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Author Topic: Oil and Gas Issues  (Read 249022 times)

numerobis

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Re: Oil and Gas Issues
« Reply #1650 on: August 12, 2017, 11:04:16 PM »
EV sales are still just 1-2%. Doubling every two-three years, but from a low base. Still, BNEF is fond of reminding people that a mere 20% oversupply caused the oil price crash. That crash was from too much oil getting pumped all at once.

If/when we hit 20% EVs -- just four doublings away, so 8-12 years at the current rate -- we get the equivalent of no change in oil pumping, but demand falling off hard, which will push prices down.

Keep in mind that Libya and Syria and Iraq are likely to get a bit more stable over that period, and Iran is newly able to buy drills and pumps and sell oil on the world market. So the supply side of cheap conventional oil is looking good from the perspective of someone wanting to buy oil (bad from the perspective of the climate).

A quick little nuclear war in Korea would also reduce demand for oil by killing a few million people and utterly devastating the world economy.

So in terms of stock price of oil majors, the oil price looks likely to be low for a long time: supply looks pretty secure in the next decade or two, and demand looks like it's set to fall off pretty fast over that period. Even if the price goes up temporarily for a few years in there, the longer-term trajectory is going to keep stock prices depressed.

rboyd

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Re: Oil and Gas Issues
« Reply #1651 on: August 12, 2017, 11:30:55 PM »
Agreed on the long-term trend, but could be a few twists and turns in between. There is also the possibility of another financial crash, given the very high debt levels. Would be bad for oil prices but probably good for reducing emissions in the short term.

Bob Wallace

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Re: Oil and Gas Issues
« Reply #1652 on: August 13, 2017, 12:42:14 AM »
If/when we hit 20% EVs -- just four doublings away, so 8-12 years at the current rate

Within 12 years, probably within 8 we are likely to have full self-driving cars.  That happens and we get robotaxis which will lead to a lot of people abandoning their ICEVs. 

Low income people who are struggling to keep their junker repaired and fueled are likely to make one last drive to the crusher.  If you can ride in a nice, highly reliable car for less than you were paying for gas why screw around with a clunker?

Two or more car households who use one or more cars for nothing more than getting to work/school are likely to cut down to one reliable ICEV and phone for the rest of their needs.

Folks, like seniors, who find driving a chore are likely to phone for a ride and leave their ICEV parked "just in case".

A lot of people who reach the point of buying their first car may not.

Demand could auger in within a decade.  Could happen....

Sigmetnow

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Re: Oil and Gas Issues
« Reply #1653 on: August 13, 2017, 06:10:51 PM »
Timely article from Bloomberg:

Gasoline Reaches Its Tipping Point
The fleet of electric vehicles in use worldwide is on track to displace around 100,000 barrels a day of road transport fuel this year -- most of it gasoline -- according to a report published last month by Bloomberg New Energy Finance. They expect that volume to rise to 155,000 barrels a day next year.

To be sure, that is a tiny volume compared with global gasoline consumption that was reported by BP Plc at more than 25 million barrels a day in 2016, but that misses the point. It is at the margin where the growing fleet of electric vehicles will make its presence felt.

Take Tesla Inc.'s Model 3 as an example. Once delivered, the current order book of 455,000 cars will displace some 18,000 barrels a day of gasoline demand, based on vehicle miles traveled and fuel consumption data from the U.S. Department of Transportation. That is not far off the EIA's latest forecast of U.S. gasoline demand growth in 2018 of 25,000 barrels a day. That forecast may already factor in all those new Teslas. If not, growth could be close to zero.

The tipping point is a little further away at a global level. The International Energy Agency sees gasoline demand increasing by around 240,000 barrels a day in 2018. But by the end of the decade electric vehicles could displace more than 290,000 barrels of gasoline and diesel, according to BNEF. And by 2025 year-on-year increases in the volume of fuel displaced could be enough to tip demand growth into contraction.

What happens then? Not the end of the world as we know it, for sure. But gasoline refiners should brace for profits to be steadily undermined.
https://www.bloomberg.com/gadfly/articles/2017-08-13/gasoline-can-reach-its-electric-car-tipping-point-by-2020
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Bob Wallace

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Re: Oil and Gas Issues
« Reply #1654 on: August 13, 2017, 06:30:58 PM »
And by 2025 year-on-year increases in the volume of fuel displaced could be enough to tip demand growth into contraction.

That contraction could happen before 2025.

Assume fully self-driving cars before 2020 (not an unlikely development).  That happens and we immediately will see robotaxis operating in our cities.  Companies like Uber are already preparing to launch driverless taxis, Uber tried to contract for 500,000 self-driving EVs with one car manufacturer.

I think there's a significant amount of 'soft' ownership of cars.  People who struggle to keep their cars operating and fueled, people who find driving or finding parking difficult, people who don't have the finances to easily afford their first car.  Some of the cars in multiple car  households.

Once these people realize that robotaxis solve their problems and leaves them more money to spend on other things I suspect we'll see car ownership lurch downward.  And those no longer wanted cars will be ICEVs that won't be burning fuel from then on.

Sigmetnow

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Re: Oil and Gas Issues
« Reply #1655 on: August 15, 2017, 08:30:45 PM »
'We've Made History': Ireland Joins France, Germany and Bulgaria in Banning Fracking​
https://www.ecowatch.com/ireland-ban-fracking-2450255362.html
People who say it cannot be done should not interrupt those who are doing it.

TerryM

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Re: Oil and Gas Issues
« Reply #1656 on: August 15, 2017, 09:51:50 PM »
'We've Made History': Ireland Joins France, Germany and Bulgaria in Banning Fracking​
https://www.ecowatch.com/ireland-ban-fracking-2450255362.html
Very good news indeed!
The next step is to ban fracked products from their nations.


IIRC the first European fracking operation was to have been the one Biden's son got involved with in the Ukraine, just after the coup. That one folded I believe.


A European ban might go a long way to preserve watersheds and the health of millions.


Terry

Sigmetnow

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Re: Oil and Gas Issues
« Reply #1657 on: August 16, 2017, 11:22:03 PM »
Shell and Exxon face censure over claim gas was 'cleanest fossil fuel'
Dutch advertising watchdog’s ruling prompts company to change line to ‘least polluting fossil fuel’ as campaigners welcome action over ‘misleading’ ad
https://www.theguardian.com/environment/2017/aug/14/shell-and-exxon-face-censure-over-claim-gas-was-cleanest-fossil-fuel
People who say it cannot be done should not interrupt those who are doing it.

Sigmetnow

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Re: Oil and Gas Issues
« Reply #1658 on: August 18, 2017, 09:31:01 PM »
Seadrill Ltd (SDRL) Stock Isn’t Going to Make It
Despite the extensions, SDRL stock is moving ever closer to bankruptcy
Seadrill Kicks the Can

With oil hovering between $45 and $50 per barrel and the glut of crude not ending, it doesn’t make much sense for energy firms to tackle expensive deepwater projects. That’s a problem if you rent/own the high-tech equipment needed to tap the ultra-deepwater areas of the Gulf of Mexico or the North Sea. It’s particularly a major issue if you have more than $11 billion in debt.

So it shouldn’t come as a surprise that SDRL has cratered over the last two years and can now be had for less than a buck.

And it also shouldn’t come as a surprise that Seadrill is looking to restructure some of this debt to reduce that burden. While SDRL has been working hard with its creditors, Chapter 11 bankruptcy isn’t out of the question, and we supposed to hear the results of its efforts at the end of July. However, SDRL managed to kick the can on the negotiations. ...
http://investorplace.com/2017/08/seadrill-ltd-sdrl-stock-make-it/view-all/
People who say it cannot be done should not interrupt those who are doing it.

Bob Wallace

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Re: Oil and Gas Issues
« Reply #1659 on: August 18, 2017, 09:33:51 PM »
Seadrill Ltd (SDRL) Stock Isn’t Going to Make It
Despite the extensions, SDRL stock is moving ever closer to bankruptcy
Seadrill Kicks the Can

With oil hovering between $45 and $50 per barrel and the glut of crude not ending, it doesn’t make much sense for energy firms to tackle expensive deepwater projects. That’s a problem if you rent/own the high-tech equipment needed to tap the ultra-deepwater areas of the Gulf of Mexico or the North Sea. It’s particularly a major issue if you have more than $11 billion in debt.

So it shouldn’t come as a surprise that SDRL has cratered over the last two years and can now be had for less than a buck.

And it also shouldn’t come as a surprise that Seadrill is looking to restructure some of this debt to reduce that burden. While SDRL has been working hard with its creditors, Chapter 11 bankruptcy isn’t out of the question, and we supposed to hear the results of its efforts at the end of July. However, SDRL managed to kick the can on the negotiations. ...
http://investorplace.com/2017/08/seadrill-ltd-sdrl-stock-make-it/view-all/


Perhaps someone should take a look at their equipment and experience, buy them out at a bargain price, and start installing offshore wind.  It's looking like offshore is going to be a huge growth market.