Latest news with #fracking
Free Malaysia Today
3 days ago
- Business
- Free Malaysia Today
Opec must squeeze US shale much more to win oil price war
Benchmark US oil prices have dropped by nearly a quarter since January to US$61 a barrel, in response to Opec+'s strategy and concerns over trade wars. (File pic) LONDON : Oil drillers in the US shale heartland are slowing down operations, a sign that the Organization of the Petroleum Exporting Countries' (Opec) high-stakes price war is starting to pay off, but Saudi Arabia will need to exert a lot more pain to make a lasting impact on market share. US oil producers upended the global market in the early 2010s, as the innovative 'fracking' drilling technique allowed them to tap vast onshore shale formations. Consequently, the US, long the world's top oil consumer, became its leading producer as of 2018. It currently pumps around 13.5 million barrels per day (bpd), around 13% of world supplies. The rising tide of US oil has long irked the Opec, which has seen its market share steadily erode over the past two decades. Saudi Arabia, Opec's de-facto leader, in 2014 sought to curb surging US output by flooding the market with cheap oil. This effort bankrupted a number of shale producers, but it only temporarily paused the country's ascent as companies adapted to lower prices and the industry consolidated. Price war redux Riyadh and its allies, a group known as Opec+, are now giving it another go. They surprised the market earlier this year by announcing that they would rapidly unwind 2.2 million bpd of production cuts introduced in 2024. The group is expected to announce further increases in production later this week. Benchmark US oil prices have dropped by nearly a quarter since January to around US$61 a barrel in response to Opec+'s strategy as well as concerns over US President Donald Trump's trade wars. At these prices, many shale wells are not profitable, as frackers require an oil price of between US$61 and US$70 a barrel to expand production, according to a survey conducted by the Dallas Federal Reserve Bank. Sure enough, nimble frackers have already responded by paring back drilling activities to conserve cash. The number of US onshore oil drilling rigs dropped by eight to 465 last week, the lowest since November 2021, according to energy services firm Baker Hughes. Crucially, drillers in the Permian Basin in West Texas and eastern New Mexico, which accounts for nearly half of US production, cut three rigs, bringing the total down to 279, also the lowest since November 2021. Crude production from new Permian wells, a measure of productivity, slightly improved in April, but that was largely offset by declines in other basins. Multiple indicators suggest activity is set to decelerate further. Importantly, Frac Spread Count, which measures the number of crews actively performing hydraulic fracturing, has seen a 28% annual drop to 186, according to energy consultancy Primary Vision, an indication that production could fall sharply in the coming months. Another measure to watch is drilled but uncompleted wells (DUCs), or partially completed wells that can start production quickly, offering operators flexibility to withhold production until market conditions improve. DUCs have risen by 11% since December 2024 to 975 in the Permian Basin. Down but not out While the latest data on shale drilling activity suggests US production will continue to slow, it is far from falling off a cliff. The US energy information administration reduced in May its forecasts for US production in 2025 and 2026 by around 100,000 bpd to 13.4 million bpd and 13.5 million bpd, respectively, compared with 13.2 million bpd last year. Production in the Permian Basin is forecast to average 6.51 million bpd in 2025, down from its previous estimate of 6.58 million bpd. However, that would still mark a significant increase from 6.3 million bpd in 2024. Opec+ may find it even harder to have a sustainable impact now than it did in 2014 as the US shale landscape is significantly different from a decade ago. True, 15 years of intensive oil and gas drilling have depleted a large chunk of the most profitable shale acreage. However, shale drillers have in recent years adopted much stricter spending discipline, focusing on returning value to shareholders in contrast with last decade's focus on growing production. Independent US oil and gas producers have so far reduced their planned 2025 spending commitments by an aggregate 4% to US$60 billion, while output is expected to remain largely flat, according to consultancy RBN Energy. Also, production today is concentrated in the hands of far fewer companies, such as Exxon Mobil and Chevron. These energy majors have developed highly efficient drilling techniques and boast strong balance sheets that leave them better equipped to withstand the Opec assault. Current oil prices are therefore likely to temporarily curb US production but not lead to the type of sharp deceleration seen in 2014. Opec+ will therefore need to deepen and extend its price war for many months if it seeks to fundamentally change the oil production balance of power.
CBC
5 days ago
- Business
- CBC
Nova Scotia chiefs say province needs to improve consultation on natural resources
The Nova Scotia Assembly of Mi'kmaw Chiefs says the provincial government needs to do a better job of consultation as it pushes to develop the province's natural resources. Chief Tamara Young of Pictou Landing First Nation told the legislature's natural resources committee Tuesday that the chiefs have "serious concerns" over how recent decisions have been made without advance notice. "We should not hear about important developments that Nova Scotia is making from the evening news," said Young. "This includes when policy or legislative changes are being proposed in the mining sector." In March, the Progressive Conservative government of Premier Tim Houston passed legislation that lifted a long-standing ban on uranium exploration and mining and a moratorium on hydraulic fracturing for natural gas. Houston has said the legislative changes were needed to boost the province's economy as it deals with the challenges posed by U.S. tariffs. However, the chiefs responded by issuing a news release on March 28 saying they were firmly opposed to any legislation that opens the door to hydraulic fracturing, a process more commonly known as fracking. 'Not a box to be checked' The chiefs said they were considering legal action and they accused the province of making decisions on unceded and traditional Mi'kmaw territory without properly consulting them. Young told the committee it was time for the government to re-engage in consultations that are "early, consistent and meaningful." "Consulting the Mi'kmaq is simply not a box to be checked," she said. "We will not support any process that treats our constitutional rights as an afterthought." Young also called on the province to update its consultation practices and to involve the Mi'kmaq in shaping the changes. "There must be transparency and predictability around what triggers the duty to consult, including mining projects on private lands," she said. 'Rocky and inconsistent' Earlier this month the province updated its list of priority critical minerals to include uranium and also announced that it was issuing a request for proposals for uranium exploration at three privately owned sites. A mineral can be added to the list based on certain factors, including whether they can help the province meet its emission targets or global demand. The priority list is also meant to highlight minerals of strategic economic importance for the province. Patrick Butler, senior Mi'kmaw energy and mines adviser, confirmed during the hearing that chiefs were also not consulted about the move to boost uranium exploration. Butler described the relationship with the Natural Resources Department as "rocky and inconsistent" over the last year, although he said there is a mineral resource working group that had established "a good working relationship" in the past. "It has been very difficult in trying to keep up with the changes," he said. Consultation would occur 'project by project' The department's deputy minister, Karen Gatien, said the government is committed to consultations, but she agreed that it should be done earlier where possible. Gatien told the committee that future consultation would occur "project by project." "It's difficult for us right now to consult on something that doesn't exist in terms of a concrete project in a particular area, but I think it will be really important to have rigorous consultation and meaningful consultation as the projects get developed," said Gatien. The deputy minister confirmed to reporters following the hearing that there were no formal documents or communications with the chiefs to inform them of the government's legislative changes. Meanwhile, the committee also heard from mining industry representatives Tuesday who called for major changes to the province's permitting process for mining development, which they described as too lengthy and a hindrance to investment. 'Our concerns are with red tape' "Permitting is a major bottleneck in the process. That is why jurisdictions across Canada and around the world are taking steps to expedite permitting while continuing to ensure the highest environmental standards are applied," said Sean Kirby, executive director of the Mining Association of Nova Scotia. Kirby called for permitting to come under a single department, saying the process is currently handled across several. "We are not asking for regulatory oversight to be less stringent. Our concerns are with red tape, unclear requirements and lengthening timelines," he said.
Yahoo
24-05-2025
- Politics
- Yahoo
Poll: Pennsylvania voter registration shifting right
Data collected by the latest Franklin & Marshall College Political Poll suggest that Pennsylvania is shifting right among working class voters. 'There has been a rightward shift in Pennsylvania's voter registration statistics that has been traced to shifts in the affiliation of working class communities, particularly those located in the northeastern and southwestern parts of the state,' reported Berwood Yost, F&M director of the Center for Opinion Research. These shifting party loyalties have been attributed to several factors, including class, culture, de-industrialization, economics, immigration, rural consciousness, and institutional failure, Yost said. 'There really is no shortage of culprits,' Yost said. Some new research offers a more direct cause, the decline of coal mining and the rise of shale gas development, Yost said. 'Fracking has thus become politically and culturally symbolic for many Pennsylvania voters — a means of restoring a dignified life for smaller, more rural communities that have struggled,' Yost said. More voters in 2024 felt the economic benefits of natural gas development outweighed the environmental risks of fracking, the College Poll showed. 'This is a change from 2020, when more voters thought the environmental risks were larger than the economic benefits,' Yost said. In counties with the most active fracking, Democratic registrations have declined by 18 and 32 percent, while Republican registrations have increased by 31 and 39 percent since 2000 in these areas.
Bloomberg
22-05-2025
- Science
- Bloomberg
The Biggest US Oil Field Is at Risk of Poisonous Water Leaks, Texas Warns
Texas regulators are warning that wastewater from fracking in the biggest US oil basin is causing a 'widespread' increase in underground pressure — a development that risks hindering crude output and harming the environment. Shale oil wells in the Permian Basin generate millions of gallons of chemical-laced water, which drillers then pump back into the earth. Landowners and activists have said for years that this process causes toxic leaks. Now the state's powerful oil and gas regulator, the Railroad Commission of Texas, is acknowledging the scale of the problem and imposing restrictions that could increase crude production costs.
Forbes
12-05-2025
- Business
- Forbes
What Next For Energy? King Coal, Queen Gas, Or A Renewables Transition
MALLNOW, GERMANY - MAY 24: A compressor station of the Jagal natural gas pipeline stands on May 24, ... More 2023 near Mallnow, Germany. The Jagal is the German extension of the Yamal-Europe pipeline that transports Russian natural gas to Germany via Poland, though no Russian gas has arrived at Mallnow since last year due to sanctions stemming from Russia's ongoing war in Ukraine. (Photo by) 'Natural gas is queen,' gushed Exelon energy executive John Rowe at the American Enterprise Institute in Washington. It was 2011, shortly after the Fukishima disaster boosted concerns about nuclear energy, and anxiety over global warming spawned scrutiny of king coal. Natural gas, which has lower emissions than coal when burned, was seen as the answer to a safe, cheap, and clean energy future. Largely due to a new way of extracting gas called fracking, the US grew from being a minor global player in 2014 to become the world's largest gas producer by 2023. WOLLONGONG, AUSTRALIA - FEBRUARY 01: A general view of the steelworks and coal loading facility in ... More Port Kembla on February 01, 2021 in Wollongong, Australia. Coal mining operations are set to expand in the Illawarra region following the recent move to reopen the area;s oldest mine. Wollongong Coal's application to expand operations to extract an additional 3.7 million tonnes of metallurgical coal at its currently dormant Russell Vale colliery over the next five years was approved by the The Independent Planning Commission (IPC) in December 2020. South 32 has also submitted plans to the IPC to extend its Dendrobium underground mine west of Wollongong. Both mines encroach on the water catchment area of Greater Sydney, with concerns raised over the expected impact and damage to Sydney's water supply. (Photo by) As the US aimed to increase its fossil fuel exports, natural gas was rebranded from 'queen' to promoting 'freedom.' Referencing the 75th anniversary of the US helping to liberate Europe from Nazi occupation, US Energy Secretary Rick Perry raved: 'the United States is again delivering a form of freedom to the European continent ... And rather than in the form of young American soldiers, it's in the form of liquefied natural gas.' US Undersecretary of Energy Mark Menezes effused, 'Increasing export capacity from the Freeport LNG project is critical to spreading freedom gas throughout the world by giving America's allies a diverse and affordable source of clean energy.' (In a spoof on the rebranding of natural gas, Slate News joked: 'Spreading freedom gas sounds like what happens when you're newly single and suddenly have the apartment to yourself.') So, if it produces less pollution when burned, promotes freedom in Europe, and even guarantees US energy independence, what's the problem with natural gas? Turns out a lot according to Cornell professor Robert Howarth, who, in addition to being my colleague, proudly bears his title as the 'Climate Scientist Fossil-Fuel Companies Can't Stand.' Let's start with the basics. Natural gas is almost completely composed of methane. Although we hear a lot about CO2 and global warming, methane is actually 80 times stronger as a greenhouse gas than CO2 over the first 20 years after it's emitted. In other words, methane warms the atmosphere a lot faster than CO2 in the near-term. Although methane's potency goes down over time, scientists agree that we need to draw down emissions immediately–which means the next twenty years are critical. A hydraulic fracturing operation at a Marcellus Shale well Natural gas can be extracted by conventional wells or by fracking–either way its emissions when burned are lower than those of coal. But natural gas produced via fracking goes through a series of stages from buried in the ground to burned at the power plant. And, at each stage, methane can leak into the atmosphere as 'fugitive emissions.' For example, methane escapes when rocks are injected with high-volume water to open up passages for methane extraction and escapes into the atmosphere through equipment leaks, including pressure relief valves that vent gas as a safety precaution. In both conventional and fracked natural gas, additional fugitive emissions occur during transport, storage, and distribution. Back in 2011, when Howarth first tried to estimate the total amount of methane emissions from ground to power plant, there wasn't a lot of data to draw on. Using the best figures available, Howarth and colleagues estimated that during the life cycle of a typical fracked gas well, 3.6 to 7.9% of the total production escapes to the atmosphere as methane. Recognizing the influence of Howarth and fellow Cornell scientist Tony Ingraffea on fracking policy, Time Magazine named them, along with actor and anti-fracking activist Mark Ruffalo, people who mattered. (Others on the 2011 list included Jeff Bezos, Hillary Clinton, Barack Obama, Vladimir Putin, and Kim Jong Il.) MARSEILLE, FRANCE - 2024/06/04: The LNG (Liquified Natural Gas) Tanker FSRU Toscana arrives at the ... More French Mediterranean port of Marseille. (Photo by Gerard Bottino/SOPA Images/LightRocket via Getty Images) Fast forward to 2024, and Howarth came out with another controversial paper–this time questioning the wisdom of expanding LNG export facilities in Louisiana and Texas. As with his earlier work on fracking, Howarth painstakingly calculated fugitive emissions throughout the life cycle of LNG from extraction to burning in Europe or China. Emissions come from the energy required to convert natural gas into LNG, as well as from burning fuel and evaporation of LNG during transport. Given the magnitude of these and other LNG emissions, Howarth concluded: 'With an even greater greenhouse gas footprint than natural gas, ending the use of LNG should be a global priority. I see no need for LNG as an interim energy source, and note that switching from coal to LNG requires massive infrastructure expenditures, for ships and liquefaction plants and the pipelines that supply them. A far better approach is to use financial resources to build a fossil‐fuel‐free future as rapidly as possible.' Not surprisingly, the oil industry and some scientists were not happy with Howarth's findings and the vitriol began to flow, questioning his credibility and motives. Maroš Šefčovič,Vice-President of the European Commission attends at the Global Methane Pledge (GMP) ... More Ministerial meeting during the United Nations Climate Change Conference (COP28) held at Expo City in Dubai, United Arab Emirates on December 4,2023. The LNG Ogun, a gas carrier that sails under the Bermuda flag, is pictured behind some wind turbines ... More on a breakwater, leaving the Port of Bilbao bound for the port of Bonny, in Nigeria, after her stopover at the Bizkaia Bay regasification plant Gas (BBG) in Zierbena, 20 km away from Bilbao, on December 21, 2022. - Bahia de Bizkaia Gas liquefied natural gas regasification plant gets LNG from tankers from all over the world and transform it into natural gas for domestic, commercial and industrial consumption as well as for the electricity generation. (Photo by ANDER GILLENEA / AFP) (Photo by ANDER GILLENEA/AFP via Getty Images) A battle rages not only over the scale of methane emissions from natural gas, but also over the economic outlook for LNG. According to Shell Oil, 'Global demand for LNG is forecast to rise by around 60% by 2040.' The Institute for Energy Economics and Financial Analysis (IIEFA) has a totally different take: 'Lackluster demand growth combined with a massive wave of new export capacity is poised to send global liquefied natural gas (LNG) markets into oversupply within two years.' IIEFA cites the 20% decline in Europe's gas consumption over the past two years, and smaller declines in Japan and Korea driven by the transition to nuclear and renewables. Not surprisingly, the Trump administration sees LNG as a card to play in its tariff wars, hoping LNG exports will eliminate trade deficits with Europe. But, according to the Columbia University Center on Global Energy Policy, 'Whatever Trump may think he is gaining in the short-term by pushing more US LNG exports to EU countries, it will hardly be a sustainable solution to bridging the US-EU trade.' Unfortunately for trade deficits, European utilities (not politicians) actually purchase gas. They are wary of entering into long-term contracts with US LNG suppliers as LNG demand declines, and of being exposed to international methane reduction agreements that the Trump administration is likely to ignore. The LNG trade issue is complicated by gas prices, which Trump has promised to lower, thus counteracting his goal of reducing the trade deficit. NOCHTEN, GERMANY - APRIL 30: In this aerial view the Boxberg coal-fired power plant stands behind ... More the newly inaugurated PV-Park Boxberg solar energy park on April 30, 2024 in Nochten, Germany. LEAG, the energy company that owns both, is building what it claims will be Germany's biggest concentration of green energy production, with solar energy parks and wind farms that will have a capacity of seven gigawatts by 2030 under the so-called GigawattFactory project. The Boxberg solar park stands on recultivated land of a former open-pit coal mine. The region of southern Brandenburg and northern Saxony has long been heavily dependent on coal. Germany is seeking to shutter its coal-fired energy production by 2038. (Photo by) As scientists and oil executives continue to clash over the methane emissions of LNG–and over future demand for LNG–the point remains that we need to go beyond the emissions from simply burning gas or coal to understand their climate footprint. We need to take into account the fugitive emissions of their entire life cycle, from extraction to transport to burning, and even closing down wells and mines. And we need to compare the costs of building new LNG infrastructure to hastening the transition to renewables. 1 The authors of the Nature study also point out the annual financial costs of fugitive emissions: roughly $1 billion in lost commercial gas and $9.3 billion in social costs, such as declining coastal property values due to fire or sea level rise.
