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Energy / Natural Gas

  • How The Worsening Ukraine-Russia Crisis Will Affect Energy Markets

    The confrontation between Ukraine and Russia has entered a potentially dangerous new phase that could increase the likelihood of a dispute over energy supplies.On Aug. 15, Ukrainian authorities reported that they destroyed a convoy of armored vehicles that had pushed into Ukraine from Russia. The details were murky, but armored vehicles apparently entered Ukraine from Russian territory close to where a convoy of Russian aid trucks was located. Tensions over Russia’s attempt to send aid to eastern Ukraine had been brewing for days, as Ukraine suspected it was a cover for a shipment of military supplies to pro-Russian rebels. Ukrainian…

  • Marcellus Shale Continues to Prove Analysts Wrong

    The impact of the Marcellus shale formation on domestic natural gas supply is difficult to overstate. The speed and volume in developing this formation is astonishing. In 2007, Marcellus supplied only 2 percent of domestic supply in the U.S. By the end of 2013 it accounted for nearly 20 percent of total supply. The EIA predicts the formation will produce an average of 15.9 billion cubic feet of gas per day in September, nearly a quarter of all U.S. production. If Marcellus had one constant trait, it would be that it has continued to prove ‘experts’ wrong or extremely conservative…

  • Fracking Fluids More Toxic Than Previously Thought

    A new study of the fluids used in the controversial practice of hydraulic fracturing, or fracking, shows that several of them may not be as safe as the energy industry says they are, and some are downright toxic.A team of researchers at the Lawrence Berkeley National Laboratory and University of the Pacific looked at more than just the process of fracking – which involves injecting water mixed with chemicals into underground rock formations to extract gas and crude oil. In their report, the researchers list the chemicals that are most often used, based on industry reports and databases. Among them…

  • Why Natural Gas Prices Collapsed

    Today I want to provide an update on the natural gas picture, as prices declined sharply at the end of July. I have laid out the argument since last winter that because of the deep inventory hole that developed over the course of the exceptionally cold winter, natural gas prices would remain high relative to last year, and that as a result natural gas producers would likely report higher year-over-year profits. (For background on the inventory picture, see my February column Natural Gas Inventories are Headed Toward Zero).First, let’s look at what natural gas prices have done since winter. The…

  • Panama Canal Turns 100 With Renewed LNG Ambitions

    The Panama Canal turns 100 years old this week, marking a century for the engineering feat considered by many to be one of the great wonders of the industrial world. Since its inauguration in August 1914, the canal has redefined global trade. And as international shipping has continued to grow, the waterway connecting the world’s two largest oceans – the Atlantic and Pacific – remains no less vital today. But Panama’s centennial celebrations offer a chance not just to reflect on the past 100 years, but also to look forward. One hundred years on, the Panama Canal is poised to…

  • New Tax Threatens to Destroy Gas Production in Ukraine

    Independent gas producers in Ukraine are joining forces to pressure the government in Kiev to re-think its new gas tax before everyone makes a run for the border in search of new assets in a more stable environment.Private producers have compiled a draft letter to Ukrainian Prime Minister Arseniy Yatsenyuk, criticizing the government’s doubling of taxes for gas producers, which was justified through the use of “wrong and misleading” data about private companies.They also warn that their time in Ukraine will be over if the tax is extended beyond the end of this year—and there will be no further foreign…

  • Ukraine Considers Restricting Russian Gas Deliveries To Europe

    Ukraine is planning to impose sanctions on Russia that might include an effort to starve its larger and richer neighbor of income by stopping the flow of Russian gas through Ukraine to customers in Western Europe.Ukrainian Prime Minister Arseniy Yatsenyuk told reporters on Aug. 8 that his government is proposing sanctions against 172 citizens from Russia and other countries, as well as 65 Russian companies “for financing terrorism” by supporting the efforts of Russian separatists in eastern Ukraine.Other options being considered include closing Ukrainian air space to Russian aircraft, reducing cooperation between the countries’ defense industries, and restrictions on Russian…

  • Who Needs Russia? Ukraine Will Destroy Itself With New Gas Tax

    Ukraine doesn’t need Russia to take it down—Kiev is doing fine destroying itself, most recently with a new tax code that doubles taxes for private gas producers and promises to irreparably cripple new investment in the energy sector at a time when reform and outside investment were the country’s only hope.Ukrainian President Petro Poroshenko on August 1 signed off on a new tax code that effectively doubles the tax private gas producers in Ukraine will have to pay, calling into question any new investment, as well as commitment from key producers already operating in the country.The stated goal of the…

  • The Differences In Fracking Tight Sand And Shales

    The recent news that Saudi Arabia has not found natural gas to be as available as it had thought from its shale deposits, and is shifting to exploring for gas in their tight sand formations has not caught a lot of attention. But it is worth considering some of the aspects of this – and hence this post.The Oil and Gas Journal define tight sands in this way: The term tight gas sands refers to low-permeability sandstone reservoirs that produce primarily dry natural gas. A tight gas reservoir is one that cannot be produced at economic flow rates or recover economic…

  • Camisea At 10 – Lessons For Energy Projects In The Western Hemisphere

    In August 2004, Peru’s then-president, Alejandro Toledo, inaugurated the long-awaited Camisea project. Named for the river adjacent to the natural gas reserves now being piped more than 700 kilometers from the Peruvian Amazon Basin to Peru’s capital Lima, Camisea ushered in a new era for the nation. On the occasion of the project’s launch and arrival of natural gas to Lima, President Toledo proclaimed: “Thanks to Camisea, Peru will go from being an energy importer to a country that exports energy overseas.”  Politicians often make bold pronouncements whenever they inaugurate major infrastructure projects. However, in this case, and with the…