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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, 22 March 23
MARKET INSIGHT - INTERMODAL
The crude tanker market continues to gather momentum as we head towards the end of 1Q2023, against a backdrop of strong U.S. exports paired with a ...
Wednesday, 22 March 23
WILL LOWER GAS PRICES SPARK SWITCHING IN EUROPE AND ASIA?
Record high prices devastated demand for gas and LNG across Asia and Europe last year. But with prices falling, companies are starting to re-evalua ...
Monday, 20 March 23
NTPC MULLS 5.4 MILLION TONNES COAL IMPORT IN FIRST HALF OF 2023-24: PTI
State-run power giant NTPC is planning to import around 5.4 million tonnes of coal to meet the supply shortage during the first half 2023-24 fiscal ...
Monday, 20 March 23
S. AFRICA’S EXXARO RESOURCES SAYS COAL PRICES COOLING OFF - REUTERS
South Africa’s Exxaro Resources on Thursday posted a 28% jump in 2022 profit after seeing average coal prices surge more than 150%, but warne ...
Saturday, 18 March 23
RUSSIAN LNG EXPORTS TO EUROPE REMAIN HIGH - VESSELS VALUE
Russian LNG exports to Europe remained at very high levels in February at 3.6 million CBM, following a 13 month high in January of 4.1 million CBM. ...
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- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Grasim Industreis Ltd - India
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Barasentosa Lestari - Indonesia
- Orica Australia Pty. Ltd.
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- Aditya Birla Group - India
- Mjunction Services Limited - India
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- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- European Bulk Services B.V. - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- London Commodity Brokers - England
- Carbofer General Trading SA - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- GAC Shipping (India) Pvt Ltd
- Simpson Spence & Young - Indonesia
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- South Luzon Thermal Energy Corporation
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Central Electricity Authority - India
- SN Aboitiz Power Inc, Philippines
- Africa Commodities Group - South Africa
- International Coal Ventures Pvt Ltd - India
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- Australian Coal Association
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Mercator Lines Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- The University of Queensland
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dalmia Cement Bharat India
- Planning Commission, India
- Coal and Oil Company - UAE
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement - Thailand
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- Singapore Mercantile Exchange
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Economic Council, Georgia
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