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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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Wednesday, 21 June 23
CHINA'S MAY COAL IMPORTS FROM AUSTRALIA RECOVER TO PRE-BAN LEVELS - REUTERS
Australian coal sales to China increased in May, as trade resumed between them even as overall coal demand weakened against an uncertain macroecono ...
Monday, 19 June 23
DROUGHT-DEPLETED HYDROPOWER DRIVES CHINA TO TURN TO COAL - REUTERS
China has leant hard on coal-fired power plants as well as wind and solar generators to make up for a shortfall in hydroelectric generation as a re ...
Monday, 19 June 23
CHINA COAL OUTPUT UP 4.2 PCT IN MAY - XINHUA
China’s raw coal output posted steady growth in May, official data showed.
The country produced 390 million tonnes of raw coal ...
Wednesday, 24 May 23
AMMONIA-FUELLED BULK CARRIERS WITHIN FIVE YEARS - BALTIC EXCHANGE
Within five years, ships powered by clean ammonia could be a feature on the iron ore trade routes between West Australia and East Asia.
A study ...
Tuesday, 23 May 23
CHINA'S APRIL COAL OUTPUT LEAPS 11% ON YEAR, BUT DEMAND DOWNTURN LOOMS - REUTERS
China’s daily coal output in April jumped 11% from the same month a year earlier, boosted by Beijing’s order to increase supply to ensu ...
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- MS Steel International - UAE
- GMR Energy Limited - India
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- PetroVietnam Power Coal Import and Supply Company
- SMC Global Power, Philippines
- Georgia Ports Authority, United States
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Minerals Council of Australia
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Baramulti Group, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- Orica Australia Pty. Ltd.
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- Latin American Coal - Colombia
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Independent Power Producers Association of India
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bharathi Cement Corporation - India
- Bangladesh Power Developement Board
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- Thai Mozambique Logistica
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- Ministry of Finance - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Maheswari Brothers Coal Limited - India
- Standard Chartered Bank - UAE
- Bhatia International Limited - India
- Planning Commission, India
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- Xindia Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- VISA Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
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