Exercise Stops The Mitochondrial Aging Process In Its Tracks

New research published in the American Journal of Physiology indicates that exercise may minimize, and even reverse, age-associated declines in mitochondrial function.[1]  This has wide-ranging implications, as the health of the mitochondria intimately affect every cell, tissue and organ within the human body.

Mitochondria are known as the “powerhouse” of the cell because they are responsible for producing the body’s primary source of chemical energy: adenosine triphosphate (ATP), but they are also intimately involved in a wide range of other indispensable cellular functions, e.g. neurotransmitter, hormone and RNA/DNA production, which is all the more fascinating considering that they have their own bacteria-like DNA ring completely foreign to our own.

As we age, mitochondrial density (the number of mitochondria per cell), and mitochondrial quality (its genetic and structural integrity) decline.  While this is a natural process, it can be greatly accelerated as a result of excessive stress, environmental radiation and chemical exposures (including pharmaceutical drugs), nutritional deficiencies, imbalances and/or incompatibilities, and mitochondrial DNA defects inherited maternally.

In the new study titled, “Age-associated Declines in Mitochondrial Biogenesis and Protein Quality Control Factors are Minimized by Exercise Training,” researchers found animals that underwent exercise training, consisting of treadmill running at 60% of the initial VO2max (also known as maximal aerobic capacity, which is the maximum capacity of an individual’s body to transport and use oxygen during incremental exercise), “…reversed or attenuated significant age-associated (detrimental) declines in mitochondrial mass,” as well as a wide range of additional age-associated mitochondrial changes, e.g. SIRT1 activity, AMPK, COX 4, etc.

The researchers summarized their conclusions:

“Exercise training also decreased the gap between young and old animals in other measured parameters including NRF1, TFAM, Fis1, Mfn1 and polynucleotide phosphorylase (PNPase) levels. We conclude that exercise training can help minimize detrimental skeletal muscle aging deficits by improving mitochondrial protein quality control and biogenesis.“

Mitochondrial biogenesis is the process by which new mitochondria are formed in the cell, and it is generally believed that the higher the mitochondrial copy number (or mitochondrial mass) the more protective it is for the cell.  Most of the research in the past 40 years has been performed on muscle mitochondria, which are believed to confer greater resistance to fatigue and strength. The muscle cell type with the highest mitochondrial density is cardiac muscle – because the heart never stops working – which may have as high as 10-100 times more mitochondria per cell versus skeletal muscle (approximately 50 vs. 5,000). This is also why statin drugs like Lipitor (atorvastin), which reduce heart mitochondrial function,[2] are so illogical for the primary prevention of heart disease; a disease which is certainly not caused by a lack of drugs. The well-known myotoxicity (muscle-damaging) properties of this chemical class of drugs may be primarily caused by their fatal disruption of mitochondrial function, and may explain why statins have been linked to such a broad range of pathologies, numbering over 300 on our database alone.

This is not, in fact, the first study showing exercise-induced mitochondrial biogenesis. A 2011 study published in the Journal of Applied Physiology showed that exercise training increased mitochondrial biogenesis in the brains of mice, which opened the door to the possibility that exercise may reduce or reverse age-associated declines in cognitive function, especially those related to inactivity.[3]

Another more recent study published in the journal Neuroscience (Jan. 2012) titled, “Exercise induces mitochondrial biogenesis after brain ischemia in rats,” found that “…exercise can promote mitochondrial biogenesis after ischemic injury [associated with stroke], which may serve as a novel component of exercise-induced repair mechanisms of the brain.”[4]

Finally, a 2011 study published in the journal Applied Physiology, Nutrition and Metabolism, reviewed the role of exercise training in inducing mitochondrial biogenesis in tissues beyond that of skeletal muscle, namely, adipose tissue, liver, brain and kidney.[5]

Exercise, of course, is another way of saying intentionally moving our bodies – something which increasingly, in a world of mechanization and technological extension and/or substitution of bodily functions (transhumanism?), is performed regularly only rarely by the majority of the world’s industrialized populations.

The saying “move it or lose” speaks volumes to what is implied by the research on mitochondrial biogenesis, or conversely, the mitochondrial degeneration implied by lack of exercise.  In other words, exercise may not be so much a ‘magic bullet’ that we apply to disease like we would a palliative drug. Although we have indexed over 80 “diseases” which appear to be prevented or improved with exercise, another way of putting it is: 80+ “diseases” may be caused by exercise deficiency, i.e. daily, moderate-to-intense physical exertion, may be a default, necessary state of the body in order to produce or maintain health. This is, after all, the very meaning of re-generation, which is the truly the default moment-to-moment state of our body, and the implied meaning of “re-creational” activities.

In closing, there are a few natural substances which may enhance mitochondrial biogenesis, but please remember there is no “magic bullet” superior to a truly healthy diet, lifestyle and attitude:

• Grape polyphenols: Shown to increase muscle mitochondrial biogenesis and decrease age-associated muscle atrophy in aged rats.[6]


• Acai berry: While I am truly fatigued by the acai-berry hype that has proliferated like a virus with the typical multi-level-marketing intensity over the past few years, it has been studied in the fruit fly model to promote healthy aging and reducing oxidative stress, while measurably increasing transcript levels of genes involved in mitochondrial biogenesis.[7]


• Resveratrol: It has been shown to induce mitochondrial biogenesis in a rat model.[8]


• Quercetin: Shown to increase brain and muscle mitochondrial biogenesis and exercise tolerance in an animal model.[9]

---

[1] Age-associated Declines in Mitochondrial Biogenesis and Protein Quality Control Factors are Minimized by Exercise Training. Am J Physiol Regul Integr Comp Physiol. 2012 May 9. Epub 2012 May 9. PMID: 22573103

[2] Effects of atorvastatin on heart mitochondrial function and coenzyme Q content in the experiment. Bratisl Lek Listy. 2011 ;112(11):603-4. PMID: 22180983

[3] Exercise Training Increases Mitochondrial Biogenesis in the Brain. J Appl Physiol. 2011 Aug 4. Epub 2011 Aug 4. PMID: 21817111

[4] Exercise induces mitochondrial biogenesis after brain ischemia in rats. Neuroscience. 2012 Jan 8. Epub 2012 Jan 8. PMID: 22266265

[5] Skeletal muscle and beyond: the role of exercise as a mediator of systemic mitochondrial biogenesis. Appl Physiol Nutr Metab. 2011 Sep 2. Epub 2011 Sep 2. PMID: 21888528

[6] Polyphenols decreased liver NADPH oxidase activity, increased muscle mitochondrial biogenesis and decreased gastrocnemius age-dependent autophagy in aged rats. Free Radic Res. 2012 May 18. Epub 2012 May 18. PMID: 22607117

[7] A botanical containing freeze dried açai pulp promotes healthy aging and reduces oxidative damage in sod1 knockdown flies. Age (Dordr). 2012 May 26. Epub 2012 May 26. PMID: 22639178

[8]  Resveratrol induces mitochondrial biogenesis and ameliorates Ang II-induced cardiac remodeling in transgenic Blood Press. 2010 Jun;19(3):196-205. PMID: 20429690 rats harboring human renin and angiotensinogen genes.

[9] Quercetin increases brain and muscle mitochondrial biogenesis and exercise tolerance. Am J Physiol Regul Integr Comp Physiol. 2009 Apr;296(4):R1071-7. Epub 2009 Feb 11. PMID: 19211721

© April 14, 2018 GreenMedInfo LLC. This work is reproduced and distributed with the permission of GreenMedInfo LLC. Want to learn more from GreenMedInfo? Sign up for the newsletter here http://www.greenmedinfo.com/greenmed/newsletter.

The post Exercise Stops The Mitochondrial Aging Process In Its Tracks appeared first on The Sleuth Journal.

Make Your Choice: Change By Pain Or Insight

This report was originally published by Chris Martenson at PeakProsperity.com

Most experienced investors know the four most dangerous words are: This time is different.

It never is.

And yet one of my key predictions here at Peak Prosperity is that The next twenty years will be completely unlike the last twenty years.

So am I saying that things really will be different this time?

Yes, I am. But to understand why, you have to look closely at the unprecedented moment in history in which we live, as well as how the Three E’s – the Economy, Energy and Environment – all tie together now in a way they never have before.

For those who prefer their conclusions right up front, the simplest summary I can provide is that everything we think we know about “how things work” is just plain wrong.

This explains why, among many other grotesque distortions, the stock and bond markets are spectacularly overpriced and overvalued right now.

This danger is important to be aware of because when things correct, as they inevitably must, the next crash will be incredibly damaging. It could be as profound as that which dethroned Spain as a world power, permanently.

Peak Prosperity user Gyurash put this risk in context within his comment to our recent podcast on Economics for Independent Thinkers:

The mention of Paul Volker was interesting. I remember listening to a lecture given by Mr. Volker played on public radio in the mid 80s. He talked about the Spanish empire in the 16th century and the easy money train they had coming from South American gold and silver. He said that although it seemed to create great wealth it also made for a false economy in Spain. In addition to creating price bubbles, the Spanish did not use it to build much of anything other than big villas, built by itinerant foreign labor by the way, so when the gold and silver flow slowed when the biggest mines were effectively depleted, their economy crashed so hard that it never recovered, even up to today.

(Source)

Delusional Thinking

What’s worse than wishful thinking? Delusional thinking.

The sort of ideas that harm rather than help those who hold them.

Of the many current policy delusions I could rail about, perhaps the greatest of them all is the quite-impossible belief that we can have infinite growth on a finite planet.

I know, I know, refuting this is so brain-dead easy to debunk that it seems pedestrian, if not childishly so, to raise it here again. It’s quite an impossible proposition.

Even the most cursory of reviews of mining data (just one of many possible examples), show that many critical ores and minerals are vastly more difficult and expensive to extract and bring to market than they were just a few decades ago. And the trendlines keep getting worse.

But let’s go through this once again, because it’s such an important point. For those of you already on my side of the boat, please bear with me. Perhaps something new will emerge for you on this next go around.

The Harsh Math

Exponential expansion requires not just some new minerals coming to market, but exponentially more.

It works out like this. Suppose that 100 units of copper were produced in year 1, and output (as demanded by economic growth) was expanding at a 3% rate. How long would it take for production to double? The answer is that after 24 years we’d find that 203 units were being produced. So a 3% growth rate means that it takes only 24 years to fully double production.

However, the more interesting fact is that over that same 24-year stretch, if we add up each year’s production into a cumulative total we discover that 3,546 units of copper had been produced. How much copper would you guess was produced over the prior 24-year stretch (the one that got us to 100 units in the first place)?

The answer is just 1775 units. In other words, half the amount produced during the next doubling. Going back further and adding up all of the doublings of copper production throughout all of history  we’d discover that each new doubling produced (and consumed) as much as the sum total of all the prior doubling periods combined.

You can prove this to yourself by looking at a doubling sequence such as 0.25, 0.5, 1, 2, 4, 8, 16, 32 etc. Note that 4 is larger than (0.25 + 0.5 + 1 + 2) and that 8 is larger than (0.25 + 0.5 + 1 + 2 + 4) and that 16 is larger than (0.25 + 0.5 + 1 + 2 + 4 + 8) and so on — into infinity.

Again, each new doubling involves an increase that is larger than the combined values of all the prior doublings in history.

For the visually-minded, here’s that same idea expressed in an image:

How Many More Doublings Can We Possibly Have From Here?

Only the most delusional would argue that we can dependably double our extraction of key natural resources forever.

Every two decades (or so), will we always be able to use twice as much farmland, twice as much fish in the sea, twice as much oil in the ground, as has been used before throughout all of human history?

Of course not. Planet Earth is a finite system.

This is why I claim that everything we think we know about “how things work” is wrong. Our entire economic and financial systems, their associated monetary models and their current financial asset prices, are predicated on the principle of continuous growth. And not just any sort of growth: Exponential growth. Predictable doubling — forever.

Look, it’s ridiculously easy to prove that there won’t always be twice as much copper (or nearly any other key natural resource) as has been extracted throughout all of prior human history. Things run out. They deplete. They become more dilute as the high grades are exploited first.

At some point, doubling becomes impossible. That’s when you’re past the point where half has been extracted and half still remains in the ground.  After that, there are exactly zero doubling periods remaining! That’s just elementary math.

Why care?

Because once the doubling periods are over, every single economic model and financial asset that is predicated on continuous expansion breaks. Our systems stop  steadily growing; and instead start increasingly shrinking.

This not a hard concept to grasp, intellectually, for most people with an open mind. But in practice, because it challenges our comfortable understanding of the world, because it collides with an entire Disney World of incompatible social belief systems, it’s pretty much impossible for the many people to even begin to wrestle with. Forget about a mainstream economist or central banker, whose salary requires them to adhere to the status quo.

The warning here is that we our deluding ourselves as a society. We are herding ourselves, lemming-like, straight towards the cliff ledge.

Think Critically!

Our mission here at PeakProsperity.com is to Create a World Worth Inheriting. While we help people make informed decisions to imbue their lives with greater abundance and satisfaction today, it’s our dedication to the long-term picture that shapes everything we do.

Very few voices are standing about waving their arms in the air like we are, warning of the approaching cliff. We’re aware that the point of no return might still be several decades out into the future, but we also realize that it could already be behind us. It’s nearly impossible to know right now given the complex system that is our planet — but given the existential risks involved, our opinion is that everyone should be mobilizing in response to this arriving (arrived?) crisis.

We often get labeled as narrow-minded “Malthusians”. Or accused of failing to account for human ingenuity. (Neither is accurate, we think.)

But in reality, we’re simply data driven. The facts are what they are. Logic is what it is.

And we get it. It’s both a factual and a logical nightmare for the infinite growth crowd that the earth is finite.

But as Einstein famously quipped:

And as you wrap your brain around the limits to growth, remember that you’re subject to the same comprehensive programming that envelops us all. The messaging that constantly reinforces the idea that endless growth is what we need, and what we can expect.

This programming is subtle, reassuring and ubiquitous; which makes it hard to resist. Here’s a prime example:

(Source)

To an economist like Bernanke, there are only virtuous expansions. Of course, the sort of expansion he refers to is exponential growth. Which is absolutely destined to fail in the long run (and now, maybe, the short).

And when that happens, the fallout will be spectacular and highly destructive to the hopes and dreams of literally billions of people.

Make Your Choice: Change By Pain Or Insight

What’s unclear to me is if there can be any meaningful recovery from this next crash, whenever it happens and however long it takes.

To return to the opening piece of this article, while I know that this time is different are dangerous words for investors to believe, the impending collision between delusional infinite growth thinking and resource limits and other realities will appear to the average observer like a gigantic change. But, in fact, it simply will mean that humans are subject to the same limits as any other life form on earth.

In other words, it really won’t be different this time.

In boy-meets-girl story form, the plot line of the natural process for all forms of life is:

1. organism finds tasty energy source


2. organism expands exponentially into that energy source


3. energy source dwindles even as organism continues into population overshoot, and then


4. happy times turn into tough times, and organism population plummets

Given that literally everything we hold dear and take for granted, such as well-stocked supermarkets, 24/7 electricity, and an appreciating retirement portfolio are all themselves dependent on an economic model that requires perpetual exponential expansion, several questions emerge.

How can I protect myself, my family and those I care about? How can I secure a prosperous future? What do I need to do to develop the right mental models and belief system to deal effectively with the coming challenges?

You can either address these questions head-on now, while the world still works the way we’re accustomed to. Or later, under crisis conditions.

We’ve learned that there are two ways that people change their beliefs and then their actions: by pain or by insight.

Most people go the pain route. And in the process, they waste a lot of valuable time that could have been spent constructively. It’s only after the heart attack, the divorce, the backing over the family dog while drunk—moments of extreme pain—that most people will begin to actively face the idea that they need to make different decisions in life.

But it doesn’t have to be that way. Part of the beauty of being human is that we can learn from observation, reflection and experience, and can adapt. Critical thinkers have this ability to change by insight. They use new information to put new behaviors into practice until those practices become new habits. And with better habits, we achieve better destinies.

So which route will you choose? Pain or insight?

The story told by the Three Es is loaded with the potential for plenty of painful moments over the next few decades. Sadly, a lot of people will not take precautionary steps far enough in advance to matter. They’re just not focusing on the risks right now. As a result, much of the world will be forced to change its behavior via the pain route.

Use this awareness as a sense of urgency to prepare now. To secure your future prosperity, as well as to help those regretting that they didn’t follow your lead.

In Part 2: Steps For Changing By Insight, we lay out our prescriptive guidance what what to do now, in a world saddled with record debts, and a debt-based system of money that itself is utterly and completely dependent on infinite expansion, where something’s got to give.

If you believe in eternal infinite growth, then sure, stay invested in stocks and bonds and go ahead and buy the dips.

But if you don’t, take steps today to change your life by insight, secure your future prosperity, and serve as a model for others.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

THE U.S. SHALE OIL INDUSTRY: Swindling & Stealing Energy To Stay Alive

By the SRSrocco Report,

While the U.S. Shale Energy Industry continues to borrow money to produce uneconomical oil and gas, there is another important phenomenon that is not understood by the analyst community.  The critical factor overlooked by the media is the fact that the U.S. shale industry is swindling and stealing energy from other areas to stay alive.  Let me explain.

First, let"s take a look at some interesting graphs done by the Bloomberg Gadfly.  The first chart below shows how the U.S. shale industry continues to burn through investor cash regardless of $100 or $50 oil prices:

The chart above shows the negative free cash flow for 33 shale-weighted E&P companies.  Even at $100 oil prices in 2012 and 2013, these companies spent more money producing shale energy in the top four U.S. shale fields than they made from operations.  While costs to produce shale oil and gas came down in 2015 and 2016 (due to lower energy input prices), these companies still spent more money than they made.  As we can see, the Permian basin (in black) gets the first place award for losing the most money in the group.

Now, burning through investor money to produce low-quality, subpar oil is only part of the story.  The shale energy companies utilized another tactic to bring in additional funds from the POOR SLOBS in the retail investment community... it"s called equity issuance.  This next chart reveals the annual equity issuance by the U.S. E&P companies:

According to the information in the chart, the U.S. E&P companies will have raised over $100 billion between 2012 and 2017 by issuing new stock to investors.  If we add up the funds borrowed by the U.S. E&P companies (negative free cash flow), plus the stock issuance, we have the following chart:

Thus, the U.S. E&P companies tapped into an additional $212 billion worth of funding over the last six years to produce uneconomical shale oil and gas.  Now, this chart is an approximation based on the negative free cash flow (RED color) from the four top U.S. shale fields and the shale equity issuance (OLIVE color).  So, how much money would these U.S. E&P companies need to make to pay back these funds?

Good question.  If we assume that the U.S. shale oil companies will be able to produce another 10 billion barrels of oil, they would need to make $21 a barrel profit to pay back that $212 billion.  However, they haven"t made any profits in at least the past six years, so why would they make any profits in the next six years?

Okay, now that we understand that the U.S. shale industry has been burning through cash and issuing stock to continue an unprofitable business model, let"s take it a step further.  If we understand that the U.S. shale energy industry is not making enough money from producing the oil and gas, then it also means that it takes more energy to produce it then we are getting from it.  Sounds strange... but true.

We must remember, investors, furnishing U.S. shale energy companies with funds are another way of providing ENERGY.  These U.S. shale energy companies are taking that extra $212 billion (2012-2017) and burning the energy equivalent to produce their oil and gas.  For example, it takes a lot more water to frack oil and gas wells.  To transport the water, we either do it by truck or by pipeline.  While this extra water usage is a Dollar Cost to the shale energy industry, it is really an ENERGY COST.  Think about all the energy it took to either transport the water by truck, or the energy it took to make the pipelines, install them and the energy to pump the water.

Moreover, if we add up all of the additional costs to produce U.S. shale oil and gas, the majority of it comes from burning energy, in one form or another.  Again, investor funds translate to burning energy.  Thus, the U.S. shale industry needs more energy to produce the oil and gas than we get from it in the first place.

Unfortunately, investors don"t see it this way because they do not realize they will never receive their investment back.  It was spent and burned years ago to continue the Great U.S. Shale Energy Ponzi Scheme.

Let me put it in another way.  The U.S. and world economies are based on burning energy.  When we burn energy, we create economic activity and hopefully growth.  If the U.S. shale energy industry needed $212 billion more to produce the oil than they made from operations, then it means it burned more energy than it sent to the market.  Do you see that now??

So, the U.S. shale energy industry is STEALING & SWINDLING energy wherever it can to stay alive.  This is the perfect example of the Falling EROI (Energy Returned On Investment) forcing an industry to CANNABLIZE itself (and the public) to keep from going bankrupt.

Lastly, as time goes by the U.S. shale energy industry will behave like a BLACK HOLE, by sucking more and more energy in to produce even lower and lower quality oil and gas.  At some point, the shale energy industry will collapse upon itself leaving one hell of a mess behind.  While it"s hard to predict the timing of the event, it will likely occur within the next 2-5 years.

Check back for new articles and updates at the SRSrocco Report. 

"My Eyes Popped Out Of My Head": Ohio Woman Receives $284 Billion Electric Bill

The ‘Nightmare Before Christmas’ has nothing on this.

Due to a processing error made by her local power company, one Ohio woman discovered earlier this month – to her abject horror – that she owed Penelec, her power provider, $284 billion, a figure that’s larger than the combined national debts of Hungary and South Africa.

According to The Eerie Times News, Mary Horomanski discovered the error while she was checking her bill online. Initially, she wondered if the hefty charge was due to her Christmas decorations.

“My eyes just about popped out of my head,” said Horomanski, 58. “We had put up Christmas lights and I wondered if we had put them up wrong."

There was, of course, one small silver lining: According to her bill, Horomanski didn’t have to pay the entire $284,460,000 sum until November 2018. Her minimum payment for December was a relatively paltry $28,156. And Penelec hadn’t turned off her electricity – yet.

Fortunately for Horomanski, the issue was quickly resolved when she texted her son, who contacted the power company and told them about the bill. They confirmed that the sum was an error, and that Horomanski owed much, much less. Her online statement was quickly fixed to the correct amount: $284.46.

A spokesman for the power company said he doesn’t know how the error occurred but that it was obviously the result of somebody accidentally moving a decimal point nine digits to the right.

“I can’t recall ever seeing a bill for billions of dollars,” Durbin said. “We appreciate the customer’s willingness to reach out to us about the mistake."

The incident, Horomanski said, prompted her to ask for a different gift from her son this year.

“I told him I want a heart monitor,” she said.

And with that, the Horomanski’s Christmas was saved.  
 

Is U.S. Gasoline Consumption Set To Collapse?

Authored by Tsvetana Paraskova via OilPrice.com,

U.S. individual vehicle miles traveled (VMT) growth has been flat since June 2017, and the potential end of the VMT growth that started in early 2014 may be an indicator of slowing oil consumption, according to government data compiled by Labyrinth Consulting Services, Inc.

(Click to enlarge)

Gasoline is the most consumed petroleum product in the U.S. Last year, motor gasoline consumption averaged about 9.3 million bpd, or 391 million gallons per day - the largest amount recorded and equal to about 47 percent of total U.S. petroleum consumption, data by the EIA shows.

Some 29 percent of all U.S. energy consumption in 2016 was for transporting people and goods from one place to another, the EIA says. Petroleum products provided around 92 percent of the total energy the U.S. transportation sector used last year.

The latest available data by the U.S. Department of Transportation shows that the seasonally adjusted vehicle miles traveled for October 2017 stood at 268 billion miles, a 0.8-percent increase over October 2016, and 0.2-percent growth as compared to September 2017. The cumulative estimate for this year is 2,685 billion vehicle miles of travel.

In its latest Short-Term Energy Outlook (STEO), the EIA said that in November, U.S. regular gasoline retail prices averaged $2.56/gallon, an increase of nearly 6 cents/gal from the average in October, primarily reflecting rising crude oil prices. EIA forecasts the U.S. regular gasoline retail price will average $2.59/gal this month, 34 cents/gal higher than at the same time in 2016. For 2018, EIA expects U.S. regular gasoline retail prices to average $2.51/gal.

Gasoline prices and increases in fuel efficiency are important factors in U.S. gasoline sales that are also highly seasonal, but according to Jill Mislinski at Advisor Perspectives, there are also some significant demographic and cultural dynamics affecting the U.S. gasoline consumption trends.

In a post from November 2017, Advisor Perspectives said that apart from fuel efficiency improvements, declines in gasoline consumption can be attributable in large part to factors such as an aging population leaving the workforce; growing trend toward working from home; social media providing alternatives to face-to-face interaction requiring transportation; a general trend in young adults to drive less; and accelerating urban population growth, which reduces the per-capita dependence on gasoline.  

OPEC vs IEA: Who"s Right On Oil Prices?

Authored by Nick Cunningham via OilPrice.com,

Last week, the International Energy Agency made a lot of OPEC brows furrow when it warned that 2018 may not be a very happy new year for the cartel.

U.S. shale supply, the IEA said in its December Oil Market Report, is set to grow more than OPEC has estimated and this could be the undoing of the production cut that boosted prices this year.

OPEC, for its part, has insisted that U.S. shale production won’t grow as much as the IEA says, baffling some observers who now wonder who they should believe. But let’s put it another way: If the coach of a football team tells you that his team will win the cup because they’re the best, but the football association has estimated that the team is not the best one in the league, who would you believe?

OPEC has a history of underestimating U.S. shale. This underestimation led to the glut that sank prices in 2014. Now it stands to reason that the cartel is more cautious in its estimates of U.S shale oil developments, but this caution does not necessarily have to be reflected in comments. Let’s not forget that comments from OPEC officials—whether or not grounded in facts—have had a direct and immediate effect on prices from events such as the shutdown of the Forties pipeline network last week.

So, it would make sense to lean more towards what the IEA says, and it says that non-OPEC supply next year will probably rise by 1.6 million bpd—a 200,000 bpd upward revision on the previous OMR. U.S. shale production alone will, according to IEA’s latest estimate, grow by 870,000 bpd in 2018. Meanwhile, demand will rise by 1.3 million barrels daily next year, hinting at another glut in the making. 

Now, OPEC’s last forecast is that non-OPEC supply next year will rise by just 990,000 bpd next year to 58.81 million bpd, although the group does caution that any non-OPEC supply growth forecast involves considerable uncertainties regarding U.S. shale production growth. For the U.S. specifically, OPEC forecasts a 1.05-million-barrel daily supply growth next year, which will be partially offset by declines in producers such as Russia, China, and Mexico, among others.

That’s quite a discrepancy between IEA and OPEC figures, but it’s not the only one. The two more notably disagree on when the glut will be over. IEA is skeptical about it disappearing before the end of next year, while OPEC is upbeat, believing the market will return to balance in the second half of 2018 as demand growth accelerates. 

Sometimes OPEC’s forecasts sound like developments that the cartel can will into existence, and this market rebalancing forecast is one of these cases. It’s true that some OPEC members have been very diligent in their compliance to the lower production quotas. Others not so much, so those from the first group have actually cut more than they agreed to in order to compensate for the non-compliant ones.

Can the overachievers continue doing this to ensure the forecast materializes? They can, but they can’t do anything about U.S. shale, and it’s uncertain whether Russia will stay in the agreement after the end of June: Moscow has indicated it would rather quit as soon as politely possible. OPEC also has another problem that’s been there since the original deal, but recently has been garnering more attention. With oil prices higher, how long until one or more OPEC members decide to drop the deal and cash in on the price increase?

Let Them Eat (Yellow)Cake - Where The Uranium Comes From

Uranium is in high demand, as it is used as fuel in nuclear power plants around the world. Statista"s Dyfed Loesche notes that according to the German Institute for Geosciences and Natural Resources BGR, Kazakhstan is the biggest producer of the radioactive metal. The central Asian country produced around 24,600 metric tons of the substance in 2016. This is a share of close to 40 percent of the worldwide production.

You will find more statistics at Statista

Australia comes in at third place with 6,300 metric tons. However, in terms of total resources Australia has the most. Around 1.1 million tons are slumbering in its earths, of which not all can currently be excavated at reasonable costs.

Around the world there are known resources of some 3.5 million tons, so there is no foreseeable shortage.

Until now, the United States is still the biggest consumer of uranium, consuming 18,200 metric tons in 2016 compared to 5,300 tons in China.

However, China"s need for uranium is likely to increase in the future, as of the 61 reactors that are being built in 15 countries worldwide, 21 are located in the People"s Republic. In Namibia, in southeast Africa, the Chinese run Husab pit took up production in 2016, which could become the world"s single biggest uranium production facilities.

Desperate Britain Forced To Import Russian Gas From Sanction-Targeted Project

We said two days ago that it’s been a tough week for anybody who needs to heat their home or put gasoline in their cars in Britain. The litany of negative events and mishaps includes extremely low temperatures, the shutdown of the Forties pipeline due to a hairline crack and an explosion at one of the Europe’s biggest gas hubs in Austria, which further tightened UK supplies.

As we noted, the price of gas futures surged by the most in 8 years. The timing of the gas hub explosion, as we head into Winter, couldn’t have been worse either.

However, adding insult to injury, the UK lacks gas storage capacity and the web of interconnections that link markets across Continental Europe. And…Centrica is closing the nation’s biggest storage site after more than 30 years. The question was, where could the UK secure alternative supplies, as we noted.

It takes about two weeks to bring LNG from Qatar, the U.K.’s biggest supplier of the super-chilled fuel. Only one tanker, the Bu Samra, is confirmed as arriving in the U.K. this month. The first tanker from Russia’s Arctic plant Yamal LNG may also head to Britain and would arrive in about five days, according to shipping website sea-distances.

The photo below shows Russian President, Vladimir Putin, personally giving the order to begin loading the first export shipment of Yamal LNG onto the world’s first icebreaking LNG carrier, the Christophe de Margerie.

The destination of the LNG carrier was expected to be Asia, but will actually be Britain, even though the British government backed US sanctions against the project. Indeed, Novatek, which operates Yamal had to perform “financial gymnastics” after the US Treasury cut it off from western financing in 2014. To overcome this challenge, the company converted the funding of the $27bn project into euros and secured a $12bn loan from Chinese banks. As the Financial Times reports.

British homes are set to be heated over the new year with gas from a Russian project targeted by US sanctions, as the shutdown of a key North Sea pipeline slashes domestic output and sends utilities and traders scrambling for supplies. The first tanker of liquefied natural gas from the Yamal LNG project in Russia’s Arctic, which was opened by President Vladimir Putin last week, is making its way to the Isle of Grain import terminal in Kent as UK gas prices soar.

The shipment of the super-chilled cargo to the UK, which was originally expected to go to Asia, will be cheered in the Kremlin, where the Yamal LNG project has been held up as evidence that it can withstand western sanctions. Moscow has insisted that Europe will remain reliant on Russia for gas. The UK government has taken a tough line on Russian sanctions since Moscow first intervened in Ukraine nearly four years ago, and Theresa May, prime minister, has stepped up criticisms more recently, accusing Moscow of meddling in elections and attempting to “weaponise information” to undermine the west.

As the FT notes, it’s not unusual for the UK to import small volumes of Russian gas by pipelines through other European countries, however, the arrival of the Christophe de Margerie LNG tanker will be the first Russian delivery to arrive by ship. Neither the UK or EU sanctions specifically target Yamal LNG, although they have targeted finance and technology for other Russian energy projects in the wake of Russia’s annexing of Crimea in 2014. The FT quoted an unnamed official close to the Russian energy ministry saying that the UK’s decision to back US sanctions, including ones targeting Yamal LNG, looks like “someone biting the hand that feeds him”. So, given the embarrassing position the UK has found itself in, what is its response? According to the FT.

Britain’s Department of Business, Energy and Industrial Strategy (BEIS), which has argued that gas supplies will still be ample this winter because of the UK’s import capacity, emphasised that 80 per cent of the gas consumed in the UK is domestic or bought from Norway or Qatar. BEIS said that it was up to the market to decide what gas to import. The LNG cargo has been bought by the London-based trading arm of Malaysia’s Petronas, which did not respond to requests for comment. “Whether this liquefied natural gas shipment is eventually consumed in the UK is down to the market,” BEIS said. “But we can only benefit from having a diverse range of supplies.”

So, using a third party gives the UK leeway to say, essentially “It’s not me, Guv’nor”, to use the cockney vernacular.

The FT asked an analyst at the respected Wood Mackenzie consultancy for his opinion.

Frank Harris at Wood Mackenzie, an Edinburgh-based energy consultancy, said that the shipment demonstrated that the UK was now reliant on a market-based import model for its gas supplies. “There’s great flexibility in that model, but ultimately you’re competing with other countries on price for supplies,” Mr Harris said.

Having been loaded last Friday, the Christophe de Margerie is currently sailing past the northern coast of Norway. As commentators are pointing out, it could still be redirected if someone is willing to pay a higher price for its gas. The way the UK’s luck has gone recently, that’s probably a pretty good bet.

 

Top Nuclear Official Agrees With Senator Who Says Obama Admin "Misled" On Uranium One Deal

Nuclear Regulatory Commission (NRC) Kristine Svinicki responded to questions raised by Senator John Barrasso (R-WY) regarding a key aspect of the Uranium One deal, agreeing that the Obama Administration had not "fully depicted" the complexity of the transaction which ultimately gave the Kremlin control over 20% of US uranium. 

“I would note that, as your letter makes clear, the responses you have received have not fully depicted the complexity of this issue” -Kristine Svinicki, NRC Chair

Svinicki"s response fell short of agreeing with Barrasso that he had been "misled" over the deal to export yellowcake uranium from the Senator"s home state of Wyoming out of the country.

Barrasso says he was given "misleading" answers on whether or not Russian mined US uranium would be allowed to leave the country, based on revelations from The Hill which revealed the Obama administration allowed the uranium to leave the country by "piggy-backing" onto an export license held by shipping company, RSB Logistic Services Inc. 

Rep. John Barrasso (R-WY)

In a Monday letter to the NRC and the Energy Department, Barrasso wrote:

Prior to the approval of the sale [of Uranium One], I wrote to then-President Barack Obama registering my strong concerns regarding Russian control over American uranium production facilities and Russia"s ability to ship U.S. uranium overseas. I also requested immediate notification should ARMZ file for a license to export U.S. uranium. Based on information that has recently come to light, I now believe the response I received, and the process by which I received it, were both misleading.

 

On March 21, 2011, former NRC Chairman Greg Jaczko responded to my letter on behalf of then-President Obama stating:

 ‘At this time, neither Uranium One Inc. nor ARMZ holds a specific NRC export license. In order to export uranium from the United States, Uranium One, Inc. or 

ARMZ would need to apply for and obtain a specific NRC license authorizing the export of uranium for use in reactor fuel’

 

The NRC staff made a similar statement in their recommendation to approve the transfer control of Uranium One to ARMZ, stating: 

 

 "before the licensee may export uranium to a foreign country, they must first comply with the NRC"s regulations and seek a specific license for such purpose."

 

Recent reporting by The Hill uncovered that Uranium One was able to export uranium without obtaining a specific export license. Beginning in 2012, Uranium One exported U.S. uranium by ‘piggy-backing’ as a supplier on an export license held by the shipping company, RSB Logistic Services Inc.

Barrasso originally wrote to the Obama administration in 2010 with concerns over Russia"s ability to export uranium overseas. In 2011, Obama-appointed NRC chairman Gregory Jaczko off the letter, noting the company would need an export license.

Barrasso says this was misleading during a Wednesday Senate hearing, stating “I specifically raised concerns about future exports of U.S. uranium by Uranium One,” adding “I believe the Obama administration’s response to my letter was at best misleading.”

Following Barrasso"s comments, the chairman of the Senate Committee on Environment and Public Works requested that the NRC and the Energy Department produce documents related to the Obama administration"s response to the 2010 letter. Barrasso says he has evidence that the Energy Department misled him on their role in approving the uranium exports, and pointed out the enormous loophole which allowed Uranium One to export without a license. 

“Uranium One did not need a specific NRC license to export U.S. uranium,” said Barrasso, adding “Instead, Uranium One only needed to be, and later was, listed as a supplier on a transport company’s NRC export license.”

The New York Times covered the Uranium One story in 2015, detailing donations which poured into the Clinton Foundation from individuals associated with the deal - which was later found to be upwards of $140 million. Meanwhile, a series of follow-up reports from The Hill have filled in the gaps with several bombshells, including: 

• The FBI had a mole deep within the Russian uranium industry who gathered evidence of millions of dollars routed to  the Clinton Foundation by Russian nuclear officials. 


• The mole says there is a video showing Russians stuffing a briefcase full of bribe money, joking about Americans.


• Bill Clinton met with Russian President Vladimir Putin at his Moscow estate right before the Uranium One deal was approved, which was the same day he collected a $500,000 check for a speech to a Russian investment bank which issued a favorable rating to Uranium One stock. 

As he prepared to collect a $500,000 payday in Moscow in 2010, Bill Clinton sought clearance from the State Department to meet with a key board director of the Russian nuclear energy firm Rosatom — which at the time needed the Obama administration’s approval for a controversial uranium deal, government records show.

 

Arkady Dvorkovich, a top aide to then-Russian President Dmitri Medvedev and one of the highest-ranking government officials to serve on Rosatom’s board of supervisors, was listed on a May 14, 2010, email as one of 15 Russians the former president wanted to meet during a late June 2010 trip, the documents show.

 

“In the context of a possible trip to Russia at the end of June, WJC is being asked to see the business/government folks below. Would State have concerns about WJC seeing any of these folks,” Clinton Foundation foreign policy adviser Amitabh Desai wrote the State Department on May 14, 2010, using the former president’s initials and forwarding the list of names to former Secretary of State Hillary Clinton’s team. -The Hill

• There was an internal scramble at the FBI to preserve records from all of the agencies which approved the Uranium One deal, as uncovered by Twitter user "Katica" after pouring through emails obtained via FOIA request. 

The agencies which received the request included the Nuclear Regulatory Commission, the U.S. Dept. of Treasury, the Office of Director of National Intelligence (ODNI James Clapper), The National Counter Terrorism Center, and the U.S. Department of Energy (DOE).

 

Five days after the initial request, the same FBI agent sent another round of notifications to the same agencies, adding the National Security Agency (NSA) and the U.S. Secret Service (USSS).

The next day, September 3rd, 2015, three more agencies were added to the preservation request: The CIA, the Defense Intelligence Agency (DIA) and the Department of Defense (DOD)

 

At this point, every single member of the Committee on Foreign Investment in the United States (CFIUS) which signed off on the Uranium One deal was served with a notice to preserve records. 

There is so much more to the deal involving players like Tony Podesta, Paul Manafort, and various members of the Obama administration - one wonders if, and when, the dam will ever break under the overwhelming weight of malfeasance - sending waves of corrupt politicians and lobbyists down the drain. 

Huge Hub Explosion Sparks Surge In UK NatGas Prices

It has been a tough week already for those that heat their homes in Britain (and those that trade Natural Gas). Following extreme weather warnings and the forties pipeline crack shutdown, an explosion at one of the Europe’s biggest gas hubs further tightened supplies sending gas futures prices up by the most in 8 years.

As Bloomberg reports, gas futures rose the most in more than eight years in Britain, which already is struggling to absorb the impact of a crack that shut down a North Sea pipeline network. After snow fell for two days in London, cooler-than-normal temperatures spread from the Alps to Scandinavia, raising demand for heating fuels.

An explosion at around 9am at Austria’s main gas pipeline hub, left one person dead and 18 injured, according to police.

The facility about 50 kilometers (31 miles) northeast of Vienna transports the equivalent of a 10th of Europe’s gas demand.

Fire engines, ambulances and a rescue helicopter have reportedly been deployed to the area, and all work has been halted at the site.

"Eighteen people are injured and one is dead," police chief Markus Haindl said, as quoted by Sputnik.

 

 

He added that "technical problems" caused the explosion, and that there was "no indication of terrorism."

Several media outlets previously put the number of people injured at around 60.

”It is the worst possible time for a big gas hub to burn, since capacity is needed ahead of the winter and it changes the expectations of how much gas there will be available,” said Arne Bergvik, the chief analyst at Swedish utility Jamtkraft AB.

 

“If weather turns colder and capacity is unavailable, it will absolutely drive up power prices.”

Britain felt the threat most acutely, since it lacks the gas storage sites and web of interconnections that link markets across continental Europe. As Bloomberg concludes, U.K. is more vulnerable than normal this winter because Centrica Plc is closing the nation’s biggest storage site after more than 30 years. The Rough facility was able to meet as much as 10 percent of peak winter demand but that is now much reduced as it pumps out its last remaining fuel.

It takes about two weeks to bring LNG from Qatar, the U.K.’s biggest supplier of the super-chilled fuel. Only one tanker, the Bu Samra, is confirmed as arriving in the U.K. this month. The first tanker from Russia’s Arctic plant Yamal LNG may also head to Britain and would arrive in about five days, according to shipping website sea-distances.

“Gas demand is at above average levels because of the cold snap,” he said by email, estimating the shortfall of supply from the Forties outage at about 10 percent of average winter demand. “If outages persist, prices will remain high for some time.”

About That Sensationalist Bitcoin Electrical Consumption Story

Authored by Charles Hugh Smith via OfTwoMinds blog,

Check the context before uncritically accepting sensationalist conclusions.

Let"s start with a primer on how to write a sensationalist story that can be passed off as "journalism:"

1. Locate credible-sounding data that can be de-contextualized, i.e. sensationalized.

 

2. Present the data as "fact" rather than data that requires verification by disinterested researchers.

 

3. Exaggerate the data as much as possible and set the tone and context with emotionally laden words: "shocking," etc.

 

4. Select a context that sensationalizes the conclusion.

Now let"s take a look at a story that has been swallowed whole, with little to no fact-checking or disinterested inquiry: bitcoin"s electrical consumption, i.e. the electricity consumed by mining/maintaining bitcoin"s blockchain.

One Bitcoin Transaction Now Uses as Much Energy as Your House in a Week

Let"s start by stipulating that energy consumption is a consequential matter worthy of serious inquiry. It"s important to measure the energy consumption of all the systems that operate within the current status quo, and compare the consumption levels of these systems.

With that in mind, let"s take a look at the story.

Right off the bat, the context we"re offered to grasp the enormity of bitcoin"s mining consumption is the electrical consumption of Nigeria, a nation, we"re breathlessly informed, with 186 million residents. Wow! That"s a crazy amount of electrical consumption, right?

Let"s do some very basic fact-checking before we accept sensationalist conclusions, shall we?

Nigeria consumes about 24 billion kWh annually, while the U.S. consumes 3,913 billion kWh annually.

So Nigeria uses 3/5th of 1% (0.6%) of the electricity the U.S. consumes.

Now let"s compare that electrical consumption with the amount of electricity consumed in the U.S. by residential devices and chargers on stand-by, i.e. appliances, devices, chargers, gizmos, etc. that aren"t in use and doing no work but that are still consuming electricity.

About a quarter of all residential energy consumption is used on devices in idle power mode, according to a study of Northern California by the Natural Resources Defense Council. That means that devices that are “off” or in standby or sleep mode can use up to the equivalent of 50 large power plants’ worth of electricity and cost more than $19 billion in electricity bills every year.

source: Just How Much Power Do Your Electronics Use When They Are ‘Off’? (May 7, 2016, New York Times)

(Please read the article to find out just how much power the 50+ gadgets in your home consume doing absolutely zero work.)

According to the U.S. Energy Information Administration, annual residential electrical consumption totals 1,410 billion kWh.

So 25% (the amount of household electricity consumed by stand-by devices) of 1,410 billion equals 352 billion kWh consumed annually by residential appliances and devices on stand-by in the U.S.

Now let"s compare the annual electrical consumption of Nigeria (24 B kWh) with the annual residential electrical consumption of devices on stand-by in the U.S.

The annual electrical consumption of Nigeria (24 B kWh) is 6.8% of the annual electrical consumed by household devices on stand-by in the U.S. That means the supposed consumption of bitcoin mining is 1/14th of the power lost to residential devices on stand-by in the U.S., devices doing essentially nothing.

Now let"s add in all the appliances and devices in government and private-sector offices on stand-by. Let"s conservatively estimate another 150 B kWh lost to all this stuff on stand-by.

Now let"s multiply the total of electricity lost to stuff on stand-by mode (doing no work whatsoever) in the U.S., 500 B kWh annually, by five, since the U.S. consumes roughly 20% of all electricity globally.

Electricity production 2016 (Enerdata)

The United States’ share of world energy consumption (EIA)

This gives us an estimate of all the electrical power lost to electrical appliances and devices on stand-by globally every year: 2,500 billion kHh. 1% of that wasted electricity is 25 billion kHh. If you reckon this seems high, let"s shave these totals to 1,500 billion kHh and 15 billion kHh.

Let"s go back to the story about bitcoin"s consumption of electricity which tells us "a shocking 215 kilowatt-hours (KWh) of juice (is) used by miners for each Bitcoin transaction."

But then a few paragraphs down, we discover the electricity per transaction might only be 77 kWh-- nobody really knows for sure. Hmm. 77 is 36% of 215, so the "shocking" consumption might overstate actual consumption by a factor of three?

Let"s choose a number between 77 and the "shocking" 215, since nobody really knows what the real number is: shall we guesstimate 135, or 2/3 of the high guesstimate? That would drop the annual consumption of bitcoin mining from 24 B kWh annually to 15 B kWh, less than 1% of the electricity wasted annually on stand-by devices doing no work whatsoever.

And so, um, bitcoin mining is a threat to the planet because it consumes less than 1% of all the electricity squandered by appliances and devices on stand-by? If we want to stop wasting so much energy, perhaps we should start by mandating near-zero stand-by power consumption for the hundreds of millions of devices which are not in use that are nonetheless sucking up electricity every second of every day.

Here"s another thought: check the context before uncritically accepting sensationalist conclusions.

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com. Check out both of my new books, Inequality and the Collapse of Privilege ($3.95 Kindle, $8.95 print) and Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle, $8.95 print, $5.95 audiobook) For more, please visit the OTM essentials website.

Why Bitcoin-Mining May Be Elon Musk"s Next Big Problem...

If you thought Tesla was burning cash now, wait until this latest scheme goes mainstream...

As EcoMotoringNews.com reports, some creative Tesla owners came up with a way to make a few bucks from their parked EVs: Cryptocurrency mining.

This raises questions that shouldn’t just be aimed at bitcoin mining, or even electric vehicles.

For those unfamiliar, cryptocurrencies only work because there is a network of distributed computing that processes the transactions. To reward those offering the computing power, cryptocurrencies give fractions of new bitcoins to those who did the work of running the network. This is referred to as “mining” bitcoins and other cryptocurrencies. This was an expensive and power-hungry task that could wear out computer components much faster than usual.

Initially, many doing this used high-end graphics processing units, but as the money earned per device diminished, miners turned to specialized computer units, called ASICs, to do the task faster with less electricity. But the units are still not free and they still can use kilowatts of electricity for a handful of them. To reduce the overall cost of running mining computers, some miners put the computers throughout their homes to act as small space heaters and reduce their heating bill. Others run their rigs on solar panels to avoid a monthly power cost.

Any source of electricity you don’t have to pay the normal rate for, or that you don’t have to pay for at all, is an opportunity for miners to increase their already thin profits. Teslas and other EVs have free access to power at many charging stations, so it was probably only a matter of time until somebody decided to plug their mining computers in.

One member of the Tesla Owners Worldwide on Facebook suggested the idea, possibly in jest. Then another owner went ahead and did it, posting a photo of his setup (above). Some members suggested that his setup could pull as much as 3 kilowatts of power and would probably require the vehicle’s air conditioning to be on for cooling. Other members raised ethical questions.

Is it stealing to use the power for something other than driving?

On the one hand, this could be a good way to offset the cost of owning an electric vehicle. On the other hand, it lowers the efficiency of the vehicle and increases the environmental impact. But then again, the mining was going to be done somewhere anyway, so does it really? Will many EV owners do this? Will they do it at places they were going to charge anyway, or will there be opportunistic fleets of EVs blocking up charging stations to make a quick buck? How will charging station owners respond?

But really, these questions shouldn’t just be aimed at bitcoin mining. Computing power is going to be in higher and higher demand going forward. Self-driving cars are already running on graphics processing units like bitcoin miners once all used. Infotainment systems are getting more and more powerful, and that power needs to come from somewhere. Mobile devices used by passengers are going to need more and more power to charge. Even beyond that, there are “V2H” systems that can run a house on an electric vehicle’s battery, and that goes far beyond the tiny bit of power needed to run a few mining computers.

And these questions shouldn’t just be applied to electric vehicles. Many of these power strains will apply to hybrid, regular gas and regular diesel vehicles. Alternators, the parts that charge most car’s 12v batteries, are already a big part of the car’s fuel consumption. Ecomodding hobbyists have gained as much as 15% fuel efficiency by removing them, and that amount is only going to grow as more demand is placed on it. Some companies are suggesting waste heat recovery to generate the electricity needed for the future.

When we look at these wider power issues, it becomes clear that bitcoin mining is just a drop in the bucket. Even if a large number of EV owners did it, it would still be nothing compared to the other computing future cars will eventually be doing. Where that power is going to come from is a good question we shouldn’t just be aiming at the odd bitcoin miner.

OPEC, Russia Said To Announce Oil Pact Extension On Nov 30

Authored by Tsvetana Paraskova via OilPrice.com,

Saudi Arabia and Russia have agreed that OPEC and non-OPEC allies should announce an extension of the cuts at the highly-anticipated meeting in Vienna on November 30, Bloomberg reported on Friday, quoting people involved in the talks.

Recent OPEC/non-OPEC oil pact chatter had it that Saudi Arabia was pushing for an announcement of the cuts extension next week in Vienna, while Russia was more hesitant about telling the market on November 30 how the participants in the deal would act. Russia appeared to be stalling and playing for an announcement to be issued closer to the current expiration deadline of the deal, March 2018.

According to Bloomberg’s sources, now Russia and Saudi Arabia have agreed on the need to announce some sort of a deal next week, but Russia has insisted on additional phrasing in the extension deal that would link the size of the cuts to the state of the oil market.

While OPEC and Russia have agreed on a general framework, discussions are ongoing as to how OPEC could meet Russia’s demands, including how to include a link between the size of the cuts and the state of the rebalancing of the oil market. There are also discussions about including an option to review the pact again in early 2018, including calling a new meeting, according to Bloomberg’s sources.

As of last week, not all Russian oil companies were on board with extending the cuts, and they were said to have discussed a six-month extension with Energy Minister Alexander Novak.

Novak, for his part, said on Friday in a television interview posted on the energy ministry’s website that some 50 percent of the global oil oversupply had been erased and Brent prices had risen to an “acceptable enough” level of more than $60 a barrel.

Nevertheless, the oil market is not yet balanced and the pact needs to be extended, Novak said, adding that Russia supports an extension, and various options are being discussed.

Details will be discussed at the Vienna meeting next week, he noted. 

 

Nebraska Regulators Approve Keystone Pipeline Route Days After South Dakota Leak, Shutdown

TransCanada received its final required pipeline route approval, winning Nebraska’s permission to build its long-delayed Keystone XL crude oil pipeline across the state... just days after a 5,000 barrel spill in South Dakota shut the pipeline.

The decision will almost certainly be challenged in court.

Just a few short days after 210,000 gallons of crude oil spilled in South Dakota, Bloomberg reports that Nebraska"s Public Service Commission voted three to two Monday, removing one of the last hurdles to the Calgary-based company’s construction of the $8 billion, 1,179-mile conduit (1,897-kilometer), which has been on its drawing boards since 2008.

For those who aren"t familiar with the project, the pipeline links Canada’s Alberta oil sands to U.S. refineries.  While a portion of the pipeline has been operating, part of it had still not been approved by state regulators... until today"s decision by Nebraska.

However, as Bloomberg notes, the commission approved an alternative route.

Jane Kleeb, president of the environmental advocacy group Bold Alliance, said green-lighting an alternative route may have helped the commission reach a "middle ground solution.”

 

At the same time it opens new questions that she said her group would explore in federal court. She argued the secondary route wasn’t adequately vetted.

 

That view mirrored a dissenting opinion filed by Commissioner Crystal Rhoades. She wrote that TransCanada didn’t meet "the burden of proof” in proving that the pipeline is in the state’s public interest, and she said the alternative route needed more study on both the state and federal level. For example, she said, Nebraska’s Department of Environmental Quality didn’t analyze the alternative route at all in its 2013 report.

 

"It is clear” TransCanada “never intended it to be considered," Rhoades said.

 

In its post-hearing brief, TransCanada told the panel its "preferred route was the product of literally years of study, analysis and refinement by Keystone, federal agencies and Nebraska agencies," and that no alternate route, even one paralleling the Keystone mainline as the approved path does, was truly comparable.

TransCanada"s share price is up on the news...

Notably, with Nebraska’s go-ahead in hand, TransCanada still must formally decide whether to proceed with construction on the line, which would send crude from Hardisty, Alberta, through Montana and South Dakota to Nebraska, where it will connect to pipelines leading to U.S. Gulf Coast refineries. The company’s open season for gauging producers’ interest closed late last month, and TransCanada executives have indicated that they’ve secured enough shipping commitments to make the project commercially worthwhile.