Posted by Brad Plumer at 12:38 PM ET, 01/23/2012

The U.S. Energy Information Administration just released its Annual Energy Outlook 2012 report, and three things stick out: The United States is dramatically curbing its oil imports, carbon emissions are flatlining and we have less shale gas than once thought. Here’s a rundown:

1) The United States is reducing its dependence on foreign oil. According to EIA forecasts (which, do note, are far from perfect), Americans will likely continue restraining their gasoline consumption, thanks, in part, to the Obama administration’s new fuel-economy standards for cars and lights trucks. Meanwhile, oil and gas production in places such as North Dakota has been booming, thanks to higher prices and new drilling technology. Put those together, the EIA calculates, and the United States is set to import just 36 percent of its petroleum by 2035, down from 60 percent in 2005.

2) U.S. global-warming pollution is flat-lining. Carbon-dioxide emissions plummeted after the financial crisis in 2008, and the EIA expects that greenhouse-gas pollution from the energy sector won’t recover back to 2005 levels anytime soon, as the chart below shows. The reasons? New vehicle fuel-economy standards; cheap natural gas that’s displacing dirtier coal-fired places; state-level laws that mandate renewable energy; and new environmental regulations on power plants from the EPA.
Granted, U.S. emissions aren’t on pace to decline – remember, at the Copenhagen climate talks, the White House pledged to reduce U.S. carbon emissions 17 percent from 2005 levels by 2020, and the EIA doesn’t think we’re anywhere near on pace to do that (Congress would most likely need to step in with new climate policies). Still, after decades of greenhouse-gas increases, there does seem to be a break from historical trends, assuming the EIA forecast holds up:

3) We have less shale gas than once thought. Remember all those old predictionsabout how the United States had a 100-year supply of natural gas, thanks to new fracking technology that can extract energy from shale rock? Lately, those first-draft euphoric estimates have been facing downward revisions, and now even the EIA report is climbing aboard the sobriety wagon.
Back in 2011, the EIA estimated that the Marcellus Shale, which stretches across Pennsylvania, New York and West Virginia, had 410 trillion cubic feet of recoverable gas – enough to meet all our gas needs for the next 20 years or so. Then, last August, the U.S. Geological Survey slashed that estimate by 80 percent. As I reported at the time, the final EIA revision was likely to be somewhat less stark, and it was – the EIA now believes there’s some 141 trillion cubic feet that’s “technically recoverable” (this means the amount of gas that can be extracted, in theory, using existing technology, though not all of that gas is necessarily worth the economic cost of drilling).

In the end, there’s still plenty of shale gas around the country, and EIA expects production to keep rising, albeit slowly thanks to low prices. By 2021, the report notes, the United States will become a net exporter of gas. But America’s underlying shale resources are a little smaller than many people once thought.

Special thanks to Richard Charter

http://www.nola.com/business/index.ssf/2012/01/shell_oil_president_says_pace.html

Times-Picayune/Nola.com

Shell Oil President says pace of federal permitting is improving
Published: Wednesday, January 25, 2012, 5:33 PM Updated: Wednesday, January 25, 2012, 5:36 PM
By Richard Thompson, The Times-Picayune

Shell Oil president Marvin Odum said Wednesday that he believes the pace of federal permitting for deepwater oil and gas drilling in the U.S. “may have turned a corner” by the end of 2011, in the nearly two years since a temporary moratorium was put in place in the wake of the BP oil spill. Odum, speaking at the annual meeting of the Louisiana Mid-Continent Oil and Gas Association in New Orleans, said Shell now has five floating drilling rigs working in the Gulf of Mexico and will soon add two more.

“We’re working hard to make up for what we lost,” he said. “Shell has always had confidence that we’ll get back to where we need to be.”

A day after President Barack Obama outlined his domestic energy policy in his third State of the Union address — a speech in which he cited projections that developing natural gas could support more than 600,000 jobs by the end of the decade and touted jobs created by federal investments in renewable energy — Odum offered a similarly optimistic outlook for the natural gas industry in Louisiana.

“For the state, we see even more opportunity in technology that turns natural gas into liquid products, like diesel fuel and lubricants,” Odum said, adding that developing such technology would create jobs and give the state an economic boost, but also “fulfill a critical need for domestic, secure supply of transportation fuels for the U.S.”

Odum said Shell has drilled about 350 vertical and horizontal wells in the Haynesville Shale natural gas field the field since 2008, and has reduced its drilling costs by 50 percent and completion costs by 45 percent, which he described as “real tangible costs.”

Last year Shell announced plans to build a 72-office building complex to service its workforce in the area, where it had a working interest in several hundred thousand acres.

The state Department of Natural Resources announced last week that 39 rigs were drilling off Louisiana’s coast, the most since May 2010. That is almost twice the number of rigs that were operating in the area at the start of 2011, but less than the average rig count of about 42 that were working there in the three months prior to the Deepwater Horizon disaster.

Richard Thompson can be reached at rthompson@timespicayune.com or 504.826.3496.

_________________________________

http://oilprice.com/Energy/Crude-Oil/Oil-Majors-Move-Back-to-the-Gulf-of-Mexico.html

Oil Price

Oil Majors Move Back to the Gulf of Mexico
By Energy Digital | Wed, 25 January 2012 23:42 | 0

Over a year since America’s worst oil spill in the Gulf of Mexico, big oil finally gets back to business… with a vengeance.

For the first time since BP’s Deepwater Horizon explosion, leading to America’s worst oil spill in history, the Gulf of Mexico has officially reopened its doors for business. In December’s lease sale, the enormity of pent up demand since permits were halted over a year ago resulted in over $337 million in bids on 191 different tracts from 20 companies.

Despite fierce opposition from environmental groups, the Obama administration remains true to the most critical energy strategies meant to boost economic recovery, lower fuel and energy prices and decrease oil imports. And considering that the Keystone XL pipeline may very well not happen along with the more recent events in Iran, which threaten to block the world’s most important oil portal, where else would the US get its most crucial energy source?

While environmentalists fear a repeat of history, moving back into the Gulf without the proper safety procedures and technologies in place, the White House sees the sale as a major milestone in the area’s recovery process.

December’s lease sales, “the first since the tragic events of Deepwater Horizon, continues the Obama administration’s commitment to a balanced and comprehensive energy plan,” said Secretary of the Interior Ken Salazar, who attended the sale and provided opening remarks. “Offshore drilling will never be risk free, but over the last 19 months we have moved quickly and aggressively with the most significant oil and gas reforms in U.S. history to make it safer and more environmentally responsible. Today’s sale is another step in ensuring the safe and responsible development of the nation’s offshore energy resources.”

Not according to environmental groups like the Natural Resources Defense Council (NRDC) and oceans advocacy group Oceana, who are pushing forward with a lawsuit over the environmental impacts of the Gulf spill. Ocean Senior Campaign Director Jackie Savitz claims there is no new assessment of how a future spill will affect ecosystems or a baseline for how much they’ve already been damaged.

But according to Interior Secretary Ken Salazar, the new five-year program will make available for development more than three-quarters of undiscovered oil and gas resources estimated on the Outer Continental Shelf (OCS), including frontier areas such as the Arctic. In addition to the Gulf, offshore drilling in Alaska will recommence under the supervision of the Department of Interior and the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE).

“The Best Place in the World to Drill”

Since the administration lifted the moratorium on drilling permits in the region, oil executives are racing to pursue what many are calling the world’s best place to drill, where more deepwater rigs are expected to go into operation this year than were present before the BP spill.

Shell’s deepest rig Perdido, meaning “lost” in Spanish, runs nearly two miles deep-no other well on Earth produces oil in deeper water. That’s good news for the industry, moving quickly to take advantage of the Gulf’s 15 billion barrels of potential oil, according to analysts.

“We are at the point where … depth is not the primary issue anymore,” Marvin Odum, head of Royal Dutch Shell’s drilling unit in the Americas told the Associated Press. “I do not worry that there is something in the Gulf that we cannot develop … if we can find it.”

That’s a frightening mindset, considering the challenges faced in deepwater drilling made clear from the BP disaster and, more recently, last month’s spill from a Chevron deepwater well off the coast of Brazil. While the Gulf remains the most attractive solution for meeting current and future demands, both from oil companies and under the administration, it’s not so clear whether the technologies and environmental regulations are up to par with the speed at which more deepwater operations are about to reoccur.

By. Carin Hall of Energy Digital

Special thanks to Richard Charter

Gulf of Mexico, Outer Continental Shelf, Central Planning Area; Oil and Gas Lease Sale, etc., 2991-2992

http://www.gpo.gov/fdsys/pkg/FR-2012-01-20/pdf/2012-1124.pdf

http://www.gpo.gov/fdsys/pkg/FR-2012-01-20/html/2012-1124.htm

Emily Yehle, E&E reporter
Published: Monday, January 23, 2012

A scientist from the National Oceanic and Atmospheric
Administration falsified findings to lowball the amount of oil
that leaked in the 2010 Deepwater Horizon explosion, according to
a scientific integrity complaint filed today.

Public Employees for Environmental Responsibility is already
pursuing a lawsuit against the Department of the Interior over a
Freedom of Information Act (FOIA) request for the memos and
emails behind the official scientific assessments of the size of
the Gulf of Mexico oil spill. Today’s complaint stems from the
documents thus far received and is the first the group has filed
under NOAA’s new scientific integrity policy.

The complaint alleges that NOAA senior scientist William Lehr
intentionally misrepresented the findings of the one of the teams
under the Flow Rate Technical Group, a panel of experts convened
by the White House to estimate the flow of oil in the disaster.
Lehr headed the Plume Analysis Team.

NOAA’s scientific integrity policy was finalized in December,
meaning Lehr’s actions preceded the policy. How that will affect
the complaint is unclear.

Lehr wrote in a final report a few weeks after the spill that
“most of the experts” concluded that the best estimate was
between 25,000 and 30,000 barrels per day. That estimate turned
out to be only half of the actual leakage, and experts have said
that the original low estimate hampered the cleanup.

PEER asserts that the team was actually split on that estimate
from the beginning. According to the group’s complaint, only
three of 13 team members made such an estimate, using a technique
called Particle Image Velocimetry (PIV), and they concluded that
it was inappropriate.

Three others used a different method that estimated a leak rate
to be between 50,000 to 60,000 barrels per day, while one team
member used a third method, and the rest didn’t submit estimates
at all, according to PEER.

The group cites an email to the plume team from Marcia McNutt,
director of the U.S. Geological Survey, who led the Flow Rate
Technical Group. In it, she appears to respond to some concerns
about oil plume estimates released to the press. She refers to
pressure from White House officials on how to frame the results,
including one communications person who suggested she say that
the flow was 12,000 to 19,000 barrels per day but could be as
much as 25,000.

“I cannot tell you what a nightmare the past two days have been
dealing with the communications people at the White House, DOI,
and the [National Incident Commander] who seem incapable of
understanding the concept of a lower bound,” she wrote. “The
press release that went out on our results was misleading and was
not reviewed by a scientist for accuracy.”

NOAA spokesman Scott Smullen said the agency had just received
the documents and thus was unable to respond to it. PEER sent out
a press release at about 11 a.m. announcing the complaint.

PEER Executive Director Jeff Ruch said the complaint will serve
as a “litmus test as to whether the Obama administration will
apply its scientific integrity rules to its own actions.”

“Hopefully, the investigation of this complaint will force the
immediate release of the full deliberations so that the
scientific record can be set straight,” Ruch said, citing his
group’s continuing lawsuit over emails concerning the plume
estimate.

Special thanks to Richard Charter

SHAWN MCCARTHY

Jan. 21, 2012 9:34AM EST
It was the 2009 annual summer retreat of the Green Group – the chief
executives, presidents and executive directors of the largest
environmental organizations in the United States – and their Canadian
counterparts had wrangled an invitation for the first time.

The U.S. environmental movement appeared to be on a roll, with a new ally
in the White House, the House of Representatives on the verge of passing a
climate bill, and guarded optimism about a breakthrough at the United
Nations summit in Copenhagen later that year.

That June, the green leaders gathered at the Airlie Center, a historic
farmhouse turned conference centre an hour’s drive from Washington, in
rural Virginia. Billed as an “island of thought,” Airlie is a sylvan
retreat for American progressives: It was there that Martin Luther King
Jr. laid plans for the Poor People’s Campaign and U.S. Senator Gaylord
Nelson announced plans for the first national Earth Day.

For the Canadian eco-activists, the Airlie session had an equivalent
significance, marking the moment when the broad and powerful U.S.
environmental movement turned its focus – and well-financed campaign
tactics – against Canada’s booming oil sands.

The concerted attack that began there set the stage for this week’s
decision by the White House to reject a proposed oil-sands pipeline
through the U.S. heartland.

Green groups on both sides of the border are vowing to keep up pressure on
the Achilles heel of the Canadian oil industry – the multibillion-dollar
pipelines needed to transport Canadian crude to markets in the U.S. and
Asia. In doing so, the environmental groups are rushing headlong into a
confrontation with the Conservative government, which is determined to get
a pipeline built through British Columbia and has criticized foreign
critics as troublesome “special interests” who have no business getting
involved.

Indeed, the government wants to frame the issue in traditional economic
nationalist terms, draping the oil sands in the maple leaf and shielding
Canada’s economic engine from costly interference from abroad. The reality
is that the oil sands – and Canada’s place on the world’s energy map – are
a global concern. And there are stakeholders on both sides of the debate
well beyond our borders.
A light switches on

While the oil sands were not unknown to U.S. activists in the summer of
2009, the Americans attending the green summit were consumed with their
own battles. But the Canadians arrived with a blunt message to look north:
In Alberta’s oil sands, they warned, multinational companies were rapidly
expanding production of a particularly nasty source of crude.

As 20 top U.S. environmentalists sat silently, Greenpeace Canada executive
director Bruce Cox gave a presentation that spelled out the oil sands’
enormous impact and the surge in greenhouse-gas emissions that would
accompany the massive expansion that was planned by the industry and
endorsed by federal and provincial governments.

One graphic was particularly eye-catching: a map of existing and proposed
pipelines, resembling a spider web spinning out from Alberta across the
central United States, to carry oil-sands bitumen to U.S. refineries.
“It was a clarion call,” Mr. Cox said this week in an interview. “And we
had a specific ask: ‘We want you to engage on this subject. We want you to
put it on the radar.”

By all accounts, the Greenpeace session was a galvanizing moment. Groups
like the influential Natural Resources Defence Council (NRDC) had
campaigned against the oil sands for years, but now the top leadership was
directly engaged, and other groups picked up the ball.
“The meeting with the Canadian groups really made a difference,” NRDC
president Frances Beinecke, one of the attendees, said from her New York
office. “It was a very important session for elevating our attention in
the U.S. to this issue and the interrelationship between the two
countries.”

In response to politicians and others who promote Canadian oil as an
“ethical” alternative to imports from Islamic plutocracies and conflict
regions, she said, “We want a cleaner energy future, and taking us from
one addiction to another doesn’t move us forward in that regard.”

The counter-punch

The Obama administration’s decision this week to impose a further delay in
approving TransCanada Corp.’s $7-billion Keystone XL pipeline project
brought howls of outrage from Republicans and the oil industry, and
“profound disappointment” from Prime Minister Stephen Harper. The State
Department did invite the company to reapply when it has completed the
rerouting of the pipeline around the ecologically sensitive Sand Hills
region in Nebraska – essentially punting the final decision until after
next November’s elections.

Stung, the Harper government has lashed out at foreign environmental
groups, characterizing them as “radicals” and “jet-setting celebrities”
fuelling pipeline controversies in Canada. Federal regulators are now
holding a public review of Enbridge Inc.’s Northern Gateway pipeline, and
the government has warned that foreign groups are financing delaying
tactics to undermine the development in the oil sands.

The Harper government itself has actively lobbied in state, federal and
European capitals to oppose policies that it views as detrimental to
Canadian oil. Yet it has good reason to worry about the globalization of
the opposition. The stakes are enormous, and not only for the Prime
Minister’s home province.

Oil is now Canada’s largest export by far, and the country ranks third in
total crude reserves behind Saudi Arabia and Venezuela. Meanwhile critics
worry that the oil boom is transforming the country into something of a
petro state, driving the loonie higher at the expense of Central Canadian
manufacturing.

In the U.S., activists have targeted fossil-fuel production and use, with
campaigns against coal, oil and the controversial “fracking” extraction of
shale gas. But oil is the most politically divisive.

U.S. groups such as the NRDC have been active in Canada, and foreign
foundations have funnelled money to Canadian environmental groups and
activists, in some cases specifically to organize opposition to the
Gateway pipeline through B.C.

Even in Europe, the Canadian government is battling an effort within the
European Parliament – backed by well-organized activists – to pass
low-carbon fuel regulations that would rate oil-sands crude as the world’s
worst from the standpoint of greenhouse-gas emissions.

Yet the environmental community is simply following the pattern of the
international oil industry, which seeks to influence policy wherever it
has operations. And they are also following a known script for global
campaigns, whether to save the Brazilian rain forest, to protect tiger
habitats in Asia or, indeed, to halt logging in British Columbia’s
Clayoquot Sound.

Canadian oil producers are now finding they have to respond to the
heightened international campaign against them, said David Collyer,
president of the Canadian Association of Petroleum Producers, speaking
from Washington, where he was meeting U.S. colleagues, Canadian embassy
staff and analysts to assess the political climate for Canadian oil
exports in the 2012 election year.

“It’s a global business, and it’s hard to draw boxes around these things,”
he said. “Ultimately, it is for Canadians to decide whether those voices
are relevant to the debate or not.”

Who’s winning?

International groups have seized on the Alberta development as a potent
symbol in the much bigger fight over climate change. Mr. Collyer argued
that the groups have been acting out of fear, trying to win a battle to
show that they are not losing the war.

Since the optimistic days of the Green Group summit, the U.S. Senate has
failed to pass climate legislation, Mr. Obama has proved disappointing on
emission regulations and international climate talks have faltered.

In turn, the environmental campaign has provoked a public-relations
response in Canada: the founding of EthicalOil.org, a group with close
ties to the Harper government and the industry. The group has been highly
critical of the foreign groups that have financed campaigns in Canada.
“These groups unfairly target Canada and our oil sands because it’s an
easy, risk-free target for them,” EthicalOil spokeswoman Kathryn Marshall
said.

But Rick Smith, executive director of Toronto-based Environmental Defence
and an attendee at the 2009 Green Group summit, said the Canadian
activists sought out the support of U.S. colleagues to help even the
playing field against the hugely powerful oil industry.
“Canadian environmentalists were working on these issues long before we
saw any greenbacks,” Mr. Smith said. “It was really the aggressive
expansion of the tar sands themselves that has made this into a
continental issue and an international issue.”

Canadian officials play down the climate impacts, saying the oil sands
represent only 5 per cent of total emissions in Canada and that this
country accounts for only 2 per cent of global emissions. But critics say
the country’s per-capita emissions are among the highest in the world, and
Ottawa will not be able to reduce them if oil-sands production grows as
expected.
Choke point

Shortly after the Airlie meeting, the NRDC’s Ms. Beinecke visited Fort
McMurray, Alta., along with Margie Alt, president of Environment America,
a green umbrella group. Both women say they were awed by the sheer scale
of the bitumen mines run by Suncor Energy and Syncrude.
“Clearly the overriding concern of the environmental community globally is
climate change,” she said. “And it really doesn’t matter where it comes
from or where you burn it.”

But she said it is wrong to assume that the NRDC has an inordinate focus
on Alberta’s oil producers. The sprawling environmental charity – with a
annual budget of $100-million (U.S.) – has offices across the United
States and one in Beijing. It works on the full range of environmental
issues, including coal mining, shale gas and hydraulic fracturing,
renewable energy and clean oceans.

But Ottawa and Alberta can expect environmentalists across borders to keep
up the pressure, whether on a Keystone revival, the Gateway project or any
future proposal. Having gotten nowhere persuading governments to rein in
oil-sands growth in the first place, they will keep looking to block the
infrastructure it takes to get the oil to market.

_____________________________________

COMMENTS (currently 130):
http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/the-day-the-oil-sands-battle-went-global/article2310137/comments/

Special thanks to Richard Charter