Energy Companies Face Crude Reality: Better to Leave It in the Ground – By  Sarah Kent,  Bradley Olson and  Georgi Kantchev Feb. 17, 2017 5:30 a.m. ET

High costs, low prices and tough new environmental rules forcing companies to cancel plans to produce oil

Today, only about 20% of future oil sands projects in northern Alberta are capable of being profitable.

Today, only about 20% of future oil sands projects in northern Alberta are capable of being profitable. Photo: Ben Nelms/Bloomberg News

A new era of low crude prices and stricter regulations on climate change is pushing energy companies and resource-rich governments to confront the possibility that some fossil-fuel resources are likely to be left in the ground.

In a signal that the threat is growing more serious, Exxon Mobil Corp. is expected in the coming week to disclose that as much as 3.6 billion barrels of oil that it planned to produce in Canada in the next few decades is no longer profitable to extract.

The acknowledgment by Exxon, after the company spent about $20 billion to put the oil sands at the center of its growth plans, highlights how dramatically expectations have changed about the future prospects of the region.

Once considered a safe bet, Canada’s vast deposits are emerging as among the first and most visible reserves at risk of being stranded by a combination of high costs, low prices and tough new environmental rules.

“For a lot of reasons the oil sands look like a prime candidate for eventual abandonment,” said Jim Krane, an energy fellow at Rice University’s Baker Institute. “One problem is that costs are persistently higher. The high carbon content only makes it worse.”

During most of the past decade, Exxon and other giant oil companies spent billions of dollars in Canada as part of a global quest for new sources of supply, as analysts cautioned about “peak oil,” or the risk of running out of the resource. Prices surged to $140 a barrel.

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Crude L.A.: California’s Urban Oil Fields (Trailer) – Vice News Published on Apr 21, 2016

For nearly four months, the Aliso Canyon methane leak just north of Los Angeles spewed several thousand metric tons of potent greenhouse gases into the air before it was finally sealed in February. The disaster displaced residents, forced schools to close, and incited widespread distrust in the local government’s regulation of the oil and gas industry.

Few people realize that Los Angeles was actually built on oil. The Aliso Canyon natural gas facility is just one of thousands of oil and gas drilling and storage sites located in and around the city, which is also home to the country’s largest urban oil field. Thousands of wells dot the cityscape, and many operate in highly populated, low-income neighborhoods.

VICE News visited Los Angeles, California to investigate how carcinogenic fumes from urban oil drilling are affecting local communities.

Read “Record LA Gas Leak Could Bring Summer Blackouts to Southern California” –

Read “LA’s Methane Leak Was the Biggest in US History” –

Activists on Trial for Blocking Oil Train Will Argue It Was Justified by Climate Change – —By Katie Herzog | Mon Jan. 11, 2016 4:54 PM EST

If it does emit, you must acquit.

This story was originally published by Grist and is reproduced here as part of the Climate Desk collaboration.

In September 2014, five climate activists with Rising Tide Seattle managed to halt the passage of a crude oil train at the BNSF Delta rail yard in Everett, Wash. After eight hours blocking the tracks, the five were arrested and charged with criminal trespass and blocking a train. Today, they go on trial.

In court, the activists—known as the Delta 5—will argue their act of civil disobedience was necessary. A spokesperson for Rising Tide said the activists “will be the first ever to argue that their actions were justified because of the threat of climate change, using the ‘necessity defense.’ The outcome of [the] trial could set national precedent for climate related civil disobedience and is being carefully watched.” The defendants will call on a rail safety expert and a climate scientist to argue that their actions were justified.`

The activists “will be the first ever to argue that their actions were justified because of the threat of climate change.”

The train the Delta 5 stopped was carrying crude oil from the Bakken Formation in Montana and North Dakota. Bakken shale oil is particularly explosive, and was responsible for the 2013 conflagration that killed 47 people after a train derailed in Quebec.

The Pacific Northwest is rapidly becoming a hub for trains moving crude oil from the Bakken shale. Regulators in Washington state are currently considering six new oil-by-rail facilities. According to a report commissioned by the Sightline Institute, “Northwest oil train terminals could…lead to more oil drilling in the Bakken formation, as much as 114,000 barrels per day beyond what would be produced without the terminals. The resulting greenhouse gas pollution from this extra production could be as much as 30 million tons per year of carbon dioxide—the equivalent of doubling the number of cars on the road in Oregon and Washington.”

It was this fear that motivated the Delta 5.

“There came a point where I could no longer sit back and wait for the politicians to act,” said Delta 5 member Patrick Mazza. “I had to put my body on the line to demand not talk, but action on a massive scale to rapidly replace fossil fuels.”

Oil is spiking – Greg McKenna, Business Insider Australia Jan 4, 2015 2:44AM EDT

Futures markets are open and the price of crude oil in the US and Europe is surging on the back of increased tensions in the Middle East after Saudi Arabia beheaded Shiite cleric Sheikh Nimr al-Nimr.

Sitting around $38 a barrel in Nymex futures trade, crude was up a little more than 2.5% on the back of the news of the beheading.

04012015 WTIfsM5Nymex Crude Oil (MT4, AxiTrader)

Deteriorating relations between the two regional powerhouses after the Saudi Embassy in Tehran was attacked and burned are adding to price pressures. That’s led the Saudis to announce they are severing diplomatic ties with Iran.

Iranian diplomats have 48 hours to leave Saudi Arabia.

Oil settled back down in later trade and Brent is up around 0.24% at $37.70 (£25.59) at 7.15 a.m. GMT (2.15 a.m. ET). US West Texas Intermediate is up 1.31% at $37.52 (£25.47).

Traders on forex markets remain fairly sanguine with the Australian dollar and Japanese Yen, both proxies for global risk appetite, having moved only around 0.1% from their previous close.

Read the original article on Business Insider Australia. Copyright 2016.

Cashing In on Oil – Allen Neuhauser August 6 2015

LOST HILLS, CA - MARCH 24:  Pump jacks are seen at dawn in an oil field over the Monterey Shale formation where gas and oil extraction using hydraulic fracturing, or fracking, is on the verge of a boom on March 24, 2014 near Lost Hills, California. Critics of fracking in California cite concerns over water usage and possible chemical pollution of ground water sources as California farmers are forced to leave unprecedented expanses of fields fallow in one of the worst droughts in California history. Concerns also include the possibility of earthquakes triggered by the fracking process which injects water, sand and various chemicals under high pressure into the ground to break the rock to release oil and gas for extraction though a well. The 800-mile-long San Andreas Fault runs north and south on the western side of the Monterey Formation in the Central Valley and is thought to be the most dangerous fault in the nation. Proponents of the fracking boom saying that the expansion of petroleum extraction is good for the economy and security by developing more domestic energy sources and increasing gas and oil exports.   (Photo by David McNew/Getty Images)

“Not sane,” “dreadful,” “super dumb” – these were the words lawmakers and experts used to describe a Senate plan to sell off the nation’s emergency supply of crude oil to pay for highway upgrades.

[READ: Boehner Calls for an End to the Decades-Old Ban on U.S. Oil Exports]

“It would be like cashing in our home insurance policy to pay for repaving the driveway,” Sen. Lisa Murkowsi, R-Alaska and chairwoman of the Energy and Natural Resources Committee, told reporters last week. “The Strategic Petroleum Reserve is a vital national security asset that must be maintained in case of serious future supply disruptions.”

It could also, she added, potentially be harnessed to support allies whose supplies are cut off.

Yet in a Congress led by Republicans resolved not to raise taxes, senators last week advanced a six-year transportation bill that harnesses the reserve to pay for roads, bridges and transit. That bill follows a House measure passed last month that would fund health care research by selling oil from the reserve.

“The most dangerous place to stand in Washington is between Congress and free money,” says energy consultant Bob McNally, former special assistant on the National Economic Council and former senior director for international energy on the National Security Council under President George W. Bush. “Congress has gotten a whiff of that with the Strategic Petroleum Reserve. While I disagree with this, I expect there will be a drawdown.”


If either measure is approved, it wouldn’t be the first time the reserve was tapped for large amounts of oil – that’s happened five times previously – but it would come at a time that booming U.S. oil and gas production has dropped oil to its lowest price in four years, and with no great change expected anytime soon.

“Selling oil at current prices is nuts,” says Steven Kopits, managing director of the consulting firm Princeton Energy Advisors (and he of the phrase “super dumb”). “Markets are really fragile right now: If you put a million barrels on the market, you’re going to tank prices by $10 a barrel.” With oil hovering at around $50, that’s as much as 20 percent.

But if the U.S. is sitting atop and producing so much home-grown oil, why is the Strategic Petroleum Reserve necessary anyway? The International Energy Agency, of which the U.S. is a part, calls on its 28 member nations to hold a 90-day supply of oil. But now that the U.S. is by some measures the world’s largest producer of crude oil, do we still need it?

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The Crude Gamble of Oil by Rail: Bomb Trains – Published on Jul 28, 2014


It’s estimated that 9 million barrels of crude oil are moving over the rail lines of North America at any given moment. Oil trains charging through Virginia, North Dakota, Alabama, and Canada’s Quebec, New Brunswick, and Alberta provinces have derailed and exploded, resulting in severe environmental damage and, in the case of Quebec, considerable human casualties.

A continental oil boom and lack of pipeline infrastructure have forced unprecedented amounts of oil onto US and Canadian railroads. With 43 times more oil being hauled along US rail lines in 2013 than in 2005, communities across North America are bracing for another catastrophe.

VICE News traveled to the Pacific Northwest to investigate the rapid expansion of oil-by-rail transport and speak with residents on the frontline of the battle over bomb trains.

More on VICE News: Do You Live In A “Bomb Train” Blast Zone? –

The new oil crisis: Exploding trains – By KATHRYN A. WOLFE and BOB KING | 6/18/14 5:01 AM EDT Updated: 6/18/14 5:25 AM EDT

Communities throughout the U.S. and Canada are waking up to the dark side of North America’s energy boom: Trains hauling crude oil are crashing, exploding and spilling in record numbers as a fast-growing industry outpaces the federal government’s oversight.

In the 11 months since a runaway oil train derailed in the middle of a small town in Quebec, incinerating 47 people, the rolling virtual pipelines have unleashed crude oil into an Alabama swamp, forced more than 1,000 North Dakota residents to evacuatedangled from a bridge in Philadelphia and smashed into an industrial building near Pittsburgh. The latest serious accident was April’s fiery crash in Lynchburg, Virginia, where even the mayor had been unaware oil was rolling through his city.

These dangerous moments on the rails raise questions about the safety of transporting increasing amounts of oil in mile-long chains of tank cars, some of them decades old. Community leaders and activists from Oregon to Alabama to Albany call the trains a disaster waiting to happen — despite the Department of Transportation’s efforts to play catchup through a series of emergency orders, agreements with industry and proposed regulations being reviewed by the White House.

(WATCH: News coverage of recent oil train spills)

A POLITICO analysis of federal data from more than 400 oil-train incidents since 1971 shows that a once-uncommon threat has escalated dramatically in the past five years:

  • This year has already shattered the record for property damage from U.S. oil-train accidents, with a toll exceeding $10 million through mid-May — nearly triple the damage for all of 2013. The number of incidents so far this year — 70 — is also on pace to set a record.

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