Wednesday, April 8, 2015 -- One Week Before April Fifteenth

Active rigs:

	4/8/2015	04/08/2014	04/08/2013	04/08/2012	04/08/2011
Active Rigs	93	191	185	208	173

RBN Energy: this year's natural gas power burn and the Marcellus.

This year’s natural gas power burn is shaping up as a record-breaker, mostly because gas consumption needs to rise sharply to offset increased production and the power sector is best able to ramp up its gas use. But what will it take, gas-price-wise, for utilities and independent power producers to increase their 2015 power burn by 2, 3 or even 4 Bcf/d this year? And which parts of the U.S. are likely to see the most dramatic coal-to-gas switching? Today we continue our look at this year’s power burn and its significance to Marcellus and other gas producers.

Huge volumes of natural gas will be produced in the Lower 48 in 2015, probably upwards of 75 Bcf/d, or more than 50% higher than 10 years ago. Once it’s injected into a midstream pipeline all that gas will need to find a home and—at least until the first liquefaction units at Sabine Pass LNG come online late this year or early next—there are only two homes available: storage or immediate use (for space heating, power and steam generation, export to Mexico etc.). One challenge gas producers and marketers must grapple with this year is that, while demand for gas from U.S. industrials is on the rise and Sabine Pass and other LNG export facilities are on the horizon, gas storage facilities may not have room to absorb as much surplus gas as they did last spring, summer and fall. (If they did, they’d be pushing their storage limits.)

Power generation is the only gas-consuming sector with the capacity and flexibility to absorb large incremental volumes of gas. Another way to put that is, electric utilities and independent power producers (IPPs) will likely burn a lot of gas in the next nine and a half months (and probably in 2016 too) to keep gas production and consumption (plus storage) in balance.

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Perhaps Hillary Was Right

Russia hacks the White House internet but no word that anyone has hacked Hillary's secret server(s). CNN is reporting:

Russian hackers behind the damaging cyber intrusion of the State Department in recent months used that perch to penetrate sensitive parts of the White House computer system, according to U.S. officials briefed on the investigation.

While the White House has said the breach only affected an unclassified system, that description belies the seriousness of the intrusion. The hackers had access to sensitive information such as real-time non-public details of the president's schedule. While such information is not classified, it is still highly sensitive and prized by foreign intelligence agencies, U.S. officials say.

The White House in October said it noticed suspicious activity in the unclassified network that serves the executive office of the president. The system has been shut down periodically to allow for security upgrades.

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Sweet Spots for "EVs": 18 - 25 Miles (No Typo)

Article over at Seeking Alpha on recent "car show." Highlights:

• current emphasis by major vehicle manufacturers on hybrid plugin EVs, with big emphasis on electric drive range of 15-30 miles
• New York Motor Show commentary indicates a long way to go for fully electric EVs
• Chevrolet and Nissan announce new generation fully electric cars with 200 mile range

The writer notes: 

The recent New York motor show, and the press coverage indicate the US mindset about personal vehicle transport… it still involves an internal combustion engine.

Curious is the claim that the "sweet spot" for an EV is an 18-25 mile range (with a "real" engine to stop being stranded constantly)! In what parallel universe is this a functional EV? Is it just the internal combustion engine car you have when you want to pay lip service to the rise of the EV? Or perhaps a way for the big car companies to extend the life of their cars with engines a little longer, rather than confronting the reality of the change. A lot of manufacturers are doing this. More seriously, perhaps a major motivation for having electric capacity for short trips means that the stated fuel consumption can be brought down to levels required by regulators.

But this may be what explains Tesla:

Norway is to EVs what Germany was to solar PV. 

For an emerging technology that isn't "there" yet, you need action by early adopters that understand that the first steps in a revolution are often hard to justify economically. Norway's commitment was to put 50,000 EVs on Norwegian roads and this will end in success soon. This may be a temporary setback for Tesla, and it may come in the next couple of quarters if the Norwegian government doesn't manage generously withdrawal of the generous subsidies.

In the EV space, the Norwegian experience has not gone unnoticed and some features of the Norwegian incentives are catching on in polluted cities around the world, as well as in environmentally aware California. For example, London exempts plug-in vehicles from its commuter tax. It may be that the way officials restrict cars into crowded and polluted cities is to allow only emission free vehicles, which would be a huge boost for fully electric cars. China seems to be heading in this direction, as are a number of European countries.

Imagine.