Gas prices expected to surge again

Rising crude oil prices and a fall in U.S. supplies are driving wholesale gas prices up sharply. That has yet to be fully reflected at the retail level.

Prices at the pump — up 4 cents the past week to a national average of $3.52 a gallon — could climb another 15 cents or higher over the next two weeks. A year ago, the national average was $3.38.

"It's getting ugly,'' says Patrick DeHaan, senior analyst for GasBuddy.com. "First and foremost, the political problems in Egypt are driving crude oil prices, but there has also been a sharp drop in oil supplies the past two weeks. This is coming at a time when demand is at its annual July peak."

Egypt is not a major oil supplier, but ongoing political woes threaten Middle Eastern shipments and were the catalyst behind crude oil prices rising to 15-month highs earlier this week. Benchmark West Texas crude oil eased 1.5% to $104.91 a barrel Thursday. Wholesale gas prices — up 30 cents to 50 cents a gallon on some markets since late June — rose 0.8% to $3.04 a gallon for mid-August delivery. Typically, pump prices are about 75 cents higher. Read more >>

Crude oil spills into Mississippi River after oil barges crash

Mississippi River at Vicksburg (Photo credit: Wikipedia)

Two oil barges pushed by a tugboat slammed into a railroad bridge in Vicksburg, Mississippi, on Sunday, causing one to leak crude oil into the Mississippi River, the U.S. Coast Guard said.

Officials used an "absorbent boom" to contain the undetermined amount of oil that leaked into the river after the collision, which occurred shortly after midnight and damaged both barges, Lieutenant Ryan Gomez said. The barge that is leaking was holding 80,000 gallons of light crude oil, he said.

"A towing vessel was pushing two barges side-by-side and they struck one of the Vicksburg railroad bridge piers," Gomez said.

No one was injured in the accident. Federal, state and local officials, as well as the industry's Oil Spill Response Organization, were on the scene. Gomez said he did not have information about any of the companies involved in the oil transport. Read more >>

China, India Major Importers of Iranian Crude

The National Iranian Oil Company (NIOC) Director General for International Affairs says China and India remain the major importers of crude oil from the Islamic Republic.

“China has not reduced its oil imports from Iran, but has increased it compared to last year,” SHANA quoted Mohsen Qamsari as saying on Saturday.

He added that India is the second major importer of Iranian oil, saying, “in addition to long-term contracts, Iran’s costumers buy oil in the form of spot packages. Therefore, we must wait until the end of the year to find out which country purchased the most [oil].”

"Iran has extended contracts with all of its costumers for the year 2012 and before the imposition of sanctions,” Qamsari said. More...

Two drill pipes discovered inside wreckage of the well

Image via Wikipedia

Second pipe may have crippled BP well's defense mechanism
Jim Tankersley, Tribune Washington Bureau

The gushing BP oil well is a mystery still unfolding, and late last month, a team of scientists from the Energy Department discovered a new twist: Their sophisticated imaging equipment detected not one but two drill pipes, side by side, inside the wreckage of the well's blowout preventer on the bottom of the Gulf of Mexico.

BP officials said it was impossible. The Deepwater Horizon rig, which drilled the well, used a single pipe, connected in segments, to bore 13,000 feet below the ocean floor. But when workers cut into the wreckage to install a containment cap this month, sure enough, they found two pipes.

The discovery suggested that the force of the erupting petroleum from BP's well on April 20 was so violent that it sent pipe segments hurtling into the blowout preventer, like derailing freight cars.

It also offered a tantalizing theory for the failure of the well's last line of defense, the powerful pinchers called shear rams inside the blowout preventer that should have cut the pipe and stopped the rising oil and gas from reaching the Deepwater Horizon 5,000 feet above. Drilling experts say those rams, believed to be partially deployed, could have been thwarted by the presence of a second pipe.

The doubled-up drill pipe joins a list of clues that is helping scientists understand the complexities of the Deepwater Horizon accident, and from that, craft changes in how deep-water drilling is conducted. More...

Health Risks from Oil Spill: "Some of the Most Toxic Chemicals that We Know" , "Every Place Can be Ground Zero", CDC Advises

Image via Wikipedia

washingtonsblog.com

An "epidemiologist" is a scientist who studies diseases among groups of people.

So the following quote from Bloomberg caught my eye:

Shira Kramer, an epidemiologist who has conducted research for the petroleum industry on the health consequences of exposure to petroleum, said she is concerned that the risks are being downplayed.

“It’s completely scientifically dishonest to pooh-pooh the potential here when you are talking about some of the most toxic chemicals that we know,” said Kramer....

“When you talk about community exposure, you are talking about exposures in unpredictable ways and to subpopulations that may be more highly susceptible than others, such as those of reproductive age, people who are immuno-compromised, children or fetuses.

‘With the World Trade Center, there have been unpredictable adverse health effects to the populations that were exposed and not just the workers,” she said. “In this case, we have a soup of chemicals from the crude, chemicals from the dispersants and pollutants that were already in the water. Who can say how they will interact?”

Crude oil contains such powerful cancer-causing chemicals benzene, toluene, heavy metals and arsenic.

In addition, BP has poured millions of gallons of the highly-toxic dispersant Corexit into the Gulf. And see this.

Bloomberg also notes that the Centers for Disease Control has issued health warnings about the oil:

“Although the oil may contain some chemicals that could cause harm to an unborn baby under some conditions, the CDC has reviewed sampling data from the EPA and feels that the levels of these chemicals are well below the level that could generally cause harm to pregnant women or their unborn babies,” the CDC said on its website.

While they suggest there is no threat, the CDC simultaneously advised “everyone, including pregnant women” to avoid spill-affected areas. More...

Gulf of Mexico: "This is the most vigorous methane eruption in modern human history"

Matthew Brown

It is an overlooked danger in oil spill crisis: The crude gushing from the well contains vast amounts of natural gas that could pose a serious threat to the Gulf of Mexico's fragile ecosystem.

The oil emanating from the seafloor contains about 40 percent methane, compared with about 5 percent found in typical oil deposits, said John Kessler, a Texas A&M University oceanographer who is studying the impact of methane from the spill.

That means huge quantities of methane have entered the Gulf, scientists say, potentially suffocating marine life and creating "dead zones" where oxygen is so depleted that nothing lives.

"This is the most vigorous methane eruption in modern human history," Kessler said.

Methane is a colorless, odorless and flammable substance that is a major component in the natural gas used to heat people's homes. Petroleum engineers typically burn off excess gas attached to crude before the oil is shipped off to the refinery. That's exactly what BP has done as it has captured more than 7.5 million gallons of crude from the breached well.

A BP spokesman said the company was burning about 30 million cubic feet of natural gas daily from the source of the leak, adding up to about 450 million cubic feet since the containment effort started 15 days ago. That's enough gas to heat about 450,000 homes for four days.

But that figure does not account for gas that eluded containment efforts and wound up in the water, leaving behind huge amounts of methane.

BP PLC said a containment cap sitting over the leaking well funneled about 619,500 gallons of oil to a drillship waiting on the ocean surface on Wednesday. Meanwhile, a specialized flare siphoning oil and gas from a stack of pipes on the seafloor burned roughly 161,700 gallons.

Thursday was focused on Capitol Hill, where lawmakers chastised BP CEO Tony Hayward.

Testifying as oil still surged into the Gulf at between 1.47 million and 2.52 million gallons a day, coating more coastal land and marshes, Hayward declared "I am so devastated with this accident," "deeply sorry" and "so distraught."

But he also said he was out of the loop on decisions at the well and disclaimed knowledge of any of the myriad problems on and under the Deepwater Horizon rig before the deadly explosion. BP was leasing the rig the Deepwater Horizon that exploded April 20, killing 11 workers and triggering the environmental disaster.

"BP blew it," said Rep. Bart Stupak, D-Mich., chairman of the House investigations panel that held the hearing. "You cut corners to save money and time."

As for the methane, scientists are still trying to measure how much has escaped into the water and how it may damage the Gulf and it creatures.

The dangerous gas has played an important role throughout the disaster and response. A bubble of methane is believed to have burst up from the seafloor and ignited the rig explosion. Methane crystals also clogged a four-story containment box that engineers earlier tried to place on top of the breached well.

Now it is being looked at as an environmental concern. More...

Gulf Oil Spill: BP Trying To Hide Millions of Gallons of Toxic Oil?

BP Embraces Exxon’s Toxic Dispersant, Ignores Safer Alternative

protecttheocean.com

It has been confirmed that the dispersal agent being used by BP and the government is Corexit 9500, a solvent originally developed by Exxon and now manufactured by Nalco Holding Company of Naperville, IL. Their stock took a sharp jump, up more than 18% at its highest point of the day today, after it was announced that their product is the one being used in the Gulf. Nalco’s CEO, Erik Frywald, expressed their commitment to “helping the people and environment of the Gulf Coast recover as rapidly as possible.” It may be that the best way to help would be to remove their product from the fray. Take a look at some of the facts about Corexit 9500:

A report written by Anita George-Ares and James R. Clark for Exxon Biomedical Sciences, Inc. entitled “Acute Aquatic Toxicity of Three Corexit Products: An Overview” states that “Corexit 9500, Corexit 9527, and Corexit 9580 have moderate toxicity to early life stages of fish, crustaceans and mollusks (LC50 or EC50 – 1.6 to 100 ppm*). It goes on to say that decreasing water temperatures in lab tests showed decreased toxicity, a lowered uptake of the dispersant. Unfortunately, we’re going to be seeing an increase in temperatures, not a decrease. Amongst the other caveats is that the study is species-specific, that other animals may be more severely affected, silver-sided fish amongst them.

Oil is toxic at 11 ppm while Corexit 9500 is toxic at only 2.61 ppm; Corexit 9500 is four times as toxic as the oil itself. Sure, a lot less of it is being introduced, but that’s still a flawed logical perspective, because it’s not a “lesser of two evils” scenario. BOTH are going into the ocean water.

The lesser of two evils seems to be a product called Dispersit, manufactured by Polychem, a division of U.S. Polychemical Corporation. In comparison, water-based Dispersit is toxic at 7.9-8.2 ppm; Dispersit holds about one third of the toxicity that Corexit 9500 presents. Dispersit is a much less harmful water-based product which is both EPA approved and the U.S. Coast Guard’s NCP list. So why isn’t it being used?

We spoke with Bruce Gebhardt at Polychem Marine Products, asked him if Dispersit was being used in the Gulf Oil Spill situation. “Very little,” he replied. When asked why, the impression was that the government had used Corexit 9500 in the past, and was going with what they know — no matter how dangerous that might prove to be.

Dispersit has a demonstrated effectiveness of 100% on the lighter South Louisiana crude, and 40% on Pruhoe Bay’s heavier crude. Exxon’s Corexit 9500 is just 55% effective on SL and 55% effective on PB. On an average, Dispersit is 70% effective, and may prove 100% effective, while 9500 is an average of 50% effective, with a maximum effective use of just 55%. Corexit 9500 is a harsh petroleum-based solvent which is dangerous to people and sea life. Dispersit’s human health effect is “slight to none.” Whether or not a dispersal agent is a wise move, the question remaining unanswered is: Why is Corexit 9500 is being used at all, when the water-based Dispersit is available, markedly more effective and less toxic? Follow the money.

Dispersal of the oil does not eliminate it, nor does it decrease the toxicity of the oil. It just breaks it up into small particles, where it becomes less visible. It’s still there, spewing toxicity at an even greater rate (due to higher surface area.) But now it’s pretty much impossible to skim or trap or vacuum or even soak up at the shoreline, because most of it will never make it to the shoreline. Instead, that toxic crude oil AND the dispersant will be spread all over the ocean’s waters. This is why introducing such a product into the crude oil as it comes out from the pipe is a very bad idea for the ocean.

It may not be pretty, but if the oil makes it to the shore, it can be soaked up, cleaned up. To “disperse” it means it will NEVER be cleaned up. It will just stay out there, polluting and poisoning the ocean, her inhabitants, and all the food we take from it. It’s unwise to be using Corexit 9500 at all, but introducing it to the oil as it leaves the broken pipe is approaching madness. Mr. Gebhardt agrees that the oil should be contained, and what has been leaked should be allowed to come to shore where it can be removed from the ocean by less toxic means.

BP’s use of Corexit 9500 on the oil before it rises to the surface seems to be a deliberate attempt to mask the poison, to cover up that it continues to flow out from the ocean’s floor, while making it impossible to recover. In short, BP and Exxon want to spread the toxic oil throughout the oceans of the world, pollute everywhere, rather than allow it to be seen coming to shore where BP would have to pay for its containment and clean-up. It’s our job to keep them from getting away with sweeping this ugly mess under the surface.

Will gold ETFs shut you out?

Wade Hansen
Gold prices have been rocketing higher the past two days. Since the start of the trading day on Wednesday, September 2, gold prices have climbed from just above $950 per ounce to just below $1,000 per ounce.

To put things in perspective, gold prices have only been above $1,000 per ounce on two other occasions---March 2008 and February 2009. Gold prices reached their highest levels on March 17, 2008 (it's quite fitting that the market found the pot of gold at the end of the rainbow on St. Patrick's day, if you ask me) at $1,033.18 per ounce.

Needless to say, this is an extremely important time for gold prices. If they can break up and through resistance at $1,000, we could see an exponential rise in the value of gold. The question is, will you be able to take advantage of rising gold prices?

You see, for the past few years, individual investors have been taking advantage of rising commodity prices---like gold---by buying commodity-based exchange-traded funds (ETFs) and exchange-traded notes (ETNs) [ETFs vs. ETNs]. Commodity ETFs and ETNs track the performance of various commodity prices. So when you buy a commodity ETF or ETN, you make money when commodity prices go up, and you lose money when commodity prices go down.

The SPDR Gold Trust (NYSE: GLD)---an ETF that actually buys gold and holds it on reserve---has been a favorite of gold investors. It has been so popular, in fact, that the trust now holds more than $32 billion of gold on reserve.

But herein lies the problem. Commodity ETFs are getting so big that they are directly affecting the commodity markets---both the futures markets and the markets for hard commodities. For instance, when investors buy shares of United States Oil Fund LP (NYSE: USO), the fund managers have to go out into the futures market and buy more crude oil contracts, which pushes the price of those contracts higher.

The impact these commodity ETFs have on the futures market has caught the attention of the Commodity Futures Trading Commission (CFTC), and the CFTC is now investigating whether or not it will curb the amount of futures contracts any ETF can hold. Regulators are also looking at potential limits on the amount of gold and other commodities ETFs can hold.

So what does this mean for you?

ETFs may be forced to limit the number of shares they have available. They may even be forced to redeem shares and cut availability even further. Hopefully everyone involved will be able to figure our a solution that will allow us individual investors to maintain access to the commodities market via ETFs, but we'll have to wait and see.

Wade Hansen in an analyst for Learning Markets