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May 2019

Carbon Dioxide Levels Hit Highest Level In 3 Million Years, While Plastic Industry Plans Big Growth

In climate-related news:

From NBC News:  “Carbon dioxide hits a level not seen for 3 million years. Here's what that means for climate change — and humanity.”

Excerpts:

In the latest bit of bad news for a planet beset by climate change, the concentration of carbon dioxide in Earth’s atmosphere has climbed to a level last seen more than 3 million years ago — before humans even appeared on the rocky ball we call home.

On Saturday, sensors at the Mauna Loa Observatory in Hawaii indicated that concentrations of the greenhouse gas — a byproduct of the burning of fossil fuels — had reached 415 parts per million (ppm), meaning that for every 1 million molecules of gas in the atmosphere, 415 were of carbon dioxide.

Carbon dioxide traps heat from the sun, and higher levels are associated with higher global temperatures and other effects of climate change, such as rising seas and unusual weather patterns.

The level of CO2 in the atmosphere has risen an average of 2.5 ppm per year over the past decade, reaching 400 ppm in 2013 — and the level appears likely to go higher from here.

“We’re racing toward a state very different from the kind humans evolved in and that civilization developed in,” said Ralph Keeling, a geochemist at the Scripps Institution of Oceanography in La Jolla, California.

The last time levels of atmospheric carbon dioxide were this high came during the Pliocene Epoch, which extended from about 5.3 million to 2.6 million years ago. During that period, average sea levels were about 50 feet higher than they are today and forests grew as far north as the Arctic, said Rob Jackson, a professor of earth system science at Stanford University. “Earth was a very different place,” he said. “You would hardly recognize the land surface, and my gosh, we don’t want to go there.”

From Deutsche Welle:  “Climate change: UN chief Guterres decries 'fading' global efforts.”

Excerpts:

Arriving in Auckland Sunday, Guterres said the world was "not on track" to confine the rise in global warming to 1.5 degrees Celsius above pre-industrial levels as agreed in the 2015 Paris agreement.

"The paradox is that as things are getting worse on the ground, political will seems to be fading," said the UN secretary general.

"Climate change is running faster than what we are … the last four years have been the hottest registered," he said, adding that political inadequacy was evident “everywhere."

From New York Magazine:  “Los Angeles Fire Season Is Beginning Again. And It Will Never End.”

Excerpts:

You could see the smoke from space. The plume from last November’s Woolsey fire swept out toward Catalina and into the Pacific beyond by the same Santa Ana winds that had carried the flames all the way down the Malibu mountainside to the beach. The aftermath was eerie, the sunsets gorgeous, toxic ash falling from the sky in heavy lumps. Horses and alpacas and a giraffe wandered the sand, having fled flames that tore through local stables and ranches and a vineyard’s private zoo. The burn scar on the land, when the smoke cleared, stretched 152 square miles through Point Dume and Malibu and up to Calabasas and Westlake Village: 96,000 densely populated acres burned, 300,000 people evacuated from 100,000 homes, a city of 10 million terrorized in ways both familiar and unprecedented.

In the mythology of Los Angeles, fires are an eternal feature of the landscape — more permanent than any human settlement and an intimation that the city and its people remain rugged, no matter how comfortably plastic and protected life in its wealthy canyon sprawl might seem. But in a time of environmental panic, last year’s fires played more like a portent of something new, even an End of Days. The same resident of Inglewood or West Hollywood or Culver City who might once have looked up from his driveway to see the same smoke plume suspended above the city’s flatlands or driven past the same flickering flames along the 405 and thought, California, now sees them and thinks, Climate change.

Los Angeles can seem, in this way, ahead of its time, a sort of preview of what the rest of the country is only peeking at through stretched fingers — communities across the city contemplating what is to come and wondering just how comfortable, or even manageable, life under those conditions could possibly be. The Woolsey fire was twice as big as anything that had burned through Malibu before, yet it represented only a tiny part of the worst fire year in the history of the state — only 5 percent of the acres that burned.

From ThinkProgress:  “Deadly flooding is rocking Texas. Scientists say this is our future under climate change.”

Excerpts:

Communities across East Texas and the wider region are reeling after an onslaught of rain and flash flooding left Houston and other cities underwater this week. The heavy rain comes only weeks after the United States closed out the wettest 12 months on record, a period that has also seen much of the Midwest devastated by flooding.

Some Houston schools were closed Friday while the city’s fire department fielded more than 75 calls related to water issues across the area. Around 21 million people can expect possible flooding this weekend, including residents in Texas, Louisiana, and Mississippi.

The region-wide deluge is unusual, even though the Texas coast is prone to flooding, particularly in cities like Houston. The fourth-largest city in the country has struggled as rain becomes a more persistent issue, and one that Houston’s drainage infrastructure is not equipped to handle. The city is also still recovering from Hurricane Harvey, which hit in 2017, killing dozens of people and causing billions of dollars in damage.

But across the country, trends indicate that flooding is becoming the new normal. On Wednesday, the National Oceanic and Atmospheric Administration (NOAA) announced that the amount of U.S. land experiencing drought has dropped to its lowest levels in decades. That dive has come hand-in-hand with a major uptick in saturation — from May 2018 to April 2019, the country saw its wettest year on record.

From Nola.com:  “Attention Louisiana climate deniers: Insurers say climate change now biggest risk.”

Excerpts:

History is full of moments when communities facing an existential challenge have two fates.

They are saved by courageous leaders who ignore personal risks to show the way. Or they become examples of disastrous, life-ending choices.

Climate change has clearly placed Louisiana at one of those crisis points. But, so far, we have chosen that second course and are barreling toward disaster just a few decades away.

The evidence of this failure was captured in two headlines from last week’s news:

Louisiana’s GOP congressmen approve pulling U.S. out of Paris Climate Accords.

Climate change jumps to biggest risk for insurers.

That [last] chilling headline is the one community leaders and policy makers have been dreading for some time. And these quotes from that story won’t make them feel any better:

"Climate change took the biggest jump this year of I believe any risk that I can remember, seeing it jump from 7 percent up to 22 percent," said, Max Rudolph, fellow of the Society of Actuaries and author of the report.

Rudolph added that it's becoming harder for risk managers to avoid thinking about climate change. He pointed to major hurricanes in 2017 and the longer, more intense wildfire seasons we're seeing in the west.

"My personal opinion is that this is a case of the risk managers catching up to the actual risk that is out there," he explained.

Risk, of course, is the major factor that determines insurance rates.

And insurance rates can go a long way to determining how affordable an area is to live and work in. And that, in turn, can determine why businesses decide to move into an area — or leave it for a safer, more affordable location.

From the Seattle Times:  “May heat shrinks Washington snowpack, raising risk for tight water flows for fish and farmers.”

Excerpts:

The Pacific Northwest is again experiencing surging spring heat that shattered temperatures this past week and prompted red-flag warnings for fire risks in lowland portions of Southwest Washington.

Last year, intense May warmth brought a sudden melt of a big mountain snowpack, causing flooding in north central and northeast Washington as the Okanogan River reached its highest flood stage in four decades.

This year, the statewide snowpack, as of Friday, averaged only 58 percent of the median amount for that date. So instead of being concerned about high water, state officials are preparing for summer drought, which can raise the potential for wildfires, reduce irrigation flows to farmers and make life difficult for salmon that depend on cool water to survive.

“When you look at some of the snowpacks in some of the basins, it looks like they are doing a swan dive off a cliff,” said Jeff Marti, a state Ecology Department official who noted that Gov. Jay Inslee already has issued drought-emergency declarations in the Okanogan, Methow and upper Yakima watersheds, because low snowpacks are expected to crimp water supplies.

...

In business-as-usual news:

From Grist:  “The plastic industry is on track to produce as many emissions as 600 coal-fired power plants.”

Excerpts:

When you think about plastic, what comes to mind? Microplastics at the bottom of the Mariana Trench, whales dying with truckloads of garbage in their bellies, that zero-waste Instagram influencer you follow?

A new report shows it’s high time to think more about the fossil fuels that go into making those plastic products. The global plastic industry is on track to produce enough emissions to put the world on track for a catastrophic warming scenario, according to the Center for International Environmental Law analysis. In other words, straws aren’t just bad for unsuspecting turtles; plastic is a major contributor to climate change.

If the plastic industry is allowed to expand production unimpeded, here’s what we’re looking at: By 2030, global emissions from that sector could produce the emissions equivalent of more than 295 (500-megawatt) coal plants. By 2050, emissions could exceed the equivalent of 615 coal plants.

That year, the cumulative greenhouse gas emissions from production of single-use plastics like bags and straws could compose between 10 and 13 percent of the whole remainder of our carbon budget. That is, the amount of CO2 we’re allowed to emit if we want to keep emissions below the threshold scientists say is necessary to ensure a liveable planet. By 2100, even conservative estimates pin emissions from plastics composing more than half of the carbon budget.

So, congrats on ordering that metal straw from Amazon! But the report shows that the plastics industry is still planning on a major expansion in production.

Here are a few more takeaways from the report, which looked at the emissions produced by the plastics industry starting in 2015 and projected what emissions from that sector could look like through the end of the century:

  • Of the three ways to get rid of plastics — recycling, landfilling, or incinerating — incinerating is the most energy intensive. In 2015, emissions from incinerating plastic in the United States were estimated to be around 5.9 million metric tons of CO2 equivalent.
  • This year, production and incineration of plastic products will make as many emissions as 189 coal power plants — 850 million metric tons of greenhouse gases.
  • Plastics that wind up in the ocean could even fuck with the ocean’s ability to do what it has historically done a superb job at: sequestering carbon. That’s because the phytoplankton and lil ocean critters that help capture the CO2 at the surface of the ocean and drag it under are being compromised by — you guessed it — microplastic.

But it doesn’t look like the industry is going to slow its roll on refining oil for plastics anytime soon. In 2015, 24 ethylene facilities in the U.S. produced the emissions equivalent of 3.8 million cars. There are 300 more petrochemical facilities underway in the U.S. Two of those, one being built by ExxonMobil and another by Shell, could produce emissions equivalent to 800,000 new cars on the road per year.

From Oilprice.com:  “The Star Permian Basin Sends US Shale Production Up, Up And Away.”

Excerpts:

US oil production from the top seven major shale plays is set to reach new record heights in June, according to the US Energy Information Administration’s latest edition of its Drilling Productivity Report

Oil production

Production from the top seven plays will increase by 83,000 barrels per day in June from May 2019 levels, with the largest increase seen in the Permian Basin, which is set to increase from 4.117 million barrels of oil per day to 4.173 million barrels per day (+56,000). The second largest increasing region according to the report is the Bakken.

Gas production

Just as noteworthy, gas production is also set to increase in these seven plays, from 79.720 million cubic feet per day in May to 80.663 million cubic feet per day in June, with the Appalachia region seeing the largest increase, followed by Haynesville and then the Permian.

From Bloomberg:  “Climate Changed:  Lenders Scolded for Climate Ignorance in ‘Insane’ Florida Real Estate Deals.”

Excerpts:

Hurricane Michael killed seven people and caused more than $6 billion in damage in Florida in October, a toll compounded by warmer, higher seas and wetter air, the signs of climate change scientists have long warned about.

But investors have yet to pay any kind of meaningful attention, buying up long-dated debt and financing real estate decades into the future. That kind of market neglect means the Florida economy can be expected to “go to hell,” warned Spencer Glendon, a senior fellow at the Woods Hole Research Center and a former partner and director of investment research at Wellington Management.

“No one should be lending for 30 years in most of Florida,” he said at an investment conference in New York last week. “During that time frame, insurance will disappear and terminal values” -- future resale income -- “will shrink. I tell my parents that it’s fine to rent in Florida, but it’s insane to own or to lend.”

From the Guardian:  “BP pushed for Arctic drilling rights after Trump's election.”

Excerpts:

BP stepped up its campaign to be allowed to drill for oil in the Arctic sea and an Alaskan wildlife refuge after Donald Trump was elected president, according to documents that detail the British firm’s lobbying efforts.

Documents written by BP and oil industry groups show how the oil “supermajor” seized on the opportunity presented by Trump’s 2016 election victory to expand its offshore business, just seven years after the Gulf of Mexico oil spill.

Areas it targeted include the Arctic sea, where experts have warned an oil spill could be an ecological disaster, as well as the Arctic National Wildlife Refuge (ANWR), not far from where BP spilled 222,000 gallons of oil at Prudhoe Bay in 2006.

Despite the reputational damage it had suffered after successive spills, BP played a key role in lobbying the government to loosen restrictions on oil drilling, according to documents obtained by Greenpeace’s investigative unit, Unearthed and shared with the Guardian.

From CBC:  “Keyera green-lights $1.3B Alberta natural gas pipeline.”

Excerpts:

Shares in Keyera Corp. rose by as much as nine per cent after it announced it will proceed with a long-anticipated $1.3-billion pipeline to bring natural gas liquids from northwestern Alberta to market.

The Key Access Pipeline System is designed to collect condensate and other petroleum liquids produced with natural gas in the Montney and Duvernay regions and bring it to the liquids processing and storage hub at Fort Saskatchewan, just northeast of Edmonton.

On a conference call on Wednesday, Keyera executives said shippers have signed long-term contracts accounting for about 65 per cent of the initial capacity of the pipeline, which is expected to come on stream in 2022.

The pipeline partners had each been pursuing similar projects with other investors before deciding to work together given their ownership interests in the gas processing plants that will supply much of the initial throughput on the system.

Analyst Nate Heywood of AltaCorp Capital pointed out the line will compete with Pembina Pipeline Corp.'s Peace Pipeline — a $500-million expansion of the latter was approved in January because of rising customer demand.

From the Wall Street Journal:  “Australia’s Conservatives Win Surprise Election Victory.”

Excerpts:

Australia’s conservative government eked out a surprise victory in Saturday’s national elections after voters in resource-rich districts turned against center-left opponents who had put climate change at the heart of their campaign.

Behind in polls for more than two years, Prime Minister Scott Morrison’s Liberal-National coalition appealed to voters in battleground states such as Queensland, struggling at the end of a long mining boom, with a campaign focused on the economy and jobs.

Climate change, a thorny problem that has ripped apart governments, re-emerged as an election issue following a summer of wildfires, drought, floods and extreme temperatures: Voter support for policies aimed at addressing climate change was at the highest level since 2007. But, as in the U.S., divisions grew more stark as the issue gathered steam.

Labor campaigned on a pledge to reduce emissions by 45% from 2005 levels by 2030, after Australia under the conservatives became the first developed nation to abolish a price on carbon in 2014. The party also promised a push on renewable energy and electric vehicles.

While the message appealed to many city voters, voters in resource-rich regions worried Labor’s climate plan would drive up living costs and put coal miners out of work. Mr. Morrison’s government approved a controversial coal mine in northeastern Queensland planned by Indian conglomerate Adani Corp just days before declaring elections.


Some UK Coastal Communities May Have To Move, While U.S. Crude Output To Grow in 2019 And 2020

In climate-related news:

From New Scientist:  “Some UK coastal communities may have to move because of climate change.”

Excerpts:

Some coastal communities around the UK may have to eventually be moved because of the scale of flooding that climate change threatens to bring, the Environment Agency has warned.

In a report on the UK’s long term flooding strategy, the regulator said the country should be prepared for sea level rises and the flooding that 4°C of warming would bring.

At 1°C higher than temperatures are expected to rise with governments’ climate plans today, and 2°C more than the Paris climate accord demands, the agency is saying the UK should be braced for the worst.

Flooding has been repeatedly cited by government agencies, advisers and scientists as the biggest risk to the UK from climate change.

The EA said the government will need to spend at least £1bn every year up to 2065 on flood defences to protect buildings and infrastructure, almost double the £520m it is spending each year between 2016 and 2021.

From ABC (Australia):  “Climate change could slash $571b from property values, study warns.”

Excerpts:

A Climate Council study warns the value of Australian real estate could plunge over the next decade unless future governments have the political will to deal with climate change.

Key points:

  • The Climate Council estimates Australian real estate will lose $571b, or almost 9pc, of its value by 2030
  • The losses will be concentrated amongst 5-6pc of property owners, with many properties virtually uninsurable
  • The report estimates $4 trillion could be wiped off economic growth over the next 80 years if carbon emissions do not fall

The research estimates residential property value losses of $571 billion by 2030 related to increased extreme weather events, inundation of some low-lying coastal properties and higher insurance premiums.

That would wipe approximately 9 per cent of the nation's total residential property value — about as much as has been lost so far in the current property downturn, which is on track to be the worst in Australia's recent history.

However, these losses would not be evenly spread, as an estimated 5-6 per cent of property owners bear the brunt of climate change risks.

As insurance companies reshape their risk strategies to manage extreme weather events, the report predicts, the cost of insuring properties — particularly those on the coast — could become unaffordable for one in 19 owners, who would have to pay annual premiums equivalent to 1 per cent of their property value.

A recent study by the Actuaries Institute — actuaries are the statisticians who calculate risk for insurers — warns that as many as one in 10 properties could become uninsurable by the end of this century due to climate change.

From NBC Connecticut:   “Warming Oceans Changing the Game for Connecticut Fishermen.”

Excerpts:

Our beautiful Connecticut coastline is at the forefront of climate change, warming four times faster than the global ocean. And while the gradually increasing water temperature may not be noticeable to beachgoers, to local fishermen it is changing the game.

“The amount of fish that we saw in the Long Island Sound the fish that are resident in Long Island Sound of the flounders and the different shellfish...those fish began to disappear noticeably disappear,” explained Gary Yerman, a fisherman and founder of New London Seafood Distribution.

Gary has been fishing out of Connecticut for 47 years. While his catches started in Long Island Sound, the evolving ecosystem has made trips longer and farther.

“Our trips were actually daytrips where we leave early in the morning,” Yerman said. “And we’d get back late in the evening and we download our fish and go the next day that turned into overnight fishing where would be gone for two days and then in the mid-80s when all we started seeing all of these changes and fisheries regulations changes and what not we ended up fishing in the ocean, in North Atlantic. We fish room all the way from Virginia to the Canadian line.”

Research is showing that water temperatures closest to the northeast coast are warming faster than 99 percent of global oceans. This supports the shift in the ecosystem that we’re seeing here in the northeast.

From the Wall Street Journal:  “Fed Readying Financial System for Climate-Change Shocks.”

Excerpts:

The Federal Reserve stands ready to respond to climate-change related weather disruptions to the economy and is working to ensure banks’ resilience from unexpected shocks tied to a warming global environment, Fed Chairman Jerome Powell told Congress in an April letter.

“Although addressing climate change is a responsibility that Congress has entrusted to other agencies, the Federal Reserve does use its authorities and tools to prepare financial institutions for severe weather events,” Mr. Powell wrote in a letter to Sen. Brian Schatz (D., Hawaii), on April 18.

“Over the short term, these events have the potential to inflict serious damage on the lives of individuals and families, devastate local economies (including financial institutions), and even temporarily affect national economic output and employment,” Mr. Powell wrote. “As such, these events may affect economic conditions, which we take into account in our assessment of the outlook for the economy,” the central bank leader said.

From New Food Economy:  “Massive banana disease, worsened by climate change, threatens global crops.”

Excerpts:

You may have heard that virtually all bananas we eat are from the genetically identical Cavendish cultivar. You’ve also likely heard about a big, scary disease called Fusarium Wilt (also known as Panama Disease) that evolved to threaten the previously resistant Cavendish. (Panama Disease basically knocked out the last great banana cultivar, the Gros Michel—French for “Big Mike!”)

But there’s another, less dramatic disease that actually causes larger global yield losses than Fusarium Wilt. It’s called Black Sigatoka or Black Leaf Streak disease, and climate change has increased its risk by 44 percent since the 1970s, according to a new study by researchers at the University of Exeter.

Unlike Fusarium Wilt, Black Sigatoka does not kill off entire banana farms. Rather, it affects the plant’s leaves, which can in turn interrupt the fruit ripening process and depress yield by up to 80 percent, according to the study.

The fungus that causes Black Sigatoka thrives on wet leaves and in temperatures that hover around 80 degrees Fahrenheit. The researchers found that climate change has bred precisely these conditions in many banana-growing regions in Latin America. They came to these conclusions by cross-referencing experimental data on Black Sigatoka infections with 60 years of climate data. “I was surprised by the strong climate change signal in the data, for Latin America,” researcher Dan Bebber wrote in an email. “Conditions have definitely improved for the fungus across large areas.”

...

Meanwhile, in business-as-usual news:

From Reuters:  “EIA raises forecast for 2019, 2020 U.S. crude output growth.”

Excerpts:

U.S. crude oil production is expected to rise by 1.49 million barrels per day (bpd) in 2019 to average 12.45 million bpd, the U.S. Energy Information Administration (EIA) said on Tuesday, up from its previous forecast for a rise of 1.43 million bpd.

The EIA forecast output in 2020 will rise by 930,000 bpd to 13.38 million bpd, a bigger increase than it previously estimated.

The latest forecast puts the United States on track to reach the 13-million-bpd milestone in the fourth quarter of 2019.

The United States has overtaken Saudi Arabia and Russia to become the world’s biggest oil producer, thanks to a shale revolution.

“According to the May outlook, EIA still expects that the United States will begin exporting more petroleum and other liquids than it imports in the fourth quarter of 2019, continuing for the foreseeable future,” EIA Administrator Linda Capuano said in an email. “The shift toward becoming a net petroleum and other liquids exporter marks a first for the United States since 1948,” Capuano said.

From Rolling Stone:  “Study: U.S. Fossil Fuel Subsidies Exceed Pentagon Spending.”

Excerpts:

The United States has spent more subsidizing fossil fuels in recent years than it has on defense spending, according to a new report from the International Monetary Fund.

The IMF found that direct and indirect subsidies for coal, oil and gas in the U.S. reached $649 billion in 2015. Pentagon spending that same year was $599 billion.

The study defines “subsidy” very broadly, as many economists do. It accounts for the “differences between actual consumer fuel prices and how much consumers would pay if prices fully reflected supply costs plus the taxes needed to reflect environmental costs” and other damage, including premature deaths from air pollution.

These subsidies are largely invisible to the public, and don’t appear in national budgets. But according the the IMF, the world spent $4.7 trillion — or 6.3 percent of global GDP — in 2015 to subsidize fossil fuel use, a figure it estimated rose to $5.2 trillion in 2017. China, which is heavily reliant on coal and has major air-pollution problems, was the largest subsidizer by far, at $1.4 trillion in 2015. But the U.S. ranked second in the world.

The human, environmental and economic toll of these subsidies is shocking to the conscience. The authors found that if fossil fuels had been fairly priced in 2015, global carbon emissions would have been slashed by 28 percent. Deaths from fossil fuel-linked air pollution would have dropped by nearly half.

Oil, gas and coal companies — and their stooges in public office — have long argued that making consumers pay for the full impacts of fossil fuel use would cripple the economy. The IMF experts call bullshit on this idea, revealing that the world would, in fact, be more prosperous. Eliminating subsidies for fossil fuels would have created global “net economic welfare gains” in 2015 of “more than $1.3 trillion, or 1.7 percent of global GDP,” the study found. (These net gains are “calculated as the benefits from reduced environmental damage and higher revenue minus the losses from consumers facing higher energy prices.”)

For the United States, the $649 billion in fossil fuel subsidies exceeded even the extravagant amount of money the country spent on defense. To offer a sense of scale, Pentagon spending accounted for 54 percent of the discretionary federal budget in 2015. In comparison to another important, but less well-funded part of the federal budget, fossil fuel subsidies were nearly 10 times what Congress spent on education. Broken down to an individual level, fossil fuel subsidies cost every man, woman and child in the United States $2,028 that year.

From The Barents Observer:  “Arсtic oil field could be Russia’s biggest discovery in 30 years.”

Excerpts:

A major oil development project could soon unfold in the Yenisey River delta. Near the area where the great Russian river runs into the Kara Sea are vast oil resources stored under the local permafrost.

Russia’s state mineral extraction agency Rosnedra now confirms that the resource estimates of the Paykha fields amount to as much as 1,2 billion tons, newspaper Kommersant reports.

That is one of the biggest estimates ever made for a Russian oil field.

The sudden upgrade of the fields comes as the Russian government is hectically struggling to add shipment volumes to the Northern Sea Route. President Vladimir Putin has requested a boost in Arctic shipping to an annual of 80 million tons by year 2024 and new infrastructure and industry is planned built to meet the ambitious target.

The Payakha fields could become a key part of the picture.

Previously, it was believed that the field by 2024 could provide up to five million tons to the Northern Sea Route. That estimate might now be increased.

Furthermore, the Payakha resources could become a crucial component in the new Arctic oil pipeline planned by Rosneft. The state oil company says it intends to build a 600 km long pipeline from the Vankor fields in western Siberia to the coast of the Taymyr Peninsula. It will have the capacity to carry 25 million tons per year and could potentially include also the Payakha resources.

From Oilprice.com:  “There’s Tremendous Room For Growth In Offshore Oil & Gas.”

Excerpts:

The Offshore Technology Conference (OTC) in Houston, Texas celebrates its 50th birthday this week, begging the question – what will the next 50 years hold for the offshore market?

Luckily, the data can provide some clues. Rystad Energy has analyzed the historic investments and oilfield service purchases of the world’s 50,000 oil and gas fields (1). While the forecast is uncertain, our analysis paints a fascinating picture of how offshore could contribute to the future of the service industry.

“Total greenfield project sanctioning, summed up to the present day, only accounts for 40% of estimated volumes of offshore projects ever being sanctioned. Likewise, the brownfield market has only begun, with total historical expenditures accounting for only about 20% of estimated brownfield spend over the projects lifetime, leaving 80% of brownfield spending to the future. And the decommissioning market is still in its nascent form,” says Audun Martinsen, head of oilfield services research at Rystad Energy.

Let’s drill down through the data.

We estimate that around 800 billion undiscovered barrels of oil and gas equivalents exist globally, hinting that exploration will still be in business in the next 50 years.

From S&P Global Platts:  “China's Apr crude oil imports rebound to record high 10.68 mil b/d.”

Excerpts:

China's crude oil imports in April hit a record high of 10.68 million b/d, rebounding from 9.3 million b/d in March, preliminary data from the General Administration of Customs showed Wednesday.

On a barrels per day basis, the volume represented a 14.9% month-on-month jump, and rose 10.8% from April 2018.

The previous record high was 10.48 million b/d in November 2018 and the country's crude imports were hovering above 10 million b/d for four months until March, when the volume fell to 9.3 million b/d.

From Rigzone:  “Most US Offshore Resources Not Up for Grabs.”

Excerpts:

Ninety-four percent of the United States’ offshore resources are not available for investment.

That’s what Eric Oswald, vice president for the Americas at ExxonMobil, revealed during a presentation at the Offshore Technology Conference in Houston, Texas, on Wednesday.

“You guys know how much of the U.S. offshore is available for investment? … Six percent. Ninety-four percent of our nation’s resources offshore … are not available for us to invest in,” Oswald told delegates attending the presentation.

“Who’s losing there? I mean it’s the country, right? It’s a huge amount of potential lost there … That’s an astonishing number,” he added.

From the Wall Street Journal:  “Flying Coast-to-Coast Nonstop Has Rarely Been Cheaper.”

Excerpts:

From Los Angeles, a flight to New York is sometimes cheaper these days than a flight to Chicago, even though it’s 2½ hours longer. From Boston, you can fly 2,611 miles to Los Angeles cheaper than 91 miles to Nantucket.

Flying coast-to-coast nonstop has rarely been cheaper. Airlines are embroiled in a fare war, with the number of seats on transcontinental routes at an all-time high. Between Los Angeles and either New York or Boston, several airlines have $317 round-trip fares on June travel dates. Some tickets drop as low as $295 round trip. That’s in peak summer season.

United, Delta, American, JetBlue and Alaska are battling for market share, mostly from California cities to New York. The fight isn’t just in the coach cabin: They’re offering deep discounts in premium cabins, too.

Up front, four of the five big carriers offer lie-flat beds, and those seats sometimes go for as low as $1,200 round trip. The same seat to London from New York—a route a bit longer than New York-Los Angeles—could cost at least five times as much.

“It’s far more competitive today than it was five years ago and 10 years ago,” says Andrew Nocella, United’s chief commercial officer.

Coast-to-coast routes are some of the most heavily traveled in the world, attracting premium cabins full of investment bankers, media executives and celebrities. These routes are key to winning contracts from big corporations and loyalty from frequent fliers.


Ocean Heat Sets New Record, While More Than One Million Kilometers Of New Oil and Gas Wells To Be Drilled By 2023

In climate-related news:

From CarbonBrief:  State of the climate: Heat across Earth’s surface and oceans mark early 2019.

Excerpts:

Global surface temperatures in 2019 are on track to be either the second or third warmest since records began in the mid-1800s, behind only 2016 and possibly 2017.

On top of the long-term  warming trend, temperatures in 2019 have been buoyed by a moderate El Niño event that is likely to persist through the rest of the year.

That’s one of the key findings from Carbon Brief’s latest “state of the climate” report, a quarterly series on global climate data that now includes temperatures, ocean heat, sea levels, greenhouse gas concentrations, climate model performance and polar ice.

Ocean heat content (OHC) set a new record in early 2019, with more warmth in the oceans than at any time since OHC records began in 1940.

The latest data shows that the level of the world’s oceans continued to rise in 2019, with sea levels around 8.5 centimetres (cm) higher than in the early 1990s.

Atmospheric methane concentrations have increased at an accelerating rate, reaching record highs in recent months, though scientists are divided on the cause of this trend.

From Grist:  Climate change’s deadliest effects are unfolding under the sea.

Excerpts: 

Think of the dangers climate change poses to animals, and you’ll likely picture skinny polar bears or cliff-diving walruses (collective sob). But it turns out that our overheating planet is actually wreaking the most havoc on creatures out of our sight: marine life.

Sea animals like crabs, lobster, and fish are dying off at twice the rate of land animals, according to a study published in Nature on Wednesday.

The researchers looked at more than 400 cold-blooded animals on land and sea, including lizards, dragonflies, lobsters, and mussels. They found that creatures that people rely on for food (fish, mollusks, shellfish) are among the most vulnerable, especially in the developing world, where many rely on them for a regular protein source.

From the Guardian:  North American drilling boom threatens big blow to climate efforts, study finds.

Excerpts:

More than half of the world’s new oil and gas pipelines are located in North America, with a boom in US oil and gas drilling set to deliver a major blow to efforts to slow climate change, a new report has found.

Of a total 302 pipelines in some stage of development around the world, 51% are in North America, according to Global Energy Monitor, which tracks fossil fuel activity. A total of $232.5bn in capital spending has been funneled into these North American pipeline projects, with more than $1tn committed towards all oil and gas infrastructure.

If built, these projects would increase the global number of pipelines by nearly a third and mark out a path of several decades of substantial oil and gas use.

In the US alone, the natural-gas output enabled by the pipelines would result in an additional 559m tons of planet-warming carbon dioxide each year by 2040, above 2017 levels, according to Global Energy Monitor, citing International Energy Agency figures.

From Bloomberg:  Soaked Midwest Farmers Can Blame Warm Pacific for Juicing Storms.

Excerpts:

American farmers raising their fists to the sky this year may be better off directing their ire toward the ocean.

Abnormally warm water in the eastern Pacific, along with a weak El Nino along the equator, have pumped a train of storms across the U.S. That has soaked fields that need to be planted with corn, soybeans and cotton and slowed barges full of grain, coal and chemicals struggling against the stiff current of the Mississippi and other Midwest rivers.

“The huge region of above-normal ocean temperatures in the eastern Pacific is helping ‘juice’ storms arriving in the U.S.,” said Jennifer Francis, a senior scientist at the Woods Hole Research Center in Falmouth, Massachusetts. “Another factor contributing to this year’s wet winter was a strong sub-tropical jet stream, probably boosted by a weak El Nino, that funneled copious moisture from the Pacific Ocean into the U.S.’’

While the storms will certainly catch the attention of researchers, climate change is also making things worse because the heat puts more energy into the atmosphere and allows it to hold about 7 percent more moisture than pre-industrial times, Francis said.

“That moisture is a potent source of energy for storms and it also fuels heavier precipitation,’’ she said. “One clear symptom of climate change is a large uptick in heavy precipitation events, especially east of the Rockies.’’

From the Washington Post:  New EPA document tells communities to brace for climate change impacts.

Excerpts:

The Environmental Protection Agency published a 150-page document this past week with a straightforward message for coping with the fallout from natural disasters across the country: Start planning for the fact that climate change is going to make these catastrophes worse.

The language, included in guidance on how to address the debris left in the wake of floods, hurricanes and wildfires, is at odds with the rhetoric of the EPA’s own leader, Andrew Wheeler. Just last month, Wheeler said in an interview with CBS that “most of the threats from climate change are 50 to 75 years out.”

Multiple recent studies have identified how climate change is already affecting the United States and the globe. In the western United States, for example, regional temperatures have increased by almost 2 degrees Fahrenheit since the 1970s, and snowmelt is occurring a month earlier in areas, extending the fire season by three months and quintupling the number of large fires. Another scientific paper, co-authored by EPA researchers, found that unless the United States slashes carbon emissions, climate change will probably cost the United States hundreds of billions of dollars annually by 2100.

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In business-as-usual news:

From Oilprice.com:  Rystad: Oil Wells To Be Drilled To The Moon And Back.

Excerpts:

A new study published today by Rystad Energy forecasts that there will be more than a million kilometers of new oil and gas wells drilled by 2023 globally; the distance of these wells combined is more than the distance to the moon and back.

Behind this push for oil and gas wells is North American shale, which, Rystad says, is expected to account for 600,000 kilometers of the million.

Rystad’s Head of Consulting, Erik Reiso, refers to the drilling onslaught to be seen in North America as “in a league of its own thanks to the shale boom,” with six of ten of the new wells in North America drilled in shale basins—wells that are typical longer than other types of wells.

While the top four offshore operators are expected to account for a quarter of the new offshore wells, the top ten onshore operators will account for only a third of the new wells in the next five years.

Discoveries of conventional resources on a global scale in Q1 2019 hit 3.2 billion barrels of oil equivalent, Rystad said in a separate statement to Rig Zone on Monday, with February seeing 2.2 billion boe of that. More than 2.4 billion boe of that was discovered by oil majors, with ExxonMobil coming out on top.

“If the rest of 2019 continues at a similar pace, this year will be on track to exceed last year’s discovered resources by 30 percent,” Rystad Upstream Analyst Taiyab Zain Shariff said in a company statement sent to Rig Zone.

From Oilprice.com:  Booming Oil & Gas Help Texas Exports Grow 3 Times Faster Than U.S. Average.

Excerpts:

The value of exports of oil and gas from Texas jumped by 45 percent, CNBC reports, citing data from trade research firm WISERTrade.

The value of Texas’ petroleum and coal product exports increased by 5 percent.

The value of Texas exports in January and February this year exceeded US$50.9 billion, a rise of 9 percent on the year—triple the U.S. national export growth of 2.6 percent in the first two months of the year, according to WISERTrade data.

As per WISERTrade, Texas accounted for almost 20 percent of all U.S. exports in the first two months of 2019, compared to 11 percent share for California. Over the past few years, the share of California of national exports has declined, while the share of Texas has grown, thanks to the soaring production and the rise in exports from the U.S. Gulf Coast after the U.S. removed restrictions on crude oil exports in 2015.

According to the U.S. Census Bureau, the value of the Texas crude oil exports stood at US$38.675 billion in 2018, a surge of 127 percent from 2017.

From Oilprice.com: “Africa’s Largest Oil Producer Aims To Double Production.

Excerpts:

Africa’s largest oil producer, Nigeria, is dusting off an ambitious plan to double its oil production by 2025, aiming to pump as much as 4 million bpd in six years’ time—a goal that analysts think may be too ambitious for the country to achieve.

OPEC member Nigeria currently pumps around 2.2 million bpd in crude oil and condensate. In March, Nigeria’s crude oil production stood at 1.733 million bpd, up by 11,000 bpd from February, according to OPEC’s secondary sources.