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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, 26 February 23
MAWANI AND JEDDAH CHAMBER SIGN AN AGREEMENT TO BUILD INTEGRATED LOGISTICS PARK
Press Release: The Saudi Ports Authority (Mawani) and Jeddah Chamber of Commerce and Industry have today inked an agreement to set up an integrated ...
Saturday, 25 February 23
INDONESIA IS STILL BY FAR THE TOP SUPPLIER OF COAL TO CHINA - BANCHERO COSTA
After a slow start in the first quarter, global coal trade has really picked up pace last year, and is now fully back to pre-Covid levels, said ban ...
Wednesday, 22 February 23
MARKET INSIGHT - INTERMODAL
The short-term outlook of the global soybean market is currently pivoted by a combination of weather patterns that are affecting the harvest progre ...
Saturday, 18 February 23
OIL UNLIKELY TO BREAK ABOVE $100/BBL THIS YEAR, J.P.MORGAN SAYS –- REUTERS
Brent oil prices are unlikely to breach the $100 a barrel level this year, barring any significant geopolitical drivers, with OPEC+ potentially add ...
Saturday, 18 February 23
CHINA'S COAL PRICES FALL TO 1 YR-LOW, CLOUDING DEMAND AND IMPORT OUTLOOK - REUTERS
China’s thermal coal prices hit their lowest levels in a year this week on rising inventories as domestic mine production is recovering faste ...
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- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Bukit Baiduri Energy - Indonesia
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Xindia Steels Limited - India
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Parry Sugars Refinery, India
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- Coastal Gujarat Power Limited - India
- Vizag Seaport Private Limited - India
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Orica Australia Pty. Ltd.
- Grasim Industreis Ltd - India
- Banpu Public Company Limited - Thailand
- The University of Queensland
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- Parliament of New Zealand
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- Australian Coal Association
- SN Aboitiz Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Tamil Nadu electricity Board
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- Posco Energy - South Korea
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- Romanian Commodities Exchange
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Rio Tinto Coal - Australia
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Planning Commission, India
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coalindo Energy - Indonesia
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Thiess Contractors Indonesia
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Formosa Plastics Group - Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Port Waratah Coal Services - Australia
- IEA Clean Coal Centre - UK
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