The global economy could withstand widespread disruption from a natural disaster or attack by militants for only a week as governments and businesses are not sufficiently prepared to deal with unexpected events, a report by a respected think-tank [Chatham] said.
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.
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.
With natural gas in such abundance here in the US and its low price, every day more people are wondering why nothing significant is being done to increase its use on a much wider scale. Of course, these low prices are temporary for this reason and the fact that the same rigs that drill for shale gas can be employed drilling for oil, and, as the report points out, the spread between gas and oil is at an all-time high
Alaska – Outlook for the Alaskan Pipeline Project just got a little less bright
An Alaska natural gas pipeline project that would serve overseas markets seemingly wouldn’t qualify for a loan guarantee under federal law. The Alaska Natural Gas Pipeline Act contains incentives aimed at speeding a project, including authorization for a federal loan guarantee. But Larry Persily, federal coordinator for Alaska natural gas transportation projects, notes that a qualified project under the law is one that would bring gas from Alaska’s North Slope to the continental United States.
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.
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.
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.
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.
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
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.
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.