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Monday, 05 January 15
FIVE ENERGY SURPRISES FOR 2015: THE POSSIBLE AND THE IMPROBABLE - KURT COBB
 The coming year is likely to be as full of surprises in the field of energy as 2014 was. We just don't know which surprises! I am not predicting that any of the following will happen, and they will be surprises to most people if they do. But, I think there is an outside chance that one or more will occur, and this would move markets and policy debates in unexpected directions.
1. U.S. crude oil and natural gas production decline for the first time since 2008 and 2005, respectively. The colossal markdown in world oil prices has belatedly been followed by a slightly smaller, but nevertheless dramatic markdown in U.S. natural gas prices. The drop in prices has already resulted in announcements from U.S. drillers that they will curtail their drilling operations significantly next year.
But drilling that is already contracted for will likely go forward, and wells waiting for completion will be completed. It can be costly to pull out of drilling contracts. And, failing to complete already successful wells and bring them into production is downright foolish since the costs incurred in drilling the wells including future debt payments remain. In those circumstances, some revenue at lower prices is preferable to no revenue at all.
Having said all that, scaled-down drilling plans when combined with what's left in drillers' immediate inventory both to drill and complete may not be enough to overcome the prodigious production decline rates from existing wells in deep shale deposits of oil and gas which have provided almost all the recent growth in U.S. production. The decline rates are 60 to 91 over three years for tight oil plays and 74 to 88 percent over three years for shale natural gas plays.
If low prices continue for a second year, the cheers for "Saudi" America will disappear. It was never to be anyway. What America has left is high-cost oil and natural gas. And, even at high prices both were likely to peak and decline in the next 5 years. Now, low prices may bring peak production rates in the coming year for both U.S. oil and natural gas--peaks that may never be seen again.
2. World crude oil closes below $30 per barrel. I think that such a price would only last a short time unless the world is in the throes of the next Great Depression. But since OPEC has reaffirmed that it will continue to pump oil at current rates until non-OPEC production declines, look for this game of chicken to create increasing inventories of oil worldwide for several months. The underlying cause for rising oil inventories is slowing economic growth in much of Asia, especially China, and economic stagnation in Europe and Japan. Any pickup in worldwide growth would send oil significantly higher than where it is today as oil demand increases.
3. Developments in solar thermal energy show that it can solve the storage problem for electricity from renewable energy. The difficulty with renewable energy supplying electricity is that electricity is very expensive to store (and so we do very little of this). Storage is important because renewable energy production comes when the wind blows and the sun shines, but not always when we need it. A breakthrough in solar thermal may be in the offing that would overcome previous limits on temperatures generated by solar thermal capture devices and make it possible to store heat cheaply enough to run solar electric generating plants around the clock at high output.
4. A climate agreement in Paris calls for binding greenhouse gas emissions limits. Expectations are exceedingly low for next summer's international climate conference to be held in Paris. The aim is to agree on binding limits for carbon emissions for the world's nations. Few people think that will happen no matter what the urgency of the matter.
But we cannot know what climate events might occur between now and the Paris conference that would change the outcome. It would have to be big, on the order of an ice shelf plopping into the ocean and raising sea-level enough to notice. Nevertheless, I would say that such a disturbing event becomes more likely with time and might be necessary to move the world's nations to a binding emissions agreement.
Even some progress in the direction of a binding agreement will have the world's energy analysts talking about stranded assets, a reference to the oil, natural gas and coal that would have to be left in the ground in order to avoid breaching agreed limits on carbon emissions. That would have significant consequences for the companies whose work is extracting and refining hydrocarbons.
5. Oil prices reach $100 per barrel before December 31, 2015. This is the other extreme from surprise No. 3. Almost all analysts expect oil prices to remain low, and many believe we are now entering a new era of cheap oil. (I, of course, don't buy it.) An earlier and more dramatic drop in production than anticipated and a greater rise in demand than anticipated could easily bring prices back above $100. I think this is more likely to happen later in 2016. But the timetable for a return to prices above $100 could be accelerated by many factors not now apparent.
I regard none of these events as likely which is why they would be surprises. But even one of these surprises would result in large financial gains or losses for many. And, either of two of them--binding greenhouse gas emissions limits or a breakthrough in renewable energy storage--would have giant consequences for the entire world.
About Author:
Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights.
Views and opinions / conclusion expressed herein are personal views of the author and not that of COALspot.com.
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Tuesday, 14 November 23
CHINA'S BELT AND ROAD INITIATIVE TURNS AWAY FROM COAL - WOOD MACKENZIE
Ambitious, contentious and big spending, China’s Belt and Road Initiative (BRI) is 10 years old. In that time, China has splashed more than U ...
Friday, 10 November 23
THE COMMODITIES FEED: OIL UNDER PRESSURE - ING
Energy – Brent plummets
The oil market came under significant pressure yesterday. ICE Brent settled 4.19% lower on the day and ...
Friday, 10 November 23
COAL USE AT U.S. POWER PLANTS CONTINUES DOWNWARD SPIRAL; FULL IMPACT ON MINES TO BE FELT IN 2024 - IEEFA
This year, the use of coal by the U.S.’s power producers has been so anemic that the fuel has not achieved a 20% market share in any month so ...
Friday, 10 November 23
INDIA: NATIONAL COAL INDEX RISES 3.83 POINTS IN SEPTEMBER AMID HIGHER DEMAND - LIVEMINT
The National Coal Index (NCI) rose 3.83 points to 143.91 in September amid growing demand for coal.
The union coal ministry on Tuesd ...
Thursday, 09 November 23
WE'RE PRODUCING TOO MUCH COAL, OIL AND GAS, REPORT SAYS - WSJ
World leaders pledged in 2015 to reduce emissions in a combined effort to limit climate change.
Now they are stepping up production ...
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- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- White Energy Company Limited
- Thai Mozambique Logistica
- Planning Commission, India
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Power Finance Corporation Ltd., India
- VISA Power Limited - India
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- Ambuja Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Bangladesh Power Developement Board
- Cigading International Bulk Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bharathi Cement Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- London Commodity Brokers - England
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Attock Cement Pakistan Limited
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- Central Electricity Authority - India
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
- Semirara Mining and Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Australian Coal Association
- Indian Oil Corporation Limited
- Ceylon Electricity Board - Sri Lanka
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- Kumho Petrochemical, South Korea
- Posco Energy - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Energy Development Corp, Philippines
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Manunggal Multi Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Siam City Cement PLC, Thailand
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Edison Trading Spa - Italy
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