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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, 11 April 23
OIL RISES ON CHINA STIMULUS EXPECTATIONS, WEAKER DOLLAR - REUTERS
Oil prices rose on Tuesday on expectations of potential economic stimulus by China, healthy demand in the rest of Asia and a drop in U.S. crude sto ...
Sunday, 09 April 23
CHINA’S BUSINESS INCOME REBOUND POINTS TO IMPROVING ECONOMY: OFFICIAL - XINHUA
Chinese businesses have posted a strong rebound in sales revenue since the beginning of this year in the latest signal of an improving economy.
...
Sunday, 09 April 23
COAL INDIA TO BOOST SUPPLIES TO INDUSTRIES AS UTILITIES’ INVENTORIES RISE - REUTERS
Coal India Ltd will increase supplies to industries, the world’s largest coal miner said on Wednesday as fuel inventories at utilities run by ...
Thursday, 06 April 23
MARKET INSIGHT - INTERMODAL
LNG Current Supply/Demand Dynamics
This year, LNG supply will likely exceed demand, so prices will need to decline to levels that will encourag ...
Sunday, 26 March 23
EUROPE’S RUSH TO LNG COULD TURN INTO 'WORLD’S MOST EXPENSIVE AND UNNECESSARY INSURANCE POLICY'- CNBC
Europe’s rapid buildout of liquefied natural gas infrastructure is on track to far exceed demand by the end of the decade, according to new r ...
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- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- Electricity Authority, New Zealand
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Eastern Energy - Thailand
- Wilmar Investment Holdings
- Dalmia Cement Bharat India
- Global Green Power PLC Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Mjunction Services Limited - India
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Mintek Dendrill Indonesia
- Billiton Holdings Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Bahari Cakrawala Sebuku - Indonesia
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Kumho Petrochemical, South Korea
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- The Treasury - Australian Government
- SMG Consultants - Indonesia
- Baramulti Group, Indonesia
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- The University of Queensland
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- Wood Mackenzie - Singapore
- Planning Commission, India
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- Australian Coal Association
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- MS Steel International - UAE
- Energy Development Corp, Philippines
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- ASAPP Information Group - India
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Economic Council, Georgia
- Chettinad Cement Corporation Ltd - India
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- Siam City Cement PLC, Thailand
- Jorong Barutama Greston.PT - Indonesia
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
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