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Norway: A Political Risk Lesson For Oil
Matthew Hulbert, Forbes
Oil markets are riddled with geopolitical risk. A sanctions hit Iran, a broken Iraq, a fiesty Venezuela, a corrupt Angola, a restless Russia, a worried Saudi Arabia – we know the narrative well. But what markets continually overlook is the idea that political risk can be just as acute, if not more deadly in the most developed states of all. The latest workers strike in Norway provides a perfect example.
While all eyes were on the Middle East to see how sanctions deadlines played out, the oil price didn’t budge an inch. Any trader worth their salt would claim they had that one comfortably priced in; but when a bunch of fed-up workers in Oslo demand retirement at 62 with full pensions rights, the oil price shot straight back to $102/b. We now face the prospect of 2mb/d of high quality, low-sulphur Norwegian production being shut in. Truly explosive stuff for the supply-demand balance. No one saw it coming.
The strike has already clipped Norwegian output by 15% with nine platforms being taken offline. The Norwegian Oil Industry Association hardly helped the situtation by threatening to end all national production if the strike wasn’t called off by midnight tonight (9th July). Someone will have to blink first, and the chances are, it’s going to be the Labour led Norwegian government to come up with a compromise solution. If they don’t, things are deemed so bad, that the International Energy Agency will step in to release the strategic petroleum reserve to offset any shortages.
(9 July 2012)
Are Natural Gas Liquids as Good as Oil?
Michael Levi, Council on Foreign Relations
… There are two basic problems with the standard NGLs-aren’t-oil argument.
This first problem concerns what goes into a petroleum refinery. NGL skeptics love to point out that ethane, propane, and butane are of no use in cars and trucks. That’s true, but oil isn’t of any use in cars or trucks either. Drivers want mobility, and for now, that mostly means gasoline and diesel. Those fuels are produced by refineries. The right question to ask, then, is this: how does ethane, propane or butane compare to oil as a refinery feedstock? If they are interchangeable, then NGLs should be thought of as no different from crude oil. If NGLs are useless as refinery inputs, they should be treated as something different.
It turns out that ethane it pretty useless as a refinery feedstock, but propane and butane aren’t. Both (along with propylene and butylenes, products derived from propane and butane) are inputs into refinery alkylation units that produce high octane blending components for refined products. (They might be useful for something different – I’m whatever you call the opposite of a refining expert, and would love any feedback from people who know more about all this than I do.) What I don’t know is how much new propane or butane could be absorbed into gasoline and diesel manufacturing before the system became saturated. In the short run, the answer is probably “very little”, since alkylation units are expensive and take time to bring online. In the long run, that constraint weakens, which should change the equation. How much so is something that requires some real quantitative work.
The second problem comes when you look at the other end of the refinery, i.e. what comes out of it. One of the biggest products, after gasoline and diesel, is naphtha, a petrochemicals feedstock currently produced at a rate of about five million barrels a day globally. Ethane, propane (converted to propylene) and butane (converted to butylene) are all potential substitutes for naphtha in many industrial processes.
(9 July 2012)
„Das ganze Land in Gebrauch nehmen“
Reinhard Wolf, taz.de
Fisch-Kinderstube Barentssee? Das war mal. Oslo gibt die Ölförderung bis zur Bäreninsel frei – und damit bis an die arktische Packeisgrenze.
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STOCKHOLM taz | Als Norwegens Öl- und Energieminister Ola Borten Moe die neuen Ölförderpläne vorstellte, ließ er keinen Zweifel daran, dass es keine Grenzen nach Norden – also in die Arktis – mehr gibt. Man wolle sich von niemanden sagen lassen, wie man es mit der Förderung von Öl und Gas in den arktischen Gewässern zu halten habe: „Diese Gebiete sind genauso norwegisch wie unsere Fjorde.“
Im Rahmen der neuen Konzessionsrunde können sich Ölkonzerne in der Barentssee um 72 Bohrlizenzen bemühen. Das Fördergebiet reicht bis zum 75. Breitengrad, auf dem die zu Norwegen gehörende Bäreninsel liegt. Das ist die Packeisgrenze.
Und es ist erst der Anfang. „Zwar nicht morgen“, aber binnen der nächsten 25 Jahre, so Moe, werde Norwegen das Meer dann bis zum 84. Breitengrad für die Ölwirtschaft öffnen. Derzeit wird diese Region nördlich der Inselgruppe Spitzbergen seismisch erkundet. Von da aus wären es nur noch 700 Kilometer zum Nordpol.
Bei diesen Plänen ist das weitere klimabedingte schnelle Abschmelzen der arktischen Eisdecke fest eingeplant. Nimmt man die aktuellen Berechnungen des National Snow and Ice Data Center im US-Bundesstaat Colorado, das für diesen Sommer einen neuen Eisminusrekord erwartet, dürfte die norwegische Rechnung aufgehen.
„Signifikante Risiken“
„Schlecht für das Klima, schlecht für die Arktis und schlecht für alle Bemühungen, zu globalen Umweltschutzübereinkommen zu gelangen“, sagt Fredric Hauge von der Umweltorganisation Bellona. Er wundere sich, wie Norwegen, das sich so gern als Umweltvorbild profiliert, die Augen so verantwortungslos vor den damit verbundenen „signifikanten Risiken“ verschließen könne.
(9 July 2012)
Norway plans to go north into the Arctic for oil, regardless of the environmental consequences. -BA
