First page: a "debate of sorts" between two analysts on where the price of oil is headed; one says higher; one says lower. After reading the first couple of paragraphs, I quit reading it. Predicting the price of oil is a fool's errand. Two comments: we will never run out of oil. Saudi Arabia is setting us up for a huge spike in the price of oil. Or not.
Page R2: a quiz on the Keystone XL pipeline. So yesterday.
Page R3: full half page by Amy Myers Jaffe, the executive director of energy and sustainability of California, Davis, and chairwoman of the Future of Oil and Gas for the World Economic Forum. Title of her article: "Never Mind Peak Oil -- Here Comes Peak Demand." If I remember I will come back to this one. See below.
Page R6: What the future of oil drilling will look like. Date line: Tioga, ND: Liberty Resources' 'oil factory' focuses on lower costs, more flexibility, and better community relations. Great graphics. Need to come back to this later. See below.
Page R6: Oil nations see an opening to reduce subsidies.
Page R7: the tough path form coal to renewables. Can't wait to read this one. See below.
Page R8: water meters begin to get smarter.
Page R8: Green spinoffs open sector to investors.
Page R8: frackers look for ways to cut their prodigious thirst. Can't wait to read this one. See below.
Page R9: carbon capture - a status report.
Page R9: easier to pay, easier to spend. The surprising result of automatic bill paying. This should be interesting.
Page R10: In Kenya, the wind and a dream.
Page R10: A Wichita linedrone? Utilities use unmanned craft to inspect power lines.
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The Stories
This story first: full half page by Amy Myers Jaffe, the executive director of energy and sustainability of California, Davis, and chairwoman of the Future of Oil and Gas for the World Economic Forum. Title of her article: "Never Mind Peak Oil -- Here Comes Peak Demand."
In this 10-page insert in today's WSJ this article was the first to catch my attention. The first thing I did, once I got the gist of the story, was to see if renewables were mentioned. They were. I read the short section on "renewables" and immediately looked to see who the author was. Then it all made sense. A story from the state of fruits and nuts. Her thesis is that we have reached -- or will soon reach -- peak demand for oil.
The Saudis are very, very concerned about "peak demand for oil." And how does one counter "peak demand"? Give oil away for $50/barrel; maintain the addiction.
Near the end of the article, Ms Jaffe wrote:
Finally, renewable energy is turning out to be more promising than expected, eating away at oil's share of electricity production -- and, eventually, automotive energy. China's commitment to an industrialization program pushing itself to be the world's major exporter of solar panels and advanced vehicles including the production of five million electric vehicles a year is another source of caution to those who forecast oil demand will rise exponentially forever.Let's parse what she just said.
- after thirty of years of tax subsidies and grants, the amount of solar energy consumption in the US rounds to 0% -- zero percent
- President Obama "tariffed" China's solar panel program into the dustbin of renewable energy
- Chinese EVs, as well as America's EVs, will run off coal
- no one ever said anything about oil demand rising exponentially forever
- fifty percent of oil is used for non-transport industries (plastics)
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Liberty Resources, Page R6
What the future of oil drilling will look like -- case study: Liberty Resources, the Bakken. Regular readers already know about this; we've been talking about the "manufacturing stage" in the Bakken for the past several years.
Here's the graphic:
Note the graphic above: 12 wells per pad. In the graphic above, there are six 1280-acre drilling units. That's 72 wells. In fact, that's just the start. Others may have seen this coming long ago, but it was Harold Hamm who espoused it publicly over and over. And over. There will be enough wells in this one "manufacturing unit" to support a salt water disposal well, eliminating the need for trucking water to an off-site SWD well.
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The Tough Path From Coal To Renewables
This is really, really cool. The article starts with "the Navajo reservation." I talked about this after reading Unreal City: Las Vegas, Black Mesa, and The Fate of the West, Judith Nies, c. 2014. I wrote about it October 10, 2014.
The article begins:
PAGE, Ariz.—For the past decade, the Navajo reservation here has struggled to navigate the change from coal to green power.
It’s still struggling.
The effort began when environmental activists filed a federal lawsuit that helped result in the closure of a nearby coal plant, which ended up costing many Navajos their jobs.
Activists said they would try to help the tribe develop clean-energy jobs. But now, years later, few jobs have been created. And a second large coal plant in the area is facing a partial shutdown, putting many of the nearly 1,000 jobs at the facility and a related mine in jeopardy.
About 90% of those jobs are held by Navajos, and the fallout could be significant on a reservation where unemployment runs about 50%. “We Navajo are wondering what to do next, because coal is a major part of our resource,” says Travis Francisco, 35, who supports a family of six on his job as a plant supervisor.Everyone needs to read Judith Nies' book.
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Why Utilities Like Automatic Payments
Look at this: The average rise in electricity use by residential customers who switched to automatic payments: 4%.
People who enrolled in automatic bill-payment programs increased their monthly electricity consumption by between 4% and 6% on average, and some groups used as much as 9% more electricity, according to research by Steven Sexton, assistant professor of public policy and economics at Duke University. Dr. Sexton’s paper on the subject appeared in the May issue of The Review of Economics and Statistics.
The effect is based on what behavioral economists and many marketers noticed a long time ago—the less attention we pay to price, the more likely we are to spend more.
It is why companies bombard consumers with cheap introductory offers that, once they expire, turn into higher rates.
Mobile apps from companies such as Uber Technologies Inc. and tools such as Amazon Inc.’s new Dash button, which allows people to order household items at the push of a button, hide the price and payment transaction entirely.
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Fracking Water Costs
I was unaware of how "watery" the Permian is:
At ConocoPhillips Co., so much water is coming up with the fuel it is drilling in the Permian Basin of Texas that water management, logistics and recycling have taken on a new importance. During a recent talk with analysts and investors, the company said water-management improvements have helped it cut the cost of supply by about $8 a barrel in some areas. Last year, ConocoPhillips produced 58,000 barrels a day of oil equivalent in the Permian Basin.There is a reason the Bakken is not mentioned in the article (unless I missed it): there is more than enough water in the Bakken to frack every well that is drilled. Period. Dot.
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We'll See
And finally this one. This is why Saudi Arabia is giving away their oil for $50: "In Kenya, the Wind and a Dream."
One risk that remains: a further decline in oil prices. Key African oil exporters such as Nigeria and Angola have been hurt by the global plunge of oil prices. Kenya, however, a net importer of energy, is benefiting, according to the World Bank.
Hence, the risk to the Lake Turkana project is that if oil prices continue to fall, energy produced by the wind farm could end up costing more than electricity produced using oil.
“No one believes these [low oil] prices will last forever” says Mr. Van Wageningen, when asked whether it makes sense to build big renewable-energy projects at a time of historically low energy prices. The director says he expects Lake Turkana’s pricing to be competitive as long as crude doesn’t go below $40 a barrel.
Despite all of the difficulties, he expects the wind farm to be profitable. “In Africa you don’t get government subsidies to build renewable-energy projects like you do in Europe,” he says. “Here you can only do it because it makes financial sense.”We'll see. But no, low oil prices won't last forever.
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Another Example Of Why The US Is The Best Country In The World
Embedding has been disabled. No one will open that link, but on the off-chance that you do, go to "56.00 minutes."
Witchita linedrone ... Glen would not be pleased ..
ReplyDeleteBut you've given me an idea; it's been a long time since I've posted a song.
DeleteThank you.
Bagpipes, ROFL
ReplyDeleteYes, only in America,.
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