• Thousands of Bulgarians protested throughout the Balkan country on Saturday against exploration for shale gas, worried it would poison underground waters, trigger earthquakes and pose serious public health hazards. Protesters rallied in more than six major Bulgarian cities calling for a moratorium on shale gas tests through hydraulic fracturing, known as fracking, and demanding a new law to ban unconventional drilling for gas in the southeastern European country.
• The Environmental Protection Agency says New York regulators should set limits for radioactive materials in gas-drilling wastewater sent to public treatment plants before allowing any hydraulic fracturing of natural gas wells in the state.
• Teamster pipeline workers are heading back to the job after the union and the Pipe Line Contractors Association struck a deal extending an expired contract. The National Pipe Line Agreement, which expired on Jan. 31, 2011, will be extended until April 13. The two sides will return to bargaining over the next three months. At stake is the future of pipeline workers retirement plans. The union and management group are battling over types of retirement plans. The impasse led to a strike that began in at pipeline work sites in Pennsylvania and West Virginia Jan. 1 and spread to pipelines in California early this week

Keystone XL

• The White House said on Thursday that finding an alternate route for the Keystone XL oil pipeline from Canada to Texas would take time and any effort to circumvent the approval process would be “counterproductive.” President Barack Obama faces a February 21 deadline set by Congress to either allow TransCanada’s $7 billion pipeline to be built or determine the project is not in the national interest of the United States. Speculation in Washington is rampant on how Obama will address the tricky political question, which divides two key parts of his base during an election year.

Iran

• The Iran Government has raised the temperature further in its dispute with western regimes that threaten to impose sanction on its oil exports. Having threatened to close the Straits of Hormuz shipping channel through which 35%-40% of the world’s oil is moved by sea, it has now warned OPEC members in the region not to ‘ramp up their output’.  ’Should Iran’s southern neighbours collaborate with the adventurous countries [the US and the European Union] to replace their oil production for that of Iran.such countries will be held as main culprits.’ The official added: ‘Such moves are not considered friendly and the consequences of Saudi Arabia and other OPEC members raising production could not be predicted.’
• This week the European Union announced they will be delaying their embargo of Iranian oil for at least six months.

Climate Change, Global Warming & Effects

• Nothing is quite as damning or convincing as photo evidence. And when James Balog looked over his time-lapse photography of an Icelandic glacier, everything he thought he knew about climate change …. changed. ”Your basic human perception of this stuff is that major epochal, geologic scale change happened a long time ago or will happen a long time in the future. ”[But] when we looked at these pictures, we realized — good God — we’re right in the middle of epochal change happening right now.
• On Wednesday, the Environmental Protection Agency (EPA) issued its list of top greenhouse gas emitters from 2010. Of the top 100 emissions sources, 96 were power plants, virtually all of them coal-fueled.
• See China’s Insane Pollution From Space
• China tripled its solar energy generating capacity last year and notched up major increases in wind and hydropower, government figures showed this week, but officials are still struggling to cap the growth in coalburning, which is the biggest source of carbon dioxide emissions in the world. The latest evidence of China’s promotion of renewable energy has been welcomed by climate activists, but they warn that the benefits are being wiped out by the surge in coal consumption.
• Some more China bashing: China’s airlines will refuse to pay any charges under the European Union’s new carbon trading scheme, while other Asia Pacific carriers, already battling a weak travel market, are likely to pass on the extra cost to passengers.
• What Rising Temperatures May Mean for World’s Wine Industry. Warming temperatures associated with climate change are already affecting vineyards from France to Chile, often in beneficial ways. But as the world continues to warm, some traditional winemaking regions are scrambling to adapt, while other areas see themselves as new wine frontiers.
• As the graph below from the UN Food and Agriculture Organization (FAO) clearly demonstrates, the amount of arable farmland has already shrunk and will continue to do so.

Macroeconomics

• China a prisoner to its own growth story. In order to sustain growth the Chinese will have to continue supporting a lopsided growth model: one driven by expanding leverage and increased investment and infrastructure spending. And while in the short run, investment (and even a little overinvestment is ‘ok’) at some point the consumer and organic demand must become the driving force of an economy.
• It’s the derivatives, stupid As in 2008, a boom has generated a large stock of liabilities of dubious worth—subprime loans then, European sovereign bonds now—with banks incurring large exposure to eurozone risk directly and through credit default swaps (CDS) and other derivatives. European banks have sold $238 billion in credit default swaps on bonds issued by the governments of vulnerable European countries—Greece, Ireland, Italy, Portugal, and Spain. U.S. banks have provided $518 billion in guarantees, mostly also in the form of credit default swaps, on the government, bank, and corporate debt of these countries. Banks tend to hedge a substantial portion of their CDS exposure, and it can be devilishly difficult to determine their net exposure to speculative instruments. For example, after a lengthy data slog, one analysis concludes that we can say very little “about the extent and form of U.S. banks’ exposure” to Europe.
• The actions of the European Central Bank greatly eased the immediate financial pressures in the Eurozone. But the underlying problem of internal imbalances remain, and the European response is still not addressing those imbalances. Instead, the commitment to the fixed exchange rate combined with Germany’s failure to recognize that their current account surplus must turn to deficit if they ever hope to be repaid promises to lock the Eurozone on the path of ongoing recession.
• I continue to be a skeptic of the pundits rhetoric that a European recession could lead to a true contraction of the economies of China and India. This is unlikely, and bordering on impossible.
• I remain a bear of the U.S. markets, but the U.S. consumer credit numbers for November 2011 (just released in January 2012) were striking and definitely not bearish for the markets. If consumers are happy to take on debt, for whatever reason, it is very bullish sign. However, as with all things in economics, the devil is in the details. Below is a table of the consumer credit breakdown, from December 2010 to November 2011 (the latest available data) from the Federal Reserve Economic Data
• U.S. consumers started the New Year feeling more hopeful about the economy, according to data released Friday. The Thomson Reuters/University of Michigan consumer sentiment index for early January increased to 74.0 from a reading of 69.9 at the end of December and a preliminary December reading of 67.7, according to sources who have seen the report.
• Friday’s jobless claims report showed an increase to both initial and continued unemployment claims as seasonally adjusted initial claims jumped back near the so-closely watched 400K level.
• If the United States economy is going to turn down, then foreign trade is the most likely source of the slump.

Logistics

• FMCSA delays enforcement of final driver work rule until 2013, giving truckers and shippers more time to test impact, prepare a challenge. Many factors may push truck pricing higher this year, but new restrictions on truck driver work hours won’t be among them.
• Rail services linking Asia and Europe are set to boom as shippers take advantage of an operation that is faster than ocean shipping and cheaper than air delivery, rail operators say.
• More Asian air cargo carriers will remove capacity this week year as export traffic remains week, said industry executives. The current air cargo export market out of Asia was “very, very bad,” said Paul Tsui, chairman of the Hong Kong Association of Freight Forwarding and Logistics.  He pointed to a 10 percent year-over-year decrease of export traffic at Hong Kong International Airport in the first 11 months of last year. Total traffic was down 5.6 percent in the same period.
• The cost advantage of manufacturing products in low-cost manufacturing locations in Asia will erode in comparison to the U.S. and Mexico in 2012, according to a new report by global consultancy AlixPartners. China, which is experiencing negative pressure as an exporter because of wage inflation, exchange-rate pressures and higher freight rates, could lose its cost advantage vis-à-vis U.S. production in four years if freight rates rise at 5 percent annually, according to the 2011 U.S. Manufacturing-Outsourcing Cost Index.

• “What has raised the world’s suspicions is that Iran continues to produce 20 percent enriched uranium despite the fact that this exceeds its civilian needs and, as President Mahmoud Ahmadinejad acknowledged in September, does not make economic sense,” writes Olli Heinonen on ForeignPolicy.com.
• “Covert action creates the time and space for pressure to build, while reducing the need for military action. Ultimately, covert action should be aimed at bringing enough pressure to bear on Iran’s leaders so that they understand they will never reach their goal of being a nuclear power,” writes Andrew Cummings in the Guardian.
• “Whatever the moral considerations, there is no doubt that curtailing Iran’s nuclear ambitions is a paramount goal for policy-makers and security services alike, and the covert campaign appears to be the most effective means of delaying the Iranians’ progress,” argues this Daily Telegraph editorial.
• Experts believe that covert actions that include a campaign of assassinations, bombings, cyber attacks and defections are the modus-operandi used mainly by Israel to weaken the Iranian regime and to halt the country’s attempts to develop nuclear capabilities. “Sabotage and assassination is the way to go, if you can do it,” Patrick Clawson, director of the Iran Security Initiative at the Washington Institute for Near East Policy, told The New York Times in an interview published on Thursday.

Iranian Oil 

• Following a meeting with U.S. Treasury Secretary Timothy Geithner, Japanese Finance Minister Jun Azumi said Japan would continue to reduce its imports (al-Jazeera) of Iranian oil as part of a U.S.-led plan to sanction the country over its nuclear program.
• The US has slapped sanctions on three companies including a large Chinese oil trader for selling refined oil products to Iran, just days after US Treasury secretary Tim Geithner travelled to Beijing to press for Chinese support on Iran sanctions. The measures send a strong warning to energy companies working in Iran. But they also mark a more confrontational approach to China, Iran’s biggest trading partner, after the US has spent years lobbying Beijing for closer co-operation on its attempts to isolate Tehran over its expanding nuclear programme.
• Iran will struggle to sell embargoed crude
• Iranian President Mahmoud Ahmadinejaddenounced capitalism Wednesday during a speech at the University of Havana on the third leg of a trip to highlight friendships with hisLatin American allies, most of them thorns in Washington’s side. Ahmadinejad held a private meeting later with President Raul Castro and was expected to meet with Fidel Castro. In all, he planned to spend less than 24 hours on the island before flying to Ecuador.

Nigeria

• In a video posted on the internet, the leader of Nigeria’s Islamist Boko Haram, Abubakar Shekau, defended the group’s recent killings of Christians (Reuters) in the north of the country as justifiable revenge.
• The Nigerian authorities have imposed a 24-hour curfew in Niger state after a crowd of youths went on the rampage, setting fire to buildings and cars.The trouble in the state capital, Minna, came on the third day of nationwide strikes against a government decision to end fuel subsidies.

Syria

• Syrian President Bashar al-Assad appeared in public for the first time during the ten-month-old uprising against his regime, addressing a rally of thousands in Damascus. Assad vowed to “defeat the conspiracy” (NYT) in the surprise speech.
• The Arab League has delayed sending more monitors to Syria, as its mission runs into further difficulties. The league’s move comes after 11 of its observers were injured in an attack in the port of Latakia earlier this week. One of the league’s 165 observers has already quit the mission describing it as a “farce”, and reports say another is set to walk out.

Fracing (Fracking… eventually I’ll concede that the popular media has succeeded in morphing the spelling which comes from ‘frac’ which is short for ‘fracturing’)

• After earthquakes in Lancashire and tales of poisoned water and flaming taps in the US, “fracking” for gas or oil in the English home counties was never likely to be easy. And so it proved when oil executives faced the fury of a village hall full of West Sussex residents in a clash over a controversial technology that energy companies believe could open up major reserves of energy from underground rocks. ”What you are about to do will make our water beyond toxic!” Ella Reeves shouted at Mark Miller, the Pennsylvania oil man who had come to Balcombe to explain plans to search for hydrocarbons 800 metres under the Sussex weald. “It’s about money for you, but for me it is about life.”
• US natural gas prices suffered their biggest week drop in two-and-a-half years, falling 12.7 per cent, amid forecasts of continuing mild winter weather and booming US production. Higher than normal temperatures in the east and Midwest of America have depressed US natural gas prices over the past few months, when consumption is supposed to be at its strongest. “There doesn’t seem to be a floor [to the price] right now,” said Laurent Key, natural gas analyst at Société Générale in New York.
• Low natural gas prices will eat into Chesapeake Energy Corp.’s profits, analyst Phil Weiss of Argus Research said in a note to clients on Friday.  ”While the company has recently realized additional cash from asset monetizations and plans more, it still faces a cash shortfall relative to its ability to generate sufficient operating cash flow to fund its 2012 capital budget,”
• Last week, I received a note from him letting me know that, on Martin Luther King, Jr. Day, he would be undertaking a hunger strike directed against New York State officials who are bound and determined to make the Southern Tier of the state a showcase for the effectiveness of a process called Induced Hydraulic Fracturing, or “fracking.”

Macroeconomic News

• Of course the news would come on Friday the 13th. After a day of leaks and rumors, Standard & Poor’s Ratings Services made it official late this afternoon. The credit-rating agency is stripping unlucky France of its AAA credit rating, knocking it down by one notch to AA+. Also getting knocked down one notch each were Austria, Malta, Slovakia and Slovenia. S&P gave even worse news to Italy, Spain, Cyprus and Portugal, marking down their debt ratings by two notches each. That downgrade kicked Cyprus and Portugal all the way to “junk” status, where Greece already resides. Ouch.
• The U.S. trade deficit widened 10.4 percent to $47.8 billion in November from October, driven by higher prices and volumes for imported oil and a drop in major export categories other than consumer goods. Non-petroleum imports rose 0.1 percent, including a 3.7 percent jump in automotive import volumes. Imports of capital goods rose despite declines in computers, semiconductors and the volatile category of civilian aircraft. Consumer goods imports fell 1.7 percent.
• Consumer confidence in the U.S. last week reached the highest level since July as the improving job market helped allay pessimism.
• Chinese inflation edged down in December, setting the stage for a continuation of cautious policy loosening to support the slowing economy. Consumer prices rose 4.1 per cent from a year earlier, the lowest in 15 months and well below July’s peak of 6.5 per cent.

Keystone Pipeline

• Cornell GLI’s new report, Pipe Dreams? Jobs Gained, Jobs Lost by the Construction of Keystone XL examines the job impacts of TransCanada Corportation’s Keystone XL Pipeline, the proposed pipeline that would transport tar sands oil almost 2,000 miles from Alberta, Canada to the Gulf of Mexico in Texas. The report reviews claims made by TransCanada and the American Petroleum Institute that the project will create 20,000 construction and manufacturing and 119,000 (direct, indirect and induced) jobs. The report concludes that the job estimates put forward by TransCanada are unsubstantiated and the project will not only create fewer jobs than industry states, but that the project could actually kill more jobs than it creates.

Global Climate Change

• Dramatic and unprecedented plumes of methane – a greenhouse gas 20 times more potent than carbon dioxide – have been seen bubbling to the surface of the Arctic Ocean by scientists undertaking an extensive survey of the region.
• The offer of a fitness club membership is helping insurers includingUnitedHealth Group Inc. (UNH) and Humana Inc. (HUM) draw healthier and less costly patients to their Medicare programs, said researchers reporting in the New England Journal of Medicine. The study found 35.3 percent of new enrollees in a fitness membership benefit plan reported “excellent” or “very good” health, compared with 29.1 percent in the group without the benefit. The number of plans offering the memberships rose to 58 in 2008 from 4 in 2002, the researchers said.

Other

• Energy efficiency is an over-rated policy tool when it comes to cutting energy use and CO2 emissions—that’s the basic message promoted by the US think tank the Breakthrough Institute (BTI), and amplified in major news outlets like theNew Yorker and the New York Times. Their logic is that every action to conserve energy through efficient use leads to an opposite reaction to consume more energy—a “rebound” mechanism, which, according to the BTI, can negate as much as 60-100% of saved energy, and in some cases can backfire to increase net energy consumption.
• In this research note we refute this policy message and show that the BTI, as well as its champions in the media, have overplayed their hand, supporting their case with anecdotes and analysis that don’t measure up against theory and data….
• Global investment in clean energy reached a new high of $260bn (£169bn) last year – despite the financial crisis and the anti-environment agenda of Republicans in the US Congress, a United Nations investors’ summit was told on Thursday. Data from Bloomberg New Energy Finance, which tracks clean energy investment, showed a 5% increase compared with 2010, driven largely by a surge of money going to the solar industry.
• Giant cargo boats and US navy warships have been successfully powered on oil derived from genetically modified algae in a move which could herald a revolution in the fuel used by the world’s fleets – and a reduction in the pollution they cause. The results of substituting algal oil for low-grade, “bunker” fuel and diesel in a 98,000-tonne container ship are still being evaluated by Maersk, the world’s biggest shipping company, which last week tested 30 tonnes of oil supplied by the US navy in a vessel travelling from Europe to India. Last month, the navy tested 20,000 gallons of algal fuel on a decommissioned destroyer for a few hours. Both ran their trials on a mix of algal oil – between 7% and 100% – and conventional bunker fuel.
• Chevron, the second-largest US oil company by market capitalisation, warned that its earnings for the fourth quarter of last year would be “significantly” below the third quarter’s, as a result of a slump in refining profits of about $2bn and adverse exchange rate effects. Chevron said refining margins had dropped because of a fall in demand for petrol and overstocked supplies, which did not improve over the December holiday driving season.

Older News

• Texas and Colorado approved rules today requiring oil and natural-gas operators to report the chemical ingredients used in new hydraulically fractured wellsbeginning [this] year. The Texas Railroad Commission, which oversees the industry in the state, said any well receiving an initial drilling permit beginning Feb. 1 will be subject to the new chemical-disclosure rules, according to an e-mailed statement today.

Bakken – North American Miracle?

The “Economic Miracle State” of North Dakota pumped another record amount of oil during the month of November at a daily rate of 509,754 barrels, which was 43% above last year’s output, and the first time that the state’s daily production exceeded 500,000 barrels (see chart above, data here). Oil production in the Peace Garden State has more than doubled from 246,000 barrels per day two years ago, and North Dakota is now producing enough oil to completely displace the imports of crude oil from Colombia (364,000 bpd) or Iraq (422,000 bpd).

And a slightly different perspective on this milestone: On Tuesday afternoon, North Dakota, home to the booming Bakken oil shale, announced that it had scored its first victory over OPEC. Bakken production in November passed the mark of half a million barrels of oil per day, at about 510,000 barrels, surpassing Ecuador. It’s probably worth pointing out Ecuador is the “Rhode Island” of OPEC. In the same way that metaphors looking to make just about any small land area in the world look big use the comparison of Rhode Island, Ecuador is the only OPEC nation that the Bakken can rival, representing 0.6% of OPEC reserves, or roughly 476,000 barrels daily.

Water

Even investors are worried about water: Jonas Kron is worried about water. The investment adviser at Trillium Asset Management, a $900 million fund manager that focuses on environmentally sustainable investment, fears the world’s dwindling supply of fresh water is hurting the companies he has invested in. For most of the year, Kron has led a shareholder challenge to J. M. Smucker, the strawberry jam maker that also owns Folgers coffee. Kron says the company hasn’t demonstrated it’s prepared for the market changes that are sure to come as climate change reduces the size of the world’s coffee growing area.

Climate experts believe that changing rain patterns at Lake Victoria (the world’s second largest lake), consistent with expected climate impacts, are contributing to [falling water levels], and that further changes are possible. “To date the quays have conceded two metres of waters,” Ndaro says in frustration.

Gasoline prices to rise?

Cognizant of the fact that retail gasoline is currently running nearly 30 cents per gallon higher than it was in January 2008 the year when prices topped out at a national average of $4.11 and that gasoline futures have risen by 30 cents a gallon in the last few weeks, there is reason for concern. Typical of the stories is one from the Los Angeles Times that quotes Tom Kloza, long-time chief analyst for the Oil Price Information Service and the go-to guy when one needs numbers and forecasts on gasoline prices. Kloza notes that for the last decade gasoline futures prices, which ultimately determine pump prices, have risen from an autumn low to a spring high by an average of 83 percent. During these years, the annual winter-spring price surge has varied anywhere from 52 to 169 percent making higher prices by summer a fairly sure bet. This year the 2011 low for gasoline on the NY futures market likely will turn out to have been $2.44 a gallon on November 25. If one does the arithmetic using the average price jump of 83 percent, futures prices could be expected to top out in the vicinity of $4.46 a gallon next spring. Adding in the additional 60 cents to get the gasoline taxed and to the nozzle of your pump, we could theoretically be paying a national average on the order of $5.00 a gallon before the 4th of July. This of course assumes that nothing bad happens in the Middle East that restricts or seriously threatens the flow of oil exports and sends prices much higher.

Nigeria in crisis

Nigerian oil workers threatened on Wednesday to shut down output in Africa’s top crude producer, deepening a national strike over a more than doubling of petrol prices. With the government and unions locked in a showdown which has paralyzed Nigeria for three days, the biggest oil union said it was ready to halt oil production, although industry officials doubted it could shut down crude exports completely.

Gunmen in Nigeria have opened fire in a bar in the north of the country, killing eight people including several police officers. The attack in Yobe state is the latest in a series that officials blame on the Islamist militant group, Boko Haram.

MENA

Iranian President Mahmoud Ahmadinejad defended his country’s nuclear program as he began a four-nation tour of Latin America, joining his ally Venezuelan President Hugo Chavez in accusing the U.S. and its allies of using the dispute to unjustly threaten Iran. Both leaders planned to travel to Nicaragua on Tuesday for the inauguration of newly re-elected President Daniel Ortega, and then Ahmadinejad will also visit Cuba and Ecuador. The Iranian leader is using the visit to tout relationships with some of his close friends shortly after the U.S. imposed tougher sanctions on Iran over its nuclear program.

US Treasury Secretary Timothy Geithner is in Beijing meeting Chinese leaders to seek support for sanctions on Iran’s oil industry.

European refiners have started to sever links with Iran, stopping spot purchases of crude ahead of a European Union meeting later this month that could impose a full oil embargo on Tehran.

Egypt’s Foreign Ministry said Wednesday it had told Israel that it would not be “appropriate” for Israeli pilgrims to make an annual visit to the tomb of a 19th-century Jewish holy man in the Nile Delta, as activists mobilized to block the pilgrimage route. Ceremonies at the tomb of Rabbi Yaakov Abu Hatizra have triggered yearly political sparring in Egypt throughout most of the last decade, with Islamists, nationalists, and others claiming that the government by allowing the pilgrimage is pursuing an unpopular policy of normalization with the country’s former enemy.

A bomber on a motorcycle killed a scientist from Iran’s Natanz uranium enrichment site and his bodyguard-driver on Wednesday during the morning commute in Tehran, Iranian media reported, in an assassination that could further elevate international tensions over the Iranian nuclear program and stoke the country’s growing anti-Western belligerence. It was the fourth such attack reported in two years and, as after the previous episodes, Iranian officials accused the United States and Israel of responsibility.

And for a slightly different phrasing of the same incident: An Iranian university professor and deputy director at Natanz enrichment facility was killed in a terrorist bomb blast in a Northern Tehran neighborhood on Wednesday morning.

The European Union’s recent agreement in principle to gradually ban Iranian crude oil imports has brought to a head a long-running dispute between Europe’s economic and foreign ministries. Economic ministries feared politicizing oil because any disruption could hurt fragile economies and send prices soaring. Foreign ministries, for their part, were eager to turn the screws on Tehran with an oil embargo that would raise the costs of the country’s alleged pursuit of nuclear weapons. This gap is narrowing fast — but not only because of the urgency of increased diplomatic pressure.

Can Diplomacy Save an American Condemned to Death in Iran?

How’s this for timing: by accident of Navy schedules, the U.S. military now has two aircraft carrier battle groups near Iran’s shores, with a third on her way, right as a bomb killed an Iranian nuclear scientist and Iran threatens to close off a key waterway.

A US ship has picked up Iranians in trouble at sea, in the second such rescue in less than a week, the Pentagon has said.

A militant attack on a government vehicle in Yemen’s business capital, Aden, Wednesday, killed a political security officer and injured seven others

Israel’s military chief said on Tuesday that the army was preparing for a potential influx of refugees into the Golan Heights from Syria with the demise of the government of President Bashar al-Assad, which he said was inevitable.

An Algerian has quit the Arab League team sent to check Syria’s compliance with an Arab peace plan, and a second monitor said he might leave because the mission was failing to end the killing of civilians protesting against the president’s rule.

Bunker prices have rallied at the start of 2012 to levels not seen since 2008, when record crude oil prices pushed the price of marine fuels to all-time highs. The price of 380 centistokes (cSt) bunker fuel, the most widely used bunker grade, rose to $740 per metric tonne (pmt) in Singapore on Wednesday, January 11. That was just over $20 shy of an all-time high of $761.50 set on July 15 in the world’s leading bunkering port, 2008 according to Bunkerworld data

Other

Around 300 Chinese workers who manufacture XBox consoles took to a factory roof and threatened bosses with mass suicide over a dispute about pay, unconfirmed reports have claimed. The workers were employed at the Foxconn Technology Park in Wuhan in Hubei province. Foxconn is an independent, global manufacturing partner to companies including Apple, Microsoft and Sony.

I highly recommend this podcast which covers the disturbing Foxconn story in an entertaining and enlightening  manner.

Gregoire says oil-refinery charge would aid transportation system

Is the EU in recession? The German economy is likely to have shrunk by 0.25% in the final quarter of 2011, an official from the Federal Statistics Office has said.

A digital rights and civil liberties group has filed a lawsuit against the Department of Transportation and the Federal Aviation Administration, demanding that they release information on who is authorized to operate drones within the United States.

Nigeria

Lagos ports remained closed on Tuesday as Nigeria’s nationwide strike by labour and civil rights groups entered a second day. The Nigerian Ports Authority (NPA) said ships were neither berthing nor leaving and that 29 ships had been effectively trapped.

Other

A cargo vessel that broke its moorings off the Australian territory of Christmas Island sank during severe weather on Monday night spilling the majority of its contents, including bunker fuel, into surrounding waters. The Panamanian-flagged MV Tycoon was carrying approximately 102 metric tonnes (mt) of intermediate fuel oil (IFO), 11,000 litres of lubricant oil, 32 tonnes of diesel oil and approximately 260 tonnes of phosphate.

Bad timing if you’re into piping tar sands syncrude out of Canada

Canadian pipeline builder Enbridge reported a leak from one of its pipelines on the day public hearings began into the company’s planned Northern Gateway pipeline. U.S. pipeline regulators told Enbridge about the possible leak. A subsequent helicopter over-flight discovered a metre-wide patch of bubbles over the company’s Stingray pipeline, which can carry 560-million cubic feet a day of natural gas from offshore wells in the Gulf of Mexico. The bubbles were found about 100 kilometres from the Louisiana coast.

Enbridge Inc.’s proposed Northern Gateway pipeline through British Columbia’s mountains faces rising costs as regulators and opponents weigh environmental threats in the latest battle over Alberta’s oil sands.

With energy demand on the rise and sources of supply dwindling, we are, in fact, entering a new epoch — the Geo-Energy Era — in which disputes over vital resources will dominate world affairs.  In 2012 and beyond, energy and conflict will be bound ever more tightly together, lending increasing importance to the key geographical flashpoints in our resource-constrained world.

The U.S. House of Representatives recently voted to pass — with only six nays — the Iran Threat Reduction Act of 2011. At the Hill’s Congress Blog, Jamir Abdi explains that (as you may have heard) it contains “a provision—inserted without debate in committee after garnering the majority of its cosponsors—that would outlaw contact between U.S. government employees and certain Iranian officials.”

In this month’s update of the “real” employment situation we will dig down behind the headlines and look deeper into the recent release of the Employment Situation report from the Bureau of Labor Statistics.

Russia

Russian Dec seaborne oil exports down 6.6 pct vs Nov

Remember the GOM BP oil spill?

After the catastrophic explosion in April 2010 at BP’s Deepwater Horizon oil rig, it’s believed that 206 million gallons of crude shot from the riser pipe over three months. Now, learning what was released, how much and where are key for understanding the impact on ecosystems, a Sarasota Herald-Tribune report said. As much as 36 percent of the oil remained in deep underwater plumes, a government-funded study published Monday said.

Some more on coal

Alpha Natural Resources Inc. has settled all remaining wrongful-death lawsuits with the families of coal miners killed in a 2010 explosion that was the worst U.S. mining accident in four decades. Alpha inherited the civil suits when it acquired Massey Energy for $7.1 billion last June, more than a year after an explosion at Massey’s Upper Big Branch mine in West Virginia killed 29 miners.

Bunkering woes

A Spanish member of the European Parliament has renewed his attacks on bunkering in the Bay of Gibraltar. “These waters are suffering the negative effects of repeated spills of fuel and facing the risks posed by extremely dense maritime traffic and constant uncontrolled bunkering operations,” said Fancisco Sosa Wagner.

The year in review and the year ahead by Derik Andreoli (Logistics Management)

The second liquefied natural gas (LNG) export facility in North America—originally designed for imports—is being constructed in Louisiana. The Federal Energy Regulatory Commission released an environmental assessment of the Sabine Pass LNG facility. FERC found that approval of the project, with a few changes, would not significantly affect the “quality of the human environment.” The deadline for comments is January 27.

Getting thirsty, yet?

Snow ‘drought’ across the West Coast bodes ill for water levels this summer: snowpack and stream flow forecast

Perhaps the West is looking a bit like Texas where: Water has always been a concern for 65-year-old Joe Parker, who manages a 19,000-acre cattle ranch here in South Texas. “Water is scarce in our area,” he says, and a scorching yearlong drought has made it even scarcer. What has Mr. Parker especially concerned are the drilling rigs that now dot the flat, brushy landscape. Each oil well in the area, using the technique known as hydraulic fracturing, requires about six million gallons of water to break open rocks far below the surface and release oil and natural gas. Mr. Parker says he worries about whether the underground water can support both ranching and energy exploration.

A tunnel beneath the Yellow River, China’s second longest, and related water gates and ditches have been completed for the eastern route of the country’s giant south-north water diversion project. Water diverted from the Yangtze, China’s largest river, along the eastern route will flow through the tunnel to the parched northern provinces of Shandong and Hebei as well as Tianjin Municipality, the Shandong Provincial Construction Management Bureau of South-to-North Water Diversion Project said in a statement on Sunday.

One of the government’s top scientists says much more research is needed to determine the possible impacts of shale gas drilling on human health and the environment. “Studies should include all the ways people can be exposed, such as through air, water, soil, plants and animals,” Dr. Christopher Portier wrote to The Associated Press in an email.

Federal environmental regulators took steps Friday to deliver drinking water to several Dimock Twp. homes where tainted well water has been tied to nearby gas drilling, according to three families who spoke with EPA officials.

The U.S. Environmental Protection Agency abruptly changed its mind Saturday about delivering fresh water to residents of a northeastern Pennsylvania village where residential wells were found to be tainted by a natural gas drilling operation. Only 24 hours after promising them water, EPA officials informed residents of Dimock that a tanker truck wouldn’t be coming after all. The about-face left residents furious, confused and let down — and, once again, scrambling for water for bathing, washing dishes and flushing toilets.

About being a net petroleum products exporter…

Growing tension with Iran and a threat to global crude supplies may be dominating oil traders’ attention but a potentially bigger story is breaking on the demand side of the market. Petroplus, Europe’s largest independent refining company, this week began shutting down three of its five refineries, halting about a quarter of a million barrels of daily production.

Meanwhile in the MENA

As the US completed its official withdrawal from Iraq, a series of events stoked a political crisis that will push Iraq toward a precipice. Observers questioned the timing of Prime Minister Nuri al-Maliki’s audacious moves against two of Iraq’s senior Sunni politicians, Vice President Tareq al-Hashemi and Deputy Prime Minister Saleh al-Mutlak. All within days of the troop withdrawal, Maliki called on the parliament to depose Mutlak, who recently likened Maliki to Saddam, and the judiciary issued an arrest warrant for VP Hashemi’s alleged involvement in terrorist activities. Kurdish officials have refused to comply…

While the US military has formally ended its occupation of Iraq, some of the largest western oil companies, ExxonMobil, BP and Shell, remain.

The Arab League has urged the Syrian government to end its violence against protesters and allow League monitors in the country to work more freely, but stopped short of asking the U.N. to help.

Iran’s top nuclear official announced this weekend that the country was on the verge of starting production at its second major uranium enrichment site, in a defiant declaration that its nuclear program would continue despite new international sanctions restricting its oil revenue.

Iran’s Revolutionary Court has sentenced an Iranian-American man to death for spying for the CIA, officials said on Monday, a move likely to aggravate U.S.-Iranian tensions already high because of Tehran’s disputed nuclear program.

Iran has described the US Navy’s rescue of 13 Iranian fishermen held by Somali pirates as a “humanitarian gesture”. Foreign Minister Ali Akbar Salehi said his country had also rescued foreign sailors from pirates on occasion. But he said such acts did not affect overall relations between countries.

Venezuelan President Hugo Chavez dismissed a U.S. warning to avoid close ties with Iran on Sunday, denouncing what he said was Washington’s attempt to dominate the world as he welcomed the Iranian president to the Latin American nation.

And things are getting worse in Nigeria

Nigeria’s president has said for the first time he thinks sympathisers of the Islamist Boko Haram group are in his government and security agencies. Goodluck Jonathan’s comments come amid a wave of violence blamed on Boko Haram which has left dozens of people dead in the north, most of them Christians. Mr Jonathan also said the security situation was now more complex than during the civil war four decades ago.

A general strike in Nigeria over the elimination of a fuel subsidy has brought the country to a standstill. Shops, offices, schools and petrol stations around the country closed on the first day of an indefinite strike.

Nigeria was paralysed by strike action over high fuel prices on Monday, with shops, schools and banks shut, roads empty and thousands of people joining demonstrations in large cities. Police shot dead one man and injured several others in Lagos, a union leader said, near to where several thousand people had gathered peacefully in a park to denounce President Goodluck Jonathan’s administration.

A bit on coal

Exports of coal are helping drive the business for railroads, but will new regulations leave the business in the dust? Coal exports may account for less than 10 percent of U.S. production, but strong demand from overseas buyers proved critical for domestic mining companies facing weak utility markets in 2011.

And some other stuff

Economic growth was disappointing in 2011 and a strong rebound is unlikely in 2012, but North America’s railroads will continue to outperform the overall economy, especially in the intermodal sector.

More than 60 percent of truckers surveyed in November said they expect volume to increase in 2012, with only 2 percent expecting freight levels to decrease, says trucking acquisition analysis and research firm Transport Capital Partners. An even larger share, 70 percent, said they expect rates to rise

Truckload rates rose less than some carriers expected but more than shippers wanted in 2011, with spot market rates on average rising 7.4 percent and contract rates climbing an average 6.5 percent, a freight pricing specialist says.

An system that allows ships to make emulsion fuel onboard could help ship operates save on bunker cost while also ensuring compliance with global and regional emissions standards, according to the company that makes it. (my note: we’re talking fuel savings of 5 to 15%…)

Shale gas pipeline costs triple (Underground Construction)

Drilling Down: Documents: Industry Privately Skeptical of Shale Gas (NYT)

As natural gas prices fall, shale drilling loses some luster by Loren Steffy (Houston Chronicle)

Do oil companies need a belly rub? by Steve LeVine (Oil and Glory, Foreign Policy)

Slideshow of gas flaring in North Dakota (NYT)

International players jump at U.S. shale by Simone Sebastian (Houston Chronicle)

Are E&P companies coming to their senses about gas? by G. Allen Brooks (Rigzone)

Virtually No One Can Predict Natural Gas Prices by Devon Shire (Seeking Alpha)

EPA may retest PA. water near fracking by  Edward McAllister and Timothy Gardner (Reuters)

MENA

Persian Gulf Storm Clouds by Robert McMahon (CFR)

Potential ‘Political Chaos’ in Iraq – an interview with Ned Parker (CFR)

Damascus street explosion kills 25 by Abigail Fielding-Smith in Beirut (FT)

Arab League role in Syria questioned by Abigail Fielding-Smith in Beirut and Roula Khalaf in London (FT)

Political Role for Militants Worsens Fault Lines in Iraq by Jack Healy and Michael Schmidt (NYT)

Italy urges gradual Iran oil ban by James Blitz in London and Guy Dinmore in Rome (FT)

Iran is baiting, but America won’t bite by Ian Bremmer and Cliff Kupchan (FT)

Seoul and Tokyo seek to ease Iran oil ties by Ben McLannahan and Song Jung-a (FT)

Other

U.S. refineries and blenders produced record amounts of distillate fuels (EIA)

A very interesting chart tracking the prices of five benchmark crude streams (EIA)

A new gas-to-liquid fuels technology by Harry Tournemille (EnergyBoom)

Greenbrier says demand strong for new railcars (American Shipper)

Boko Haram Backgrounder (CFR)

Eurozone unemployment raises recession fears by Stanley Pignal (FT)

What America looked like before the EPA by Jess Zimmerman (Grist)

EPA releases toxic release analysis (UPI.com)

CDC Scientist: Tests needed on gas drilling impact (WSJ)

‘Frac Sand’ Mining Rush In Midwest Spurred By Natural Gas Fracking Boom (Huffington Post)

Oil Prices

Traders fear ‘tail risks’ in commodities by Javier Blas (FT)

Tail risk in crude oil, friend or foe? by Kris Rymer (Seeking Alpha)

Long-Term Perspective On Crude Oil And Natural Gas Markets by Jeremy Johnson (Seeking Alpha)

How Likely Is Another Oil Price Crash? (Seeking Alpha)

MENA and the Geopolitics of Oil

Iraq: Bombings in Baghdad and Nasiriya kill scores (BBC News)

Attacks on Shiites in Iraq Kill at Least 60 by Michael Schmidt (NYT and Truthout)

Arab monitors to stay in Syria despite “mistakes” (Reuters)

Arab League seeks UN help in Syria (Asharq Alawsat)

Oil Price Would Skyrocket if Iran Closed the Strait of Hormuz by Clifford Krauss (NYT)

EU, concerned by Iran’s nuclear program, aim for agreement on Iranian oil ban by end of month (WP)

How Serious Are Iran’s Threats? (CFR)

Obama’s Counterproductive New Iran Sanctions: How Washington is sliding toward regime change by Suzanne Maloney (Foreign Affairs)

Time to attack Iran by Matthew Kroenig (Foreign Affairs)

Tar Sands

PetroChina buys full stake in Canada oil sands project (LA Times)

Other

Oil industry launches big election PR campaign (Yahoo Finance)

Qatar’s next big purchase: a farming sector by Martina Fuchs (Reuters)

Water shortage in Beijing severe (China Daily)

Time to Stop Being Cynical About Corporate Money in Politics and Start Being Angry by Bill McKibben (Truthout)

US railroads report record intermodal container loads (JOC)

Solar power paying for and powering a Chevy Volt (c|net)

• What the frack? Is there really 100 years’ worth of natural gas beneath the United States? by Chris Nedler (Slate)
• Ohio suspends well operations after a series of quakes by Kim Palmer (Reuters)
• Ohio site of two earthquakes nearly identical by Henry Fountain (NYT)
• The French and Chinese are digging in your yard for natural gas by Shira Ovide (WSJ)

MENA Geopolitics

• Iran’s rhetoric sets diplomacy on edge by James Blitz and Najmeh Bozorgmehr (FT)
• Iranian currency plunges to record low by Najmeh Bozorgmehr (FT)
• Monitors raise heat on Damascus by Noah Browning and Borzou Daragahi (FT)
• Syrian rebels raise flag from the past by Borzou Daragahi (FT)
• Iran’s real weapon of mass destruction is oil prices by Daniel Fisher (Forbes)

Environmental

• Ecuador court holds up $18 billion Chevron ruling by Naomi Mapstone (FT)
• EU warns wasting environmental resources could spark new recession by Janez Potocnik (The Guardian)
• China and Vietnam dumping wind towers, U.S. claims (American Shipper)
• Airlines to hike prices to cover emissions (Seattle Times)

• Gulf lease sales will reduce U.S. oil dependence, agency says by Jim Snyder (Bloomberg)
• Oil industry: ‘Huge political consequences’ if pipeline rejected by Andrew Restuccia (The Hill)