Reminder:This Is Not An Investing / Investment Site — July 24, 2023

Locator: 45161B. 

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them.  

Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source.

Big Story Today: World's Largest Battery Energy Storage Scheme Gets Planning Permission -- Michael Kern -- Oilprice -- July 24, 2023

Locator: 45190BATTERY. 

Link here.

• the Trafford battery energy storage scheme (BESS)
• Greater Manchester, England
• Carlton Power
• world's largest battery energy storage schheme
• $1 billion (actual: $963 million)
• 1 GW (1040MW / 2080MWh)
• Trafford Low Carbon Energy Park in Greater Manchester
• construction to begin: 1Q24 (six months from now)
• on-line / commercial operation: 4Q25
• another source: 300,000 homes for two hours
• reminder: Texas freeze knocked out wind power for days

When / if I get caught up, we'll explore this a bit more.

Other links to explore:

• utility-scale battery storage, including cost considerations, NREL, British; 2022 data. Link here.
• The Electric Company. Link here.
• British, 2021: UK's biggest battery storage project gets underway, using 198MWh of Tesla Megapacks. Link here.
• wind farm cost. Link here.
• British, 2022: Europe's largest battery storage system goes live in UK. Link here.
• US, 2016: New England; off-shore wind energy. Link here.

How Much Longer Can Shale Support U.S. Oil and Gas Production? RBN Energy -- Juuly 24, 2023

Locator: 45189B.

Must-read. After a day or so this article will disappear behind a paywall.

RBN Energy: how much longer can shale support US oil and gas production? Archived.

Back in the early 2000s, the outlook for energy security in the U.S. was bleak. Domestic oil production had been on a steady decline since 1985 and gas production was also well off its apex in the 1970s.

M. King Hubbert’s concept of peak oil ignited fears of eventual energy scarcity. Given fossil fuels’ ubiquity underlying our entire Western economic and industrial structure, it’s no wonder that folks were concerned.

But then the Shale Revolution changed everything. It’s often been said that necessity is the mother of invention and, after many trials and with considerable ingenuity, U.S. producers learned to wring massive volumes of previously trapped hydrocarbons from shale and gave the U.S. energy industry a new lease on life. But there are still limits on how much crude oil, natural gas and NGLs can be economically produced — and concerns lately that the best of the U.S.’s shale resources may have already been exploited. In today’s RBN blog, we examine crude oil and gas reserves: how they are estimated and what they tell us about the longevity of U.S. production.

Excerpts:

Fortunately, to help shed a little light on how much oil and gas still remains, the EIA also releases as part of its Annual Energy Outlook (AEO) its assessment of unproved technically recoverable resources (TRR), which includes probable and possible (3P), but not proved resources. This assessment is derived from the EIA’s Oil and Gas Supply Module (OGSM) and takes into account enhanced recovery techniques like carbon dioxide (CO₂) flooding as well as limitations like well spacing (more on that in a moment). What it shows is that the Permian, even beyond the proved reserves, still has an enormous amount of hydrocarbons left in the ground in the form of unproved TRR: 112 billion barrels (Bbbl) of crude (dark-blue bars and left axis in Figure 3), 368 trillion cubic feet (Tcf) of natural gas (green bars and right axis) and 58 Bbbl of NGLs (light-blue bars and left axis). That dwarfs nearly every other major producing region. The next two largest crude reserves in the U.S. onshore are in the Western Gulf (think Eagle Ford) at 30 Bbbl and the Williston/Bakken at 18 Bbbl. Only Appalachian gas, at 678 Tcf, surpasses the Permian in technically recoverable gas reserves. Other gassy basins include the Texas-Louisiana-Mississippi Salt (i.e. Haynesville) at 191 Tcf and the Western Gulf at 142 Tcf.

Here’s the catch though. Reserves may include Tier 1, 2 and 3 acreage — where Tier 1 includes the most productive zones while Tier 3 has the least productive. The key distinction between reserve estimates and tiering is that the former is based on a set of economic assumptions and therefore unsurprisingly changes over time, whereas the latter is an assessment of the relative quality of the rock — and while that can be somewhat subjective, it is less mutable. More specifically, acreage tiering takes into account the zone’s thickness, depth, pressure, porosity, permeability and presence (or lack of) contaminants. Because it is more productive, Tier 1 acreage generally provides better producer economics and will fall into the “proved” category (which, remember, is based on existing economic and operating conditions) at lower commodity prices. Since recoverable reserves are dependent on economics, producers will extract hydrocarbons from Tier 2 or Tier 3 acreage at the right price, but it has to be high enough to make it worth their trouble — which may not be good news for those further down the value chain.

More:

Note that the largest portion of the decline happens in the Southwest, which based on the AEO’s regional definitions (shown in the map to the right in Figure 4) is dominated by the Permian. Under the same scenario, there also would be a noticeable decline in the Northern Great Plains region, or the Williston Basin (a.k.a. the Bakken). Notably, these large declines don’t show up in the AEO reference case, which is mostly flat for the same through-2050 time horizon.

Bottom line:

In the U.S., the last 15 years of drilling top-tier acreage has taken its toll on Tier 1 availability, but there’s still plenty of Tier 2 available. Altogether, while we think there’s little danger of the U.S. depleting crude and gas reserves in the short-to-medium term, continued production growth will be contingent on producer economics — in other words, the price at which they’re incentivized to continue drilling and investing.

*************************
The Book Club 

American Empire, 1945 - 2000: The Rise Of A Global Power, The Democratic Revolution At Home, Joshua B. Freman, c. 2012

Notes.

WTI Surges -- Monday, July 24, 2023

Locator: 45188B.

All of a sudden this has become a big story. 

Off-shore wind:

• dead?
• Spanish-based Iberdrola to abandon Massachusetts off-shore project.
  
• the US east coast elite can rest easy; off-shore projects delayed, deferred, defeated.
  
• let Texas, Oklahoma, Kansas, Oregon carry the load
• few Americans have a dog in this fight; most don't care;
• Texas: maybe a pleasant surprise for faux environmentalists.
  
• other links:
  
• 2023: Rhode Island's wind strategy is unraveling -- climate change goals now endangered.
• 2023: inflation, interest rates, whales -- why offshore wind projects are on the rocks.
• 2023: wind turbine costs.
• 2016: cost of wind farm.

******************
Back to the Bakken

WTI: $79.07 -- jumps $2.61%; adds $2.01 / bbl.

Tuesday, July 25, 2023: 84 for the month; 192 for the quarter, 447 for the year
39508 conf, CLR, Vance 3-14H,
38949 conf, Hess, BW-Rolfson-151-98-2116H-16,
37178 conf, Hess, EN-Davenport-156-94-1003H-7,

Monday, July 24, 2023: 81 for the month; 189 for the quarter, 444 for the year
39507, conf, CLR, Vance 2-14H,

Sunday, July 23, 2023: 80 for the month; 188 for the quarter, 443 for the year
39135, conf, Iron Oil Operating, Antelope 2-33-28H,

Saturday, July 22, 2023: 79 for the month; 187 for the quarter, 442 for the year
None.

RBN Energy: how much longer can shale support US oil and gas production? Archived.

Back in the early 2000s, the outlook for energy security in the U.S. was bleak. Domestic oil production had been on a steady decline since 1985 and gas production was also well off its apex in the 1970s.

M. King Hubbert’s concept of peak oil ignited fears of eventual energy scarcity. Given fossil fuels’ ubiquity underlying our entire Western economic and industrial structure, it’s no wonder that folks were concerned.

But then the Shale Revolution changed everything. It’s often been said that necessity is the mother of invention and, after many trials and with considerable ingenuity, U.S. producers learned to wring massive volumes of previously trapped hydrocarbons from shale and gave the U.S. energy industry a new lease on life. But there are still limits on how much crude oil, natural gas and NGLs can be economically produced — and concerns lately that the best of the U.S.’s shale resources may have already been exploited. In today’s RBN blog, we examine crude oil and gas reserves: how they are estimated and what they tell us about the longevity of U.S. production.

“X” Is The New “Blue Bird” — July 24, 2023

Locator: 45187ELON.

Link here.

*********************

WTI

Trending toward $78 this morning.