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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, 16 April 23
CHINA JUGGLES FOUR MAJOR ECONOMIC CHANGES IN 2023 - WOOD MACKENZIE
Change is afoot in China. Economic growth is slowing, while rising political tensions between China and the US, coupled with global supply chain re ...
Sunday, 16 April 23
CHINA'S MARCH COAL IMPORTS JUMP TO 3-YEAR HIGH - REUTERS
China’s coal imports surged in March to their highest in any month over the past three years as utilities increased purchases on expectations ...
Sunday, 16 April 23
OPEC KEEPS WORLD OIL DEMAND GROWTH OUTLOOK UNCHANGED
The OPEC Reference Basket (ORB) declined in March by $3.43, or 4.2%, m-o-m to average $78.45/b. The ICE Brent first-month contract fell by $4.33, o ...
Sunday, 16 April 23
CHEAPER SPOT LNG PRICES TEMPT SOME ASIAN BUYERS AMID SUPPLY GAINS - REUTERS
Cheaper spot prices for liquefied natural gas (LNG) are luring price-sensitive buyers back in Asia, with China and India recording rising imports i ...
Tuesday, 11 April 23
COAL USE CLIMBS WORLDWIDE DESPITE PROMISES TO SLASH IT - AAP
The burning of coal for electricity, cement, steel and other uses went up in 2022 despite global promises to phase down the fuel that is the bigges ...
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- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Central Java Power - Indonesia
- PNOC Exploration Corporation - Philippines
- Agrawal Coal Company - India
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- Sakthi Sugars Limited - India
- Pendopo Energi Batubara - Indonesia
- Coal and Oil Company - UAE
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Ambuja Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- Antam Resourcindo - Indonesia
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- Central Electricity Authority - India
- Mercator Lines Limited - India
- Chamber of Mines of South Africa
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Indogreen Group - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Vizag Seaport Private Limited - India
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Tamil Nadu electricity Board
- Vijayanagar Sugar Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- European Bulk Services B.V. - Netherlands
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Minerals Council of Australia
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Trasteel International SA, Italy
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- GAC Shipping (India) Pvt Ltd
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- TeaM Sual Corporation - Philippines
- Semirara Mining Corp, Philippines
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- Australian Coal Association
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- Barasentosa Lestari - Indonesia
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- GMR Energy Limited - India
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Lanco Infratech Ltd - India
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
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