Two years into the worst oil price rout in a generation, large and mid-sized U.S. independent producers are surviving and eyeing growth again as oil nears $50 a barrel, confounding OPEC and Saudi Arabia with their resiliency. That shale giants Hess Corp, Apache Corp and more than 25 other companies have beaten back OPEC’s attempt to sideline them would have been unthinkable just months ago, when oil plumbed $26 a barrel and collapses were feared. OPEC and Saudi Arabia “thought that there would be major capitulation and damage to U.S. shale producers as a result of the deep downturn,” said Les Csorba, a leadership consultant at Heidrick & Struggles who works with shale executives. “But what happened was that it actually created a new paradigm among U.S. producers to transform their businesses.” –Ernest Scheyder and Terry Wade, Reuters, 20 June 2016
American shale has weathered the storm better than anyone expected. With oil prices back up around $50 per barrel, shale once again seems ready to boom anew. OPEC bet the house on shale’s inability to withstand a bearish oil market, but that gamble doesn’t seem to be paying off as producers around the world start to settle into today’s new market equilibrium. We’ve said it before but it bears repeating: bet against American innovation at your own risk. —The American Interest, 20 June 2016
All this supports the claim that fracking has brought a new dynamic to global oil markets: the ability to flex output up and down more quickly than conventional oil drilling, rather like factories responding to changes in demand. Conventional oilfields take years to develop and then produce oil for decades, leaving oil output relatively unresponsive to short-term price movements. Shale wells, in contrast, take just a few weeks to drill and frack, and have a lifespan of only a few years, so production quickly falls if drilling abates. —The Economist, 18 June 2016
ONE of Scottish Labour’s biggest backers has told the party to “get real” over fracking and likened contribution of its MSPs at Holyrood over the issue to “a student politics pub debate”. Gary Smith, GMB Scotland Secretary said: “This sobering intervention from the industry is one that Scottish Labour would do well to take on board because the idea that we can heat our homes or run our industries without fossil fuels anytime soon is a nonsense. Some of the contributions earlier this month in the Scottish Parliament resembled a student politics pub debate and its time the party of labour got real again on Scotland’s energy future.” –Daniel Sanderson, The Herald 16 June 2016
There was much cheering when representatives of 195 nations agreed a new global climate deal in December last year in Paris. Yet many governments had no idea what would be necessary to achieve this objective when the first 170 government ministers signed the Paris climate agreement at the United Nations headquarters in New York in April. According to the calculations of study author Volker Quaschning of the University of Applied Sciences in Berlin (HTW), “the production of cars with gasoline and diesel engines has to end by 2025 and main roads will have to be fitted with overhead electrical lines for freight transportation.” The study also finds that Germany’s Autobahn too will need to have overhead catenary akin to overhead railway lines because the entire bus and freight transport needs to be electrified within a short period of time. –Daniel Wetzel, Die Welt, 21 June 2016
A paper recently published attempts to measure the relationship between ice accumulation and temperature in Antarctica for the last 31000 years. We can see that for most of the time since the end of the ice age temperatures have been much higher than now. We can also clearly see the sharp drop coinciding with the Little Ice Age, and that temperatures were similar to now in the MWP. We are continually told that humans are pushing the earth’s climate into unknown territory, but once again we see this is not true. As far as the Antarctic is concerned, all the evidence points to the 20thC rise in temperatures being no more than a natural recovery from the LIA. –Paul Homewood, Not A Lot Of People Know That, 19 June 2016
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