Heating Oil Tale Moves US to Generosity
Maine heating oil dealer Ike Libby touched the nation's heart after delivering heating oil to an elderly couple who could not afford to pay. (image: wcsh6.com)
A newspaper story on a struggling heating oil dealer’s benevolence has sparked a national outpouring of generosity for cash-strapped oil heat customers, the Huffington Post reports.
Ike Libby runs Hometown Energy, a fuel oil delivery business in Dixfield, Maine. Like countless heating oil dealers around the country, Libby is no stranger to the hardship faced by many of his customers and the difficulties they face paying winter fuel oil bills.
When pensioner Robert Hartford tried to hand over the title to his 16-year-old Lincoln Town Car in exchange for heating oil to prevent him and his disabled wife from freezing, Libby filled their tank without payment, rather than seeing the elderly couple go cold.
But he never expected the outpouring of generosity that would follow.
The story appeared on the front page of Saturday’s New York Times and appears to have struck a chord with readers across the country, many of whom immediately wanted to help.
On Monday morning, when Libby went to work, the cards, checks and credit card donations started rolling in. They now total more than $100,000 in cash to help heat impoverished customers’ homes, the Lewiston Sun Journal reports.
“I didn’t expect this to happen,” he said. “You can’t even put it into words. America’s got a heartbeat and we are hearing it.”
One of the letters read: “A donation to Hometown Energy. Good luck, thanks for caring.” It was a check for $5000.
“We struggle as a business,” Libby told WCSH. I’m getting some credit for this. [But] I’ve just been trying to do my job.”
An emotional Libby said he had set up a trust account for the money to make sure it goes to the people who need it most. Despite a near-record mild winter, heating oil prices remain stubbornly high on strong export demand, fears of supply disruptions from refinery closures and volatile world oil markets.
But those on low incomes also face cutbacks to the federal Low Income Heating Energy Assistance Program (LIHEAP), which has been slashed this year to reduce the federal deficit. The cuts mean Maine’s allowance alone has fallen from $56.5 million to $39.9 million, and has left thousands of people living in cold climates who depend on aid from the program struggling to keep up with heating oil expenses this winter.
Nevertheless, Libby has helped the Hartfords and many other Maine families struggling to stay warm by delivering oil to people he knew couldn’t afford their bills.
“I haven’t always looked out for the best interest of the business, but you know what this has been great.”
The Hartfords have just had their tank refilled. The cost came to $771.72. The receipt left on the door said it had been paid in full. Wilma Hartford, 71, said the outpouring of donations was unbelievable.
“It tells me there’s a lot of good people out there. Sometimes in this world we look at it and think this world is really going to pieces. Bad news everywhere. But this has lifted my spirits and I know there’s a few good people out there.”
Those interested in donating to the heating oil trust can contact Hometown Energy at (207) 562-8822 or mail checks to Hometown Energy at P.O. Box 485, Dixfield, ME 04224. Donations are also being accepted online via Hometown Energy’s website.
HO Contracts Post Big Yearly Gain
Facing Western sanctions designed to hobble its apparent nuclear weapons program, Iran is threatening to blockade a key oil shipping route in and out of the Persian Gulf, sending oil prices higher. (image: cbc.ca)
Heating Oil contracts have posted their third consecutive annual price increase, surging 15 percent in 2011, bloomberg.com reports. The bullish result came despite tought global economic conditions and has helped push residential prices to near record levels this winter.
Heating oil’s rise is being attributed to strong international demand for distillate fuels and the shuttering of refineries in Europe and the Northeast, which analysts fear will lead to supply shortages. The 15 percent price increase for heating oil futures contracts comes on the back of a 20 percent jump in 2010.
International demand for fuel oil is strong. The US exported a record 1.07 million barrels a day of heating oil and diesel fuel in October, US Energy Department figures show. About 18 percent, or 196,000 barrels a day, went to the Netherlands, the top destination for US diesel and heating oil cargoes.
Meanwhile, prices marched higher in late December amid supply fears after Petroplus Holdings AG (PPHN), Europe’s largest independent refiner by capacity, began shutting plants when banks froze $1 billion of its loans, forexdice.com reports.
And the Energy Information Administration warned last month of potential supply disruptions and price volatility in the US Northeast because of plans to shutter three Pennsylvania refineries that account for half the region’s refined fuel production.
Crude oil prices, which are closely linked to those of heating oil, also posted significant gains during 2011. Crude averaged US$95.09 a barrel in New York during the last year, up from $79.64 in 2010 and US$62.11 in 2009, canadianbusiness.com reports.
The price of benchmark West Texas Intermediate rose as high as US$113.93 a barrel in April, then dropped to $75.67 by October. Oil’s fortunes were closely linked to the year’s geopolitical and financial developments. A civil war in Libya effectively cut off the North African nation’s 1.5 million daily barrels of crude supply, sending prices spiraling up. But persistent high prices cut into world oil demand later in the year and prices came crashing back.
But oil prices have since rebounded to near $100 a barrel on Iranian threats to close key shipping lanes in the Persian Gulf if the West hits Iran with new sanctions over its nuclear program. The Strait of Hormuz is a key oil route used by tankers carrying one-sixth of the world’s oil exports. Any disruptions to this route could force world oil prices to spike to new levels.
And high oil prices are expected to continue weighing on the US economy this year as it struggles to rebound.
“It’s like leaving the parking brake on while you’re trying to drive the economy forward,” said Michael Lynch, president of Strategic Energy & Economic Research.
Heating Oil Price Trend for June 22: -4¢
Investors worldwide anxiously awaited a confidence vote on the Greek government yesterday, as mixed markets sent crude prices up and heating oil prices down. (image: citywire.co.uk and Nicholas Whitaker for HeatingOil.com)
Crude and heating oil prices went in opposite directions once again yesterday as uncertainty surrounding the bailout package and austerity program that could pull Greece out of its crippling debt crisis, accompanied by weakened oil demand, inspired mixed market action.
The government of Prime Minister George Papandreou passed a confidence vote Tuesday, bringing Greece’s bailout package one step closer to fruition. The bailout program would mean more loans from the International Monetary Fund and the European Union. Economists worldwide await the approval of the package, as stabilizing Greece would likely prevent potential global economic collapse. The bailout will also hopefully bring security to European banks and good news for the oil market.
Analysts also noted that lackluster demand and negative economic news continued to affect prices, as crude prices rose 14¢ to settle at $93.40 per barrel and heating oil dropped 1.4% to its lowest level in nearly a month.
Traders said they don’t believe crude prices will go much higher, since U.S. stockpiles for this time of year have leveled out at a remarkable 21-year high. And, the National Association of Realtors reported existing-home sales have plummeted to a six-month low, another sign the U.S. recession may be far from over.
The Energy Information Administration will release its weekly report today, which analysts expect will show a modest inventory decline and a slight boost in refinery operations.
Today’s average retail heating oil price for the Northeast is four cents lower than Tuesday’s average price.
Drunk Oil Trader, Banned in the UK, Lands New Job in Switzerland
Help wanted: oil trader. Banned from work in the UK? No problem!
On Tuesday Stephen Perkins was fined £72,000 (US$108,00) by Britain’s Financial Services Authority (FSA) and banned from working in the financial services industry for five years for driving up the price of oil through unauthorized trades while blacked-out drunk. On Wednesday he was in Geneva meeting with the commodity broker Starsupply Renewables SA to talk about joining the firm, reported the UK’s Daily Telegraph. Apparently making illegal trades while drunk and then lying and trying to cover it up is a minor hiccup on the path to a successful career as a commodity trader in Switzerland.
Perkins lost his former employer, PVM Oil Futures, $10 million with his unauthorized trades, and the price of Brent crude oil gained about $1.65 in two hours as a result of his trading. According to the FSA, Perkins “is not a fit and proper person to be involved in regulated activities and his behaviour posed a risk to the proper functioning of the market,” but the British regulator can’t prevent Perkins from trading elsewhere. The agency has informed Swiss regulators of Perkins’s history.
Perkins says he has received treatment for his problem with alcohol and has stopped drinking. The Daily Telegraph interprets his quick recovery from disgrace as proof of “how valuable top brokers are to commodity companies,” which raises a question: If the guy who got drunk and lost his company $10 million is a “top broker,” what are the rest of them like?
Kevin Costner’s Oil-Separating Centrifuges at Work
Three centrifuges are aboard this barge and being used to clean up the oil spilled in the Gulf of Mexico. (image: BPplc via youtube.com)
Last week we reported that BP had bought 32 oil cleanup machines developed by Kevin Costner’s company, Ocean Therapy Solutions (OTS). Now those machines are in action, and BP has released a video describing in detail how the machines’ centrifuge technology works to separate oil from water.
So far the centrifuges are not a complete success—the separated water is not yet clean enough to be returned to the sea—but they’ve only just been deployed and their efficiency could be improved. To find out more about the technology and how it works with skimmers, barges, and holding tanks, watch the video below and listen to the explanations from the people directing this cleanup effort.
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Heating Oil On The Move: From NJ Terminal to The Westmore Rack at Port Chester, NY
(image: Nicholas Whitaker for HeatingOil.com)
The word picturesque is not often associated with the heating oil industry, but this short piece we’ve produced about a heating oil barge is that and more. I have a soft spot for oil barges. I remember a freezing cold evening in 1980, when my father took his first barge delivery at a terminal he had just purchased from Sunrise Petroleum. It was a small barge, and a small terminal, just like the one you’ll see in this film. I remember standing on the windy dock all of 8 years old in a jacket and tie, waiting for the ship to arrive. It finally did, coming in slow and low to the water, heavy with product. My mother and sister had baked the crew a plate of chocolate chip cookies, which got us a tour of the ship. It was noisy and smelly, but to my father it was the Queen Elizabeth. The ship in this piece, the Patrick Sky, reminds me a lot of that ship.
It also reminds me that this industry and our comfort depends on an almost incomprehensible matrix of people and systems–from the oil rigs of Africa and Asia, to the refineries of the Gulf Coast, to the crew of the Patrick Sky, to the oil truck driver who delivers our fuel. It is awesome to consider all the other systems and companies we take for granted in our daily lives. I hope you will enjoy (as I have) the simple beauty of a glimpse at one of the smallest and most picturesque links in the global energy supply chain.
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Heating Assistance Fraud Gets NJ Heating Oil Dealer 4 Years in Prison
For stealing from the state’s heating assistance program, a New Jersey heating oil dealer faces four years behind bars, and could be joined by others who have defrauded the state. (image: scrapetv.com)
Over the course of five or six heating seasons, Thomas J. Harris, the owner and sole proprietor of Harris Fuel Oil, defrauded New Jersey’s Home Energy Assistance (HEA) Program of nearly $400,000. After pleading guilty in 2009 to money laundering and misapplication of government property, Harris was sentenced to four years in prison on Thursday, according to a press release from the New Jersey attorney general’s office.
Harris Fuel Oil participated in the state’s Low-Income Home Energy Assistance Program (LIHEAP), which is one part of New Jersey’s HEA Program, and Harris’s scheme involved offering cash, rather than heating fuel, in exchange for heating assistance checks, provided that the cash amount was less than the value of the heating oil. The press release quotes Attorney General Paula T. Dow on the case:
“This heating oil supplier shamelessly exploited the low-income beneficiaries of the New Jersey Home Energy Assistance Program, enticing them to trade the assistance checks that were supposed to heat their homes for a reduced amount of cash, while he pocketed the difference,” said Attorney General Dow. “In doing so, he stole from the state and its taxpayers.”
Investigators found 259 cases from 2008 and 2009 in which Harris fraudulently gave cash for heating assistance checks. In those transactions Harris deposited $399,812 in HEA funds and distributed $247,700 in cash, leaving the remaining $152,112 for himself. In addition to prison time, Harris must pay restitution for the money that he took for himself.
Harris is involved in two related cases in which HEA administrators are implicated in defrauding the state. Constance Campbell has pleaded guilty to processing false applications for herself and her family, some of which were cashed with Harris, and still awaits sentencing; the state has asked for a five-year prison term. Nicole Victor has been indicted on similar charges, and was also accused of working with Harris to trade fraudulent assistance checks for cash.
While these investigations have uncovered a dismaying amount of corruption in New Jersey’s heating assistance program, the successful prosecution and sentencing point to a serious effort on the part of the state to ensure that energy assistance funds make it into the hands of those who need them. Stephen Taylor, director of New Jersey’s Division of Criminal Justice, promised continued vigilance in regulating heating assistance in the state:
We will continue to aggressively investigate and prosecute those who engage in this type of fraud, which drives up the cost of public assistance programs.
Building Owners Will Pay for Bronx River Oil Spill
One way that crews are cleaning up the Bronx River spill is by using boom to keep the oil in the river from spreading. The owners of the apartment building where the spill began have agreed to pay for cleanup. (image: Al Jones for 1010wins.com)
Cleanup crews are still vacuuming up the 200 gallons of no. 4 heating oil that spilled into the Bronx River on June 2, but the potentially vexed question of who would pay for the cleanup has been largely settled, reports the local news website LoHud.com. Bronstein Properties, which owns the apartment building that leaked heating oil into the river, has agreed to pay up to $200,000 for the cleanup.
Maureen Wren, a spokeswoman for New York’s Department of Environmental Conservation (DEC), said that details had not been finalized but confirmed that Bronstein had agreed to pay for remediation. Scott Berg, an attorney for Bronstein, told LoHud.com about the agreement:
“We’re trying to do the right thing,” Berg said. “A leak did occur and we’re paying for it. We’re still investigating how exactly it happened. The bulk of the clean-up has been done.”
Bronstein could also face penalties of up to $25,000 a day, but officials at the DEC seemed reluctant to slap Bronstein with such a fine, saying that paying for cleanup was the pivotal issue.
While Bronstein has agreed to pay for the cleanup, it may not be the only company held financially responsible for the spill. As Berg stated, the cause of the leak is still under investigation, and the building’s furnace contractor could be responsible for the spill. Star Industrial Service Co. of Brooklyn did repair work on the building’s furnace the day before a jogger first noticed the spill.
Whatever the cause of the spill, it looks like taxpayers will not be on the hook to pay for the cleanup efforts, as Westchester County Executive Robert Astorino had promised.
Rubin: Today’s Oil Prices Point to New Record High for Crude in 2011
Economist Jeff Rubin believes $150 crude oil and $5 gasoline are only one year away. (image: theglobeandmail.com)
Economist and oil commentator Jeff Rubin made clear his dire predictions for the future of oil prices in his recent book Why Your World is About to Get a Whole Lot Smaller. Last week, blogging for The Globe and Mail, Rubin doubled down on his predictions, making the case that current oil prices are proof that the price of crude will surpass its previous all-time high of $147 a barrel some time next year.
Rubin makes the point that the current crude oil price ($86.60 per barrel as of this writing) was high enough three years ago to induce serious concern among both oil producers and consumers. In contrast, he argues, today’s price (despite the absence of clear fundamental causes) has not caused much of a stir among major players in the oil markets: OPEC is happy with current prices, and not much has been said about rising oil prices as a possible hindrance to economic recovery.
According to Rubin, the world’s quiet acceptance of crude oil prices at $80-plus per barrel amounts to a head-in-the-sand attitude toward the imminent “energy shock.” He reiterates the factors he believes will bring on this shock: the rapid depletion of cheap and easy-to-reach crude, huge demand growth form the emerging economies of China and India, and deceptively low consumer prices for petroleum products in producer nations like Saudi Arabia that encourage excessive consumption.
Rubin’s argument certainly makes sense. The above factors that he first identified in his book late last year are still firmly in place, and the price of crude has been rising steadily for almost a year. The only mitigating factor in the unfolding of Rubin’s scenario is excess production capacity—can OPEC and other producing nations increase production sufficiently to meet rising demand and avert huge price spikes in the next year and a half? Rubin would undoubtedly say no. However, current supplies are more than amply meeting recession-dampened demand, but prices are rising anyway, so maybe the supply/demand factor is less important in today’s oil market than free market economists will have us believe. Either way, the chances of oil prices dropping in the next 18 months do not look too good.
For Rubin, oil prices are still very much a product of supply and demand forces, and those forces are poised to keep pushing prices higher:
Whether we are talking about supply or demand, there is nothing on the horizon to prevent the imminent return of the very same oil prices that put us into the deepest postwar recession yet in the first place.
Consumers of heating oil and gasoline should hope that he’s wrong—but prepare for him being right.
Heating Oil Price Trend for April 5: +3¢
A pickup in manufacturing activity in the US and China helped lift the price of heating oil on Monday. (images: alossix via flickr.com, Nick Whitaker for HeatingOil.com)
As expected, oil markets showed a delayed reaction to the government employment report released on Friday that send prices for crude and heating oil shooting upward. The price of crude hit an 18-month high this morning, briefly rising above $86 in early trading and lifting the price of heating oil by about one percent along with it. The jobs report released on Friday showed that the US economy added the most jobs in three years this March, but markets were closed for the Good Friday holiday. Oil prices are also supported by accelerations in American and Chinese manufacturing activity, which traders interpreted, along with the increase in US hiring, as a sign that economic recovery and an upswing demand for oil are already underway. Traders also noted that the price of crude had “broken out” of the price range it had been trading in for the last three months or so, which some interpreted as additional evidence of a longer-term upward trend in crude prices.
Today’s average retail heating oil price in the Northeast is 3 cents higher than Friday’s average price.
Environmental Coalition Uses Avatar to Criticize Tar Sands Mining
For some environmental groups, the earth-smashing ubobtanium mining in Avatar (top) perfectly parallels the excavation of Canada’s tar sands (bottom) in pursuit of crude oil. (images: gawker.com and whitepinepictures.com)
On Sunday Avatar fell short of winning the coveted “Best Picture” Academy Award, but it continues to rule box offices around the world as the most profitable movie ever made. While the film’s dazzling three-dimensional special effects and fantasy-world setting are likely the main drivers of its massive popularity, there is another element of Avatar that has lot of people talking: its environmental message.
In the film, a corporation intent on extracting an invaluable mineral called “unobtanium” from the lush green planet of Pandora meets resistance from the planet’s inhabitants, who want to prevent the environmental destruction that the excavation of unobtanium brings. For many, the heroic natives’ struggle against the greedy invaders amounts to a powerful environmental allegory that urges humanity to deny greed and respect the pristine harmony of the natural world.
As the CBC reported on March 5, a coalition of environmental groups took the allegory one step further, placing an ad in the film industry publication Variety that cast Canada’s Alberta tar sands as the real world’s unobtanium. The ad, paid for by 50 environmental groups, featured an aerial photograph of a massive oil sands site, where excavation had removed all signs of life, leaving only a huge field of brown sand dotted with man-made hills and pits. Title text labels the photo “Canada’s Avatar Sands.” For the groups who took out the ad, the bitumen (a chemical precursor to crude oil) trapped in the tar sands of northern Alberta is real-life unobtanium, and the environmental destruction it has brought to the plains and forests of Canada parallels the tragic and heartless plundering of Pandora.
Despite the engineering inaccuracies of Avatar’s mining equipment, it is hard to deny that the destructive mechanical behemoths used to mine unobtanium in the film bear a striking resemblance to the massive drilling machines and dump trucks used to excavate Canadian tar sands. But to draw so direct of a comparison between the real world and a fictional one goes a bit further than most green-minded citizens are willing to allow.
In any event, the public “shame on you” directed at oil companies excavating oil sands have successfully attached (at least for now) the issue to a global blockbuster that nearly every citizen of the world has at least heard of, if not seen. But so long as Canadian tar sands keep providing a steady supply of oil to the US and other major consumers, projects will continue to expand. And as global crude demand recovers, other tar sands sites like the massive fields in Venezuela’s Orinoco belt will likely be dug up as well.
So long as the world thirsts for oil and squeezing it from tar sands it is a profitable enterprise, all the environmentally friendly movies in the universe won’t stop the digging.
Watch the trailer for Avatar below (it begins at 0:44):
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Airlines Move Away from Oil Hedging After 2008’s Losses
US Airways considers oil prices too volatile to allow for hedging, and has opted out of oil futures markets entirely. (image: vistingdc.com)
Airlines take a safe approach to hedging their fuel consumption, industry CFOs told Reuters at a conference sponsored by the news service. Airlines and other companies that rely on petroleum products often try to protect themselves against price changes by hedging, that is, buying futures contracts or options. If airlines (or heating oil companies, for example) buy futures contracts and the price of oil rises, then the value of their futures contracts rises as well; they still pay the higher price for the oil they use, but they can also sell the futures contracts at a profit to offset the expense of paying more for their fuel. Seems like a smart move, but some airlines have fared so badly in their hedging that they’ve scaled back or eliminated their hedging activity.
In 2008, the year that crude oil hit the record-high price of $147 a barrel in July before plummeting to $32 a barrel by that December, some airlines lost huge amounts on hedges that that went bad. United Airlines, which had bought contracts under the assumption that oil prices would continue rising through the entire year, lost $370 million on fuel hedges that settled in the fourth quarter of 2008 alone. Said United CFO Kathryn Mikells, “we really took it on the chin.”
Kuwait Drops Oil Price as Asian Refiners Cut Production
An offshore rig of Kuwait Petroleum, which has cut prices in response to low oil demand in Asia. (image: kpc.com)
In Kuwait, at least, oil prices are reflecting classic economics: With lowered demand for oil, Kuwait cut its prices. Although that’s how we typically expect prices to work, that hasn’t been the case for oil prices in the US.
Bloomberg is reporting that Kuwait Petroleum Corp. reduced its official February selling price for crude oil to Asia. In the face of shrinking demand, the Kuwaiti company’s official February selling price was the lowest in five months.
Japanese and South Korean refiners have cut back on their processing in response to low oil demand, much the same way US refiners have tried to preserve some profit by closing some refineries and operating below capacity.
In the US, however low demand hasn’t necessarily meant lower prices. Oil prices climbed in 2009 despite paltry demand, supported by speculation and investment.
HeatingOil.com Weather Report: December 31, 2009
Today’s Northeast Weather: A mix of rain and snow will hit coastal areas today from Boston to Baltimore, with morning snow giving way to rain. A winter weather advisory has been issued for parts of Virginia, Connecticut, Massachusetts, and Rhode Island. Light snow could fall on upstate New York and northern New England, but those areas will see more precipitation tomorrow and over the weekend. Freezing rain is likely in northern Maryland and southern New Jersey, slowing down all travel, including heating oil deliveries. The mix of snow, sleet, and rain through the I-95 corridor could disrupt holiday travel plans and heating oil deliveries, especially as it threatens to freeze overnight.
Forecast for Tomorrow: Conditions will stay wet in many areas throughout the weekend, with northern New England bearing the brunt of the snowstorm. Cold weather could follow the storm and bring low temperatures by the end of the weekend and lake-effect snows in the eastern Great Lakes area.
Local Temps and Heating Degree Days (December 30)
New York City: Low 19°F, High 32°F. HDD: 39, +8 from average
Long Island: Low 15°F, High 33°F. HDD: 41, +8 from average
Boston: Low 11°F, High 29°F. HDD: 45, +11 from average
Portland, Maine: Low 6°F, High 24°F. HDD: 50, +9 from average
Burlington, Vermont: Low -1°F, High 23°F. HDD: 54, +10 from average
Washington D.C./Baltimore: Low 18°F, High 31°F. HDD: 40, +9 from average
Seattle: Low 36°F, High 46°F. HDD: 24, -1 from average
Sources: weather.com, weather.gov/climate
Rising Oil Output Protects Against Crude Price Spikes
A steady flow of crude is a buffer against sudden changes to demand or access. (image: upstreamonline.com)
Last week, militants threatened oil supplies in Iraq and Nigeria, two of the world’s most beleaguered crude producers. Typically, the prospect of conflict in either country, no matter how fleeting, would be enough to trouble the market and create a sizeable spike in global oil prices. This time around, however, crude prices rose only 70 cents, to end the week at a modest $73.36 a barrel, a sign that the oil sector’s growing capacity to shrug off sudden losses in production will, at least for the moment, keep crude prices stable.
According to an article published on Sunday by the Wall Street Journal, several major oil producers have improved production capacity in recent months, ensuring a steady supply of crude despite the occasional disruption. Earlier this year, Saudi Arabia said it increased its production capacity to a record 12.5 million barrels a day, while Qatar will soon ramp up the capacity of its offshore Al Shaheen oil field to 500,000 barrels a day (about three times the current capacity of Iraq).
Obama Takes Climate Stand: Announces Emissions Target, Plans to Attend Copenhagen
President Obama is officially eyeing a U.S. emissions reduction target. (image: tdbimg.com and seedcapitalfunds.com)
Last week, President Obama ended months of speculation concerning his pre-holiday travel plans by announcing that he will personally attend the upcoming climate conference in Copenhagen. The announcement is significant for two reasons, according to Darren Samuelson and Lisa Friedman in Wednesday’s New York Times.
First, Obama will be the first sitting president to attend the conference since George H.W. Bush in 1992, which lends the visit substantial symbolic value, even if Obama’s attendance doesn’t lead to an international pact. The fact that Obama is boarding a plane at all marks a break from the previous administration, whose public comments on climate change most often consisted of a wan shrug.
FL Commissioner Says Offshore Drilling Not Worth It–Does Argument Apply to Rest of US?
Offshore drilling. (image: sun-sentinel.com)
Tuesday’s News-Press out of Fort Myers, FL carried an impassioned op-ed by county commissioner Adam Cummings against proposed oil and natural gas drilling off the Florida coast. The core of Cummings’ argument is not personal politics, but an analysis done by the Energy Information Administration on drilling in currently restricted areas of the Gulf of Mexico, which found that oil extraction at all sites would diminish US dependence on foreign oil by only 2.5 percent over the next 20 years, with negligible impact on prices. Florida’s share of these untapped reserves would account for only .625 percent of that already small reduction, causing Cummings to question the wisdom of potential environmental damage to Florida’s greatest resource: its famous beaches, and the tourism and retirement industries they support.
The area in question, the South Florida Basin, includes all the coast south of St. Petersburg to the Keys, as well as Miami, West Palm Beach and Fort Lauderdale on the Atlantic side. While tourism is currently in a slump due to the economic downturn, leading some to call for the opening of the restricted reserves, millions of dollars of investment and years of waiting would be required before these sites would yield anything, and Florida’s share of that return would be, in Cummings eyes, insufficient to justify the local impact. Drawing on his own experience working in the Gulf oil industry in Louisiana, Cummings says:
Heating Oil Price Trend for November 27: -5¢
(image: thornhillfund.com and zimbio.com)
NYMEX oil prices slipped on Wednesday, driven downward by falling US stock markets and a strengthening dollar. The trend continued in electronic trading over yesterday’s Thanksgiving holiday (US markets were closed), with the price of crude at one point falling to five percent below Wednesday’s close. Some analysts are seeing recent drops in oil prices as the early stage of an oil bubble bursting, as the price of crude has fallen 10 percent over the last month—the US economy remains mired in recession and US stockpiles of petroleum remain sky-high. Two consecutive days of losses made for much lower retail heating oil prices this morning.
Today’s average retail heating oil price in the Northeast is 5 cents lower than Tuesday’s average price.
How Many Thanksgiving Turkeys in a Barrel of Oil?
Carefully lowering a turkey into hot oil for deep-frying. (image: z.about.com)
Today being Thanksgiving, we thought we’d give you the scoop on turkeys and oil. No, not deep-frying turkeys in oil, but how many turkeys equal a barrel of oil.
If you’ve ever eaten too much at Thanksgiving dinner—and who among us hasn’t?—at some point, as you roll yourself away from the dining room table, you’ve probably thought, made, or heard something like the following comment: “Man, you could probably heat your home for a month with the calories I just ate!” (Or maybe it’s just us, who write about heating oil, who have those thoughts…)
How much energy is in a Thanksgiving turkey, or your Thanksgiving dinner, and how does that compare to the energy in a barrel of oil? It’s not a far-fetched comparison: oil, as well as the other fossil fuels, coal and natural gas, was once living organisms. The energy stored in a barrel of oil is fundamentally the same energy stored in your Thanksgiving turkey—the packaging and (we hope!) the taste is very different, but at the end of the day, a calorie from turkey and a calorie from oil are thermodynamically identical and chemically almost the same. (One of the most dramatic illustrations of the interchangeability of meat and fuel was provided on Mythbusters when the team launched a salami-powered rocket.)
Oil Companies Compete to Win Nigerian Oil Licenses
Despite challengers, Western companies are eager to stay in Nigeria. (image: greenpeace.org.uk)
Somehow, Nigeria’s oil industry has somehow become even more complicated.
The race to control the world’s oil resources has heated up as China has ambitiously entered the contest to win leases in Nigeria, putting Western firms on notice. And, at the same time, the Nigerian government has discussed imposing new taxes and fees on companies seeking to renew their leases, according to an article in Sunday’s Wall Street Journal.
According to the Journal, China’s state-owned Cnooc oil company was approached by a Nigerian “middleman” who inquired if the company was interested in taking leases held by Western companies such as Chevron, Shell, and Exxon once they expire. Cnooc has allegedly declined this offer, fearing reprisals from the more established companies it may need to partner with in the future. China does have a presence in Nigeria, as it co-owns an offshore oil field with France’s Total SA.
