (12/14)

ExxonMobil finally conceded to the multi-year campaign by shareholders and activists to disclose its risk to climate change, a notable departure after years of trying to dismiss the issue.  It will start publishing reports of the risks that possible climate policies may have on its business. The company will disclose more information regarding “energy demand sensitivities, implications of two degree Celsius scenarios, and positioning for a lower-carbon future.” (12/12-12/13)

New York state’s power grid will operate reliably after the Indian Point nuclear plant closes early in the next decade as long as natural gas-fired and dual-fuel resources come online as planned, the New York Independent System Operator said Wednesday. (12/14)

Solar slowdown: A US solar power trade group said the Trump administration was standing in the way of growth, but the sector showed resilience in the third quarter. Through the end of the third quarter, researchers found solar power installations are behind pace from the same period last year by 22 percent. This quarter shows what happens when policy uncertainty becomes a disruptive factor. (12/15)

Vietnam was unable to export 2 million mt of coal to China this year as the latter set strict specification for mercury, arsenic, phosphoric, chlorine and fluorine content in imported coal. (12/12)

A Japanese court on Wednesday ordered Shikoku Electric Power Co not to restart one of its reactors, overturning a lower court decision and throwing into turmoil Japan’s protracted return to nuclear power after the Fukushima disaster.  The decision by the High Court in Hiroshima in western Japan has no immediate effect on Shikoku Electric’s operations because the reactor in question has been idled for maintenance, but it casts into doubt any restart. (12/13)

In Poland, an $11 billion effort to support the development of renewable energy secured the nod from European regulators, a commissioner said. The Polish government is supporting a scheme to cut levies to finance the development of renewable energy in a nation that has few natural resources of its own. (12/14)

Financing RE: Nine energy companies working in the European energy sector said Monday they made pledges to support a sustainable financial model for renewables. (12/12)

Denmark’s market for electric vehicles set a milestone with more than 1 million charges and 36 million miles since 2014. German utility company E.ON said it’s leading in the Danish market with its 1,300 charging points. Since 2014, the company said more than 1 million drivers charged up their vehicles at E.ON stations and it’s now working on partnerships to build more stations at car parks, fast-food chains, and retail service stations. (12/15)

Car jobs: Almost a year ago, after heavy criticism from President-elect Donald J. Trump, Ford Motor Company canceled plans to build a $1.6 billion car plant in Mexico and announced that it would instead equip a Michigan factory to make electric and hybrid models. Now the automaker is changing its plans again, saying it intends to assemble new battery-powered cars in Mexico, not Michigan. But the Michigan location will get an even larger investment than previously planned and will focus on making a range of self-driving cars. (12/12)

E-buses: Communities across the United States are looking to replace their dirty diesel buses, ushering in what some analysts predict will be a boom in electric fleets. But transit agencies doing the buying are moving cautiously, an analysis by Reuters shows. Out of more than 65,000 public buses plying US roads today, just 300 are electric. Among the challenges: EVs are expensive, have limited range and are unproven on a mass scale. (12/12)

Extreme weather left its mark across the planet in 2016, the hottest year in recorded history. Now climate scientists are starting to tease out which of last year’s calamities can, and can’t, be linked to global warming. In a new collection of papers published Wednesday in the Bulletin of the American Meteorological Society, researchers around the world analyzed 27 extreme weather events from 2016 and found that human-caused climate change was a “significant driver” for 21 of them. The effort is part of the growing field of climate change attribution. (12/16)