We live in a suburb of Dallas-Ft Worth, Texas. Our granddaughter has a very nice friend. Her mom is Indian, having immigrated to the US when she was 18 years old. She came alone and had no one in the US to help her when she arrived. She got a college degree in Michigan and found a job in tech. She works from home ever since Covid. She may or may not receive child support and alimony from her husband.
About two years ago, she moved from an apartment to a McMansion in the same area as the apartment she moved out of. The McMansion has a swimming pool. A year later she bought a new car (ICE and previously owned). Right now she is spending a couple of weeks with her daughter at her lakeside home in Michigan.
******************************** Indian Solar Energy
Spectrum cable is "out" (down, not working) in our area and has been "out" several hours.
The company has alerted us that they will update us every three hours!
I'm working off my cellular data which is much slower than my computer. So, bear with me.
ERCOT capacity is well above demand, so it's not that. Unless, it's a regional thing.
Update: Spectrum has now gone nine hours with no solution. Spectrum is still down. Updates are given every three hours. The next update is scheduled for 4:00 a.m. CT.
Was it a cooling problem that caused this or did some foreign country hack into Spectrum?
Update, 3:50 a.m. CT: Spectrum has now gone twelve hours with no solution. Spectrum is still
down. Updates are given every three hours. The next update is scheduled
for 6:00 a.m. CT. Maybe things are getting better. The updates had been provided every three hours. The next update is only two hours from now.
One wonders if Spectrum will reimburse us 1/30 of the lost connection? LOL.
This is for the archives. Everyone of my readers has seen this story. If not, they're not paying attention. LOL.
Lede:
Germany's RWE just pulled the plug on its U.S. offshore wind business.
Quietly. No fireworks, no headlines about thousands of turbines scrapped—just a dry admission that it's "halting activities" in American waters.
For one of Europe’s biggest green energy giants to walk away from a market as large as the U.S., in the middle of an energy transition no less, is not just a business decision.
It’s a red flag.
The exit—confirmed by a speech manuscript published ahead of a yet-to-be-delivered speech by the company’s CEO—comes as RWE rethinks where and how it deploys capital. In March, the company slashed $11 billion off its low-carbon investment plan, citing rising costs, hostile regulatory environments, and a spike in its required return on investment from 8% to 8.5%. In other words: too risky, too expensive, too slow. [Sounds like the US oil sector, under Biden, Kerry, Pocahontas, and many others.]
RWE's CEO, Markus Krebber, had already warned last fall that Trump’s return to power could delay or derail projects on the U.S. East Coast. Now, the company is making that pivot official. All U.S. offshore wind operations are paused—indefinitely—and RWE will instead chase safer, more lucrative projects in places like Germany, where it just broke ground on a new 22.8-MW onshore wind farm.
Blaming the failure of an inefficient business plan on Trump. So, what else is new?
A new study commissioned by EIA examines the role of high-voltage direct current (HVDC) lines in integrating renewables resources into the electric grid. The review indicates that, although applications in the current electric transmission network are limited, HVDC lines have a number of potential benefits including cost effectiveness, lower electricity losses, and the ability to handle overloads and prevent cascading failures. These attributes mean that HVDC lines could, if properly configured, help mitigate some operational issues associated with renewable generation.
Renewable resources can be categorized into two types of generating sources—dispatchable and non-dispatchable. Dispatchable generators can respond to real-time system operator instructions to increase or decrease output. Among renewable power plants, those fueled by geothermal and biomass resources are considered dispatchable.
Non-dispatchable renewables, such as those fueled by solar and wind energy, are dependent on the availability of naturally occurring resources. As a result, these technologies have a limited capability to respond to dispatch signals. Hydroelectric generators fall between these categories; they can typically respond to dispatch signals, but they often have seasonal operational limitations that prevent them from being completely dispatchable.
Go to the linked article to see why high voltage DC transmission lines are being considered for renewable energy.
Maersk, whose container ship and oil businesses have been struggling, announced last year that it would split up into separate companies and said it would unveil details of its structural changes by September 2018.
Market: Wow, that was fast. In an earlier post this morning I mentioned:
capitulation; and,
sector rotation
Now, this story: "funds pull back from Permian as US shale oil firms go into overdrive." From the Reuters story, data points:
cash, people and equipment are pouring into the prolific Permian shale basin in Texas as business booms in the largest U.S. oilfield
but one group of investors is heading the other way - concerned that shale may become a victim of its own success.The speed of the recovery in the U.S. shale industry in the past year has surprised oil investors after a global supply glut led to a two-year crude price slump and bankrupted many shale firms
eight prominent hedge funds have reduced the size of their positions in
ten of the top shale firms by over $400 million, concerned producers are
pumping oil so fast they will undo the nascent recovery in the industry
Liza. This is pretty cool. I've mentioned ExxonMobil's "elephant" off the coast of Guyana on two occasions:
ExxonMobil and partners will spend $4.4 billion to develop part of the Liza oilfield off the coast of Guyana, a megaproject despite glut of oil and focus on US shale
this is the fifth deepwater project approved by various operators this year
Exxon spent nearly $7 billion earlier this year to more than double its holdings in the Permian
Guyana: looks good to Exxon due to its low cost of production
Phase One of Liza: expectations -- 450 million bbls total; 120,000 bopd
to come online in 2020
first phase: 17 wells
second phase: not discussed
Hess' share in the project: $1 billion (rounded)
Back-of-the-envelope: $4.4 billion / 450 million bbls = $10/bbl (plus, of course, what has already been spent)
British power producer Drax is assessing whether to convert its
remaining coal-fired power units to run on gas instead so they can
compete in the country's annual capacity auction.
Drax has converted half of its Yorkshire coal plant, once Europe's
most polluting coal-fired power station, to burn wood pellets but plans
to switch the remaining units to biomass have stalled since the
government changed renewable energy subsidies.
"One option is to repurpose the coal units to run on gas," said Andy
Koss, chief executive of Drax's generation business.
But there's even more. This has been a constant theme on the blog: intermittent energy -- solar/wind -- will require additional back-up electricity, and now this in the linked article:
Drax is banking on the need for back-up electricity production capacity to complement solar plants and wind turbines and is forecasting a trebling in earnings by 2025.
It is already planning to build four modern open-cycle gas turbine (OCGT) plants.
From this weekend’s WSJ Review, “The Charade of the Paris Treaty: Real Progress Will Require A Massive Investment In Green Energy.” Some data points:
empty pledges are no way to deal with the climate threat
the Paris treaty risks wasting huge resources to do almost nothing to fix the climate problem while shortchanging approaches that promise the most transformative results
signatories will work to keep the rise in average global temperature “well below” 2 degrees Celsius and even suggests that the increase could be kept to 1.5 degrees. This is empty political rhetoric
based on current carbon dioxide emissions, achieving the target of 1.5 degrees would require the entire planet to abandon fossil fuels in four years
but the treaty has deeper problems
just 0.6% of the world’s energy needs are currently met by solar and wind
by 2040
even with the Paris treaty, solar and wind are expected to contribute less than 3% of world energy by 2040
fossil fuel will go from 81% to 75% of global energy needs
I forced myself to read to the end of the article to see if Bjorn Lomborg, president of the Copenhagen Consensus Center (“the science is settled”) and writer of the article had any solutions.
He did not.
Hold that thought. From cbc: global warming his Alaska with a vengeance --
The 25th-annual Kluane Chilkat International Bike Relay has been
cancelled due to snow at the starting line, affecting about 1,300 riders
who were set to begin the race Saturday morning.
This is the first time the race has been cancelled.
More:
"The race was cancelled because not only snow and slush in the upper
elevations in the summit legs, but right here in Haines Junction at the
start," said Mike Kramer, race coordinator.
"The road report is saying black ice and slushy sections; there is a
travel advisory in effect for driving vehicles, so certainly in terms of
riding bikes — especially racing bikes — it is totally out of the
question."
Kramer said the race will be postponed until next year.
The EIA, via twitter, makes a big deal that the amount of US wind energy consumption has increased 20% year-over-year.
The graph is worth a thousand words. Twenty percent of zero is still zero.
Total energy consumption by source. Of all sources, geothermal, wind, and solar need to be combined if they were to even show up on the graph. If broken out separately, wind and solar would come close to rounding to zero.
This graphic is in line with about almost everything else I see.
Observations:
energy: all the above -- everything is represented here
the graph goes out to 2040
this is global energy demand
coal: the amount actually increased significantly from 2000 to 2015, and really doesn't decrease all that much (if it does, its almost imperceptible)
natural gas: the huge winner -- compare 2040 with 2015 (or 2000, for that matter)
oil: even oil shows a huge increase
nuclear: increases some (China? India? where?)
other renewables (wind/solar): although there's a relative increase, it looks like about 25 quadrillion BTUs/700 quadrillion BTUs = 3.57%. I.N.C.O.N.S.E.Q.U.E.N.T.I.A.L. A rounding error at best.
By the way:
2015: 575 quadrillion BTUs
2040: 700 quadrillion BTUs
(700 - 575) / 575 = 22% increase in global energy demand over the next 25 years.
Note: this is not an investment site. Do not make any investment, financial, travel, job, or relationship decisions based on what you read here. But this seems to be an open-book test when it comes to looking where to invest for the long term.
There is no question that solar has some niches (wind has none, absolutely zero) but as a real global player, unreliable, expensive, non-dispatchable energy is irrelevant.
But I don’t think I’ve talked to someone who loves to ride a bicycle as much as Bill Walton.
“I
love to ride all day,” Walton told me on a recent afternoon, in a
telephone interview. “My dream is to do 100 miles a day. Get up, have
breakfast, get going, ride all day, stop for lunch, ride, come home,
take a swim, take a Jacuzzi, have a hot shower, have dinner, go to bed,
get up and do it again, day after day.”
You see what I mean.
And now this:
But before we go, a couple of Bakken economy stories.
Mercy Medical
Center (MMC) formally announced on Tuesday that it is joining to a
regional healthcare system and will unite with nine healthcare
facilities in central and western North Dakota.
CHI
Mercy Medical Center in Williston, CHI St. Joseph’s Health in
Dickinson, CHI Carrington Health in Carrington, CHI Mercy Hospital in
Devil’s Lake and CHI St. Alexius Health in Bismarck, Garrison, Turtle
Lake, Minot, Mandan, and Washburn will be united under one name, CHI St.
Alexius Health.
A popular
Sturgis bar that burned down after last year’s 75th anniversary of the
town’s rally will be rebuilt and moved after a major expansion is
planned.
The new location will be a 600-acre site five miles from the original
bar at the former Broken Spoke campground near the base of Bear Butte.
U.S. wind energy generation rose to 191 TWh in 2015, accounting for
4.7% of the country’s electricity. That was an increase on the 4.4%
wind contributed to U.S. power in 2014 but, due to weaker winds, it was
only a 5.1% increase on 2014’s total TWh, the smallest increase in
wind’s output since 1999.
Weather patterns in the Western U.S. caused
lower wind speeds and decreased wind production in the first half of
2015, though the same weather patterns caused the stronger winds in the
central U.S. that were the basis for major wind output growth in that
region.
U.S. wind’s cumulative installed capacity reached 73 GW in 2015.
New wind capacity grew by 8.1 GW, a 12.9% gain, and wind led all
resources in new installed capacity for the year, accounting for 41% of
new U.S. megawatts. Wind was second only to hydropower in TWh
of generation from renewable sources.
Original Post
Wind speeds slowing down? Was this predicted by the warmists? There seems to be absolutely no correlation between wind capacity growth and wind energy generation growth -- every time you look more closely at intermittent energy you find another reason not to like it.....just staying....
Wow, capacity increased significantly last year (see below) while actual generation slowed considerably. Interesting, huh? That would be like drilling more oil wells and coming up with less oil, I suppose.
EPA Chief admits: ‘I’m not disagreeing’ states with climate regs have ‘triple’ the electric rate. Link here.
Pointing out the high costs of electricity in states that have
implemented climate regulations similar to EPA’s proposed Clean Power
Plan, Senator Bill Cassidy tells EPA Administrator Gina McCarthy,
“states that emit the most carbon have the lowest energy costs [while
those] that emit the least have the highest — in some cases triple…”
Administrator McCarthy responds, “I guess I’m not disagreeing with your–
the facts that you’ve outlined them just there.”
SENATOR CASSIDY: “In a previous conversation we’ve
had, I’ve made the point that if the Clean Power Plant [sic] rule raises
energy costs, that will put our economy at a economic disadvantage
relative to countries overseas which frankly will continue to pollute or
emit carbon. Now, we wanted to test this hypothesis, so we took all the
states in the United States, and we looked at those which have the
easiest compliance with the Clean Power Plant [sic] rule, i.e. they
currently emit the less [sic], and those states that are going to have
the hardest time, they emit the most. And, turns out there is kind of an
inverse correlation with electricity costs. So, if you look at RGGI
states for example, the Northeast, they have electricity costs that are
three times higher than that for a state like Montana.”
ADMINISTRATOR MCCARTHY: “Mmmhmm (affirmative).”
SENATOR CASSIDY: “Now, I think I remember you
saying, ‘No, it’s possible to lower emissions without raising the
costs’, but I’ll just say it, baseline, these states which have the
lowest emissions of carbon already have triple the cost of their
electricity.”
According to EIA: just slightly less than 14 gigawatts (GW) of electricity sourced by steam coal retired in 2015. However, note: The coal-fired generating units retired in 2015 tended to be older and smaller in capacity than the coal generation fleet that continues to operate.
Was that replaced? If so how? I'm sure there will be better updates later and better sources, but for now, this source:
In 2015, those particularly excellent trends continued. Though we won’t
have complete data until next spring, the country will likely install
7.4 gigawatts of solar energy through Dec. 31 of this year.
Wind power is also flying, with almost 3.6 gigawatts coming online in the first three quarters of this
year and more than 13,000 megawatts now under construction.
January 29, 2016: this is a most incredible graphic, from the Wall Street Journal. Take some time studying it -- electricity costs, already cheap in the US, dropped another 15 - 30% in many areas of the country. But someone is going to have to ask Houston if there's a problem. Why is the price of electricity going up in Houston?
Original Post
From the linked story below: electricity now costs about 3.5 cents per kilowatt-hour. That compares
with an average wholesale price of about 7.6 cents a kilowatt hour for
2008, when gas prices were much higher.
If you are paying more than 3.5 cents kilowatt-hour, ask your utility company how much wind energy you are paying for. Good luck.
If you want to save a few bucks/month on your utility bill, install a $35,000 solar system on your roof. LOL.
The lowest electricity prices in more than a decade are testing the
whole business model of independent power-generation companies.
While
most companies are thrilled when their fuel costs drop, plunging
natural-gas prices have pushed wholesale electricity prices down to
rock-bottom levels. That trend is pressuring the sales and stock prices
of some of the biggest power-plant owners in the U.S.
Shares in Dynegy Inc., Calpine Corp. and NRG Energy Inc. slid more than 55% last year. So far this year, they are down
between 4% and 19%. Last month NRG’s board of directors replaced
longtime chief executive David Crane, hoping change at the top would reverse the company’s slippage, but there is no relief in sight.
A
U.S. Supreme Court decision this week put additional pressure on
generators’ stocks with a ruling that allows big consumers to receive
payments for cutting their electricity use that are equivalent to what
generators are paid to make electricity.
Good, bad, or indifferent, this is what caught my attention:
The companies mostly burn coal and natural gas to generate
electricity, but it is gas prices that often dictate electricity prices
in places like California, Texas and the northeast. That is because the
country’s fleet of power plants has dramatically changed over the last
20 years to run on more gas as coal plants have shut down due to old age
and new pollution regulations. Today nearly 30% of U.S. power is
generated from gas, up from less than 20% two decades ago.
The
average U.S. electricity price last year fell by about a third to 3.5
cents a kilowatt-hour, according to a Wall Street Journal analysis of
statistics compiled by Intercontinental Exchange Inc. In December, as gas prices hit a 14-year low, the price in some
regions was even lower. In the mid-Atlantic power sold for a little as
2.7 cents per kilowatt-hour, according to federal data.
That compares
with an average wholesale price of about 7.6 cents a kilowatt hour for
2008, when gas prices were much higher.
3.5 cents/kw-hour. In the mid-Atlantic, for as little as 2.7 cents/kwh. As a rule of thumb, I usually think of 6 - 9 cents / kwh. Because that's what it was back in 2008.
Solar / wind energy? You can't get an honest answer. Too many variables, but 20 - 30 cents/kwh is probably as good a number as any for intermittent energy. Remember, when you suggest otherwise, that intermittent energy needs back-up fuel energy to provide energy at night and when the wind does not blow.
So, for folks who like to pay intermittent energy, they can pay 30 cents/kwh for intermittent energy vs 3 cents/kwh for reliable energy. The only reason our utility bills are not 10x what they are is because utilities manage somehow to limit intermittent energy to only a small percentage of their overall fuel. But if you like solar/wind/intermittent energy, be prepared to pay a utility bill ten times what you are already paying.
This reminds me of the old commercial, "When it absolutely, positively has to be there ...."
When one's electricity source absolutely, positively has to be there, one does not choose intermittent energy; one goes with reliable GE gas-powered turbines. Reuters is reporting:
For years, crippling electricity shortages have plagued Pakistan, creating challenges for residents and businesses alike, and fixing the problem has become a priority for the Federal Government of Pakistan. To address this, GE will provide two high-efficiency 9HA gas turbines, one steam turbine and two heat recovery steam generators to .... PowerChina, for the new 1.2 gigawatt Haveli Bahadur Shah power plant.
The steam turbine and HRSGs have been engineered by Alstom, and with GE’s recent acquisition of Alstom’s power and grid businesses, they have been incorporated into GE’s portfolio. PowerChina will handle engineering, procurement and construction of the plant.
Regardless of where one stands on the issue of intermittent energy, it is obvious that intermittent energy is a "luxury" only rich countries can afford. And regardless of how much money a country has, when that country absolutely, positively needs uninterruptible electricity, one goes with fossil fuel.
Inshallah.
*************************
Hydrogen -- An EIA Energy Cookie
Reported a few days ago, I'm still clearing out my in-box:
Refineries use hydrogen to lower the sulfur content of diesel fuel. Refinery demand for hydrogen has increased as demand for diesel fuel has risen both domestically and internationally, and as sulfur-content regulations have become more stringent.
EIA data show that much of the growth in hydrogen use at refineries is being met through hydrogen purchased from merchant suppliers rather than from increased hydrogen production on-site at the refinery. The increased use of purchased hydrogen has implications for the refining industry's use of natural gas as a feedstock…Comparing 2008 and 2014, on-site refinery hydrogen production changed very little (less than 1%), while hydrogen supplied by merchant producers increased by 135. --- EIA
For a distillate fuel oil definition, see this link.
"Demand for diesel fuel has risen...." --- they must be talking about long-term trends. I was not aware of an increasing demand for diesel domestically right now .. this is what John Kemp is reporting about diesel fuel demand, last week:
US distillate consumption is at 10-year record lows.
It's bad enough that NASA/NOAA recalibrated thermometers and moved thermometers to new locations to help support the global warming story, but when agencies like the EIA grossly mis-interpret the data, it's pretty frustrating. Maybe I'm mis-reading something. It wouldn't be the first time I mis-read something.
That below the asterisks was the original post. I would ignore it. It is long and probably incorrect; I was just trying to figure out the article. While strolling our youngest granddaughter, I think I have the 30-second soundbite or the "elevator explanation."
Vermont residents who pay high electricity prices for the privilege of solar energy are simply providing a "subsidy" (called a "REC") to the big, bad utility companies in neighboring states like Massachusetts and Connecticut so they can continue burning fossil fuel.
Meanwhile, the Massachusetts / Connecticut utilities are burning very, very inexpensive fossil fuel and charging their customers as if they are paying for expensive solar energy. At least that's how I see it.
If I live in Vermont, my local utility company tells me that to do my part in fighting global warming, I should buy electricity from my local utility because some of its electricity comes from the solar array it built on the edge of town.
So, if I'm a hippie-dipper bicyclist who lives in Vermont, I gladly pay a bit more for electricity, knowing that even though solar is a bit more expensive, it's well worth it: I'm doing my part to fight global warming.
To ensure the electricity you are buying -- that solar energy -- can compete with electricity provided by coal or natural gas -- the state of Vermont grants the utility a break in taxes they would otherwise pay, let's say, a penny for each kilowatt. So everybody's happy:
people across the state pay their state income taxes, to include a little bit for the local utility to provide solar energy, to make it competitive it with cheap natural gas or coal
these grants the state pays to the utility companies are called renewable energy credits
the utility companies then take those renewable energy credits and sell them to utilities in other states like Massachusetts, Connecticut, California, or Minnesota who have state-mandated intermitttent energy requirements
let's say they sell them for two pennies for each kilowatt -- they got a tax break of one penny per kilowatt hour and now they sell those credits to a third party for two pennies
From the linked article:
The attorney general’s warning says in part, “If your solar project
sells the RECs, do not make any statements or suggestions that consumers
are using renewable energy from your project.”
SunCommon’s
website has four alternating front pages advertising “solar at no
upfront cost,” ‘’Ditch fossil fuels, invest in solar” and saying its
“mission is to tear down the barriers to renewable energy.”
In a
web-based ad for a community solar project in Bridport, posted in July,
there was no mention that RECs would be sold out-of-state.
Since
the attorney general’s warning letter last month, SunCommon has added
information about RECs to its website, but it’s still on an inside page
of the site, near the bottom.
The nation’s largest solar
marketer, San Mateo, California-based SolarCity, promises on its website
that customers can “power your home with clean energy. ... Move to a
cleaner, renewable energy today.” But the contract notes that the green
aspects of the power can go elsewhere.
The reason it is complicated is because the snake-oil salesman says that regardless of who pays for what, the utility is doing its part to fight global warming by installing solar panels. The RECs and the money trail are simply business sideshows.
At the end of the day, you are paying a big more for electricity to help neighboring states meet their state-mandated intermittent energy requirements.
It's interesting that the states have told the attorneys general to take action on any false advertising. I assume the natural gas and coal industries are behind this "truth in advertising."
I guess at the end of the day, the utilities are doing their part by providing intermittent energy to fight global warming -- "you" just aren't being told why your participation means nothing.
I know Washington, DC, is being pummeled by global warming this weekend; I wonder how the Maldives are doing? Back to the Maldives later, but first this: 2015 was not the hottest year on record, regardless of what you may have read or heard. From the linked article:
The claim is meaningless anyway:
Here’s how Dr. Richard Lindzen,
an emeritus Alfred P. Sloan Professor of Meteorology at the Department
of Earth, Atmospheric and Planetary Sciences at MIT, puts it:
“I urge you when looking at a graph, check the scales! The uncertainty here is tenths of a degree.”
“When someone points to this and says this is the warmest temperature
on record. What are they talking about? It’s just nonsense. This is a
very tiny change period. And they are arguing over hundredths of a
degree when it is uncertain in tenths of a degree.”
“And the proof that the uncertainty is tenths of a degree are the
adjustments that are being made. If you can adjust temperatures to
2/10ths of a degree, it means it wasn’t certain to 2/10ths of a degree.
Yes, I had noticed that before. The lowest point on the graph is 8.25 degrees; the high point is 8.5 degrees, over 15 years. 0.25 degrees/15 years = 0. 0167 degrees/year. Is that even measurable? Repeatable? Significant? And that's the worst case scenario. Using the other line, the difference is even less. I find it amazing what "flat earthers" notice.
Now that we got that out of the way, for those snowed in Washington, DC, snowed in over the weekend, Ice Age Now (linked at the sidebar at the right) recaps current winter weather worldwide. It's not just Washington that's getting hammered this weekend; it's happening all over the world. Moscow? As of January 19, Moscow has already received double its "normal" amount of snow.
I was tempted to go through the list and highlight most of them here, but I decided on linking just one article, mostly for all the comments. The windmills in Sweden are frozen and helicopters, using fossil energy, are de-icing the windmills. Click on the photo at this link to see the de-icing. Be sure to read the comments. I particularly enjoyed the first one:
I live near a couple hundred + of these dumb things. In the hot dog days of summer when everyone has their air conditioners on, the windmills don’t turn much, because there is no wind. Then they kick up the co-gens-gas fired plants.
In winter after the cold blows in and everyone needs max heat the wind dies down, and again, they kick up the co-gens-gas fired plants.
I guess when they do work we throw our nuclear power away, but don’t worry it’s not much, I was told that these 270 windmills can’t even supply one small town in my county. If that’s not going ass backwards I don’t know what is.
Many people get $$$ because these things turn the sun into a slow strobe light at sunrise & sunset. I think all the people from town who come out and oooo & aahh at their stupid windmills should have their morning coffee with that damn light blinking in their eyes.
From Science magazine’s “The Next Oil Crisis Looms Large—and Perhaps Close,” August 21, 1998:
This spring . . . the Paris-based International Energy Agency (IEA) of the Organization for Economic Cooperation and Development (OECD) reported for the first time that the peak of world oil production is in sight.
Even taking into account the best efforts of the explorationists and the discovery of new fields in frontier areas like the Caspian Sea . . . sometime between 2010 and 2020 the gush of oil from wells around the world will peak at 80 million barrels per day, then begin a steady, inevitable decline, the report says.
In round numbers, "we're" producing about 90 million bopd. Someone said we were producing 95 million bopd in 2015. If so, 95 - 80 / 80 = almost a 20% increase.
The same scientists who predicted "Peak Oil" back in 1998 knew they would soon be out of a job, and moved on. They are now predicting future global temperatures.
**************************
Flashback
We Can't Drill Our Way to Lower Gas Prices -- President Barack Obama with best advice money can buy:
one minute sixteen seconds of fathomless ignorance
"It's tough to make predictions, especially about the future."
-- Yogi Berra
****************************** I Don't Remember Loving You
I Don't Remember Loving You, John Conlee
********************************
Overseas, Wind Energy Is All The Rage
SeekingAlpha is reporting:
GE Renewable Energy secured 1.4 GW of firm and unconditional wind turbine supply orders in the month of December, 2015
The
flurry of deal activity follows the recent launch of GE Renewable
Energy, a new business unit the company introduced in November after
completing its acquisition of Alstom's renewable energy group
The agreements call for GE's wind technology to supply more than 20 new wind projects across seven different countries
Alcoa Inc. has struck a $1.5 billion long-term supply contract with
General Electric Inc.’s aviation unit, underscoring the aluminum
producer’s efforts to offset difficult conditions in its raw-aluminum
business.
Under the deal, New York-based Alcoa will supply
advanced nickel-based superalloy, titanium and aluminum components for
engines and for engine parts made by GE.
Alcoa shares rose 1% in recent premarket trading.
The
announcement comes ahead of what is expected to be Alcoa’s worst
quarterly report since early 2014, due after the market closes Monday,
including a 17% drop in revenue from a year earlier and earnings of two
cents a share, according to a poll of analysts. Raw-aluminum prices have
fallen over 25% to about $1,500 per ton in the past year.
As
usual, it will be first major U.S. company to report, setting the tone
during a volatile time for the stock market.
Front page, on-line edition, but way, way at the bottom, from The Los Angeles Times, google in North Dakota, an oil boomtown doesn't want to go bust.
It may be tempting to write off Williston as another boomtown heading
for a bust, a story that has defined the American West, whether the
resource was fur, gold or timber.
But Williston believes it can
build something more enduring. The way city officials tell it, closing
the camps is a show of faith in the future.
"It's very difficult to build a sustainable community on man camps," said Ward Koeser, who retired as mayor in 2014.
The
city used its newfound wealth to build a $70-million high school, a
$68-million recreation center, and new water and sewer systems. It
renovated Main Street and created a city position for someone to write
parking tickets. Highways have been widened, and an airport is under
development.
The biggest transformation may be in the city's
housing stock. As the population tripled to more than 36,000, developers
built about 10,000 houses and apartments.
Police are hunting for a gunman who shot and killed a fellow passenger on board a train in Oakland, California.
Description of the suspect, in broad daylight or at least a well-lit train, with at least one witness.
The suspect was wearing blue jeans, military-style boots and a dark jacket.
So politically correct we don't know whether the suspect is male, female; tall, short; thin, fat; white, black; hat, no hat; tattoos, no tattoos; long hair, short hair, no hair. But we do know the suspect was wearing --OMG -- "military-style" boots.
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From The Boston Globe
Shire finalizes deal to buy Baxalta with $32 billion offer.
David Bowie dead, cancer, at age 69.
Burdened students confront candidates on college loans.
Boston Globe delivery problems persist. For the second consecutive week, thousands of Sunday newspapers did not reach subscribers.The Globe continues to print daily "apologies" to its subscribers. Comment: there's a huge backstory here that is not being reported.
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The LA Times
Google: The Saudi-U.S. relationship: Shakier than ever.
Saudi Arabia's royal family is frightened — and that's a problem for the U.S.-Saudi relationship.
The
Saudis are surrounded by enemies.
To the north, Abu Bakr Baghdadi,
leader of Islamic State, has promised to overthrow the Al Saud dynasty,
which he calls “the serpent's head.” To the south, Sunni-led Saudi
forces are at war against Shia Muslim rebels in Yemen. To the east, the
Al Saud face the rival they fear most, Shia-ruled Iran.
The Saudis have problems at home, too.
Fearing subversion from both
Islamic State and Iran, the government has cracked down on Sunni and
Shia dissidents alike, jailing writers, journalists and human rights
lawyers as well as potential terrorists.
The plummeting price of oil has
blown a hole in the government's budget while the population,
accustomed to subsidized housing and utilities, keeps growing.
And
the family faces a succession crisis; 80-year-old King Salman, who
ascended to the throne last year, is described privately by diplomats as
nearly senile.
Once their regime was a pillar of conservative stability; now fear has made them unpredictable.
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The Birther Problem
The Ted Cruz birth problem remains, perhaps, the top story in GOP politics. Who wudda thought? Legally, he's good to go. But he was a Canadian citizen, also, up until 18 months ago. He renounced his Canadian citizenship in 2014, when he was ready to announce he was running for president. That's a problem.
The
GDPNow model forecast for real GDP growth (seasonally adjusted annual
rate) in the fourth quarter of 2015 is 0.8 percent on January 8, down
from 1.0 percent on January 6. The forecast for the contribution of
inventory investment to fourth-quarter real GDP growth declined 0.2
percentage points to -0.8 percentage points after this morning's
wholesale trade report from the U.S. Census Bureau.
***********************************
Nominee For Geico Rock Award
StarTribune has nominated Cathy and Kevin Palmer, Blaine, MN, for the Geico Rock Award, 2016. Apparently the couple had not heard about really, really inexpensive natural gas.
Technically it's not a nomination but it certainly reads like a nomination.
They spent $5,700 on six solar panels to provide 17% of their electricity needs (of course, that's a hypothetical number and we all know that reality will never match a high-pressure salesman's projections).
Assuming they have a $300/month utility bill, 17% of $300 = $51.
$5,700 / $51 = 111 months = 9 years. So, assuming everything works as advertised their solar panels will pay for themselves in about 10 years.
If their monthly utility bill is $150 (see below), then 17% of $150 = $25.
We're in a split-level from the early 1990's in Blaine. It's about 1800
square feet. We've got the original furnace and air conditioner in our
house, so probably not very efficient. We also haven't done much to
make our house more efficient (probably could use some more/better
insulation in a few places). We are fairly aggressive with a
programmable thermostat (80 in summer, 60 or so in winter during the
day). We also replaced the fridge, which probably saves $6-$7 a month in
electricity (plus the new one is bigger and actually keeps things
cold).
Gas averages about $55/month. But, it's highly variable (about $20 in
summer, tops out around $150 in winter). Electric is about $50/month
and more consistent. Water/sewer/garbage are all billed through the
city and come out to about $36/month. We do have the smallest garbage
bin available which saves a small amount of money per month.
That was back in 2011, when natural gas was selling for $4.00 / million BTUs, vs $2.00 today.
By the way, on a percentage basis the amount of energy that solar contributes to total US consumption still rounds ... drum roll ... 0.0%. To the first decimal place, solar contributes 0.0% of energy consumption in the US. Wind: 2%. And this is after decades of advocacy, tax credits, and government mandates:
There is talk that the amount of energy that solar contributes to total US consumption by 2030 could triple.
There's growing evidence that Saudi Arabia's attempt to flood the crude market at a time of oversupply and concerns about weakening demand is not working, American oil billionaire Harold Hamm said Tuesday.
"We're in a predatory pricing environment. That's what's happened. The Saudis turned 1.8 million barrels on, and basically their intent was to drown us. But they've not got that done. It's been a monumental mistake for them, I might add, a trillion- dollar mistake."
Hamm cited speculation that Saudi Aramco, the state-owned oil giant, may sell at least part of its operations in an initial public offering.
"They're having to sell part of their business to keep doing what they are doing," he said, referring to the refusal by the Saudis to cut production. "They're having to sustain a country. We're sustaining companies here. We cut capex and quit spending money. And ride it out."
Pressure may be mounting on Saudi Arabia from fellow OPEC members, as crude prices continued to trade around 12-year lows Tuesday morning. Nigeria's oil minister said a couple members of OPEC have requested an emergency meeting. But other members said the group won't be gathering to talk about oil prices before their next scheduled meeting in June.
OPEC's trillion-dollar miscalculation, reported in Forbes. After reviewing the past year's events, and looking at an alternate strategy, the writer concludes:
Would that strategy have cost them market share? Sure, a small
amount. But assume they then pumped 34.5 million bpd at $80/bbl. That’s
just over a trillion dollars in annual revenue. If instead they pump
36.5 million bpd at $35/bbl — which is actually more than they are getting
as I write this — that’s $466 billion in annual revenues.
The annual
difference in those scenarios is $541 billion. OPEC already lost out on
that much in 2015 from the sharp drop in prices. If prices remain at
these levels for most of this year, the foregone revenue for OPEC in
2015 and 2016 will easily top $1 trillion since that November 2014
meeting.
Was this a miscalculation on the Saudis’ part, or is there a deeper
strategy at play? I firmly believe they failed to anticipate how sharply
oil prices would drop. I think they believed that oil prices could fall
somewhat below $75/bbl for a short period of time, and that would be
enough to bankrupt a lot of the shale oil companies and allow OPEC to
recapture market share.
Instead, the shale oil producers slashed costs,
and while some producers have gone bankrupt — and other bankruptcies are
undoubtedly on the way — shale oil production has proven to be much
more resilient than the Saudis and OPEC expected.
At that time, the Saudis argued that it didn’t make sense for them to
cut production. The highest-cost producers, they argued, should be the
ones to cut. It is true that defending oil prices by cutting production —
the strategy favored by Iran, Nigeria, and Venezuela — would have
propped up these high-cost producers. But the shale oil boom was going
to run its course and probably peak in a few years. OPEC still controls
1.2 trillion barrels of proved oil reserves — 72% of the world’s total.
Thus, unless they expected shale oil production to continue to expand by
millions of barrels per day every year, the group could have tightened
up production as needed to maintain much higher margins on a shrinking
market share. They would have higher revenues today, knowing they would
capture back market share as the world’s non-OPEC reserves depleted.
Their strategy may yet pay off though. If they can keep enough
marginal production sidelined over time, this period of financial
difficulty could enable them to recapture higher margins in the future.
If they are able to realize $10/bbl more for their remaining reserves as
a result of the current strategy, then their pain will be worth it (for
them) in the long run.
******************************
Saudi Crude Oil Surge! Not So Fast!
Remember all that talk about increased crude oil imports in December (John Kemp tweets -- I'll look for the posts later), we now have October EIA data.
After a couple of reports that Saudi Arabian imports surged near the end of the year, John Kemp is tweeting now that Saudi Arabia imports in late November/early December "moderated."
Saudi Arabia crude oil imports into US, October, 2015, data updated. Imports from Saudi Arabia remain near historic lows (remember, Saudi has a huge refinery along the US gulf coast they must supply (I believe that refinery has a daily capacity of 800,000 bopd); columns below are monthly, January through December; most recent data, October, 2015:
*******************************************
The drop in 2008 - 2009 coincides with a deep recession and the beginning of the Bakken boom. Current Saudi imports compare with the lows in 2008 - 2009.
With the extension of the tax benefits, wind and solar projects started
before year’s end will qualify for a 2.3 cents per kilowatt hour
production tax credit. It will gradually diminish through 2019. Wind and
solar projects could opt instead to take a 30 percent investment tax
credit that reduces their federal taxes dollar-for-dollar by what they
put into the project. The main difference is that the solar production
tax credit will phase out at the end of 2022.
Intermittent:
While green energy has a lot of public appeal, it is still
intermittent in nature. And that has put the grid’s traffic cops in an
untenable position. They are the ones whose job it is to schedule the
flow of electricity on the lines. Their task is to maintain that
reliability with the lowest-priced fuels.
Because neither the wind nor sun blows or shines on demand, they need
to be firmed up with other easily “dispatchable” forms of generation.
That creates two distinct issues:
The first is that the back-up power is
not free and the second is that if coal plants are “cycled” up and
down, they release more pollutants per unit of output than if they ran
full steam ahead.
With all the success MDU had with oil and gas, the company is now going to see what it can do for its shareholders and customers by getting into the wind energy business. From the company's press release today:
Montana-Dakota Utilities today
announced it has completed the purchase of Thunder Spirit Wind from
ALLETE Clean Energy.
The 107.5-megawatt wind generation project concluded last week and
all 43 turbines are in commercial operation. ALLETE Clean Energy
constructed the project near Hettinger, North Dakota. The approximately
$220 million wind farm can serve about 35,000 homes.
Montana-Dakota was able to take advantage of the wind farm’s
location, connecting to its transmission system in an area the company
already provides electric service,
further enhancing the company’s deliverability of power to its
customers.
“It is so rewarding to see a project of this magnitude come
together to provide our customers with a low-cost source of power,” said
Nicole Kivisto, president and CEO of Montana-Dakota. “We could not have
finished this project in a timely manner without the dedicated work of
our employees, ALLETE Clean Energy’s construction management and the
construction provided by Wanzek Construction and Nordex. It was a great
partnership.”
"So rewarding." Sort of like the Bakken was "so rewarding" for MDU/Fidelity.
"Low-cost source of power." The earlier figure was $300 million. $220 million (in today's press release) / 108 MW = $2 million / MW. Less than the $7 million Minnesotans pay / MW at their airports, but much more expensive than natural gas ($750,000 / MW). And these intermittent projects require natural gas / coal back-up anyway, and more miles of transmission lines. Whatever. It's an old story.
With this "low-cost source of power" and wind being completely free in North Dakota -- in fact, it's better than free; wind provides tax credits that are substantial -- MDU customers should expect to see their utility bills drop.
***************************
Libya Losing Control -- Or Perhaps Just A Messy Transfer of Assets To The JV Team
ISIS is burning Libyan storage tanks; "cry for help" from Libya. Bloomberg is reporting:
“We are helpless and not being able to do anything against this
deliberate destruction to the oil installations” in Es Sider and the
nearby Ras Lanuf oil terminals, NOC said. “National Oil Corporation
urges all faithful and honorable people of this homeland to hurry to
rescue what is left from our resources before it is too late.”
Libya, with Africa’s largest oil reserves, pumped about 1.6 million
barrels a day of crude before the 2011 rebellion that ended Moammar Al
Qaddafi’s 42-year rule. It’s now the smallest producer in the
Organization of Petroleum Exporting Countries, producing 370,000 barrels
a day in December.
******************************
Back to the Bakken
Active rigs:
1/5/2016
01/05/2015
01/05/2014
01/05/2013
01/05/2012
Active Rigs
58
170
184
179
195
RBN Energy: incredibly good article today on the WTI/Brent spread, contango/backwardization, the price of WTI going forward, and the future of US crude oil exports.
The first article could probably have been written every year for the past 50 years. One wonders if ObamaCare missed the low-hanging fruit.
The second article: a middle-aged (45 year old) single man will pay the $1,800 fine rather than buy an insurance policy that costs $2,900. My comment: he's a fool.
***************************
Gun Control -- An Oxymoron
From The New York Times yesterday:
The "gun control" issue is nothing more than a fund raising scheme.
The Supreme Court has ruled that "background checks" and laws to prevent some folks from owning firearms are not in violation of the 2nd Amendment. With the technology available, background checks could be accomplished in less than three minutes by anyone. The fact that Congress has not authorized such "apps" suggests to me that Congress sees advantages in preventing the development of such "apps."
Whether background checks will make any difference or not is another story, but I think most folks agree that some folks probably shouldn't have guns, for example, inmates of federal prisons, and from there, one can expand the list to one's heart's content.
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Is This Page Getting Too Long? One Last Post
What goes around, comes around. One of my favorite movies is The Usual Suspects. I've watched it a dozen times -- most recently, last week -- and I never grow tired of it. Last night while surfing YouTube I see that the movie is on "Mojo's" list of the top ten movies that have to be seen twice -- or more in the case of Mulholland Drive, also on the list.
Gramercy, the distributor, had no idea what they had. The film was only
shown in about 900 cinemas and, in terms of box office, only did about
$60m. But it soon became clear we had a phenomenon on our hands. The
Usual Suspects was on hundreds of Top 10 lists and, after winning two
Oscars in 1996, became a video hit and a cult classic. Bill Clinton was a
huge fan, because Chelsea loved it. He kept a copy on Air Force One.
When you’re in a thriller, you have to know the rules – then forget them
and just react to what’s happening. There’s a scene where a thug flicks
a cigarette and it hits McManus right in the eye. That wasn’t planned.
And in the lineup, a policeman says to Hockney: “We can put you in
Queens on the night of the hijacking.” He replies: “Really? I live in
Queens. Did you put that together yourself, Einstein?” All improvised.
It’s amazing the effect the film still has. Even people who have seen it
five or six times say to me: “I know who did it, but I still get a
surprise.” I was filming in New York last year and this guy came up to
me and introduced his friend, who was blind. The blind guy started to
recite all the dialogue from the film. I said: “You know the lines
better than we did.” And his friend said: “That was the last film he saw
before he went blind.”
Unlike Mulholland Drive, I can watch The Usual Suspects at least once a month. Mulholland Drive, maybe bits and pieces once a year. It is simply too intense.
In general, QEP appears to be fracking with 49 stages, 10 million lbs proppant in the Grail:
29373, 2,235, QEP, P. Levang 2-14-23BH, Grail, 49 stages, 10 million lbs, t5/15; cum 97K 9/15;
29374, 2,342, QEP, P. Levang 1-14-23BH, Grail, 49 stages, 10 million lbs, t5/15; cum 72K 9/15;
29375, 2,298, QEP, P. Levang 14-13-23-24-LL, Grail, 48 stages, 9.9 million lbs, t5/15; cum 103K 9/15; API: 33-053-06254-00-00; 122,000 bbls of water; proppant represented almost 19% of total frack fluid; generally in the 6 - 8% range;
29749, 2,159, QEP, P. Levng 1-14TH, Grail, 49 stages, 6.7 million lbs, t5/15; cum 89K 9/15;
**********************************
NRG Splitting Off Intermittent Energy
So, how is this switch to inermittent energy working out for the "green" utilities. Let's check in on NRG, perhaps one of the more aggressive utilities with regard to switching to intermittent energy. This is the headline and "sub-headline" at The Wall Street Journal this week: NRG Chief's green ambitions are put on back burner; money-losing investment in renewable energy didn't sit well with investors.
Throughout its 26-year life, NRG Energy Inc. has made most of its money by running big electric plants that burn fossil fuels. But six years ago, the company’s chief executive began a billion-dollar push into clean power: rooftop solar, wind farms and electric-car charging stations.
And David Crane, the CEO, became increasingly outspoken about the need to go green. In an essay earlier this year, Mr. Crane warned his fellow electricity executives that by failing to embrace clean energy they “are losing the hearts and minds of the future generation of Americans.”
He still believes that, he said in an interview. But he is backing away from the renewable-energy businesses anyway—to placate investors, he said.
In the 15 months before he decided to split off the renewable-energy businesses, the company’s shares lost about 50% of their value. The shares have dropped 25% since the new strategy was announced in mid-September.
Current investors aren’t upset about the plan to hive off the green businesses, said Jonathan Arnold, an equities analyst for Deutsche Bank Securities in New York. “They’re just sorry it isn’t being implemented more quickly.”
Jettisoning his green ambitions has been deflating, conceded 56-year-old Mr. Crane, who has run the Princeton, N.J., company since 2003. A Harvard-trained lawyer and former investment banker, he has become an electric-car enthusiast; he owns a Tesla Roadster, Nissan Leaf, Fisker Karma and BMW i8 sedan—electric cars.
My electric company here in Texas, unfortunately, is NRG, and I have some of the highest electricity bills I have ever had based on usage. And every month the bill comes in an envelope festooned with little pictures of little wind towers. Drives me nuts. I pay on-line and don't need the monthly bills in the mailbox either, but that's another story.
On a completely different note. I now know why my electric bills are so high. The CEO of NRG: A Harvard-trained lawyer and former investment banker, he has become an electric-car enthusiast; he owns a Tesla Roadster, Nissan Leaf, Fisker Karma and BMW i8 sedan—electric cars.
The oilfield services provider successfully completed its previously announced headcount reduction of 11,000, according to its 3Q report. Weatherford stated it has now increased its workforce reduction target to 14,000, “with an increased focus on support positions to be completed by year end.”
In addition to the job cuts, Weatherford has also closed five of its seven planned manufacturing and service facilities. The company said it will close one additional office by the end of the year and the remaining closure will occur in 2016. Weatherford has closed more than 70 operating facilities in North America through Sept. 30, with plans to close 90 by the end of 2015. Weatherford believes these efforts will “mitigate the effects of the downturn,” but noted that a challenging market may continue and that the company plans to further reduce its cost structure to reflect the current environment.
When Meir Zorea stepped foot in Grand Forks on Thursday, there were
more than 6,000 miles between where his company was founded and where
its future could be.
Zorea is the chairman of Israeli startup
company ARTsys360, which manufactures a 3-D micro radar system, and is
looking for a potential U.S. location for the firm.
As the
company's product could find use in the unmanned aircraft systems
industry, North Dakota is one option Zorea is investigating. Two
features that have captured the ARTsys360's attention are the state's
UAS resources and harsh weather conditions in which the radar's
capabilities can be tested.
The
cost of radar can put it out of reach for many that aren't associated
with the military, Zorea said, leaving some potential uses for the
technology unexplored.
A smaller, less expensive micro radar
system--ARTsys360's product runs about $5,000--could be used for various
means, including detecting unmanned aircraft flying into restricted
zones or allowing the aircraft to detect other objects and avoid
colliding with them during flight.
In the 1950's it was railroad hobbyists. In the 2020's it's going to be backyard airfields, drones, and micro-radar systems.
Britain will be China's "partner of choice" in the West, Prime
Minister David Cameron declared Wednesday, as China demonstrated its
commitment by putting down a 6 billion-pound ($9.3 billion) stake in the
U.K.'s first nuclear power plant since the 1980s.
Chinese President Xi Jinping signed the nuclear agreement on the
second day of a four-day visit that has seen the two countries agree
more than 30 billion pounds ($46 billion) in business deals.
Cameron said the "historic agreement" would create 25,000 jobs and eventually provide power to 6 million homes.
The nuclear deal will see the new Hinckley Point plant in southwest
England built jointly by Electricite de France and China's state-owned
China General Nuclear Power Corporation.
For the past several years it seems I saw no end to all the intermittent energy stories coming out of Britain: the Thames Array being just one example. This $10-billion nuclear deal with China tells me that intermittent energy in Britain is pretty much dead.
More:
DF said Wednesday that it would take a 66.5 percent share in the 18
billion-pound ($28 billion) plant and CGN 33.5 percent. The two firms
also agreed to develop two further nuclear power stations in southeast
England — one of which would be Chinese-designed and majority
Chinese-owned.
The latest data
from Strategy Analytics reveals that the Apple Watch remained the most
popular smartwatch through the fourth quarter of 2015, capturing 63
percent global market share based on an estimated 5.1 million sales in
the three-month period.
Samsung trailed in second place with 16 percent market share and an
estimated 1.3 million sales. Apple and Samsung together accounted for 8
in 10 of all smartwatches shipped worldwide during last year's holiday
shopping season, based on the data.
Global smartwatch sales rose to an estimated 8.1 million units in the
fourth quarter of 2015, an increase of 316 percent from 1.9 million in
the year-ago quarter. The growth was led by North America, Western
Europe, and Asia.
The record-breaking smartwatch growth contrasted the troubled Swiss
watch market, which declined 4.8 percent in Q4 2015 over the year-ago
quarter. Swiss watch sales totaled 7.9 million units in Q4 2015, down
from 8.3 million in Q4 2014.
Original Post
I remember all that "brave" talk coming out of Switzerland that their timepieces had no cause to worry with Apple getting into the market. CNBC is reporting:
The swathe of smart watches entering the market led by Apple's Watch has dented sales of Swiss-made timepieces and looks set to continue weighing on the sector.
Swiss watch exports slowed sharply in the year to September with their value sinking around 8 percent compared to September 2014, with Asia and U.S. shouldering the brunt of the decline.
Demand dropped off the most in the lower end of the market, with watches that export for below 500 Swiss francs ($520) being hit the hardest.
Alternatives to the luxury watches, such as the Apple Watch, have made retailers nervous of stocking cheaper Swiss watches as technological advances are likely to make them "obsolete," luxury analysts warn.
Times have changed, I guess. For me, the "lower end of the market" used to be $8 Casios.
