November 12, 2015

350 miles of I-80 shut down due to massive winter storm, between Cheyenne and Evanston; reported by LIveTrucking. That's practically the entire state of Wyoming along I-80; Evanston is not all that far from Salt Lake City, and, of course, Cheyenne is at the other end of the state.

Active rigs:

	11/12/2015	11/12/2014	11/12/2013	11/12/2012	11/12/2011
Active Rigs	64	188	181	191	201

RBN Energy: The Strange Magic of Turning BTUs into Kilowatt-Hours, part 1 of a 3-part series.

It used to be the case that if natural gas even came up in power-industry discussions of generation, it  happened at the end of a meeting—“Well, we’re done with our nuclear and coal plans, anyone have anything else to discuss before we go to dinner?  Oh, that’s right—anything happening with gas?”  Now it’s the other way around.  It seems like every discussion starts with gas, whether it’s about the plants being low-cost and easy to site, about concerns around reliability and price volatility, or around the impact of the gas market on coal investments.  And power is clearly the fastest growing segment of the U.S. natural gas market.  But does all this attention from the power market mean that the natural gas industry really understands the power side?  Perhaps not.  In fact, we’ve found that frequently, as soon as we get beyond the marketers and analysts who deal specifically with supplying gas-fired power generation, there’s a lot the natural gas industry (and the energy markets in general) can learn about power plants, electricity markets, and how natural gas fits in.  So for that reason, we’ve concluded that now is a good time for a primer on how gas-fired generation works, how it fits together with energy markets and how it might be affected by national policy changes.   Today we take on this challenge with the first installment of a three-part series.

There are, of course, a lot of ways to make power.  The most popular for a long time has been to burn coal to generate steam, and run the steam through a turbine.  You can also burn other things—oil, natural gas, different kinds of waste—as long as you can produce enough steam.  Second most popular, especially over the last 20 years has been to run natural gas through a combustion turbine, basically a jet engine that uses its power to turn a shaft, instead of firing out the back and sailing off into the wild blue yonder.  Neither of these methods on its own has been very efficient.  In both cases, steam and combustion turbines, for every three units of energy you put in you only get one out, at least that’s the way it used to work historically.  But today power generators are combining these technologies in a way that is much more efficient.

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Russia, Saudi Arabia, Iran, And Europe
Russia: Between Iran and A Hard Place

Updates

November 16, 2015: Saudi Arabia will wage war of attrition on Russia. OilPrice is reporting:

Russia’s central bank recently warned about the growing financial risks to the Russian economy from Saudi Arabia encroaching upon its traditional export market for crude oil. Russia sends 70 percent of its oil to Europe, but Saudi Arabia has been making inroads in the European market amid the oil price downturn.

The result is a heavier discount for Russia’s crude oil, the so-called Urals blend. Bloomberg reported that the Urals typically lands in Rotterdam, a major European destination, at a discount to Brent of around $2 or less. But the discount has widened to $3.50 lately due to increased competition from Saudi Arabia. “Oil supplies to Europe from Saudi Arabia are probably adversely affecting Urals prices,” the Russian central bank warned in a recent report.

Russian officials have accused Saudi Arabia of “dumping” its oil in Europe, a move that Rosneft chief Igor Sechin said would “backfire.”

Russia’s economy has been battered by the collapse in crude prices, compounded by the screws of western sanctions. The Russian economy could shrink by 3.2 percent this year.

Much, much more at the link. For Saudi Arabia, Russia, and Venezuela, oil is an existential issue. This is not going to look pretty, or end pretty. Russia has moved into the void in the Mideast which developed when the US, under President Obama, withdrew from the Mideast and told Saudi Arabia, in no uncertain terms, Saudi was on its own.

Original Post

Bloomberg/Rigzone is reporting:

Competition is growing in Russia’s biggest oil market. While Saudi Arabia’s encroachment in Europe is getting all the attention, the biggest threat comes from another part of the Middle East -- Iran.

The world’s largest oil exporter has started shipping crude to traditional Russian markets like Poland and Sweden, but Saudi supplies to Europe won’t increase by enough to reduce prices.

In contrast, a surge in Iranian exports after the lifting of sanctions could erode the value of Russian shipments to the region as soon as next year.

Tougher competition in Europe, the destination for almost 70 percent of Russia’s oil exports, comes as the country is already battling recession. Oil and gas sales account for about half of government revenues and the commodity-price slump has amplified the economic blow from international sanctions over Ukraine. An increase in Iranian exports following a nuclear deal with world powers could make matters worse.

“Eastern European refineries are geared to process Russian crude, the Urals blend, and the closest sort to it would be Iranian oil,” said Michael Nayebi-Oskoui, senior energy analyst for Middle East and South Asia at Stratfor.

For Saudi shipments to push prices down “they would have to be significantly rerouted from Asia towards Europe, and we don’t see that happening,” he said.

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 Columbia 

Bloomberg/Rigzone is reporting that Columbia's oil production will drop below 1 million bopd next year as exploration collapses and major fields age. Columbia's oil exports to the US have remained steady and probably increased over the past few years. Total Columbian exports to the US are minimal, about 300,000 bopd.

 
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Louisville Business First is reporting: undocumented immigrants lose Humana/ObamaCare health insurance.

Global warming science website, Alan Cheetham. Liar, lair, pants on fire. Meanwhile, Tiny Tim saw this coming decades ago. One wonders if Algore was in the audience.

Lots of stories across the nation today regarding huge snow storms, some setting records: everything is blinding white; Sierra storms setting records.

Posted earlier: Saudi Arabia risks destroying OPEC and feeding the ISIS monster, in The [London] Telegraph.

The new "big" Apple iPad: many reviewers elsewhere suggest the new Apple iPad could come close to replacing the laptop computer. Here is the WSJ story. If you hit a paywall, google Tim Cook has big ambitions for his big new iPad.

Daily newspaper circulation: has fallen below 15% per capita.

Are people paying attention: last night six aircraft were hit by lasers in NYC and Dallas; obviously not a coincidence.