UPI Energy Watch

Airline industry blames crude spike on speculation

The Air Transport Association blamed market speculation and a lack of political will on Monday's huge spike in the oil market.

The price of oil on the New York Mercantile Exchange spiked 16 percent to $120.92 Monday in its biggest one-day surge ever.

The Air Transport Association of America blamed the jump on panic ahead of the massive $700 billion federal rescue plan for Wall Street and the decline in the U.S. dollar, The Phoenix Business Journal reported.

James May with ATA said commodity traders dumped massive amounts of money into the oil market amid fears Washington would hesitate to curb the influence of speculation in the market.

ATA members AirTran, Northwest and Midwest have been pushing for restrictions on commodity speculators to prevent wild fluctuations in the market.

The airline industry purchases its fuel months or years in advance in order to receive discounted rates from suppliers.

CAPP chief pushes new industry image

The new head of the Canadian Association of Petroleum Producers said the sector needs to do better at reassuring citizens it is not an agent of corporate greed.

Former Shell Canada chief David Collyer said the oil and gas sector needs to improve its image of a profit-driven industry with no regard for the fragile environment, The Calgary Herald said Tuesday.

Collyer, who replaces nine-year veteran Pierre Alvarez, assumes the leadership position at CAPP amid soaring energy costs and mounting concerns over the environmental impact of Canadian oil sands.

Energy analysts warned Canadian officials the fallout from the U.S. economic turmoil could spill north, lending credibility to the argument that the energy sector there is tinged with greed.

"I'm going in with my eyes open," Collyer said. "It's an interesting time, there are lots of challenges for industry, but also lots of opportunity. I look forward to hopefully having a positive influence on some of that."

Gazprom, Venezuela sign gas deal

Russian energy giant Gazprom and the state-run Petroleos de Venezuela announced a joint project to produce liquefied natural gas.

Venezuela has the second-largest proven natural gas reserves in the Americas after the United States, with about 4.1 trillion cubic meters. It also boasts 7 percent of the world's oil reserves, or about 78 billion barrels of oil.

Following negotiations last week between Gazprom officials and Venezuelan Energy and Oil Minister Rafael Ramirez, Gazprom agreed to invest $850 million over seven years in the regional energy sector, the Russian daily Kommersant reported Tuesday.

Gazprom also will receive roughly $420 million from the sale of natural gas over the course of the deal.

The deal outlines procedures for the exploration, production and distribution of natural gas in fields on the continental shelf.

New fields bode well for New Zealand economy

Petroleum officials in New Zealand say new oil and gas blocks in the northwest Taranaki region point to the continued economic importance of fossil fuels.

Crown Minerals, which manages fossil fuels and mineral resources for the government of New Zealand, apportioned 11 additional onshore oil and gas blocks in Taranaki. John Pfahlert with the Petroleum Exploration and Production Association of New Zealand said the allocation shows the sector is still strong amid growing trends in renewable resources, the weekly National Business Review reported.

Pfahlert added that New Zealand has enough proven gas reserves to meet its energy demands for the next decade.

For his part, Associate Energy Minister Harry Duynhoven stated new energy partners expressing interest in exploring New Zealand's energy reserves are a further sign of the economic viability of the sector.

"This shows the industry has real confidence in the future of petroleum exploration in New Zealand," Duynhoven said.

The New Zealand government said its revenue from oil exports exceeded $300 million a month earlier this year.

Pickens blows into presidential race

Texas oil baron T. Boone Pickens called on Republican and Democratic presidential contenders to work on a plan to ease the U.S. demand for foreign oil.

Speaking at the National Press Club in Washington, Pickens, who launched a major advertising campaign to advocate alternative energy resources, said the presidential candidates need to persuade Americans to move away from fossil fuels for their transportation needs, Voice of America reported Tuesday.

"I am going to press it up to them that we want a plan, an energy plan to reduce ... our foreign oil by 30 percent in 10 years," he said.

Pickens, who toyed with a presidential run in 1988, said U.S. oil consumption topped $700 billion in overseas purchases and predicted that amount to soar to $2 trillion in the next 10 years.

Though he has been cautious not to throw his support behind either presidential candidate, Pickens blamed Republicans for trying to "drill their way out" of the looming energy crisis.

The oil tycoon has spent millions advocating the "Pickens Plan" to use wind turbines to free up natural gas reserves as an alternative to petroleum-based fuel sources. Opponents to the plan say his massive investment in alternative energy is the true motive behind his philanthropy.

Colorado considers wildlife regulations on oil sector

The Colorado Oil and Gas Conservation Commission Tuesday considered regulations focused on wildlife protection near oil waste pits.

Commissioners Tuesday were scheduled to hear petitions filed by the Colorado Oil and Gas Association asking for a delay in the consideration of the waste pit regulations while it vetted "discussions and revisions by staff," The (Colorado) Post Independent said.

Water is associated with oil in many fields. Commercial oil field operators typically collect water into disposal cells, which pose a threat to nearby wildlife.

The commission said it would back regulations that would ban the construction of waste facilities within 300 feet of public water supplies.

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