For some small oil companies in West Texas, low crude prices are beginning to sting.More at the link.
Green Century Resources, a private oil company in Midland, is weighing an investment in a drilling project that appeared profitable a few months ago when crude prices hovered above $50 a barrel. Now, with U.S. prices under the $45-a-barrel mark, the small company may have to hold off on its plans, said James Mayer, founder and chief executive of Green Century.
"If oil holds under $45, that would make a difference to us," Mayer said, adding his company is working to whittle down its projected capital and operating costs.
Several small operators in West Texas told the Houston Chronicle they're face increasing pressure from rising oil field service costs, particularly in hydraulic fracturing, in part because the downturn wiped out some of the service companies and allowed rivals to raise prices. That oil prices are falling now has convinced some to rethink their expansion plans for the year, which were set at a time when oil prices were higher.
The Trump administration has taken a key step toward paving the way for a controversial gold, copper and molybdenum mine in Alaska's Bristol Bay watershed, marking a sharp reversal from former president Barack Obama's opposition to the project.
The Environmental Protection Agency on Tuesday proposed withdrawing its 2014 determination barring any large-scale mine in the area because it would imperil the region's valuable sockeye salmon fishery.
The agency said it would accept public comments on the proposal for the next 90 days.Amazing how fast the EPA can change their stance on something. Simply amazing. And one would think the EPA is above politics. LOL.
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 2.6 percent on July 11, down from 2.7 percent on July 6.
The forecast of second-quarter real GDP growth fell 0.2 percentage points to 2.5 percent after Friday's employment release from the U.S. Bureau of Labor Statistics.
The model's estimate of the dynamic factor for June—normalized to have mean 0 and standard deviation 1 and used to forecast the yet-to-be released monthly GDP source data—decreased from 1.08 to 0.34.
The forecast of the contribution of inventory investment to second-quarter real GDP growth increased from 0.57 to 0.61 percentage points after this morning's wholesale trade report from the U.S. Census Bureau.
Community members from McKenzie and Billings County have been providing food and water to the men and women battling the Magpie Fire.
Four Corners Cafe in Fairfield cooked breakfast and lunch for 60 people on Sunday, and provided breakfast for 95 people today.
The cafe usually makes breakfast sandwiches and burritos, fresh fruit and coffee.More at the link.
The owner said its services are completely free of charge.
Ergodan does his own climate maths — decides that the most significant inflatable cash cow has disappeared from the sky. The global climate suddenly looks clearer, and so Turkey pulls back from Paris accord:
(Reuters) The U.S. decision to pull out of the Paris climate agreement means Turkey is less inclined to ratify the deal because the U.S. move jeopardizes compensation promised to developing countries, President Tayyip Erdogan said on Saturday. “Therefore, after this step taken by the United States, our position steers a course towards not passing this from the parliament,” he said.
Turkey, saving the planet, one bank account at a time.By the way, I hear that Germany has pulled its forces out of the multi-national force based in east Turkey that was fighting ISIS or Syria or someone. Germany has moved its "Turkish" forces to Jordan. Has something to do with the EU vs Turkey.
| $45.82 | 7/11/2017 | 07/11/2016 | 07/11/2015 | 07/11/2014 | 07/11/2013 |
|---|---|---|---|---|---|
| Active Rigs | 57 | 29 | 73 | 190 | 185 |
SA is now being referred to as the world's renewable crash test dummy for good reason. Set aside Saint Elon's battery backup plan for the moment.
The SA government has now committed to leasing 9 GE TM2500 generators that burn almost 2,000 gallons of diesel fuel per hour.Later, 2:28 p.m. Central Time: I wish I had said this. See first comment --
Is there no end to the fake news disseminated by the MSM? It's all distortions and half-truths, with an outright lie thrown in here and there for good measure.Even after "explaining" this to my wife, she did not want to hear it. She is so anti-Trump, so anti-oil -- don't ask.
So let's get this straight. The blackouts which have occurred, despite some of the highest electricity prices in the world, are all the fault of those evil fossil fuel producers and their gaming the system.
Banning fracking, $0.60 cent feed-in tariffs for solar, huge up-front subsidies for solar and wind installations, grid problems caused by a surfeit of intermittent wind and solar, none of that had anything to do with causing the problems.
On a sweltering night this February, the world’s No. 2 exporter of liquefied natural gas didn’t have enough energy left to keep its own citizens cool.I'm too tired to go through the exercise of connecting the dots but regular readers don't need my help.
A nationwide heat wave in Australia drove temperatures above 105 degrees Fahrenheit around the city of Adelaide on the southern coast. As air-conditioning demand soared, regulators called on Pelican Point, a local gas-fueled power station running at half capacity, to crank up.
It couldn’t. The plant’s operator said it wasn’t able to get enough natural gas quickly to run its turbines fully. At 6:03 p.m., regulators cut power to 90,000 Adelaide homes to prevent a wider blackout.
Resource-rich Australia has an energy crisis, one that offers lessons for America as it prepares to vastly increase natural-gas shipments abroad.
Australia now exports so much liquefied natural gas, or LNG, it may overtake No. 1 exporter Qatar within several years. It exported 62% of its gas production last year, according to the BP Statistical Review of World Energy.
Yet its policy makers didn’t ensure enough gas would remain at home. As exports increased from new LNG facilities in eastern Australia, some state governments let aging coal plants close and accelerated a push toward renewable energy for environmental concerns. That left the regions more reliant on gas for power, especially when intermittent sources such as wind and solar weren’t sufficient.
D.A. Pennebaker, 91, is a documentary filmmaker whose films include “Don't Look Back,” “Monterey Pop,” “ Ziggy Stardust, ” “The War Room” and, most recently, “Unlocking the Cage.”
He has collaborated with his wife, filmmaker Chris Hegedus, since the 1970s, and received an Oscar in 2012.
I grew up pretty much by myself. My parents separated soon after I was born and moved to separate cities—my father to Chicago, and my mother and me to Quakertown, PA,, where she was from.
Later, when I was 5 and my mother was living in New York, I began shuttling between New York and Chicago. I’d be put on a train with a nametag tied to my coat. For the next day and night I was on my own with a whole train at my mercy. I rarely saw much of my parents at either end. I was cared for by sitters or hurried off to boarding schools.Very, very interesting. Children are incredibly resilient. So much for "helicopter" mothers and "Asian tigers" or whatever they are called.
| $45.13 | 7/11/2017 | 07/11/2016 | 07/11/2015 | 07/11/2014 | 07/11/2013 |
|---|---|---|---|---|---|
| Active Rigs | 57 | 29 | 73 | 190 | 185 |
Production of associated natural gas in the Permian’s Midland and Delaware basins is forecasted to continue rising through the early 2020s, challenging existing pipeline takeaway capacity out of the region. There also are limits to how much gas can flow northeast into the Midcontinent and the Upper Midwest — after all, those regions have access to gas from other areas too, including the Rockies, western Canada, the Marcellus/Utica and the Midcon itself. The same holds true for Texas’s Gulf Coast, which has emerged as another battleground for gas producers. Today we continue our series on the ability of existing pipes out of the Permian to move natural gas to market and the enhancements that will be needed to allow Permian production to keep growing.
In Part 1 of our series, we said that the pace of Permian production growth will be influenced by many factors, including the degree to which the market price for crude oil exceeds the play’s breakeven prices and the ability of midstream companies to add incremental pipeline takeaway capacity as that capacity is needed. While the pursuit of crude oil is driving drilling and production activity in the Permian, rapid growth in crude output is being accompanied by large volumes of associated gas and natural gas liquids (NGLs) that also must be dealt with.
Fortunately, the Permian has been a major production area for decades — a lot of crude, gas and NGL pipeline infrastructure is already in place. But, as we’ll get to, it won’t be enough. Part 1 built on our It Was Good Living With You, (W)aha series, which described the hub-and-spoke pipeline networks in West Texas that play critical roles in transporting large volumes of Permian gas to customers as far away as Southern California and Minnesota.
Kinder Morgan, Inc.’s KMI Trans Mountain pipeline expansion may not receive funding from Canadian lender, Desjardins, which cited concerns about the project’s impact on the environment. Desjardins had committed $145 million to Kinder Morgan’s Trans Mountain pipeline expansion.Data points:
Desjardins, the largest association of credit unions in North America, is no longer contemplating on funding energy pipelines. Per the sources, on Jul 7, the company temporarily suspended lending for such projects and stated that it could finalize the decision. However, a final statement would be made by the lender in September.
Per sources, Desjardins, a financier of Kinder Morgan Canada Ltd's expansion of Trans Mountain pipeline, has been appraising its policy for such lending for months.
If Desjardins sticks to its decision permanently, the association will stop funding other major Canadian pipeline projects, including TransCanada Corp's Keystone XL, Energy East and Enbridge Inc's ENB Line 3.
Such a move would follow that of Dutch lender ING Groep NV, which has a long-standing policy of not backing projects directly linked to oil sands. It is the latest indication that pipelines could face difficulty while applying for funds as banks face pressure from withdrawals.
Two of the world’s largest oil companies have hit back against predictions that electric vehicles threaten a collapse in demand for hydrocarbons and warned that global energy security would be at risk if investment is withdrawn from fossil fuels too soon. [See original post for a most ridiculous story.]
Saudi Aramco and Royal Dutch Shell acknowledged that a shift towards renewable energy — including battery-powered cars — was under way but said oil and gas would remain indispensable for decades to come.
“There seems to be a growing belief that the world can prematurely disengage from proven and reliable energy sources like oil and gas, on the mistaken assumption that alternatives will be rapidly deployed,” Amin Nasser of Saudi Aramco told an energy conference in Istanbul.
Addressing the same event, Ben van Beurden of Shell said the transition to low-carbon technologies would “take place over generations” rather than as a rapid “revolution”.It didn't take much pushback for Ben to start changing his tune. LOL.
Patrick Pouyanne, CEO of Total SA, says demand will peak at some point in the 2040s, which is why the French energy giant he runs has been investing in solar power.
Ben van Beurden, CEO of Royal Dutch Shell Plc, has said the zenith could arrive a lot sooner, in the next 15 years or so, if electric cars became really popular.
“The energy transition is unstoppable,” Van Beurden told the St. Petersburg forum in early June. “In the most aggressive scenario, you can see oil already peaking in late 2020s or early 2030s.” In the time scale of the oil industry, where multibillion-dollar projects often take a decade or longer to come to fruition, that’s as close as it gets to saying “the day after tomorrow.”
If such forecasts prove right, oil prices are likely to remain low for a lot longer. That raises the possibility that some hard-to-reach deposits, like those in the Arctic, may never be tapped, turning what today are considered valuable reserves into assets of questionable worth. That worries big institutional investors such as BlackRock Inc. that manage mutual funds composed of energy stocks.Maybe I'm missing something, but the whole premise seems wrong.
The capacity-weighted cost of installing wind turbines was $1,661 per kilowatt (kW) in 2015, a 12% decrease from 2013…The cost of utility-scale solar photovoltaic generators declined 21% between 2013 and 2015, from $3,705/kW to $2,921/kW…The average cost of natural gas generators installed in 2015 was $696/kW, a 28% decline from 2013…Construction costs alone do not determine the economic attractiveness of a generation technology."Capacity-weighted cost" (I assume) means that the incredibly inefficiencies of wind and solar have been factored into the cost of these things. It's been my impression that folks "factoring" such inefficiencies err widely on the positive side.
We'll be off the net for awhile -- traveling. But we leave you with this:Today, just four days later, over at Bloomberg:
July 7, 2017: oil prices plunge 3% as signs of oversupplied market persist.Ah, yes, OPEC exports hit a 2017 high, "casting doubt over efforts by producers to curb oversupply."
The S&P 500 energy index sinks to its lowest level since April 2016, with U.S. crude oil now -2.9% to $44.20/bbl following EIA data that showed continued strength in U.S. oil production in the final week of June just as OPEC exports hit a 2017 high, casting doubt over efforts by producers to curb oversupply.
Sort of reminds me of this once said by a disbarred president: "Fool me once, shame on you; fool me twice, shame on me.
Headline: Saudi Arabia Exceeds Oil-Production Cap for First Time
Saudi Arabia told OPEC it pumped 10.07 million barrels a day in June, a person with knowledge of the data said, exceeding its production limit for the first time since brokering a deal to curb global crude supply to counter a glut.
The world’s biggest oil exporter boosted output from 9.88 million barrels a day in May, surpassing the limit of 10.058 million it accepted in an agreement between OPEC and other major suppliers including Russia.
Under the deal reached in December, Saudi Arabia agreed to reduce production by 486,000 barrels a day, the most of any country participating in the cuts. The person with knowledge of the June data asked not to be identified because the information isn’t public.Normally, an increase in production in the middle of the summer for Saudi Arabia would not be significant: Saudi needs huge amount of oil during the summer to run its citizens' air conditioners. But they agreed to a production cut, and they did not keep to the agreement they brokered.
With regard to the Arab IPO: I know I posted on the blog a year ago that I doubted we would ever see the IPO -- not because of price of oil, but because the KING would never go along with selling part of his kingdom AND the KING would never go along with the transparency required. I will now spend the rest of the day looking for that post. LOL. I'll never find it.
