TIME energy

How Much Crude Oil Do You Consume on a Daily Basis?

holding-petrol-pump
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Most of America's daily crude consumption stems from transportation

Oil. The commodity. We know what it’s worth – at least we thought we did – but what does a barrel of the black stuff get you in real life? Before we get theoretical, let’s first consider how much oil you use.

If you’re in the United States, that figure is approximately 2.5 gallons of crude oil per day; roughly one barrel every seventeen days; or nearly 22 barrels per year. That’s just your share of US total consumption of course; the true number is harder to discern – minus industrial and non-residential uses, daily consumption drops to about 1.5 gallons per person per day. Subtract the percentage of the population aged 14 and below and the daily consumption climbs back above 2 gallons. This is big picture, and it’s quite variable, so let’s go further.

Most of the nation’s daily crude consumption stems from transportation. If you’re an average driver in an average car, your crude consumption is in the order of 12 barrels per year. However, if your car is more than ten years old, chances are that figure is closer to 15 barrels annually. Does an electric car offer significant savings? Of course it does, but for an unconventional comparison let’s assume all of the electricity is sourced from oil – in truth, petroleum is not a very efficient fuel and accounts for just 1 percent of electricity generation in the US. Under this assumption, a Tesla Model S, with an 85 kilowatt-hour (kWh) battery and a range of 260 miles, will consume approximately 8 barrels of crude per year.

Read more: The World’s 10 Biggest Energy Gluttons

Frequent flyer? Say 2,000 miles per year on a US carrier? Add about two-thirds of a barrel of crude to your annual consumption.

A 3,000-mile cruise on the MS Oasis of the Seas may sound relaxing, but at roughly 4 barrels of crude per passenger, the carbon footprint alone is worth reviewing.

What about residential use? Using similar assumptions to the electric car example above, we can calculate our annual home electricity use in barrels of crude. In 2013, an average American home consumed 10,908 kWh of electricity, or approximately 20 barrels of crude. The real number – considering oil’s role in electricity generation – is far lower at around one-fifth of a barrel.

Petroleum products are active in nearly every facet of our daily lives; food and consumer chains are no exception. Take a look at bottled water for example. It’s an energy intensive business, one with an estimated energy expenditure of 32 million barrels of oil per year – for 33 billion liters of bottled water purchased in the US. The production of the single-use polyethylene terephthalate (PET) bottles alone requires the energy equivalent of almost 17 million barrels of oil.

Obtaining an accurate picture of your daily oil consumption is truthfully quite difficult. Your consumption is dependent on my consumption, which is dependent on someone’s consumption halfway around the globe to make a simple analogy. Moreover, consumption is largely bound by perception and the barrel is still a relatively abstract measure – few will ever lay hands on one. So for the sake of understanding, let’s look at what else a barrel gets you.

Read more: The Easy Oil Is Gone So Where Do We Look Now?

According to Chevron, one barrel of oil produces: 170 ounces of propane; 16 gallons of gasoline; one gallon of roofing tar; a quart of motor oil; 8 gallons of diesel fuel; 70 kWh of electricity; four pounds of charcoal briquettes; 27 wax crayons; and 39 polyester shirts.

For good measure, it can power a 42’’ plasma television for about a year and a half – again, it’s not very efficient. It can charge your laptop PC every day for over 7 years, or your iPhone for more than 240 years.

Finally, on the open market, a barrel of West Texas Intermediate will fetch around $50.

* 1 barrel = 42 U.S. gallons = 5,800,000 Btu
1 gallon gasoline = 124,262 Btu
1 gallon jet fuel = 128,100 Btu
1 barrel = 533 kWh (Power plant heat rate of 10,991 Btu/kWh)

Source: EIA and EIA and EIA

This article originally appeared on Oilprice.com.

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TIME energy

Recent ‘Bomb Trains’ Expose Regulatory Failures

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New rules, which are expected to be finalized in May, would require the phase-out of older cars, in favor of newer reinforced designs

The latest oil train derailments could force the federal government to tighten the regulatory screws further than they had planned.

The train disasters in Ontario and West Virginia were the latest in a long line of explosions from oil trains, or “bomb trains” as they have been called derisively by their critics. The problem, regulators thought, were the thin-walled flimsy DOT-111 railcars, which had not originally been designed to safely carry volatile crude oil.

U.S. federal transportation regulators began writing new rules that would require the phase-out of these older cars, in favor of newer reinforced designs.

The tricky problem facing regulators is one inconvenient detail – the newer railcars that have been trumpeted as much safer were the ones that derailed and exploded on February 16 in West Virginia. The so-called CPC-1232 cars are an upgrade over the DOT-111, with thicker hulls to prevent puncturing and pressure valves to vent gas in the event of the railcars overheating.

Read more: Train Carrying Volatile Bakken Crude Derails In Canada

Nevertheless, even though the CPC-1232 cars have demonstrated that they are inadequately safe, much of the crude hitting the nation’s railways are not even traveling to that standard. Railcar manufacturers do not have the capability to ramp up production of the CPC-1232s fast enough, with a backlog of at least 50,000 cars. Meanwhile, there are still around 171,000 DOT-111s still in operation.

And in another loophole exposed by E&E News, railroad companies can even continue to use damaged railcars which leak oil, with the approval from the federal government.

Another problem is the extra volatility that Bakken crude has demonstrated. Due to the associated volatile gas that comes with oil drilled in the Bakken, the oil carried by train coming from North Dakota is more dangerous than conventional crude. The state of North Dakota has required that producers process the oil to remove the gases, and that rule takes effect on April 1. While it is so far unclear if the crude that exploded in the West Virginia incident had undergone this type of processing, it would not have been required.

“At this point, we have to let this order go into effect and let the operators get the equipment installed,” the Director of North Dakota’s Department of Mineral Resources Lynn Helms said in response to questions raised in the wake of the West Virginia derailment about North Dakota needing to address safety more aggressively.

Safety on the rails is critical because of the surging volumes of oil moving on the nation’s railways. An estimated 400,000 barrels of oil were transported by railcar in 2013, a dramatic jump from just 11,000 barrels in 2009, according to data from the Association of American Railroads.

The federal government has been criticized for taking way too long to issue new safety standards. The Department of Transportation proposed new rules in August, but has now twice pushed off finalizing those rules, missing the original deadline at the end of 2014.

The proposal has not committed to one rail car design, instead it reviewed several with different safety features and levels of wall thickness. They also may only require a gradual phase-out over the next two to three years of the DOT-111 railcars. Some politicians, including Senators from North Dakota, have resisted a swifter phase-out, fearing damage to the state’s oil production. The oil shipping industry has heavily lobbied the U.S. Congress for favorable treatment.

Read more: State Of Emergency In West Virginia Following Oil Train Explosion

But the latest disaster in West Virginia is once again raising pressure for stronger action. “Yet again, we have seen a rupture-prone rail car carrying volatile crude oil wreak havoc on a community, and it further demonstrates that the federal Department of Transportation and Office of Management and Budget must release tough, comprehensive rail car standards to help avoid a future tragedy,” U.S. Senator Chuck Schumer said in a statement.

Canada is also stepping up its efforts. The government is considering a tax on oil-by-rail shipments, with the proceeds put into a compensation fund to cover damages from future derailments.

All eyes turn to the White House where the Department of Transportation recently sent a “comprehensive” set of rules. A final version is expected in May. Pressure will be on the Obama administration to ensure a weak rule doesn’t emerge as the West Virginia disaster is just the latest reminder that rail safety regulations are inadequate.

This article originally appeared on Oilprice.com.

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TIME energy

The Easy Oil Is Gone, So Where Do We Look Now?

Oil Rig Drill
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Studies point to the Middle East, Latin America, North America and Africa as the key regions for future oil plays

In 2008, Canadian economist Jeff Rubin stunned the oil market with a bold prediction: With the world economy growing at 5 percent a year, oil demand would grow with it, outpacing supply, thus lifting the oil price from $147 to over $200 a barrel.

The former chief economist at CIBC World Markets was so convinced of his thesis, he wrote a book about it. “Why the World is About to Get a Whole Lot Smaller” forecast a sea change in the global economy, all driven by unsustainably high oil prices, where domestic manufacturing is reinvigorated at the expense of seaborne trade and people’s choices become driven by the ever-increasing prices of fossil fuels.

In the book, Rubin dedicates an entire chapter to the changing oil supply picture, with his main argument being that oil companies “have their hands between the cushions” looking for new oil, since all the easily recoverable oil is either gone or continues to be depleted – at the rate of around 6.7% a year (IEA figures). “Even if the depletion rate stops rising, we must find nearly 20 million barrels a day of new production over the next five years simply to keep global production at its current level,” Rubin wrote, adding that the new oil will match the same level of consumption in 2015, as five years earlier in 2010. In other words, new oil supplies can’t keep up with demand.

Of course, Rubin at the time was talking about conventional oil – land-based and undersea oil – as well as unconventional oil sands. The shale oil “revolution” in the United States that took off soon after the publication of his book has certainly changed the supply picture, and the recent collapse in oil prices has forced Rubin to eat his words. With U.S. shale oil production soaring from 600,000 barrels a day in 2008 to 3.5 million barrels a day in 2014, the United States over the past few years has flooded the market with new oil from its shale formations, including the Eagle Ford in South Texas and the Bakken in North Dakota. According to the Energy Information Administration (EIA), total U.S. production (conventional and unconventional) will increase to 9.3 million barrels a day this year, the most since 1972.

Read more: This Huge Oil Buyer Is Appearing Nextdoor To The U.S.

While some observers, including oil giant BP, are now predicting a slowdown in U.S. shale oil production as wells are depleted at a faster rate, to be replaced by Middle Eastern output that has lost ground to U.S. shale, the thesis posed by Jeff Rubin in 2008, that the world is running out of oil, seems to have changed to: Is the world swimming in oil?

In this continuing climate of abundant oil production, Oilprice.com sought to find out where the new oil will be found. The data could be used in a further analysis to determine whether an oversupplied market will continue to depress oil prices into the future – or whether a price correction is likely given a tightening of the market on the supply side.

According to a 2013 report by Wood Mackenzie, the world holds 1.4 trillion barrels of oil equivalent oil and gas reserves, with the Middle East, Latin America, North America and Africa identified as the key regions for future oil plays.

Of course, many of the new fields are uneconomic at current prices, so it is instructive to look at the largest oil fields to see where oil producers are likely to keep pumping, even though many of these fields are in decline.

They include Ghawar and Safaniya in Saudi Arabia, Burgan in Kuwait, and Rumalia and West Qurna-2 in Iraq. These five fields were named the most important by Oilprice.com in an article last June. Ghawar, the world’s largest field, has an estimated 70 billion barrels of remaining reserves, more than all but seven other countries, according to the EIA. In production since the 1950s, it continues to produce at 5 million barrels a day.

If you noticed the dominance of the Middle East in this list, you’d be right. Current estimates have over 80 percent of the world’s proven oil reserves located in OPEC member countries, with Middle Eastern reserves comprising 65 percent of the OPEC total.

Adding to the Oilprice.com list, Forbes named Majnoon in Iraq, Khuzestan (also the name of a province) in Iran, Kashagan in the Caspian Sea, Khurais in Saudi Arabia, the Tupi field offshore Brazil, Carabobo in Venezuela’s Orinoco heavy oil belt, and the North Slope of Alaska among its top 10 fields of the future.

Fortune places the Orinoco belt in Venezuela among its six largest untapped fields, at an eye-watering 513 billion barrels of recoverable crude. In comparison the Chicontapec Basin in Mexico, also on the list, is a Lilliputian at 10 billion barrels. Others include the Santos and Campos Basins in offshore Brazil, at 123 billion barrels, the Supergiant field in the southwest desert of Iraq, at between 45 and 100 billion barrels, and the Jubilee Field in Ghana, estimated to contain 1.8 billion barrels of recoverable crude.

The Canadian oil sands should of course also be included in the matrix of future oil supply. Despite the difficulty and higher-cost, compared to conventional sources, of stripping the bitumen from the oil sands and processing it into heavy oil, the vastness of the reserves contained in the sands of northern Alberta cannot be underestimated. According to the Alberta government the oil sands has proven reserves of about 168 billion barrels, the third largest proven crude oil reserve in the world, after Saudi Arabia and Venezuela. Canadian oil sands production is forecasted to grow from about 2 million barrels per day to 3.7 million barrels per day by 2020 and 5.2 million barrels per day by 2030, according to Alberta Energy.

Many have pointed to the Arctic as the answer to the depletion of existing oil and gas fields. The region, which crosses Russia, Alaska, Norway and Greenland, is estimated to hold 166 billion barrels of oil equivalent, more oil and gas than Iran and enough to meet the world’s entire consumption of crude oil for five years, reported The Daily Telegraph.

Drilling down a bit further, the US Geological Survey estimates that over 87% of the Arctic’s oil and gas resources are located in seven Arctic basin provinces: Arctic Alaska Basin, East Barents Basin, East Greenland Basin, West Greenland East Canada Basin, East Greenland Rift Basin, West Siberian Basin and the Yenisey-Khatang Basin.

The Prudhoe Bay field in Alaska, which has been pumping oil since 1977, is the largest oil field in North America, at about 25 billion barrels. Around 16 percent of the Arctic’s undiscovered oil and gas is located on land, with the remaining potential either locked in continental shelves or underwater at depths over 500 metres.

Of the seven basins outlined by the USGS, the most abundant is Arctic Alaska, at 29.36 billion barrels of crude oil, followed by the Amerasia Basin, at 9.72 billon, and the East Greenland Rift Basin at 8.90 billion, according to Geology.com.

Among the oil majors eyeing the Arctic prize, Shell has been drilling off the coast of Alaska for decades, Statoil is active in the Norwegian Arctic, and ExxonMobil is exploring with Russia’s Rosneft in the Russian far north. Last year Rosneft/ ExxonMobil discovered a field that could hold up to 730 million barrels of oil, but for the time being, exploration looks thin. With low oil prices, most oil companies are reining in capital costs, and exploration expenditures are a high-priority line item. Statoil and Chevron have both put their Arctic plans on ice, and the ExxonMobil partnership with Rosneft could be in trouble due to Western sanctions against Russia. Shell is currently the only company sinking any capital into the Arctic, with the Anglo-Dutch firm announcing at the end of January that it plans to proceed with a $1-billion Arctic drilling this summer.

Read more: Is Oil Returning To $100 Or Dropping To $10?

And what of the shale oil reserves that have propelled the United States to becoming close to energy-independent and threaten to knock Saudi Arabia off its pedestal as the world’s top oil producer? In 2013, the EIA conducted the first-ever U.S. analysis of global shale oil reserves. It estimated “technically recoverable” (as opposed to economically recoverable) shale oil resources of 345 billion barrels in 42 countries, the equivalent of 10 percent of global crude oil supplies – and enough to cover over a decade of oil consumption.

According to the EIA, Russia and the United States have the largest shale oil resources, at a respective 75 billion barrels and 58 billion barrels, followed by China, Argentina and Libya. The other countries on the top 10 list of countries with technically recoverable shale include Australia, Venezuela, Mexico, Pakistan and Canada.

The EIA report also shows a marked increase in the number of prospective shale deposits globally compared to an earlier 2011 report. That report listed 32 countries with shale versus 41 in 2013, 48 basins versus 95, and half the number of formations, at 69 in 2011 versus 137 in 2013.

This article originally appeared on Oilprice.com.

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MONEY Gas

Here’s What Americans Are Doing With the Gas Money They’re Saving

Gas nozzle and money
Tim McCaig—Getty Images

The government's Energy Information Administration estimates the average household will spend $750 less on gas this year. So where's that money going?

Americans are enjoying a nice raise at the moment, in the form of dramatically lower gas prices. The government’s Energy Information Administration estimates that the average household will spend $750 less on gas this year, which is like getting a roughly $1,000 raise, since the savings aren’t taxed. For a little perspective, the 2008 economic stimulus package passed by Congress designed to save America from the worst of the recession sent a maximum of $600 to American households.

The gas price drop means even more to struggling lower-income earners: the bottom fifth of earners spend 13% of their income on gas.

That’s the good news. The bad news? Retailers aren’t seeing much, if any, of that money.

Americans spent $6.7 billion less on gas in January than November, but retail spending actually fell slightly during that span. That means lower gas prices are not acting as a surprise stimulus plan for the economy.

So where is the money going? To the bank.

The Federal Reserve Bank of St. Louis recently reported that Americans’ notoriously low personal savings rate spiked in December, to 4.9%, from 4.3% the previous month. The cash that’s not going into the gas tank is going into savings and checking accounts instead.

Few Americans save enough money, and many have insufficient rainy-day funds. With the recession fresh in their minds, many Americans appear to be more concerned with restoring their severely damaged net worth than buying stuff.

But Logan Mohtashami, a market observer and mortgage analyst, suspects something else might be at play.

“People don’t think the gas price (drop) is a long-term reality,” Mohtashami said. Despite government predictions to the contrary, he says, consumers aren’t adjusting their spending to a new normal, and instead they’re holding onto their cash for the next rise in prices.

Again, that kind of pessimism is sensible, and it’s good for personal bank accounts, but it’s not so good for growing the economy.

How much are you saving thanks to lower gas prices? What are you doing with the “raise?” saving or paying down debt? Planning a better vacation? Driving a gas-guzzler more often? Let me know in the comments, or email me at bob@credit.com.

More from Credit.com

This article originally appeared on Credit.com.

MONEY Markets

Oil Prices: Freaking Investors Out for 150 Years and Counting

Oil derricks moving up and down
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The entire oil and gas industry has pretty much maneuvered from crisis to crisis since its inception.

Whenever I read or watch financial media coverage of oil prices lately, the image that comes to mind is a bunch of kids who just ate half their weight in candy, washed it down with a gallon of Red Bull, and then run around the playground at warp speed. They both move so fast and sporadically that is almost impossible to keep up with them.

Here is just a small example of headlines that have been found at major financial media outlets in just the past week:

  • Citi: Oil Could Plunge to $20, and This Might Be ‘the End of OPEC’
  • OPEC sees oil prices exploding to $200 a barrel
  • Oil at $55 per barrel is here to stay
  • Gas prices may double by year’s end: Analyst

What is absolutely mind-boggling about these statements is that these sorts of predictions are accompanied with the dumbest thing that anyone can say about commodities: This time it’s different.

No it’s not, and we have 150 years worth of oil price panics to prove it.

Oil Prices: From one hysterical moment to another

The thought of oil prices moving 15%-20% is probably enough to make the average investor shudder. The assumption is that when a move that large happens, something must be wrong with the market that could change your investment thesis. Perhaps the supply and demand curves are a little out of balance, maybe there is a geopolitical conflict that could compromise a critical producing nation.

Or maybe, just maybe, it’s just what oil prices do over time.

Ever since 1861 — two years after the very first oil well was dug in the U.S. — there have been:

  • 88 years with a greater than 10% change, once every year and a half
  • 69 years with a greater than 15% change, or once every 2.25 years
  • 44 years with a greater than 25% change, once every 3.5 years
  • 13 years with a greater than 50% change, once every dozen years or so

Also keep in mind, these are just the change in annual price averages. So it’s very likely that these big price pops and plunges are even more frequent than what this chart shows.

Investing in energy takes more stomach than brains

It’s so easy to fall into the trap of basing all of your energy investing decisions on the price of oil and where it will go. On the surface it makes sense because the price of that commodity is the lifeblood of these companies. When the price of oil drops as much as 50% over a few months, it will likely take a big chunk out of revenue and earnings power.

As you can see from this data, though, the frequency of major price swings is simply too much for the average investor to try to time the market. Heck, even OPEC, the organization that is supposed to be dedicated to regulating oil prices through varying production is bad at predicting which way oil prices will go.

The reality is, being an effective energy investor doesn’t require the skill to know where energy prices are headed — nobody has that skill anyways. The real determining factor in effectively investing in this space is identifying the best companies and holding them through the all the pops and drops.

Let’s just use an example here. In 1980, the price of oil — adjusted for inflation — was at a major peak of $104. From there it would decline for five straight years and would never reach that inflation adjusted price again until 2008. For 15 of those 28 years oil prices were one-third what they were in 1980. If we were to use oil prices as our litmus test, then any energy investment made in 1980 would have been a real stinker.

However, if you had made an investment in ExxonMobil in 1980 and just held onto it, your total return — share price appreciation plus dividends — would look a little something like this.

XOM Total Return Price Chart

So much for all those pops and drops.

What a Fool believes

The entire oil and gas industry has pretty much maneuvered from crisis to crisis since its inception, we just seemed to have forgotten that fact up until a few months ago because we had two years of relative calm. The important thing to remember is that the world’s energy needs grow every day and the companies that produce it will invest and make more money off of it when prices are high and less money when prices are low.

Based on the historical trends of oil, analysts will continue to go on their sugar-high proclamation streak and say that oil will go to absurd highs and lows so they can get their name in a financial piece, and they will try to tell you that this time it’s different because of xyz. We know better, and they should as well.

There’s 150 years of evidence just waiting to prove them wrong.

TIME portfolio

Inside a Saudi Arabian Oil Giant’s American Oasis

“When I think back on growing up in Dhahran, it seems like a dream. An American dream in Saudi Arabia.”

Photographer Ayesha Malik grew up in a typical American suburb with cookie-cutter houses, softball fields, and Christmas trees in December. However, her hometown, Dhahran, is located on the east coast of Saudi Arabia, some 8,000 miles away from the California neighborhood it was modeled after.

Dhahran is a 22.5 square-mile gated compound built for the American expatriate workers of Aramco, the biggest oil company in the world. Now owned by the Saudi state, Aramco was originally founded in 1933 as a U.S.-Saudi joint venture. Palm trees and lush lawns were imported after striking black gold.

“Growing up, I didn’t differentiate between ‘American’ and ‘Saudi’,” says Malik. “In my world, abayas and softball fields were very compatible. As I got older, I realized what a rare privilege it was to have the chance to experience Saudi Arabia.”

 Dhahran Saudi Arabia
Ayesha MalikStreet signs in Dhahran are written in both Arabic and English.

The opportunity for Westerners to travel, let alone photograph, in Saudi Arabia has always been severely restricted. “Sure, [Dhahran] is in Saudi Arabia, but it’s not really Saudi Arabia,” Malik tells TIME. Outside the Aramco compound, women can’t drive, shops close multiple times a day for prayer, and restaurants are segregated between families and single males, she says.

In Dhahran, Malik can drive, ride a bike, and photograph her hometown. But, if she steps out of the compound, she cannot enjoy the same range of freedoms without being accompanied by a male relative, and must conform to the country’s stringent rules. “I still get told to put my camera away by guards at the mall,” she says. “Legally, I can take photos in public — but that wasn’t always the case. For years, camera phones were banned at the mall, but there is no way that could be controlled in this day and age.”

 Dhahran Saudi Arabia Mall
Ayesha MalikDhahran Mall, a 10 minute drive outside of the compound. Women usually wear abayas outside of Aramco’s compound.

With her Pakistani origins, her American passport and Saudi background, Malik is perfectly positioned to document Saudi identity, which now forms an integral part of her work as a photographer. “I try not to let the restrictions on women get in my way,” Malik tells TIME. “I focus on the positive. As a woman, I have the chance to meet and speak with many other young women in Saudi Arabia, which would not be doable as a man. I get my fair share of rejections [from men and women], but I also find that people are more curious and open to [being photographed].”

Saudi Arabia is a complex country, and the pace of change is slow, Malik says. However, she sees signs of a shifting status quo. “I just don’t think you can look at Saudi Arabia and implement changes based on a Western perspective,” she says. “Saudi Arabia takes great pride in its history and tradition, but it also values the importance of a future in the modern world.”

Ayesha Malik is a photographer based in New York City and Riyadh.

Marisa Schwartz is an Associate Photo Editor at TIME.com. Follow her on Instagram and twitter.

 

TIME Accident

Train Derailment in West Virginia Causes Oil Spill

Train Derailment
John Raby—AP A fire burns Monday, Feb. 16, 2015, after a train derailment near Charleston, W.Va.

Emergency officials ordered some residents to evacuate and conserve water

A train carrying crude oil in southern West Virginia derailed Monday, setting at least one house on fire and spilling oil into the state’s largest river, according to local news reports.

Authorities ordered residents within a mile and a half of the derailment to evacuate, according to WSAZ. The Charleston Daily Mail reports a CSX train went off the tracks at 1:20 p.m. ET, according to a spokesman for the Department of Military Affairs and Public Safety.

Following the crash, West Virginia Gov. Earl Ray Tomblin declared a state of emergency for Kanawha and Fayette counties.

“State officials are on site and will continue to work with local and federal officials, as well as CSX representatives, throughout the incident,” said Tomblin in a statement released by his office.

No injuries have been reported, and a shelter was set up at a local high school. The spill into the Kanawha River shut down some sources of water typically supplied to residents and led the state’s health department to ask them to conserve resources.

A variety of state and local offices, including the Fayette County Fire Department, Bureau for Public Health, state police and the governor’s office, are responding to the derailment.

TIME energy

U.S. Oil Production Reaches All-Time High Amid Low Crude Prices

An oil pump is viewed in on Feb. 4, 2015 in Big Springs, Texas.
Spencer Platt—Getty Images An oil pump is viewed in on Feb. 4, 2015 in Big Springs, Texas.

U.S. producers pumped out an average of 9.2 million barrels of crude daily in the latest week, the most since the federal government started keeping records

Domestic oil production has reached a new high of 9.2 million barrels daily, according to a new government report.

The total is the most since 1983, according to the Energy Information Administration, based on weekly data. It also matches the agency’s daily record set in Oct. 1973 that was calculated using monthly production levels.

The increased production follows a huge years-long drilling and fracking boom. Oil producers dramatically ramped up their operations to cash in on soaring energy prices.

But since the summer, the global crude market has collapsed because of a glut in production and lower-than-expected consumption in Europe and China. Since then, prices have fallen more than half, and ended the day Wednesday at below $50 per barrel.

In response to the glut, U.S. producers and oil services companies have slashed jobs and investment. Still, it has yet to fully impact production. On Tuesday, Halliburton said it would cut 6,400 positions, joining fellow oil and services firms Chevron, Baker Hughes and Weatherford International in implementing layoffs.

But the cuts have yet to completely curtail new production. In the latest week, daily U.S. production rose an average of 49,000 barrels to reach record levels.

At the same time, U.S. crude stockpiles also grew by nearly five million barrels to 417.9 million barrels for the week of Feb. 6, according to the government. That is well above analyst expectations.

Meanwhile, gasoline stockpiles rose by 2 million barrels, according to the Wall Street Journal. That gain went 200,000 barrels over analyst expectations, the newspaper said.

This post originally appeared on Fortune.com

MONEY Gas

Gas Prices Spike More Than 20¢ Per Gallon Overnight

The price of gas is displayed in downtown Midland on February 4, 2015 in Midland, Texas.
Spencer Platt—Getty Images

The national average for a gallon of regular is up 10¢ over the past three days, and in some parts of the country, prices jumped more than 20¢ overnight.

What was a slow rebound in gas prices at stations around the U.S. has picked up the pace significantly over the past few days. Last week, the national average bottomed out at $2.03 per gallon, before inching up to $2.05 on Monday, according to AAA. It then spiked up to $2.11 on Wednesday and $2.15 today.

Drivers in certain parts of the country have seen gas prices increase in alarmingly quick fashion, far outpacing the rise in the national average. In central Ohio, for instance, the average price for a gallon of regular was $2.26 on Wednesday, up from $2.04 the day before. As of Thursday, AAA reports that the statewide per-gallon average in Ohio is up to $2.27.

The gas-price tracking service GasBuddy reported that 26 metropolitan areas in the U.S. saw spikes of 15¢ or more per gallon from Tuesday to Wednesday of this week. Michigan has been hit especially hard: Eight out of the nation’s top 15 highest price increases in occurred in the state, including the three largest spikes. Up until last week, Michigan had enjoyed five straight weeks of sub-$2 gas; at last check, the statewide average was $2.28.

Meanwhile, drivers in states where the average has been under $2 for weeks should reacclimate themselves with having to pay more at the pump: The averages in Alabama, Arizona, Colorado, Kansas, Louisiana, Missouri, New Jersey, New Mexico, Oklahoma, Texas, and Wyoming have all inched up back to within two or three pennies of the $2 threshold.

Even if prices continue to creep higher in the short term, however, drivers won’t necessarily be subjected to ever-higher prices at the pump in the months ahead. On Wednesday, the Wall Street Journal noted, U.S. oil stockpiles rose unexpectedly to 6.3 million barrels—which is the highest it’s been at this time of year in at least eight decades. When there’s a surplus of oil, wholesale prices drop, and that generally translates to a subsequent drop in retail prices at gas stations.

No one knows for sure where gas prices are heading, but even after the recent spike, drivers in many parts of the country are still paying less than $2 per gallon—an absolute bargain compared to 2011, 2012, and 2013, when the year-long national averages were $3.49 or higher. And most signs indicate that prices won’t be heading back to those kinds of levels anytime soon.

MONEY Gas

Gas Prices Starting to Rise

gas coming out of nozzle and rising
Microzoa—Getty Images

After dropping mightily for four months in a row, prices at the pump appear to have bottomed out—meaning you'll probably pay more than $2 a gallon again soon, if you aren't already.

Last week, something weird happened: Gas prices rose. In most years, an increase in gas prices around now isn’t unusual at all. In fact, a gas price hike at the start of the year has become more or less an annual tradition lately. But this year, the late January rise ended a historic decline in fuel prices that stretched 123 consecutive days.

That rare increase in prices at the pump appears to be no fluke. According to AAA, the national average for a gallon of regular bottomed out at about $2.03 last week. The average has since inched up a penny or fraction of a penny here and there, reversing earlier trends in which it dropped 1¢ daily for weeks. Yesterday, the national average hit $2.056, and it’s up to $2.067 on Tuesday.

Very recently, AAA forecast that the national average would dip below $2 a gallon by the start of February. Now it looks like we’ll never get there. Instead, AAA researchers and other gas analysts are saying that prices are likely on the upswing through spring.

“It is a good bet that most drivers will pay more for gasoline in March than today,” AAA spokesperson Avery Ash said in a press release this week.

Oil refineries have reduced their output lately, and the result is rising wholesale gasoline prices—which translate to rising consumer prices as well, GasBuddy senior analyst Gregg Laskoski explained in a post published Monday: “From Jan. 7 up to this morning, wholesale prices on average are up 23 cents per gallon so there’s no doubt now that the first-quarter climb is under way and is already being reflected in rising prices at the pump.”

In all likelihood, the gas stations that will see the steepest price increases are the ones that have been selling the cheapest gas in recent weeks. For instance, the statewide average in California is currently $2.45 per gallon, but some stations have been trying to woo customers with prices under $2. It’s these kinds of stations, GasBuddy analyst Allison Mac told the Sacramento Bee, that “will see the most dramatic change. Those are the stations that are going to see 20 to 30 cents [price-per-gallon increases], probably over the next couple of weeks into mid-February.”

Even with the tides turning toward higher gas prices, drivers should keep in mind that fuel costs remain exceptionally cheap. This week’s message from AAA noted that more than half the gas stations in the U.S. still have gas under $2 per gallon, that the average last month was $2.11—incredibly cheap compared to $3.30 in January 2014—and that it does not expect the national average to ever surpass $3 in 2015. Mind you, the average was well over the $3 mark for the majority of 2014, and it was considered a big deal when prices dipped under $3 at any station. What’s more, the national averages for the years 2012 and 2013 were well over $3 per gallon.

In other words, even if gas prices creep upward for months, drivers will still be paying far less than they have during the past few years.

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