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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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Sunday, 10 September 23
CHINA AUGUST COAL IMPORTS OF 44.3 MLN T HIT RECORD - REUTERS
China, the world’s top coal consumer, imported 44.3 million metric tons of the fuel last month, customs data showed, the highest amount in an ...
Tuesday, 22 August 23
CHINA'S COAL PRODUCTION LOGS STEADY GROWTH IN JANUARY-JULY: XINHUA
China’s output of raw coal went up 3.6 percent year on year in the first seven months of this year, official data showed.
The ...
Sunday, 13 August 23
THE COMMODITIES FEED: LNG SUPPLY RISKS LINGER - ING
Energy – OPEC sees deficit over remainder of 2023
Oil prices came under some pressure yesterday with ICE Brent settling a litt ...
Wednesday, 09 August 23
COAL TRADE TO RETURN TO 2019 LEVELS - BALTIC EXCHANGE
The International Energy Agency’s mid-year Coal Market Update for 2023 brings both positive and concerning news for the global coal industry. ...
Sunday, 23 July 23
ANALYSIS-INDIA'S COAL MINING BET STUMBLES AS WARY BANKS WEIGH RISING RISKS - REUTERS
India’s drive to ramp up coal output to meet growing energy demand is faltering due to banks’ reluctance to finance newly auctioned min ...
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- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Petron Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- The University of Queensland
- Deloitte Consulting - India
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
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- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Bayan Resources Tbk. - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- GVK Power & Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IEA Clean Coal Centre - UK
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Planning Commission, India
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Renaissance Capital - South Africa
- Economic Council, Georgia
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Orica Mining Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- VISA Power Limited - India
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- Orica Australia Pty. Ltd.
- Indogreen Group - Indonesia
- The State Trading Corporation of India Ltd
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Price Waterhouse Coopers - Russia
- Uttam Galva Steels Limited - India
- Xindia Steels Limited - India
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Indian Energy Exchange, India
- Indo Tambangraya Megah - Indonesia
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bhatia International Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- Wilmar Investment Holdings
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