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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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Saturday, 18 March 23
HEDGE TO OFFSET LNG VOLATILITY, TRADERS TOLD - BALTIC EXCHANGE
A shift in imports from Asia to Europe led to significant volatility in liquefied natural gas shipping last year, prompting industry experts to urg ...
Friday, 17 March 23
INDONESIAN COAL PRICE REFERENCE UP AROUND 2.17% IN MARCH 2023
COALspot.com: Indonesian Coal Price Reference up around 2.17% in March 2023.
According to the new HBA regulation No. 41.K/MB.0 ...
Saturday, 11 March 23
MARKET INSIGHT - INTERMODAL
Uncertainty over the recovery of Chinese demand, demand destruction in Europe, as well as weather conditions will pivot the LNG market this summer. ...
Wednesday, 08 March 23
INDONESIAN COAL REFERENCE PRICE FORMULA HAS OFFICIALLY CHANGED
Indonesian Minister of Energy and Mineral Resources has officially changed the guideline for determining the benchmark price for the sale of coal c ...
Thursday, 02 March 23
INDIA'S SEABORNE CRUDE OIL IMPORTS IN 2022 INCREASED BY 11.5% YOY - BANCHERO COSTA
2022 has turned out to be a very positive year for crude oil trade, despite the surging oil prices and risks of economic recession, Banchero Costa ...
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- Uttam Galva Steels Limited - India
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- ASAPP Information Group - India
- Binh Thuan Hamico - Vietnam
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Salva Resources Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Malabar Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- India Bulls Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- TeaM Sual Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Medco Energi Mining Internasional
- Independent Power Producers Association of India
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- Indika Energy - Indonesia
- PTC India Limited - India
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- The University of Queensland
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Bharathi Cement Corporation - India
- Banpu Public Company Limited - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- Intertek Mineral Services - Indonesia
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Thai Mozambique Logistica
- Deloitte Consulting - India
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Xindia Steels Limited - India
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Australian Coal Association
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Grasim Industreis Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Marubeni Corporation - India
- Sical Logistics Limited - India
- Sindya Power Generating Company Private Ltd
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Sakthi Sugars Limited - India
- Kartika Selabumi Mining - Indonesia
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Renaissance Capital - South Africa
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
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