Friday, October 16, 2015

Active rigs:

	10/16/2015	10/16/2014	10/16/2013	10/16/2012	10/16/2011
Active Rigs	67	189	184	187	195

RBN Energy: why aluminum producers rely on crude refiners.

Petroleum coke (known as petcoke or “coke”) is produced by refinery coker units that break up residual fuel oil to squeeze out the last drops of lighter components used to make gasoline and diesel – leaving a solid carbon based residue. Petcoke is also the only commercial source of material used to manufacture electrolytic anodes that play a critical part in making aluminum. As a result – these industries are effectively joined at the hip - although you wouldn’t know it because the two rarely cooperate. As we explain in today’s blog - that may need to change going forward because a looming petcoke shortage could disrupt aluminum production and prices.

This blog series is based on the recently published “Alliance Anode Coke Study” prepared by Turner, Mason and Company, AZ China Ltd and Cascade Resources.

For those of you wondering why RBN Energy’s blog would suddenly veer off into the world of metals and in particular aluminum – tighten your seat belts and bear with us while we explain the relationship between crude oil and aluminum.

Aluminum is almost exclusively made using the Hall-Heroult electrolysis process where electricity at very high currents is passed through a molten electrolyte containing dissolved alumna (a compound of aluminum and oxygen produced from bauxite) at around 960 ^oC (1,760 ^oF). The alumina is reduced to its component parts – with the aluminum accumulating in reduction cells on one electrode (the cathode that transmits the current). The other electrode (the anode) is comprised of multiple blocks of carbon – typically around 1 metric tonne (MT) in weight – suspended in the electrolyte. These anodes are primarily manufactured from petcoke as well as a pitch based binder.

The anodes are consumed during the electrolysis by reaction with oxygen to form CO2.

Around 0.4 to 0.45 MT of carbon anode are consumed to produce 1 tonne of aluminum metal. Bottom line – you need about half a tonne of petcoke to make a tonne of aluminum. Who knew?

The US exports its greenhouse-gas emissions -- as coal. Profitable coal. The Washington Post is reporting (a series):

Gillette, Wyo. — A few feet below this prairie town lies one of North America’s biggest coal deposits, a 100-foot-thick slab of brittle black rock spanning an area the size of Rhode Island — nearly all of it owned by the U.S. taxpayer.Just a dozen nearby mines, scattered across a valley known as the Powder River Basin, contain enough coal to meet the country’s electricity needs for decades. But burning all of it would release more than 450 billion tons of carbon dioxide into the atmosphere — more than all greenhouse-gas emissions from all sources since 2000.

The Obama administration is seeking to curb the United States’ appetite for the basin’s coal, which scientists say must remain mostly in the ground to prevent a disastrous warming of the planet. Yet each year, nearly half a billion tons of this U.S.-owned fuel are hauled from the region’s vast strip mines and millions of tons are shipped overseas for other countries to burn. Government and industry reports predict a surge in exports of Powder River coal over the next decade, at a time when climate experts are warning of an urgent need to reduce coal burning to prevent global temperatures from soaring.
Each shipment highlights what critics describe as a hypocrisy underlying U.S. climate policy: While boasting of pollution cuts at home, the United States is facilitating the sale of large quantities of government-owned coal abroad.

“We’re a fossil-fuel-exporting super­power that goes around lecturing the rest of the world about cutting emissions,” said Paul Bledsoe, who was an adviser on climate during the Clinton administration. “The United States is reducing its domestic coal use and then simply exporting some of those emissions abroad.”

The production of electricity is the leading source of man-made greenhouse gases in the atmosphere, and the global demand for electricity, particularly in developing nations, will only grow. Coal accounts for 40 percent of the electricity produced globally — and more in China and India.

The Port of Los Angeles reports steep shipping decline in September, 2015. The Los Angles Times is reporting:

With a 9.4% drop in imports, the largest container port in the U.S. appears to be bearing the brunt of languishing trade. --That's the "story line" but there is much more to it.

Shipments through the Port of Los Angeles fell at a steep rate last month, extending a downward trend over the past year that suggests the port is bearing the brunt of sluggish U.S. international trade. In September, Los Angeles handled 124,286 loaded twenty-foot equivalent units, a standard measure for container cargo. That was off 17.5% from last September, the 12th straight month that loaded export containers declined from a year ago.

Imports declined 9.4% year-over-year, to 372,991 inbound containers. Shipping at many of the largest U.S. ports has been tepid in recent months. Foundering demand for U.S. goods in the troubled European and Asian economies has clipped exports and overstocking earlier this year by American retailers has led many of them restrain imports heading into the fall. But most ports aren’t reporting the deep declines that Los Angeles is coping with.

At the neighboring Port of Long Beach, imports fell 1.9% in September while exports were up 6.1% from the same month last year.

For January through August, the major ports of New York and New Jersey, Savannah, GA, and Seattle and Tacoma, WA, reported double-digit gains in loaded import containers.

Imports at the Port of Oakland were flat for the first nine months of 2015 through September while Long Beach has reported an increase of 2.1% in imports over the same period last year.

The East Coast ports have reaped the benefits of congestion on the West Coast earlier this year related to protracted contract negotiations with the dockworkers’ union there.

The talks wrapped up in late February, but the West Coast has been slow to fully recover their cargo volumes as many shippers shifted their goods to different routes after months of uncertainty at the Pacific ports.

Overall, including an additional 233,029 empties, Los Angeles saw a decline of 5.8% in total container volume in September—the largest drop since the height of West Coast port congestion earlier this year. The inbound container volume at Los Angeles also fell 8.5% from August to September, a break from historic patterns that see business grow as retailers bring in goods for the holiday sales season. Los Angeles is facing tough comparisons to 2014, when it handled 8.3 million containers, the most since 2007. A spokesman for the Port of Los Angeles said 2014 was a near-record year, and beating last year’s volumes has been challenging in the wake of this year’s congestion problems.

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Syria

This is why Obama refuses to meet with "Russia" to discuss Syria -- according to The Fiscal Times.

Vladimir Putin’s ongoing effort to keep the U.S. off balance has forced the White House into yet another politically awkward choice. The Obama administration has officially refused a meeting with Russian Prime Minister Dmitry Medvedev and a high-level delegation of Kremlin officials, following an offer from the Russian government to open up talks about the ongoing conflict in Syria.

The offer, extended by the Kremlin, was ostensibly an effort to begin coordinating the two countries’ military efforts against the terror group ISIS.

However, White House spokesman Josh Earnest said that the administration has no interest in aligning with the Kremlin in Syria.

The Obama administration, of course, has very obvious reasons for declining high-level talks with Russia on coordinating the two countries efforts against ISIS – not lest (sic) of which is that the White House doesn’t appear to believe that Russia really is doing much to counter the terror group that has taken over large parts of Syria and Iraq in the first place.

Syria is currently in the grip of a three-way war, in which the forces loyal to dictator Bashar al-Assad are fighting against rebel groups seeking to overthrow the regime, as well as ISIS. The rebels and ISIS, in addition to fighting Assad, are fighting each other.

For the archives:

• From the WSJ, Henry Kissinger, October 16, 2015
• Comment at this article:

Foreign policy novice Obama has destroyed 40+ years of positive American influence in the Mideast and handed Putin the keys: http://www.wsj.com/articles/a-path-out-of-the-middle-east-collapse-1445037513 "That geopolitical pattern is now in shambles. Four states in the region have ceased to function as sovereign. Libya, Yemen, Syria and Iraq have become targets for nonstate movements seeking to impose their rule. Over large swaths in Iraq and Syria, an ideologically radical religious army has declared itself the Islamic State as an unrelenting foe of established world order. It seeks to replace the international system’s multiplicity of states with a caliphate, a single Islamic empire governed by Shariah law."