Thursday, March 29, 2012

U.S. consumption of electricity will fall during 2012

U.S. Electricity Consumption

EIA expects total U.S. consumption of electricity will fall slightly during 2012, and then grow by 1.9 percent during 2013 (U.S. Total Electricity Consumption Chart). Growth in retail sales of electricity to the commercial and industrial sectors during 2012 of 0.7 percent and 0.8 percent, respectively, will be offset by a 2.1 percent decline in residential sector consumption. Residential consumption falls this year as a result of milder weather compared with last year. EIA estimates that U.S. residential electricity consumption during January and February was about 9 percent lower than during the same months of 2011, primarily because of the 17-percent decline in heating degree-days nationwide. Similarly, the projected 15-percent year-over-year decline in U.S. cooling degree-days this year is expected to lead to reduced electricity demand this summer. The total number of U.S. households is expected to grow by 1.4 percent during 2013, which would be the highest growth rate since 1998.

U.S. Electricity Generation

Recent data show that the trend in displacing coal with natural gas as a generation fuel has accelerated in response to the current low price of natural gas delivered to electric generators. U.S. generation fueled by natural gas in December 2011 was 11.6 percent higher than in December 2010. In contrast, coal-fired generation declined by 20.7 percent over the same period. EIA expects this fuel displacement pattern to continue at least through the first half of 2012, causing the annual average share of total generation fueled by natural gas to rise from 24.8 percent in 2011 to 27.1 percent for 2012. As delivered natural gas prices begin increasing later this year, in response to higher demand and flattening growth in production, EIA expects the trend in fuel displacement will reverse slightly in 2013, with natural gas’ share of U.S. generation falling back to an annual average of 26.1 percent (U.S. Electricity Generation Chart).

U.S. Electricity Generation by Fuel, All Sectors

U.S. Electricity Retail Prices

The price of natural gas delivered to electric generators is estimated to have averaged about $3.30 per MMBtu in February 2012, which would be its lowest nominal value in 10 years. EIA expects these low fuel costs to be passed through to residential electricity consumers over the next two years. Average U.S. residential electricity prices are forecast to rise by 0.4 percent in 2012, and then fall by 0.9 percent in 2013 (U.S. Residential Electricity Prices Chart). These growth rates compare with an average annual increase of 2.6 percent during the past five years.

U.S. Electricity Retail Prices

Tuesday, March 27, 2012

U.S. coal production falls in 2012

U.S Weekly Coal Production

Coal production the week ending March 10, 2012 was below the five-year range and 10% lower than the week ending March 12, 2011, according to weekly preliminary estimates from the U.S. Energy Information Administration and the latest quarterly production data from Mine Safety and Health Administration (MSHA). Warm weather this winter along with high stockpile levels and strong competition from natural gas depressed demand for coal by U.S. electric generators, which accounted for over 93% of total domestic coal use in the first nine months of 2011.
Production declines were most pronounced in Appalachian coal basins where some mine operators (including Consol EnergyRoyal Coal Corporation, and Alpha Natural Resources) have chosen to idle mines in the face of weakened demand.

U.S Coal Production Map

Coal production rose slightly in 2011, driven largely by exports of bituminous coal from the Appalachian and Interior regions to Asian markets. Flooding in early 2011 disrupted the coal mining industry in Australia, the world's largest coal exporter. Australian production, however, returned to near pre-flood levels during the second quarter of 2011, dampening demand for U.S. coal on the world market.

U.S Weekly Coal Production by Basin

As of January 1, 2011, the DRB was estimated to contain 485 billion short tons. In the United States, coal resources are larger than remaining natural gas and oil resources. Annually, EIA reports remaining tons of coal in the demonstrated reserve base (DRB), which is comprised of coal resources that have been identified to specified levels of accuracy and may support economic mining under current technologies.

Between 1990 and 1999, EIA obtained updated coal reserves information and data largely through its Coal Reserves Data Base (CRDB) program. That program encouraged State agencies to revise coal resource and reserves estimates in their respective States. These revised coal reserve estimates include improved analyses of coal quality, accessibility, and recoverability in the study areas. EIA used these new data to revise the DRB.

EIA initiated a new coal reserves project in 2008 to incorporate existing reserves data into a geographic information system (GIS) based program. This system will include existing data, plus U.S. Geological Survey data, particularly for the Powder River Basin area of Montana and Wyoming.

Recovery rates vary greatly between underground and surface mining. The actual proportion of coal resources that can be recovered economically from undisturbed deposits varies from less than 40 percent in some underground mines to more than 90 percent at some surface mines. In some underground mines, by design a portion of the coal is left intact as pillars to protect against surface collapse. Adverse geologic features in a mining area, such as folding, faulting, and inter-layered rock strata, can limit the amount of coal recovered at some underground and surface mines.

Access to some coal is limited. Because of property rights, land use conflicts, and physical and environmental restrictions, EIA has estimated that only about 50 percent of the demonstrated reserve base (DRB) may be available or accessible for mining.

EIA annually estimates recoverable coal reserves by adjusting the DRB to reflect accessibility and recovery rates in mining. As of January 1, 2011, EIA estimated that the remaining U.S. recoverable coal reserves totaled over 259 billion short tons (a short ton is a unit of weight equal to 2,000 pounds), from a demonstrated reserve base of 485 billion short tons.

Recoverable coal reserves at producing mines represent the quantity of coal that can be recovered (i.e. mined) from existing coal reserves at reporting mines. These reserves essentially reflect the working inventory at producing mines. In 2010, the recoverable reserves at producing mines were 17.9 billion short tons. EIA conducts an annual survey, Form EIA-7A, “Coal Production and Preparation Report,” to gather and report the quantity of recoverable coal reserves at producing mines.

There are four major ranks of coal in the U.S. classification scheme. In the United States, coal rank is classified according to its heating value, its fixed carbon and volatile matter content, and, to some extent, its caking properties during combustion. The coal ranks from highest to lowest in heating value are:
  • anthracite
  • bituminous
  • subbituminous
  • lignite

Of the four ranks, bituminous coal accounts for over half (53.1 percent) of the demonstrated reserve base (DRB). Bituminous coal is concentrated primarily east of the Mississippi River, with the greatest amounts in Illinois, Kentucky, and West Virginia.

All subbituminous coal (36.5 percent of the DRB) is west of the Mississippi River. Most subbituminous coal is in Montana and Wyoming.

Lignite, the lowest-rank coal, accounts for about 8.8 percent of the DRB. Lignite is found mostly in Montana, Texas, and North Dakota.

Anthracite, the highest-rank coal, makes up only 1.5 percent of the DRB.
 Anthracite is concentrated almost entirely in northeastern Pennsylvania

Friday, March 23, 2012

Bolivia Energy Report

Hydrocarbons are an important element of the economy of Bolivia, one of the poorest and least developed countries in Latin America. Though Bolivia exports natural gas to Brazil and Argentina, continued questions about the actual size of its proved natural gas reserves have contributed to skepticism about the country's potential to be a significant fossil fuel producer and regional energy hub. Political risk also has characterized the energy sector and foreign involvement in it. Bolivia has asserted greater state control over the energy sector since President Evo Morales and his Movimiento al Socialismo (MAS) party assumed power in January 2006 and issued a nationalization decree in May of that year.

Map of Bolivia

Hydrocarbons, primarily natural gas, account for roughly 10 percent of Bolivia's gross domestic product, 30 percent of government revenues, and 40 percent of export earnings. The state-owned oil company and private companies claimed to invest around $800 million in Bolivia's hydrocarbon sector in 2010, an increase of over 30 percent from 2009.

Bolivia's known fossil fuel endowment is largely concentrated in southern and eastern departments, which have been controlled by opposition parties that demand greater autonomy from the federal government – partly in order to increase investment in and revenues from the hydrocarbon sector.

Petroleum is responsible for roughly half of Bolivia's primary energy consumption, with most of the remainder attributable to natural gas. According to the International Energy Agency, combustible renewables and waste meet nearly 15 percent of the country's energy needs. Traditional biomass is an important fuel for heating and cooking, especially for the 2.2 million Bolivians who lack access to electricity. The electrification rate of 77.5 percent masks enormous disparities for urban and rural populations: more than 98 percent of city dwellers have access to electricity, compared to just 38 percent of those in rural areas.



Historically, Bolivian oil consumption and production had been strongly correlated. Domestic production satisfied most of the country’s demand, with a small surplus devoted to exports. Following the sector’s reorganization, oil production declined by nearly one-quarter between 2007 and 2009 and Bolivia transitioned from the status of a net exporter to a net importer of petroleum. Bolivian oil production rebounded appreciably in 2010. Statistics from the state-owned oil company suggest that increased production of natural gas liquids more than offset declines in crude oil production.

Bolivia Oil Production and Consumption 

Bolivian officials have stated that fuel subsidies, which have frozen the prices of gasoline and diesel at around $2 per gallon, cost the government $1.5 billion over the last five years. An attempt to reform subsidies in December 2010 was quickly aborted after large-scale protests erupted in response to a roughly 75-percent rise in the prices of some transportation fuels.


Bolivia has proven oil reserves of 465 million barrels, according to Oil & Gas Journal. Estimates of Bolivia’s proven reserves have been relatively consistent since the early 2000s, when they increased three-fold due to heightened exploration activity. Bolivia has only the sixth-largest oil reserves in South America and ranks among the smallest reserve-holders in the world. The country claims another 391 million barrels of probable reserves and 255 million barrels of possible reserves.

South American Oil Production and Reserves

Exploration and Production

Bolivia's production of crude oil, including lease condensate, was slightly below 43,000 barrels per day (bbl/d) in 2010. Total Bolivian oil production – which also includes natural gas plant liquids, other liquids, and refinery processing gain – was almost 54,000 bbl/d in 2010.

According to official Bolivian statistics, more than half of the country's oil production is driven by two fields – Sabalo (36.6 percent) and San Alberto (20.6 percent). They are primarily natural gas fields that produce associated lease condensate. Tarija, which claims those two fields, dominates liquids production (70 percent), followed by the departments of Cochabamba (15 percent), Santa Cruz (12 percent), and Chuquisaca (3 percent). As operator of the Sabalo and San Alberto fields, Petrobras's Bolivian subsidiary was responsible for nearly 60 percent of the country's 2010 liquids production. Other significant operators include Repsol YPF (18 percent of 2010 liquids production) and two subsidiaries of the national oil company – YPFB Chaco (11.9 percent) and YPFB Andina (5.5 percent).

Though specifics have not been finalized, the government plans to unveil policies to encourage new investment and stimulate hydrocarbon exploration and production. There have been proposals to fully reimburse private producers for their exploration costs if they find new reserves of oil or gas, or increase the price paid to private firms for each barrel of oil produced. Foreign investment in the sector has stagnated as profit margins have narrowed and the international price of oil has diverged from the price that the Bolivian government is willing to offer, which has been frozen at $27 per barrel.


The state-owned YPFB Transporte controls the majority of Bolivia's petroleum transportation network. It operates more than 1,242 miles (2,000 kilometers) of pipelines – capable of carrying crude oil, condensate, natural gas liquids, and intermediate products – that connect centers of production with the departments of Cochabamba, Oruro, and La Paz.

Major Bolivian Oil Pipelines

Bolivia Oil Pipelines

Source: YPFB Transporte, Ministerio de Hidrocarburos y Energía

CLHB S.A. Nacionalizada, another component of the national oil company, operates a separate network of petroleum product pipelines that total about 932 miles (1,500 km).

An international oil pipeline connects the northwestern terminus of the domestic pipeline network with Arica, Chile. In the south, the YPFB Transporte network terminates at the border between Yacuiba, Bolivia and Pocitos, Argentina.


Though it is a net oil importer, Bolivia produces reconstituted crude for occasional export through the pipeline to Arica, Chile. It exported an average of less than 10,000 bbl/d during the nine months in which the pipeline flowed in 2010.


Bolivia's refining capacity is roughly equivalent to its current crude output. YPFB Refinación S.A. is the state-owned subsidiary that operates the country's two largest refineries. Nearly 60 percent of Bolivia's 2010 refinery output came from the Gualberto Villarroel refinery in Cochabamba, which has 25,000 bbl/d of crude oil refining capacity according to Oil & Gas Journal. The Guillermo Elder Bell refinery in Santa Cruz processed over 15,000 bbl/d in 2010. The combined output from YPFB Refinación's two refineries satisfies all internal demand for gasoline, jet fuel, and kerosene, 55 percent of domestic diesel consumption, and 20 percent of liquefied petroleum gas consumption. YPFB has announced plans to boost capacity from 43,600 bbl/d to 57,000 bbl/d over the next few years. The government also reports output from two much smaller refineries in Santa Cruz, Oro Negro and Parapetí.

Sector Organization

The state-owned oil company, Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) controls, oversees, or executes all activities in the country's oil and gas sector. YPFB has absorbed various private firms that were nationalized and now act as subsidiaries of the national oil company, such as YPFB Andina, YPFB Chaco, and YPFB Transporte (formerly Transredes). YPFB Petroandina was created as a 60-40 joint venture between YPFB and PDVSA (the Venezuelan national oil company).

While YPFB leads the oil and gas sector, private companies often act as operators and lend important expertise, services, and capital. For those firms that were not nationalized, the government imposed significantly higher royalties and eliminated the “risk-sharing” contracts that conferred ownership rights over resources to private companies. Instead, private companies surrender production to YPFB in exchange for a fee.

The Ministerio de Hidrocarburos y Energía (MHE, Ministry of Hydrocarbons and Energy) is the planning and policymaking body that has overseen the industry's restructuring, augmented state control over the energy sector, and attempted to revitalize hydrocarbon exploration, production, and processing. The Agencia Nacional de Hidrocarburos (National Hydrocarbons Agency) has regulatory oversight over the supply and disposition of oil and gas.

Natural Gas


Among mainland South American countries, Bolivia trails only Argentina and Venezuela in terms of natural gas production. Its production volumes have risen dramatically since 1999, when natural gas exports to Brazil began. 

Bolivia Natural Gas Production and Consumption

The development and disposition of Bolivia’s natural gas has been a source of considerable controversy. Violent unrest and government crackdowns in late 2003 became known as the “Gas Wars” because they were precipitated by opposition to a plan to export liquefied natural gas (LNG) via Chile, with which Bolivia has had troubled relations since it lost its sovereign access to the sea during the nineteenth-century War of the Pacific.

Roughly one-fifth of Bolivian natural gas production is slated for the domestic market, which is dominated by electricity demand (over one-half of Bolivian natural gas consumption), industry (roughly one-quarter), and transportation (just below one-fifth). Domestic natural gas prices are fixed at levels that range from $.90 per thousand cubic feet (Mcf) to $1.98 per Mcf, depending upon its end-use.


Bolivia has proved natural gas reserves of over 26 trillion cubic feet (Tcf), according to Oil & Gas Journal, which would rank as the second largest reserves in South America. However, some studies have suggested that the country’s proved reserves are less than half that size. Most recently, YPFB accepted a Ryder Scott report that significantly downgrades the size of Bolivia’s proved reserves to 9.9 Tcf.

South American Natural Gas Production and Reserves

Tarija contains over 85 percent of the country’s proved natural gas reserves (led by the San Alberto, Margarita, Sábalo, and Itaú fields), followed by Santa Cruz (10.6 percent) and Cochabamba (2.5 percent). Recent test wells by Repsol YPF and YPFB have each discovered large volumes of natural gas in Santa Cruz’s Rio Grande field.

According to recent analysis by EIA and Advanced Resources International, Bolivia has 48 Tcf of technically recoverable shale gas resources.

Exploration and Production

Bolivia produced an estimated 446 billion cubic feet (Bcf) of dry natural gas in 2009, a substantial decline from a peak of 518 Bcf the year before. Preliminary Bolivian data suggest that natural gas production and exports rebounded in 2010, both increasing by more than 10 percent.

Approximately three-fifths of Bolivian natural gas production comes from the Sabalo (34 percent of 2010 production) and San Alberto (26 percent) fields. They both lie in Tarija, which accounts for over 70 percent of Bolivian natural gas production. Santa Cruz ranks second at just below 20 percent. MHE has announced that La Paz, Beni, and Pando will soon join Chuquisaca, Cochabamba, Santa Cruz, and Tarija as natural gas producing departments.

Officially, the largest natural gas producer in the country is YPFB. However, as with the oil sector, Petrobras Bolivia is the operator of the Sabalo and San Alberto fields and is thus responsible for 60 percent of the country’s output. State-owned YPFB Chaco and YPFB Andina collectively produce 20 percent of Bolivia’s natural gas, with a number of privately held firms responsible for smaller stakes.

Oil and Gas Fields in Bolivia 

Source: YPFB

In February 2011, a consortium that includes Total, Petrobras, and YPFB Chaco announced the start of commercial production in the Itaú field (near San Alberto field), which will produce over 50 million cubic feet (MMcf) of natural gas per day. According to some plans, future phases of development could more than triple those volumes.

YPFB has announced that it and foreign partners plan to invest over $4 billion in the natural gas sector by 2015. President Morales's goals include a near-doubling of natural gas production by 2015.


YPFB Transporte controls the most extensive natural gas pipeline network in the country, while a number of smaller, regional pipelines are operated by various public and private entities. The Central Intelligence Agency estimates that Bolivia’s total natural gas pipeline infrastructure spans 3,226 miles (5,192 kilometers).

Major Natural Gas Pipelines in Bolivia

Natural Gas Pipelines Bolivia

Source: YPFB Transporte, Ministerio de Hidrocarburos y Energía


The Bolivia-Brazil natural gas pipeline (commonly referred to as GASBOL) – which connects Santa Cruz, Bolivia with Porto Alegre, Brazil via São Paulo – is described by Petrobras as Latin America’s biggest and most important energy infrastructure project. The 1,907-mile (3,069-kilometer) pipeline, of which 346 miles (557 kilometers) transit Bolivia, required over $2 billion of financing by Petrobras. Construction commenced in November 1997 and was completed one year later. The Bolivian portion of GASBOL is owned and operated by Gas TransBoliviano, of which YPFB Transporte has a majority stake. The GASBOL system has a maximum capacity of 1.1 Bcf/d.

There is also a pipeline to Cuiabá, in the Mato Grosso state of Brazil, which has an installed capacity to transport 141 MMcf/d of natural gas.


The YABOG pipeline, which runs from Río Grande, Bolivia to Salta, Argentina, was completed in 1972 with a capacity of 210 MMcf/d. Argentina and Bolivia are building another small cross-border pipeline, known as Juana Azurduy, which is due to be completed in 2011. The Argentine government has proposed a Gasoducto del Noreste Argentino to serve its remote northeastern provinces with the larger volumes of gas that Bolivia has promised for future years.


Brazil is the primary destination for Bolivian natural gas. Roughly 70 percent of Bolivian natural gas output – or 85 percent of exports – is directed to Brazil.

Natural gas exports to Brazil commenced in 1999. The bilateral natural gas trade is governed by a 20-year contract between YPFB and Petrobras, under which Bolivia commits to supplying 1.1 Bcf/d (30.08 million cubic meters per day, or MMcm/d) and minimum average flows of .85 Bcf/d (24.06 MMcm/d) are guaranteed through a take-or-pay provision. The price of natural gas sold to Brazil is computed quarterly according to the terms of the contract, and averaged $6.03 per million Btu in 2010.

In October 2010, Bolivia agreed to supply Brazil with another 78 MMcf/d (2.2 MMcm/d) of gas for a power plant in Cuiabá, which has been shuttered since Bolivian supplies were interrupted in 2007 due to unexpectedly low output and high domestic demand.


Bolivia began exporting natural gas to Argentina in 1972, which is now the destination for about 15 percent of Bolivian natural gas exports. A contract between YPFB and Energía Argentina Sociedad Anónima (ENARSA) extends through 2026 and stipulates a current trade volume of 272 MMcf/d (7.7 MMcm/d), which is up from 177 MMcf/d (5 MMcm/d) in 2010 and due to grow to nearly 1 Bcf/d (27.7 MMcm/d) by 2017. Official data suggest that Bolivian exports to Argentina averaged less than 173 MMcf/d (4.9 MMcm/d) in 2010, but Bolivia insists it is abiding by the terms of the agreement due to the relatively high heat content of its natural gas. Argentina paid an average of $7.27 per million Btu for Bolivian natural gas in 2010.

Sector Organization

Similar to the oil sector, YPFB exercises control over natural gas as a state-owned company. Likewise, the Ministry of Hydrocarbons and Energy (MHE) and the National Hydrocarbons Agency establish and enforce industrial strategy, policy, and regulation. The Empresa Boliviana de Industrialización de Hidrocarburos (the Bolivian Company for the Industrialization of Hydrocarbons) was established in 2009 to develop a more robust petrochemicals industry, based largely upon the country's natural gas resources.

Following the nationalization decree in May 2006, oil and gas companies were compelled to negotiate new contracts with the state as a condition of continued operation in the country. The contracts agreed to in October 2006 entitled the state to a majority of the take from natural gas fields: 18 percent in royalties, 32 percent from the special hydrocarbon tax (IDH), and up to a 32 percent share for YPFB. The partial nationalization of the natural gas sector was completed in 2009 after difficult negotiations, ultimatums, and military occupations of some natural gas fields.

Though the country adopts a unified approach to many facets of the oil and gas industry and its attempts to stimulate exploration and production, natural gas is the country's more significant resource. As such, the government is attempting to promote the domestic use of natural gas as a substitute for oil products, integrate more households into the natural gas grid, and convert most of the motor vehicle fleet to compressed natural gas.


Bolivia generated 6 billion kilowatthours of electricity from nearly 1.5 gigawatts (GW) of installed capacity in 2008. Thermoelectric power plants, which are the largest source of generation, primarily burn natural gas and a small amount of oil.

Bolivia Electricity Generation by Type

The Bolivian government plans to invest in nearly 1 GW of capacity additions, mostly hydroelectric, by 2015. The government has expressed a desire to increase its reserve margin, or the cushion between available capacity and peak load, from around 10 percent in order to enhance system reliability and minimize disruptions.

Major Electricity Infrastructure in Bolivia

Major Electricity Infrastructure in Bolivia

Sources: Comité Nacional de Despacho de Carga, EIA

Sector Organization

Electricity has been broadly governed by the Ley de Electricidad (Electricity Law) of 1994 and associated rulemaking, which privatized and unbundled the electricity sector. However, the sector has changed dramatically in recent years through a new constitution, new institutions, and President Morales's renationalization campaign.

Bolivia's principal electricity system is the Sistema Interconectado Nacional (SIN), a network of generation, transmission, and distribution infrastructure that connects major population centers. The SIN serves about 90 percent of the country's electricity demand. Electricity on the SIN network is bought, sold, and traded on the Mercado Eléctrico Mayorista (MEM, wholesale electric market). The Sistemas Aislados (SA, or “isolated” systems) consist of the electricity infrastructure in remote areas not served by the broader SIN grid.

In 2009, the Autoridad de Fiscalización y Control Social de Electricidad (AE) replaced the Superintendencia de Electricidad as the regulatory and planning body with oversight of the electricity sector. AE's stated objectives are to promote universal access to electricity, equitable and affordable rates, and efficient, sustainable, and secure system operations.

The Comité Nacional de Despacho de Carga (CNDC, roughly translates as National Committee for Load Dispatch) is Bolivia's approximate equivalent to a Regional Transmission Organization or Independent System Operator. CNDC is responsible for the operation of the SIN and the administration of and planning for the MEM.

The national electricity company, Empresa Nacional de Electricidad (ENDE), was essentially re-founded in 2008 after its assets had been privatized in the 1990s. In May 2010, four electricity firms, which accounted for more than half of the electricity market, were expropriated by the government after failed contract renegotiations: Corani (had been 50 percent owned by France's GDF Suez), Guaracachi (had been 50 percent owned by the United Kingdom's Rurelec), Valle Hermoso, and the Empresa de Luz y Fuerza Electrica Cochabamba (ELFEC). The nationalizations returned the firms' assets to the recently reconstituted ENDE. Following the announcement, the government claimed control over 80% of Bolivia's electricity generation and expressed a desire to achieve complete government control over the sector.

Thursday, March 22, 2012

U.S. natural gas net imports declined to the levels at 1992

The preliminary estimate of U.S. natural gas average daily net imports—imports minus exports—was just over 5 billion cubic feet per day (Bcfd) in 2011, which was the lowest level since 1992 (see chart above). Net import declines are due to both lower imports and higher exports; U.S. net imports of natural gas peaked in August 2007 at 10 Bcfd, and have fallen markedly since.
The United States imports natural gas via pipelines from Canada and Mexico, and from tanker deliveries to liquefied natural gas (LNG) terminals. Some key points include:
  • The vast majority of U.S. natural gas imports arrive via pipeline from Canada (see chart below). Significant increases in U.S. natural gas production have led to decreased U.S. demand for Canadian natural gas. Imports from Canada for 2011 were significantly below the previous five-year range, and have been lower for much of 2012 so far (some of this decline, however, can be attributed to warmer-than-usual weather across much of the United States).
U.S Natural Gas Net Imports

  • , U.S. daily dry natural gas production averaged 64.2 billion cubic feet per day (Bcfd) in January 2012, up about 10% from the January 2011 level, according to Bentek Energy, LLC. Natural gas production in liquids-rich areas and shale plays, such as in portions of the Marcellus and the Eagle Ford, continues to boost natural gas production.
U.S Natural Gas Production

  • LNG is the other main source of imported natural gas, however average daily deliveries from U.S. LNG terminals from January 1, 2012 through March 15, 2012 averaged 0.6 Bcf/d, down about 44% from a comparable period in 2011. Higher natural gas prices in competing markets abroad are attracting "spot" LNG cargoes that can be delivered under flexible pricing terms. LNG imports through U.S. terminals peaked in 2007 at over 2.1 Bcfd.
  • U.S. natural gas imports from Mexico are negligible, totaling just 2.7 Bcf, or about 7.3 million cubic feet per day in 2011. Imports from Mexico enter primarily through southern Texas and southeastern California.
U.S. Natural Gas Imports from Canada

U.S. exports of natural gas are up over the past decade. Some key factors underpinning the growth in exports are:
  • Domestic natural gas production is growing, primarily from shale gas formations. Some of this production is being shipped on pipelines into Canada and Mexico (see chart below).
  • Much of the growth in natural gas exports to Canada is due to increased deliveries on U.S. pipelines to natural gas storage facilities in Ontario.
  • Exports to Mexico reached a high in 2011, averaging almost 1.4 Bcfd for the year, exceeding the previous high of 1.1 Bcfd in 2004.
Monthly average U.S natural gas exports

Natural gas spot prices near 10-year lows amid warm weather and robust supplies.Average spot natural gas prices for January were $2.68/MMBtu. Spot natural gas prices in January 2012 reached their lowest level in 10 years except for a 4-day period over the Labor Day weekend in 2009.

Spot Natural Gas Prices U.S.

Monday, March 19, 2012

Oil production from the top five U.S. oil-producing states increased during 2011

Monthly Crude oil production by State 2011

Combined oil production (crude oil and lease condensate) from the top five U.S. oil-producing states increased during 2011 (see chart above). The biggest gains were in North Dakota and Texas, due in large part to increased horizontal drilling and hydraulic fracturing activity. Texas, Alaska, California, North Dakota, and Oklahoma accounted for about 56% of U.S. oil production last year, according to EIA's February Petroleum Supply Monthly report.

Annual Crude by State 2000 2011

Highlights from the top oil-producing states in 2011 included:
  • Texas. The Eagle Ford shale formation in south Texas contributed to gains in the state's oil production, which averaged 1,425 thousand barrels per day (bbl/d), the highest level since 1997.
  • Alaska. Oil production fell for the ninth year in row, averaging 563 thousand bbl/d.
  • California. Oil production averaged 535 thousand bbl/d, the lowest level in at least three decades.
  • North Dakota. Preliminary data indicate increasing oil production from the Bakken formation pushed North Dakota ahead of California in December as the third biggest oil-producing state. North Dakota's oil production averaged 535 thousand bbl/d in December 2011 and 419 thousand bbl/d for the year.
  • Oklahoma. Oil production averaged 204 thousand bbl/d during 2011, topping 200 thousand bbl/d for the first time since 1998.
Oklahoma Oil Coal Natural Gas Electricity Map

Texas Quick Facts

  • Texas is the leading crude oil-producing State in the Nation (excluding Federal offshore areas, which produce more than any single State).
  • The State’s signature type of crude oil, known as West Texas Intermediate (WTI), remains the major benchmark of crude oil in the Americas.
  • Texas’s 27 petroleum refineries can process more than 4.7 million barrels of crude oil per day, and they account for more than one-fourth of total U.S. refining capacity.
  • Approximately three-tenths of total U.S. natural gas production occurs in Texas, making it the Nation’s leading natural gas producer.
  • Texas also leads the Nation in wind-powered generation capacity; there are over 2,000 wind turbines in West Texas alone.
  • Texas produces and consumes more electricity than any other State, and per capita residential use is significantly higher than the national average.

Alaska Oil Natural Gas Electricity Map

Alaska Quick Facts

  • Excluding Federal offshore production, Alaska ranks second in the Nation in crude oil production.
  • Prudhoe Bay on Alaska’s North Slope is the highest yielding oil field in the United States, producing approximately 264,000 barrels per day.
  • The Trans-Alaska Pipeline transports crude oil from the frozen North Slope to the warm-water Port of Valdez, on Alaska’s southern coast.
  • Alaska has six oil refineries, most of which are “topping” plants.
  • Alaska’s electricity infrastructure differs from the lower 48 States in that most consumers are not linked to large interconnected grids through transmission and distribution lines. Rural communities rely primarily on diesel electric generators for power.
  • Plans are being discussed to develop two small nuclear facilities to help meet electricity demand in Alaska.

California Oil Natural Gas Electricity Map

California Quick Facts

  • California ranks third in the Nation in refining capacity and its refineries are among the most sophisticated in the world.
  • California’s per capita energy consumption is low, in part due to mild weather that reduces energy demand for heating and cooling.
  • California leads the Nation in electricity generation from nonhydroelectric renewable energy sources, including geothermal power, wind power, fuel wood, landfill gas, and solar power. California is also a leading generator of hydroelectric power.
  • California imports more electricity from other States than any other State.
  • In 2000 and 2001, California suffered an energy crisis characterized by electricity price instability and four major blackouts affecting millions of customers.
  • Two solar power plants are proposed for central California, covering 12.5 square miles and generating as much as 800 megawatts of power.

North Dakota Oil Coal Natural Gas Electricity Map

North Dakota Quick Facts

  • North Dakota accounts for about 2 percent of total U.S. crude oil production.
  • Due partly to high heating demand in winter, North Dakota’s per capita energy consumption is among the highest in the Nation.
  • Nearly all of the electricity generated in North Dakota is produced by coal-fired power plants.
  • North Dakota is one of the few States that allow the statewide use of conventional motor gasoline.
  • North Dakota is a substantial producer of wind energy and leads the Nation in potential wind power capacity.

Oklahoma Oil Coal Natural Gas Electricity Map

Oklahoma Quick Facts

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Thursday, March 15, 2012

Falkland Islands

As the 30th anniversary of the liberation of the Falklands from the Argentine invasion approaches, the Argentine government has Falklanders worried. Argentine President Cristina Fernández de Kirchner has embargoed ships flying the Falklands flag, encouraged boycotts of British products and accused the British of militarising the South Atlantic. President Kirchner vowed to raise the issue of the Falklands’ sovereignty at the United Nations and hopes to annex the Islands as an Argentine colony, a core component of her political agenda.

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Falkland Islands

Before the Kirchner government pleas to the UN, she should note the issue of self-determination has a long history, and Argentina has a record of defending self-determination before the UN. According to a 2010 UN release, Argentine Senator Rubén Giustiniani called for self-determination of Puerto Rico, stating that “Argentina deemed Puerto Rico’s cause to be its own and reaffirmed the calls for recognition of its right to self-determination”. He also stated that the Argentine Senate fully supported Puerto Rico’s right to self-determination. Clearly, Argentina wants to dictate when self-determination should apply, regardless of the expressed opinion of the affected population. Notably, support for Puerto Rican independence has never received more than 5% of the vote on three separate referendums.

The Obama administration’s official position is that the United Kingdom and Argentina should negotiate the sovereignty of the Falklands. This misguided policy misses the point of the Falklanders’ right to self-determination, a right that the British government has been determined to protect until Falklanders decide otherwise. The issue of sovereignty is a non-starter unless the Falklanders expressly choose to change their current status. The Argentine Constitution contains a provision that states that the Falkland Islands are Argentine, making negotiations tainted from the start.

Falklanders have a democratic system of government, an effective Chamber of Commerce, produce annual budget surpluses and maintain excellent primary and secondary schools. The Falkland Islands has determined for itself that it wishes to remain associated with Britain. It is not a colonial outpost held hostage by a foreign military.

falkland islands-Argentina

President Obama should state, unequivocally, that he supports the Falklanders’ right to self-determination. The United Kingdom has granted the Falkland Islands the right to determine their future, and President Obama should give his support to the Falklanders’ rights. Not only would this solidify US support for self-determination, it would reaffirm, again, that America remains committed to our Special Relationship with the United Kingdom – a relationship cemented by the close and long-standing friendships between our countries’ leaders – Roosevelt & Churchill, Reagan & Thatcher, and Clinton and Bush with Tony Blair.