U.S. Holds More Oil Reserves Than Saudi Arabia and Russia
By Andy Rowell
According to a new analysis, the U.S. now holds more oil reserves than Saudi Arabia and Russia, the first time this has happened. And more than half of the U.S.'s remaining oil reserves are in shale oil.
The analysis, by Rystad Energy, has concluded that recoverable oil in the U.S. from existing fields, discoveries and yet undiscovered areas is equivalent to 264 billion barrels, which easily beats Saudi Arabia's 212 billion barrels and just squeezes past Russia's 256 billion.
Photo credit: Paul Lowry
The crux though will be whether the U.S. shale industry can access the finance to carry on exploiting shale. And that remains to be seen.
The mini-revival in the oil price may be over. Having rallied since its low point earlier in the year of $27, oil had reached the $60 a mark, but has slipped back to below $50 a barrel on concerns about a slowdown in the global economy has increased.
And those looking for a rapid increase in the next few months look set to be disappointed. The CEO of the world's largest oil trader, Vitol, which trades about 6 million barrels a day, has told Bloomberg that oil prices will not rise much further over the coming months.
Vitol's boss, Ian Taylor said: "I cannot see the market really roaring ahead. We have a lot of oil in the system and it will take us considerable time to work that off."
The international benchmark will probably end the year "not too far away from where we are today" and rise to about $60 by the end of 2017, Taylor said.
According to Bloomberg: "The wild card for next year is U.S. shale supply, which appears to have reached a bottom, but it's too early to say whether growth will resume."
But shale growth is not looking certain, with the industry still struggling with a low oil price and access to financing. And one of the key way to access financing is via bond sales.
As the Financial Times reported: "Bond sales by U.S. independent oil and gas companies have fallen to their slowest rate for more than a decade, in a warning sign of financing constraints that could hold back the industry's recovery."
In the second quarter of this year, the U.S. shale sector sold a paltry $280m of bonds in the second quarter, making it a slower period than any since the financial crisis of 2008-09.
In contrast, the paper points out, the industry raised almost $860bn from bond sales and bank loans during the boom years of 2007-2014. It is an industry still sitting on a crumbling pile of debt.
And the bottom line is that the industry is still spending more than it is earning. According to the FT, the leading U.S. exploration and production companies cut their capital spending to $14.9 billion in the first quarter of this year, which is a whopping $10 billion more than they earned.
This is totally unsustainable and will constrict the smaller players from accessing bonds and finance. Gary Ross of Pira Energy told the FT: "It's not going to be easy to reconstruct this industry."
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By Sarah Steffen
A stretch of coastline in the Philippine capital, Manila has received backlash from environmentalists. The heavily polluted Manila Bay area, which had been slated for cleanup, has become the site of a controversial 500-meter (1,600-foot) stretch of white sand beach.
Sand Makeup Crucial for Ecosystems<p>While UNEP/GRID-Geneva generally supports finding <a href="https://www.dw.com/en/not-enough-sand-for-construction-industry-despite-abundance/a-49342942" target="_blank" rel="noopener noreferrer">alternative sources of sand</a> so as not to disrupt ecosystems in rivers and oceans when extracting them, Vander Velpen stressed it was vital to use sand which closely matches the makeup of the native sand to protect beach fauna.</p><p>"If you change the core characteristics of the native sand, the original sand, you need to do an environmental impact assessment (EIA) to find out how it's going to impact the ecosystem and nearby ecosystems," he told DW.</p><p>But according to Torres, such an assessment was not done in Manila.</p>
Beautification Stunt Instead of Proper Cleanup?<p>Manila Bay's waters are heavily polluted by oil and trash from nearby residential areas and ports. A huge "No swimming" sign warns visitors to stay away from the ocean.</p><p>Philippines' <a href="https://denr.gov.ph/index.php/priority-programs/manila-bay-clean-up/25-priority-programs/1825-frequently-ask-questions-faqs-on-the-dolomite-and-the-beach-nourishment-project" target="_blank">Department of Environment and Natural Resources (DENR)</a> has denied dolomite sand poses any risk to human health and the ecosystem.</p><p>However, scientists of the University of the Philippines have come forward disputing the DENR's claims. A <a href="https://biology.science.upd.edu.ph/index.php/ib-statement-regarding-dolomite-in-manila-bay/" target="_blank" rel="noopener noreferrer">statement by the Institute of Biology</a> said that using crushed dolomite did not address any of the rehabilitation phases and instead was "even more detrimental to the existing biodiversity as well as the communities in the area," pointing to the case of water birds. "The dumping of dolomite in Manila Bay has effectively covered part of the intertidal area used by the birds thereby reducing their habitat."</p><p>At peak migration season, Manila Bay is home to 90 aquatic bird species, including species of international conservation concern that are facing a very high extinction risk in the wild. </p><p>Authorities should focus on protecting and conserving biodiversity, the Institute of Biology added. "Rehabilitating mangroves is an example of a nature-based solution that is cheaper and more cost-effective than the dolomite dumping project," the scientists said.</p><p>Moreover, <a href="http://www.msi.upd.edu.ph/" target="_blank" rel="noopener noreferrer">the Marine Science Institute</a> has warned that prolonged inhalation of finer dust particles of dolomite could "cause chronic health effects," leading to discomfort in the chest, shortness of breath and coughing.</p><p>They also warned dolomite sand grains would erode during storms and be carried out to sea, essentially being washed away.</p>
Rehabilitation vs. Reclamation<p>Environmentalists say covering up the beach doesn't address the real issues of the bay. Torres and others believe the best way to clean up Manila Bay is not to add anything, but rather remove trash and pollution.</p><p>"There have been studies saying much of the waste comes from already collected waste — so these are open dump sites along the coast that get washed up because of the rain," Torres said.</p><p>She criticized the authorities for continuing to push reclamation projects she says are at odds with each other. These projects will affect large areas of mangrove forests, she said, and experts warn that this, in turn, exacerbates coastal erosion.</p><p>"If you've removed the areas that helped trap the sand, like mangrove forests, then the likelihood increases that you will have to nourish a beach. Same as building right up to the waterfront," said Vander Velpen of UNEP/GRID-Geneva.</p>
Plenty of Sand in the Sea?<p>The question of Manila's contentious white beach echoes larger questions about sand mining worldwide. <a href="https://unepgrid.ch/storage/app/media/documents/Sand_and_sustainability_UNEP_2019.pdf" target="_blank">Global sand consumption has tripled</a> over the past two decades, UNEP/GRID-Geneva has found. A huge chunk of it is now taken up by construction.</p><p>"Many operate on the assumption that natural sand is endless in its supply," said Vander Velpen.</p><p>Sand scarcity is a concern shared by Stefan Schimmels of <a href="https://www.fzk.uni-hannover.de/fzk_start.html?&L=1" target="_blank">Forschungszentrum Küste</a> who's done extensive research on shore nourishment to stop coastal erosion. And as climate change and rising sea levels are threatening coasts, demand for sand will grow even more.</p><p>A large study, the <a href="http://www.stencil-project.de/wp-content/uploads/2019/10/STENCIL_SWOT_Analyse_191026.pdf" target="_blank">Strategies and Tools for Environment-Friendly Shore Nourishments as Climate Change Impact Low-Regret Measures (STENCIL project)</a>, focused on the German island of Sylt, a popular vacation spot.</p><p>About 1 million cubic meter of sand per year is used to maintain the coastal area of Sylt, STENCIL project head Schimmels said. That's about 100 million 10-liter buckets of sand.</p><p>When sand was extracted off the coast of Sylt, underwater craters were formed. "You can still detect these craters even decades later," Schimmels told DW.</p><p>"Also when you add a couple of meters sand onto the beach — you essentially bury all things that do creep and fly," he said. "How quickly will they recover?" Schimmels said more research was needed as there was still too little known about long-term effects on the environment. </p>
Criticism Piling Up<p>As for Manila's artificial white sand, it looks like some might have already been blown away by a recent storm. DENR claims it wasn't washed away, but said that grayish sand, stones and other material had simply piled up over the dolomite sand. People in Manila have tweeted photos showing how the storm has ravaged the beach. </p>
<div id="adc0b" class="rm-shortcode" data-rm-shortcode-id="98f9390db6bb81cb421aaf0bb9d9a6fb"><blockquote class="twitter-tweet twitter-custom-tweet" data-twitter-tweet-id="1318816633280851969" data-partner="rebelmouse"><div style="margin:1em 0">Exactly one month after giving excited netizen a glimpse of Manila Bay white sands, look what happened now after ju… https://t.co/X0Z9i0bPB0</div> — M*A*S*H (@M*A*S*H)<a href="https://twitter.com/Magtira_Matibay/statuses/1318816633280851969">1603265362.0</a></blockquote></div><p>Authorities have been called tone-deaf for spending around 389 million pesos ($8 million) on a beach nourishment project in the middle of a raging pandemic.</p><p>An image of cake iced with the words "It really hurts - that's [worth] 389 million pesos?" has since gone viral.</p>
<div class="rm-shortcode" data-rm-shortcode-id="4387aad52ea316e4db7330052318ca2f"><div class="fb-post" data-href="https://www.facebook.com/theweekendpatisserie/posts/144564207350008"></div></div><p>"It's just a waste of precious resources," Torres said. </p><p>The environmental activist now also worries that she might be labeled a terrorist for speaking out under the <a href="https://www.dw.com/en/philippine-anti-terrorism-law-triggers-fear-of-massive-rights-abuses/a-53732140" target="_blank" rel="noopener noreferrer">Philippines' controversial new anti-terrorism law</a>. She says she could be arrested for inciting fear when talking about environmental dangers.</p>
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