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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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Monday, 17 July 23
APPROVED AMMONIA-FUELED CONTAINERSHIP - BENEFITS AND RISKS: REED SMITH
Following the news in Offshore Energy that Korea Maritime Consultants has secured approval in principle from the American Bureau of Shipping for it ...
Friday, 14 July 23
CLEAN COAL USE KEY TO DEEP CUTS IN EMISSIONS, STABLE ELECTRICITY SUPPLY - CHINA DAILY
China must push for the clean use of coal and step up integration of the dirty fuel with carbon capture, utilization and storage to achieve sustain ...
Thursday, 13 July 23
VIETNAM'S COAL EMISSIONS PRIMED FOR SURGE AFTER IMPORTS JUMP - REUTERS
Vietnam’s thermal power emissions are primed for a steep climb this summer after the country’s imports of thermal coal soared to their ...
Monday, 26 June 23
COAL PRODUCTION AND CONSUMPTION UP IN 2022 - EUROSTAT
In 2022, EU coal production and consumption continued to increase, reaching 349 million tonnes (+5% compared with the previous year) and 454 millio ...
Wednesday, 21 June 23
QATAR STRIKES SECOND BIG LNG SUPPLY DEAL WITH CHINA - REUTERS
Qatar on Tuesday secured its second large gas supply deal with a Chinese state-controlled company in less than a year, putting Asia clearly ahead i ...
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- PowerSource Philippines DevCo
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- Central Electricity Authority - India
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- The University of Queensland
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- The Treasury - Australian Government
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- Indian Oil Corporation Limited
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- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Trasteel International SA, Italy
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- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
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- Neyveli Lignite Corporation Ltd, - India
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- IHS Mccloskey Coal Group - USA
- Altura Mining Limited, Indonesia
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- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
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- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Central Java Power - Indonesia
- Siam City Cement PLC, Thailand
- Mercuria Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Lanco Infratech Ltd - India
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- PTC India Limited - India
- Electricity Authority, New Zealand
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Oldendorff Carriers - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- Alfred C Toepfer International GmbH - Germany
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- SMC Global Power, Philippines
- Vizag Seaport Private Limited - India
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Therma Luzon, Inc, Philippines
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- India Bulls Power Limited - India
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Ambuja Cements Ltd - India
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Eastern Energy - Thailand
- Eastern Coal Council - USA
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