World Bank Raises Alarm that Middle East Conflict Could Propel Oil Prices Above $100 Per Barrel!

May 5, 2024

The World Bank has issued a warning that escalating tensions in the Middle East, particularly due to recent missile exchanges between Iran and Israel, could significantly impact global economic stability.

This escalation risks driving the oil price above $100 per barrel, countering the recent downward trend in global inflation. Previously, the World Bank had anticipated an average crude oil price of $84 a barrel for this year but now acknowledges that this estimate may be overly optimistic given the current geopolitical unrest.

The institution highlights that the surge in oil prices, influenced by fears of a full-scale war, has already seen Brent crude trading at $87 a barrel. This increase is reflected in higher fuel costs for consumers, with the price of unleaded petrol in the UK surpassing £1.50 per liter, a peak not seen since the previous November. Such developments could push global inflation up by nearly one percentage point in 2024 if a severe disruption in oil supply occurs. Read more...

Harvest Petroleum News!

April 5, 2024

Harvest Petroleum has closed on purchasing the remaining assets of Mercury Operating, which is in receivership.
The assets are located in Andrews, Concho, Fisher, and Marion Counties in the State of Texas.
More details will disclosed when available.

Dependency on Foreign Oil Threatens California

January 22, 2024 : cipa.org

As the world's fourth-largest economy, California faces a significant, self-imposed energy problem. The state's heavy reliance on foreign oil imports should concern every Californian, especially given the ongoing geopolitical unrest affecting key global shipping routes.

The Southern Red Sea, a vital pathway for energy shipping, is witnessing increased military tensions. The U.S. is advising ships to avoid this route temporarily. The region's instability is also impacted by incidents such as the seizure of an oil tanker, St Nikolas, by Iranian forces in the Gulf of Oman, as reported by the White House national security spokesperson, John Kirby.

The Red Sea, crucial for access to the Suez Canal<https://cipa.us3.list-manage.com/track/click?u=ed573d659cc0cf653cb22e87f&id=407ad037bb&e=51e12d710d>, has experienced over 100 attacks on commercial ships in the past month. This situation has compelled the world's top ten international cargo companies to reroute their vessels around Africa to reach Europe or the Americas, substantially increasing travel time, costs, and greenhouse gas emissions during transit. The rerouting around the southern tip of Africa adds 6,000 miles and three to four weeks to voyages, impacting global supply chains and causing spikes in oil prices.

This global uncertainty and conflict expose the vulnerability of California's energy strategy, which is increasingly reliant on oil imports. Saudi Arabia and Iraq are two of California’s largest sources of foreign oil. Overall, California imports 75% of the oil it consumes every day. Without pipeline connections to the lower 48 states, California lacks a fallback option if oil tankers cannot reach its ports.

This dependency on foreign oil exposes the state to the whims of international conflicts and raises questions about the sustainability and security of its energy supply.

Rather than maintain or expand in-state oil production, California's politicians are looking for ways to cut it even further. In the past four years, California oil production is down more than 25 percent, and oil imports are way up—imports that cost approximately $5-6 more per barrel than domestic oil and are exempt from California climate laws.

In the end, it’s California families who pay the price for misguided energy policy and over-reliance upon climate-damaging foreign oil imports.

The true cost of EVs is more than the sticker price

By Brent Bennett, Ph.D., The Honorable Jason Isaac|November 13, 2023
This commentary was originally published in the Dallas Morning News.

The goals of President Joe Biden’s administration are lofty: among them, nationwide vehicle electrification within 20 years. To reach that goal, the administration has recently proposed new fuel economy regulations that will help ensure that 67% of new passenger cars sold are electric vehicles by 2032.

The problem is that this green dream is physically impossible to achieve in the next 10 years, and our new research at the Texas Public Policy Foundation shows how much Americans are already paying to try to achieve it.

EV advocates often claim that with the right balance of expensive subsidies and coercive regulations, we can quickly summon new battery and EV technology on a massive scale and make EVs cheaper than gas-powered cars.

What they don’t admit is that these subsidies and regulatory favors, not counting the new subsidies in the Inflation Reduction Act that are beginning to take effect this year, are already costing Americans at least $22 billion annually, which is almost $50,000 per EV that is sold.

Much has been written about the $7,500 federal tax credit for EVs and tax breaks for domestic battery manufacturing, but our research shows that regulatory credits are the biggest subsidy for EVs, an average of $27,881 per vehicle. This is primarily because EVs are being given a 6.67 multiplier to their rated fuel economy under the federal standards, so that an EV with a rated fuel economy of 100 miles per gallon is credited as if it is getting 667 miles per gallon.

Another concern is the strain EVs will place on the grid if nothing is done to optimize their charging patterns. As it is, infrastructure to support EV charging — including things like replacement and upgrade of transformers, circuits, feeders, and transmission lines, as well as extra overhead costs like metering and billing required to service charging stations — will result in an average of $11,833 in costs per vehicle over 10 years, our research found. Those costs are being socialized to your electric bill and to your tax bill.

A regular EV charging at home consumes as much power as several homes, and fast-charging an EV in under an hour may consume as much as 100 homes or an average grocery store. A Tesla here and there are manageable, but if more than 100 million EVs are connecting to the grid like the Biden administration is envisioning — not to mention its push to electrify heating and industrial processes — then the impact on our grid is hard to fathom.

Ironically, ditching gasoline wouldn’t meaningfully impact the environment. Personal vehicles account for only 20% of all U.S. carbon dioxide emissions, and phasing out all U.S. emissions by 2050 will only reduce temperatures in 2100 by the barely measurable amount of 0.08 degrees Celsius, our research found.

The U.S. is already a world leader in clean air, and levels of actual pollutants such as soot and smog are already so low in the U.S. that taking half the cars off the roads during the 2020 COVID-19 lockdowns did not measurably change pollution levels, according to our research. Forcing every American into an EV to try to achieve such a small impact is not worth it.

Also, EVs have social and environmental impacts that must be considered. EV batteries require significant mining of cobalt, lithium, and copper, which is primarily done in foreign countries with lax labor and environmental standards. The result isn’t environmental justice; it’s children as young as four mining cobalt in dangerous, squalid conditions in the Congo, as reported by CBS News.

As battery prices fall over time, hybrids are the natural next step. They use batteries that are 50-100 times smaller than EV batteries to achieve significant fuel economy gains, and they do not require new infrastructure to fuel up. Despite receiving far fewer government favors, hybrids are still outselling EVs in the U.S. according to the U.S. Energy Information Administration, and hybrid sales are growing at a similar pace to EVs.

Instead of spending hundreds of billions of dollars to force automakers and consumers to adopt a politically favored technology at unsustainable rates, our leaders should let markets drive technology adoption, efficiency, and all the benefits that come with that.

Super-Spiked 07.22.23 | FAQ: Peak demand? Peak Permian? What About Africa?.

NAVIGATING THE ENERGY CRISIS ERA

Question: Isn't the peaking of oil demand inevitable?

It is now well documented that the energy sector is still trying to shake off memories of last decade's poor profitability and the resulting diminution of investor interest and appetite for new CAPEX. We recognize that the period of structurally improved ROCE has not yet been long enough to give investors confidence the 2020s will not be a repeat of the 2010s. The other big overhang on the sector has been broad-based calls from leading Western institutions that have forecast a near-term peak/plateau/decline in oil demand.

The International Energy Agency’s (IEA) infamous May 2021 Net Zero By 2050 report showed a scenario where global oil demand peaked in 2019, pre-COVID. Other macro forecasters have expected oil demand to peak somewhere in the mid-2020s. It is noteworthy that despite a generally choppy global GDP environment—particularly in the largest oil consuming regions of China, Europe, and the United States—global oil demand is on-track to obliterate the doom-sayers.
Read More...

July 3, 2023, 9:00 AM CST - Oil and Gas growing demand and supply while CA tries to eliminate oil and gas
Sean Wallentine..

Lee Ying Shan reported that, "Oil and gas will continue to be leading sources of energy for decades to come on the back of a lagging energy transition, major industry players said at the Energy Asia conference held in Malaysia's capital Kuala Lumpur this week." So, while California policymakers continue to press forward with eradicating all production and usage of fossil fuels,

most of the world's population, which is in Asia, is planning to increase production and use of fossil fuels. California's leaders continue to claim they are "leading the world" on climate mitigation by, among other things, shutting down oil production. Yet, no other states in America are following California's lead, let alone the rest of the world. California is going backwards, not transitioning forward.

In fact, what was highlighted at Energy Asia was that Asia is planning to increase oil exploration and production due to future increase demands, including expanding refinery capacity. The California Legislature is going backwards. Refineries are shutting their doors and the state is adopting arbitrary and unscientific "setbacks" falsely claiming they are protecting peoples' health. Yet, Californians demand more oil and natural gas in 2023 than ever before.

While the rest of the world is moving forward with an all-of-the-above approach to energy and an energy transition, California is stumbling and bumbling its way into a manufactured energy crisis in the name of saving a world from climate change that is more interested is adaption and opportunity than being saved from fossil fuels.

"We think the biggest realization that should come out of this conference ... is oil and gas are needed for decades to come," said John Hess, CEO of U.S. oil company Hess Corporation. "Energy transition is going to take a lot longer, it's going to cost a lot more money and need new technologies that don't even exist today," he continued.

Asia will continue to spur the demand for oil and gas, as the region's growth is set to overtake the U.S. and Europe by the end of the year. "This is the region [Asia] where the growth in energy demand will be, and more to come," S&P Global's Vice Chairman Dan Yergin said at the energy conference. He said Southeast Asia's population alone is 50% greater than the European Union's.

California policymakers would do well to listen closely to what the rest of the world is planning regarding fossil fuels, and particularly Asia. It is not possible to "save the planet" by stopping oil production in California alone, especially when Asia is going in the opposite direction.

If California leaders want to continue bragging about the state being the 5th largest economy in the world, they should start acting like they know how to run the 5th largest economy in the world from a global perspective. And that starts with keeping local oil production high to meet high demand for crude oil in California.

May 10, 2023, 9:00 AM CST - One Medium-Size Oil Platform vs. a Giant Wind Farm
By Harvest Petroleum, Inc.

Both installations would produce approximately 12 billion kilowatt hours of energy annually — enough electricity for 2 million European homes or one million U.S. homes annually.

One oil platform produces approximately 20,000 barrels of oil per day, and is the size of one football field.

A comparable windfarm with minimum batterybackup would require 146 Giant GE Haliade-X 12-Megawatt Wind Turbines, covering 110 square miles of ocean.

The all-in costs for both energy sources for installation, maintenance, and the daily cost of producing the energy over 10 years would be as follows:

• Oil Platform: $3.5 Billion
• Wind Farm: $128 Billion
Read more...

Aug 01, 2022, 5:00 PM CDT - How China Could Send LNG Prices Into The Stratosphere
By Irina Slav - OilPrice.com
*Six years ago, China suffered a severe natural gas shortage and has since been very careful to ensure it has as much gas as it needs before winter.
*One of the few things keeping a lid on natural gas prices this year has been a significant reduction in Chinese LNG imports.
*If China has a colder than expected winter or if there is a change in its Covid strategy, then global LNG markets are sure to get even tighter. Read more...

October 22, 2022 - 5 Trends Shaping the Future of Energy. - Alex Epstein.
Today I gave a 90-minute presentation + Q&A to a group of executives interested in my perspective on the future of energy. I focused on 5 trends shaping the future of energy that I believe most commentators underestimate or overlook. Read more...

August 2, 2022 - The U.S. Energy Information Administration predicts that the global oil surplus will decline from 3.05 million barrels per day this year to 2.92 million barrels per day in 2023. Read more...

July 27, 2022 - California's oil and gas workers send warning to states about Newsom's devastating energy policies. California Globe. Read more...

June 30, 2022 -The State of California consumes 1.8 million barrels of oil per day, yet the Sacramento State Assembly continues to push green initiatives at $6.00+ per gallon gas in the State.

June 10, 2022 - The world must brace itself for a further surge in oil prices. Financial Times

JPMorgan"s chief executive Jamie Dimon thinks oil prices could surge to $175 a barrel later this year. Jeremy Weir, the head of commodity trader Trafigura, says oil could go "parabolic". Energy Aspects, a consultancy with clients stretching from hedge funds to state energy companies, says we are facing "perhaps the most bullish oil market there ever has been". Goldman Sachs thinks oil prices will "average" $140 a barrel in the third quarter of this year. Read more...

Oct. 19, 2020 - EIA: Natural Gas is Poised to be More Competitive Than Renewables in China

The U.S. Energy Information Administration recently released its 2020 International Energy Outlook (IEO), delivering some very promising insights into the future of natural gas, driven in particular by demand in Asia. As noted in the report, Asian markets, deprived from local natural gas resources, have a gargantuan need for the affordable and popular energy-source, in order to achieve country-based energy transition targets. Just last year, almost 70 percent of the total global LNG exports were shipped to Asia, with China becoming the largest natural gas importer in 2018. Thus, Asia's growing natural gas demand translates into promising expansion opportunities for U.S. natural gas producers. Let's take a closer look into a couple of the outlook's findings. Read more...