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oren

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Re: Oil and Gas Issues
« Reply #2900 on: February 01, 2019, 11:40:55 PM »
Thanks for the reminder rboyd.
NG is even worse because its pollution is invisible. With coal, there is a public outcry over the health and smog effects, so coal is under pressure to shut down. NG is touted as clean, and locally it is, so it can stay on forever, while its GHG contribution ends up similar to coal.

Sigmetnow

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Re: Oil and Gas Issues
« Reply #2901 on: February 05, 2019, 09:15:51 PM »
The article mentions that Occidental Petroleum and Diamondback Energy will also spend less this year.

WPX Energy Oil Stock Is Slamming on the Brakes Amid Lower Oil Prices
Quote
... with crude now in the low $50s, WPX Energy is cutting its budget back to between $1.1 billion and $1.275 billion, or about 23% lower at the midpoint of both ranges. This budget level will enable the company to live within cash flow at $50 oil. That spending reduction will force the company to cut two rigs from its Permian Basin operations and three in the Bakken Shale, which will cause it to grow production at a slower pace this year. Overall, its output should rise 20% compared to last year's level, though production will only increase between 5% and 10% from the exit rate at the end of last year to the fourth quarter of 2019. In addition to cutting its budget, the company also sold more than $200 million in assets, including its stake in one pipeline, and plans to reinvest about $100 million of that money into acquiring land in a core area of the Permian Basin.
..
The crash in crude oil to end last year is forcing oil companies to take a much more cautious approach to capital spending this year, since they won't make as much money on those lower oil prices. It's a prudent approach given that wild spending in previous years made matters worse, as it put more downward pressure on both oil prices and the financial profiles of oil companies.
https://www.fool.com/investing/2019/02/05/this-oil-stock-is-slamming-on-the-brakes-amid-lowe.aspx
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vox_mundi

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Re: Oil and Gas Issues
« Reply #2902 on: February 09, 2019, 05:01:44 PM »
Report to Congress on Changes in the Arctic
https://news.usni.org/2019/02/08/report-congress-changes-arctic-4

The diminishment of Arctic sea ice has led to increased human activities in the Arctic, and has heightened interest in, and concerns about, the region’s future. The United States, by virtue of Alaska, is an Arctic country and has substantial interests in the region.

Record low extents of Arctic sea ice over the past decade have focused scientific and policy attention on links to global climate change and projected ice-free seasons in the Arctic within decades. These changes have potential consequences for weather in the United States, access to mineral and biological resources in the Arctic, the economies and cultures of peoples in the region, and national security.

Changes to the Arctic brought about by warming temperatures will likely allow more exploration for oil, gas, and minerals. Warming that causes permafrost to melt could pose challenges to onshore exploration activities. Increased oil and gas exploration and tourism (cruise ships) in the Arctic increase the risk of pollution in the region. Cleaning up oil spills in ice-covered waters will be more difficult than in other areas, primarily because effective strategies for cleaning up oil spills in ice-covered waters have yet to be developed. ...

Although there is significant international cooperation on Arctic issues, the Arctic is increasingly being viewed by some observers as a potential emerging security issue. Some of the Arctic coastal states, particularly Russia, have announced an intention or taken actions to enhance their military presences in the high north. U.S. military forces, particularly the Navy and Coast Guard, have begun to pay more attention to the region in their planning and operations.

_________________________

Russian Tor-family air defense system trains to defend the Arctic
https://defence-blog.com/army/russian-tor-family-air-defense-system-trains-to-defend-the-arctic.html

The Tor-M2DT anti-aircraft missile system crews have started practicing in order to prepare for potential battles in the Arctic,according to a Ministry of Defence of the Russian Federation.

Russia is setting up a special unit armed with an advanced version of Tor-family autonomous short-range anti-aircraft missile system, called the Tor-M2DT, ready to fight in the Arctic as tensions over the region’s allegedly vast oil and gas wealth reserves grow.
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rboyd

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Re: Oil and Gas Issues
« Reply #2903 on: February 12, 2019, 03:17:54 AM »
New Fossil Fuel Subsidies Hidden Under The "Clean Gas" Hood

The article below details one of the latest CCS wheezes, this time for a natural gas CCS plant by Exelon. Seems it cant compete with solar without subsidies - so its going to get paid per unit of carbon dioxide stored underground, including that used to enhance oil recovery!

https://www.usnews.com/news/national-news/articles/2018-11-13/new-technology-promises-natural-gas-with-no-emissions

Sigmetnow

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Re: Oil and Gas Issues
« Reply #2904 on: February 12, 2019, 03:50:44 PM »
U.S.:  Atlantic Coast Pipeline delayed amid $2 billion - $3 billion price increase
Quote
The completion of the Atlantic Coast Pipeline has been delayed amid a projected cost increase to more than $7 billion, about $2 billion to $3 billion more than initial projections.

In a separate development, two research organizations released a report questioning the viability of the project. The report released Jan. 29 by the Institute for Energy Economics and Financial Analysis and Oil Change International said lower consumer demand for natural gas and the availability of affordable renewable options were casting doubt on the overall feasibility and potential profitability of the pipeline.

The pipeline project has been delayed until late next year with the pipeline not expected to be in full service until 2021, according to a statement released Friday by the company working on the pipeline. ...
https://www.fayobserver.com/news/20190205/atlantic-coast-pipeline-delayed-amid-2-billion---3-billion-price-increase
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vox_mundi

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Re: Oil and Gas Issues
« Reply #2905 on: February 24, 2019, 08:59:11 PM »
Canada Energy Regulator Gives Nod to Pacific Pipeline
https://phys.org/news/2019-02-canada-energy-pacific-pipeline.html



Canada's energy regulator renewed its support on Friday for a controversial oil pipeline to the Pacific, saying the risks to endangered whales from increased tanker traffic were "justified."

The National Energy Board (NEB) said the project would have "significant adverse environmental effects" on the whales and an oil spill could have equally horrendous impacts on the marine environment.

But it concluded "that they can be justified in the circumstances, in light of the considerable benefits of the project and measures to mitigate the effects."

The federal government has 90 days to decide whether to give final approval for the project, but has signaled it may delay until after a general election in October.

The expansion of the 715-mile (1,150-kilometer) pipeline was to move 890,000 barrels of oil a day from landlocked Alberta province to the Pacific coast, replacing a smaller crumbling conduit built in 1953.

“There are three classes of people: those who see. Those who see when they are shown. Those who do not see.” ― Leonardo da Vinci

Insensible before the wave so soon released by callous fate. Affected most, they understand the least, and understanding, when it comes, invariably arrives too late

Ken Feldman

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Re: Oil and Gas Issues
« Reply #2906 on: February 28, 2019, 06:23:49 PM »
Investment in US shale oil production is decreasing this year:

https://oilprice.com/Energy/Energy-General/Shale-Growth-Is-Nearing-An-Inflection-Point.html

Quote
Drilling activity has plateaued in much of the U.S., with the rig count zig-zagging well below the peak from last November.

The rig count often rises and falls in response to oil prices, but on a several-month lag. It takes some time before oil companies make drilling decisions in response to major price movements. As such, the price meltdown in the fourth quarter of 2018 is still working its way through the system.

But the U.S. shale industry has already begun to tap the brakes. Total U.S. oil rigs are stood at 853 for the week ending on February 22, down from a peak of 888 in November. In particular, the Permian – often held up as the most profitable and prolific shale basin – has seen the rig count decline to a nine-month low.

Quote
That said, multiple drillers have laid out more conservative and restrained drilling programs, facing pressure from shareholders not to overspend. According to Bloomberg and RS Energy Group, U.S. E&Ps have trimmed their spending plans by 4 percent on average, while at the same time they still expect production to grow by 7 percent.

Noble Energy, for instance, posted a $824 million loss for the fourth quarter, and slashed 2019 spending plans in response. The company expects to spend between $2.4 billion and $2.6 billion this year, sharply down from the $3 billion spent in 2018. The loss was magnified because the company was forced to take an impairment charge due to lower oil prices, which pushed some of its assets out of reach. “Recent market dynamics, including increased commodity price volatility, further highlight the need for our industry to prioritize capital discipline and corporate returns over top-line production growth,” said Noble Chief Executive David Stover, according to the Houston Chronicle.

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It’s hard to reconcile the disappointing financial results and the promises to do better on the one hand, and the forecasts from the likes of the EIA for ongoing explosive production growth on the other. There are signs that the U.S. shale industry is slowing down – modest spending cuts and a flat or declining rig count – but also plenty of evidence to suggest production growth will remain on track.

The industry is entering a new era of heightened scrutiny from shareholders. The financials seem to be improving, with some (only some) companies cash flow positive or on the verge of it. But they still expect to spend large amounts to grow production. This year will be an important marker for the health of the industry, after lofty promises of lower breakevens, efficiency gains and a cash flow-centric strategy. Time will tell.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #2907 on: February 28, 2019, 06:39:24 PM »
As the saying goes, "follow the money":

https://oilprice.com/Energy/Energy-General/Wall-Street-Loses-Faith-In-Shale.html

Quote
To Wall Street, the shale industry has lost a lot of its allure. A decade’s worth of promises have failed to materialize, and Big Finance is cutting some of its ties with smaller shale drillers who have not delivered.

The Wall Street Journal reports that the shale industry only saw $22 billion in new bond and equity deals, down by more than half from 2016 levels, which was a much worse time for the market.

The steep decline in new debt and equity issuance is a sign that major investors are no longer rushing to finance unprofitable shale drilling. It’s worth noting that this is a new development. For years Wall Street financed unprofitable drilling, holding out on the promise that rapid production growth would eventually pay off.

Shale wells suffer from precipitous decline rates, with as much as three quarters of a well’s total lifetime production coming out in the first year or two. After an initial burst of output, shale wells enter a steep decline.

Of course, this has been known since the beginning and Wall Street has long been fully aware. But major investors hoped that shale companies would scale up, achieve efficiencies and lower breakeven prices to the point that they could turn a profit.

However, that has not been the case. While there are some drillers that are profitable, taken as a whole the industry has been cash flow negative essentially since its beginning in the mid-2000s. For instance, the IEA estimates that the shale industry posted cumulative negative free cash flow of over $200 billion between 2010 and 2014.

Quote
To top it off, all of these pesky investors are much more demanding than they used to be, calling on companies to stop spending so much and instead return cash to shareholders. That leaves less capital available to inject back into the ground. Earlier this month Barclays issued a double-downgrade to Occidental Petroleum, lowering it from Overweight to Underweight, citing the company’s deficit after dividends at a time when the driller still expected to aim for an aggressive production target.

So where is the money going?

https://moneymorning.com/2018/10/10/chart-the-biggest-investors-in-renewable-energy-will-shock-you/

Quote
If You Can't Beat Them, Buy Them

Big Oil firms are no longer content competing against renewable energy, they're now getting into the clean energy business themselves.

And when some of the biggest companies on the planet decide to start spending money, we're more than happy to get in on the action.

Exxon Mobil Corp. (NYSE: XOM), for example, has more than $3 billion of cash on hand they can deploy on renewable energy. In fact, that's exactly what Big Oil firms have just started doing.

As of last year, the oil majors spent a total of $6.2 billion on renewable energy firms, and they bought twice as many clean energy companies in 2016 as they did in 2015, the most recent years available.

Relying on oil alone simply won't be enough for the oil supermajors to sustain their profits.

Take a look at some of the most recent blockbuster Big Oil deals in renewable energy…

Earlier this year, Royal Dutch Shell Plc. (NYSE: RDS.A) spent $217 million to buy a 44% stake in Silicon Ranch Corp., a major U.S. solar developer. Shell is committing $1 billion a year to clean energy investments.

BP Plc. (NYSE: BP) spent $200 million for a 43% stake in Lightsource in 2017. Lightsource BP is Europe's largest solar development company.

Thanks to its 60% stake in SunPower Corp. (NASDAQ: SPWR), French super major Total SA (NYSE: TOT) now dominates the French solar power market. And to make its foothold even larger, Total paid $1.1 billion for Saft, an energy storage company, an essential service supporting renewable energy.

Even Chevron Corp. (NYSE: CVX), one of the last oil supermajors to embrace renewables is investing $100 million into a "Future Energy Fund" designed to help develop new clean energy technology.

And this is just the beginning of the trend.

Sigmetnow

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Re: Oil and Gas Issues
« Reply #2908 on: March 05, 2019, 03:25:03 PM »
People who say it cannot be done should not interrupt those who are doing it.

sidd

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Re: Oil and Gas Issues
« Reply #2909 on: March 07, 2019, 07:34:50 AM »
unrest in saud : king at odds with bonesaw

"disagreed over a number of important policy issues in recent weeks, including the war in Yemen."

" ... so alarmed at the possible threat to his authority that a new security team, comprised of more than 30 hand-picked loyalists from the interior ministry, was flown to Egypt to replace the existing team."

"reflected concern that some of the original security staff might have been loyal to the prince"

Looking up the minister of the interior reveals he aint in the bonesaw camp. yet.

"[bonesaw appointed] full brother, Khalid bin Salman, to the ministry of defence."

That might backfire on bonesaw. Khalid seems to have been unwitting of the Khashoggi barbecue, might stick the knife in.

I think the next bit carries more weight in the ulema and the street, the House of Saud is built on alliance between the imams and royal family.

"[bonesaw] angered people last month when he walked on top of the Kaaba in Mecca, the holiest site in Islam, provoking complaints to the king by some religious scholars that the move had been inappropriate"

https://www.theguardian.com/world/2019/mar/05/fears-grow-of-rift-between-saudi-king-salman-and-crown-prince-mohammed-bin-salman

On the other hand, all of it might just be oil traders talking up prices, or the non bonesaw princes talking their book. Sorta like Kremlinology back in the day.

sidd
« Last Edit: March 07, 2019, 08:21:26 AM by sidd »

sidd

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Re: Oil and Gas Issues
« Reply #2910 on: March 07, 2019, 08:14:55 AM »
I sorta suspected there were several backstories to Aramco IPO failure.

Here's one: sabotage in saud bureaucracy

"met with “passive resistance” within his own government to projects such as the attempted flotation of Saudi Aramco, including from Energy Minister Khalid al-Falih"

Falih better take care his head remains attached. And his limbs. Or bonesaw might do a khashgoggi on him.

" after alarm from government officials that the flotation could cost customers a fortune and expose the previously opaque business to public scrutiny, officials within the government were eventually able to delay the project"

" these same officials are determined to make that delay permanent and stop the IPO from ever happening."

" in order to get the company up to [bonesaw]'s valuation of $2 trillion, it would be necessary to sell gasoline and oil products at market prices."

"The result would be a potential tripling of fuel prices in the kingdom, likely provoking a backlash from the population."

https://www.middleeasteye.net/news/passive-resistance-saudi-bureaucrats-blocking-crown-princes-reform-plans-report

sidd

gerontocrat

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Re: Oil and Gas Issues
« Reply #2911 on: March 08, 2019, 11:33:21 AM »
Norway decides whether to dump oil stocks from its Sovereign Wealth Fund in the next hour or so.

https://www.bloomberg.com/news/articles/2019-03-08/norway-decides-fate-of-oil-stocks-in-its-1-trillion-fund-q-a
Norway Is About to Decide Whether Its $1 Trillion Fund Dumps Oil
By Mikael Holter
8 March 2019, 05:00 GMT
Quote
Norway is about to decide whether to let its $1 trillion sovereign wealth fund dump all its oil and gas stocks. After more than a year of closely held deliberations, the Finance Ministry is set to reveal whether its massive fund will be allowed to divest close to $40 billion in oil and gas stocks.

The decision will be made public around 11:45 a.m. in Oslo.


1. Why does Norway’s fund want to dump petroleum stocks?
The fund contends that it makes little sense for Norway to be doubly exposed to the oil markets. As western Europe’s biggest oil and gas producer, its fortunes are already heavily linked to petroleum, deriving almost half its exports and more than 20 percent of the state’s revenue from the commodities.

The central bank, which oversees the fund, insists that the plan is based solely on financial considerations and that it doesn’t reflect a particular view of the oil industry’s prospects.

2. What would be the impact of divestment?
The proposal shocked markets when it was revealed in 2017, sending oil stocks broadly lower. The plan was hailed by activists around the world as a monumental step in getting investors to back away from fossil fuels. If it becomes reality, it would likely turn the heat up on Big Oil, which is already facing pressure to do more to fight climate change and adapt to the energy transition.

The fund owned about $37 billion of oil and gas stocks at the end of last year, including more than 2 percent of Royal Dutch Shell Plc, BP Plc and Total SA. But it has also assured that any sell-down would likely take years.

3. How has the proposal been received?
Economists are split over the plan and a government-commissioned expert panel last year advised against it, arguing a divestment would be inefficient insurance against a drop in commodity prices. It also said it would threaten the fund’s simple and well-established strategy of investing broadly.

In theory, the proposal has the support of a majority of parties in Parliament, which has the final say. However, since the plan was presented, the centrist Liberals and Christian Democrats, who are in favor of dumping oil stocks, have joined the bigger Conservative and Progress parties to form a majority government. While they haven’t voiced a clear view of the oil-stock proposal, the Conservatives and Progress Party have traditionally been reluctant to make dramatic changes to the fund’s investment strategy.

4. What happens now?
The issue is likely to be settled within the coalition before the Finance Ministry makes its announcement on Friday. While that process makes a heated contest in parliament improbable, it also makes the outcome harder to predict.

Tore Storehaug, a Christian Democrat lawmaker who sits on Parliament’s Finance Committee, declined to say anything on what might happen in case the government decides not to follow the fund’s advice.

“Generally speaking, there’s broad consensus that the management of the oil fund and the enormous values Norway controls should have the broadest possible political backing,” he said by phone.

The opposition Labor Party, Norway’s biggest political group, has long said it’s sympathetic to the proposal, and is now coming out clearly in favor of selling the fund’s oil stocks.

“My expectation is that they’ll follow the advice from Norges Bank,” said lawmaker Svein Roald Hansen. “We will of course consider the government’s arguments. But in my opinion, they will need to come up with some surprising elements to change our mind.”
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gerontocrat

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Re: Oil and Gas Issues
« Reply #2912 on: March 08, 2019, 12:04:56 PM »
Decision made
Norway's trillion dollar fund to dump oil and gas investments.

https://www.ft.com/content/d32142a8-418f-11e9-b896-fe36ec32aece
Norway recommends sovereign wealth fund divest from oil and gas
The $1tn oil fund should sell out of the sector, government says

Richard Milne in Oslo 6 MINUTES AGO Print this page
Norway’s $1tn oil fund should sell out of upstream oil and gas shares, the country’s government has recommended, in a move that will send shockwaves through the energy sector.

The world’s largest sovereign wealth fund, which owns about $37bn in oil and gas shares, should sell out of companies that solely explore and produce oil and gas in a bid to reduce the risk to the Norwegian economy, according to the country’s finance minister.

“The goal is to make our collective wealth less vulnerable to a lasting fall in oil prices,” said Siv Jensen, finance minister of western Europe’s largest petroleum producer.

The move is likely to be seized upon by environmentalists as a template for other big global investors and marks the biggest proposed divestment of fossil fuel assets.

The oil fund, which is already barred from investing in large coal producers or consumers, itself sparked the debate and jolted markets when it recommended 18 months ago that it divest from oil and gas for purely financial reasons rather than environmental ones. It argued that Norway could reduce its sensitivity to the oil price without hurting returns.

Norway is facing growing questions about its own oil industry, the largest in western Europe and the source of wealth for the oil fund as well as the main contributor to its rise to one of the richest countries in the world.

Oil companies have pushed for decades for new acreage around the picturesque Lofoten Islands in the Arctic Circle to be opened up but it looks increasingly as political parties will reject this. Some politicians have also begun to query Norway’s generous tax regime to oil explorers.

Oil and gas shares accounted for 5.9 per cent of the oil fund’s $623m equities portfolio at the end of 2018 with it owning stakes of more than 2 per cent each in BP, Royal Dutch Shell and Total and about 1 per cent each in Exxon Mobil and Chevron.

A government-appointed commission recommended that the fund should keep its oil and gas stocks, arguing that divestment was not an effective insurance against a permanent decline in petroleum prices.

Norway has faced cries of hypocrisy over its attempts to balance being one of the world’s largest petroleum producers and an environmentally-engaged country, pushing the likes of Indonesia and Brazil to protect their rainforests and becoming the leading nation for electric cars.

"Para a Causa do Povo a Luta Continua!"
"And that's all I'm going to say about that". Forrest Gump
"Damn, I wanted to see what happened next" (Epitaph)

rboyd

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Re: Oil and Gas Issues
« Reply #2913 on: March 08, 2019, 04:57:28 PM »
Norway is a massive hypocrite, but other countries may not react too well if it decided to "keep fossil fuels in the ground". The series "Okkupert" (Occupy) is an interesting scenario of what might happen if they did so - it may not be a Russian occupying army (working in conjunction with the EU) but there may very well be a foreign occupying army to keep the wells going.

Its on Netflix (at least in Canada) wit subtitles.

Nix

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Re: Oil and Gas Issues
« Reply #2914 on: March 10, 2019, 08:09:45 PM »
Interesting video on oil production daily...


Ktb

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Re: Oil and Gas Issues
« Reply #2915 on: March 11, 2019, 02:21:59 PM »
While it is an interesting video, it is outdated. The US was producing 11,849,000 barrels of oil per day in December 2018.

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M
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Ken Feldman

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Re: Oil and Gas Issues
« Reply #2916 on: March 14, 2019, 06:10:11 PM »
The oil industry is finally starting to feel the heat on climate change:

https://oilprice.com/The-Environment/Global-Warming/The-Oil-Industry-Faces-A-Crisis-Of-Confidence.html

Quote
The oil industry is starting to feel the pressure of climate change.

Oil executives, by and large, have not been swayed to change their business practices despite years of warnings about the climate crisis. However, they are beginning to listen to shareholders who are demanding change, while also seeing policy risks looming just over the horizon.

Quote
Last week, Norway’s $1 trillion sovereign wealth fund proposed a divestment from oil exploration companies, an event that may turn out to be a significant moment in history, marking the beginning of a difficult chapter for the oil industry.

But it wasn’t just Equinor. BP’s CEO also said that the industry needs to change if it wants to adapt. “We need to demonstrate that we share the common goal of a low-carbon future and that we are in action toward it,” Bob Dudley told the audience at CERAWeek in Houston. He even said that oil companies should engage with backers of the Green New Deal. “But we can only fully play our part if we have the trust of society and the confidence of our shareholders. That means engaging more with the young people who will take to the streets on Friday,” he said, referring to planned protests.

Those are soothing words, but they reveal that the industry is beginning to feel serious pressure on from both shareholders and broader society pushing for change. At the same time, the FT reports that BP “lobbied intensively to weaken US rules on methane emissions even as the energy group cast itself as leading a campaign to cut the release of the potent greenhouse gas.” So, perhaps it’s still business as usual?

Nevertheless, other oil companies are willing to play ball. EOG Resources has reportedly agreed to limit methane emissions, bowing to shareholder pressure. That comes after aggressively fighting such measures in the past.


Royal Dutch Shell has arguably gone further, setting compensation packages with links to emissions reduction targets. “How would we be a successful energy company in 2040 if we’re not really good at providing our customers with low carbon energy?” Maarten Wetselaar, director of integrated gas and new energy at Royal Dutch Shell, told the WSJ. “If you want to be a winner in this industry 20 years from now, that’s the game.”

On Tuesday, another Shell official directly voiced support for federal regulations in the U.S. on methane emissions. “It is a big part of the climate problem and frankly we can do more,” Shell’s U.S. Country Chair Gretchen Watkins said in a Reuters interview, referring to methane. “We don’t usually tell governments how to do their job but we’re ready to break with that and say, ‘Actually, we want to tell you how to do your job.’” She went on, urging the EPA “to put in a regulatory framework that will both regulate existing methane emissions by also future methane emissions.”

The Trump administration has done the opposite, proposing to roll back methane regulations. While that may seem like a gift to the oil and gas industry, oil executives increasingly see the policy pendulum heading in the other direction and want to get ahead of the brewing storm.


Ken Feldman

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Re: Oil and Gas Issues
« Reply #2917 on: March 14, 2019, 06:16:32 PM »
Based on current levels of investment, US oil production is predicted to decline.

https://oilprice.com/Energy/Crude-Oil/US-Oil-Production-Is-Headed-For-A-Quick-Decline.html

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Thus, it may come as a surprise to learn that production at the end of 2020 may have actually decreased from December’s 11.9 million barrels per day level to between 11.3 and 11.5 million barrels per day. This lower figure represents the production level that should be expected given the financial activity of the independent firms behind the shale output surge.

The coming decline will occur mostly in the areas that have produced the most growth over the last five years: the Bakken, Eagle Ford, Haynesville, Julesburg, and Permian basins. The production drop will occur because the firms operating there have been forced by monetary constraints to cut back on drilling. The recent reduction in debt and equity issuance by these firms assure the output decline.

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Many frackers behave like farmers, except that the “crop cycle” appears to be longer, perhaps two years. These firms will borrow or sell equity one year and then drill for sixteen to twenty-four months. Production will surge two years later and then, as many authorities have noted, fall off rapidly.
Related: Analysts: Permian Oil Output Set To Double By 2023

These firms will also enter into hedges as soon as the size of their new discoveries is delineated. The futures sales will likely occur when wells are completed and before they are fracked to ensure the company can cover costs and perhaps profit, even if prices fall.

Data on the issuance of debt and equity by shale firms and their positions in futures markets thus provide an indicator of their future production. These data today point to a large decline in output.

A February 24 Wall Street Journal article by Bradley Olson and Rebecca Elliott should warn everyone of the impending slowdown. A key graph presented there shows that debt and equity issued by US shale producers declined to $22 billion in 2018, which is less than half the amount raised in 2016 and one-third the amount raised in 2012.

When one compares the total debt and equity issuance to Lower-48 onshore production lagged two years, one finds a close relationship. Lower-48 onshore output rose from three million barrels per day to 8.5 million barrels per day in 2018. However, the drop in the issuance of equity and borrowing suggests this production could fall by a third to six million barrels per day by the end of 2020 if the relationship holds.


Ken Feldman

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Re: Oil and Gas Issues
« Reply #2918 on: March 15, 2019, 05:06:45 PM »
Based on current levels of investment, US oil production is predicted to decline.


The investment cycle is useful but it's a lagging signal imho. What key in this whole fracking business is the production rates per well. Overall the production has grown significantly since they started this "boom" in the early 2000s. The claims of basin sizes were really high and then assumptions were made of the ongoing profitiabluiy of high prodcutions rates based on thsoe early wells. It wasn't too long after that all those poredcitions were shown to be rubbish and highly exagerated.

The only reason production has remained high and grew was the ongoing deployment of new drilling of new wells. Thousands and thousands of them. Meanwhile the rate per well, of the earlier ones has kept on plummeting. To compensate for that (I think is right) the companies kept drilling new wells in the same areas to boost production - but this action was never predicted in the investment guidance. What it means is that the costs of fracking are very much higher be million barrels over time than what they hoped.

The pea and shell game has been extended by expanding the volume of wells as fast as humanly possible. and finding new areas to drill, eg Trumps changes to allow them into federal lands. AS much as possible the companies avoid minimise any "story" or providing hard figures for cost per well and their production rates declining per well ... but combining all the old data with new wells being sunk. I think that's how they play this.

But sooner or later, probably sooner the big calls about how great the US is doing with it's exports being at record levels is going to evaporate. Eventually the financials will catch up with them all. Leaving only a wasteland of destroyed lands, waterways and geology behind for eternity.  iow it is not going to end well for the USA and her people.

The other thing to keep in mind about oil production in shale fields is that the well can be drilled but not "completed".  In other words, they just cap it and move the drilling rig to the next location without fracking the well and pumping out the oil.  They wait until the oil prices go up and complete the wells then.

Because much of the US oil production in the past decade comes from fracked wells, it's difficult to predict how quickly the production will respond.  Still, the decrease in investment in oil production is a good sign.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #2919 on: March 15, 2019, 05:11:51 PM »
There are also signs that the oil industry's efforts to prevent methane leaks are real, not just another round of greenwashing.

https://oilprice.com/Energy/Energy-General/Big-Oil-Is-Backing-Methane-Regulation.html

Quote
While the oil and gas industry has opposed federal regulations on methane emissions, some are warming up to the idea.

There are a few reasons for this. First, capturing methane, rather than letting it leak, can be more profitable for companies, at least in theory. Second, the oil majors are increasingly gas majors. They are making long-term bets on natural gas, particularly as climate regulations force out dirtier forms of energy like coal. If future economies are going to be carbon-constrained, the industry had better plug their leaks. Third, the majors have the resources and technologies to cut methane emissions, and since they are under pressure to do so, they want to drag the rest of the industry along.

Quote
ExxonMobil has been working with Environmental Defense Fund (EDF) on monitoring and reducing methane emissions. Matt Kolesar, regulatory manager at XTO Energy, a subsidiary of Exxon, said that they have slashed methane leaks since launching a leak detection program in 2017. “Just 18 months into our voluntary program we’ve achieved nearly a 40 percent decrease in observed leak frequency,” Kolesar said in an interview with EDF.

But XTO and Exxon also want federal regulations on methane to level the playing field. “As we explained in our written comments to the EPA, ExxonMobil strongly encourages the agency to continue regulating methane emissions at new and modified sources, and to expand methane regulation to existing sources,” Kolesar of XTO said.

Sigmetnow

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Re: Oil and Gas Issues
« Reply #2920 on: March 16, 2019, 04:22:33 PM »
Quote
Third, the majors have the resources and technologies to cut methane emissions, and since they are under pressure to do so, they want to drag the rest of the industry along.

Or, they want to crush smaller competitors who are barely hanging on in today’s low oil price economy and can’t afford to invest in upgrades.
People who say it cannot be done should not interrupt those who are doing it.

Archimid

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Re: Oil and Gas Issues
« Reply #2921 on: March 18, 2019, 02:16:33 AM »
Quote
Many frackers behave like farmers, except that the “crop cycle” appears to be longer, perhaps two years. These firms will borrow or sell equity one year and then drill for sixteen to twenty-four months. Production will surge two years later and then, as many authorities have noted, fall off rapidly.

I've always seen fracking as a temporary measure. Fracking is not sustainable in any way. It is not profitable in the long term, there isn't enough of it and the more we frack the more we will poison our own water and turn our rock foundation to sand. Fracking will not lead to global economic prosperity, even if it didn't cause climate change.

Fracking is fundamentally flawed.
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Sebastian Jones

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Re: Oil and Gas Issues
« Reply #2922 on: March 18, 2019, 05:14:03 AM »
Quote
Many frackers behave like farmers, except that the “crop cycle” appears to be longer, perhaps two years. These firms will borrow or sell equity one year and then drill for sixteen to twenty-four months. Production will surge two years later and then, as many authorities have noted, fall off rapidly.

I've always seen fracking as a temporary measure. Fracking is not sustainable in any way. It is not profitable in the long term, there isn't enough of it and the more we frack the more we will poison our own water and turn our rock foundation to sand. Fracking will not lead to global economic prosperity, even if it didn't cause climate change.

Fracking is fundamentally flawed.
Archmid is of course correct.
The way that fracking makes sense economically to so many people and to such a large extent in Canada and America really illustrates how fundamentally flawed our economic system is.
Unsustainable ( economically and environmentally and socially) though fracking is, it has become dominant in our petroleum production.
David Hughes has been showing us that fracking makes no sense since it started to take over from conventional production in 2005.
It is fruitless, although interesting, to speculate where we would be now had petroleum production really peaked in 2005 instead of this insane Red Queen style performance we are witnessing at the expense of our planet.
Please excuse the rant. This is important. Until we can say "NO!" to increasing oil and gas production, there is no hope for us.

rboyd

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Re: Oil and Gas Issues
« Reply #2923 on: March 19, 2019, 02:20:34 AM »
I think that the producing countries such as the USA will pull out every possible rabbit out of the hat to keep going, externalizing/delaying as many costs (water table contamination, methane leaks, regulatory costs ...) as possible as the EROI keeps falling. A possibility at some point if fracking hits the wall is some kind of government intervention on national security grounds. The attempted coup in Venezuela makes sense as a way to grab a big remaining chunk of oil reserves.

I truly hope that the Chinese EV adoption curve is very steep, forcing other car producing nations to expedite the move. The resulting crash in oil prices as the marginal demand is removed should help kill any new oil production plans.

solartim27

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Re: Oil and Gas Issues
« Reply #2924 on: March 20, 2019, 07:45:06 PM »
FNORD

vox_mundi

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Re: Oil and Gas Issues
« Reply #2925 on: March 21, 2019, 05:05:56 AM »
Citing Climate Change, U.S. Judge Blocks Oil and Gas Drilling in Large Swath of Wyoming 
https://www.nbcnews.com/news/amp/ncna985646

BILLINGS, Mont. — A judge blocked oil and gas drilling across almost 500 square miles in Wyoming and said the U.S. government must consider climate change impacts more broadly as it leases huge swaths of public land for energy exploration.

... U.S. District Judge Rudolph Contreras in Washington appeared to go a step further than other judges in his order issued late Tuesday.

Previous rulings focused on individual lease sales or permits. But Contreras said that when the U.S. Bureau of Land Management auctions public lands for oil and gas leasing, officials must consider emissions from past, present and foreseeable future oil and gas leases nationwide.

Quote
... "Given the national, cumulative nature of climate change, considering each individual drilling project in a vacuum deprives the agency and the public of the context necessary to evaluate oil and gas drilling on federal land," Contreras wrote.

---------------

Trump regulation rollbacks will result in more than 200 million tons of additional greenhouse emissions each year
https://desdemonadespair.net/2019/03/trump-regulation-rollbacks-will-result-in-more-than-200-million-tons-of-additional-greenhouse-emissions-each-year-the-trump-administration-has-taken-historically-unprecedented-actio.html



WASHINGTON, D.C., 5 March 2019 (NYU School of Law) – Today, the State Energy & Environmental Impact Center at the NYU School of Law announced the release of a Special Report detailing the extensive climate change and public health damage caused by the Trump administration’s environmental deregulatory agenda. In its Special Report, titled “Climate & Health Showdown in the Courts: State Attorneys General Prepare to Fight,” the State Impact Center highlights how state attorneys general are leading the fight to prevent the rollback of six essential federal rules, which would lead to annual increases of more than 200 million metric tons of carbon dioxide equivalent (CO2e) emissions in the United States.

https://www.law.nyu.edu/sites/default/files/climate-and-health-showdown-in-the-courts.pdf
 
The Special Report features in-depth analysis of how the Trump administration’s environmental rollbacks are designed to benefit the coal, automotive, oil & gas and landfill industries, which are collectively responsible for nearly 50 percent of national greenhouse gas emissions.
« Last Edit: March 21, 2019, 05:14:10 AM by vox_mundi »
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interstitial

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Re: Oil and Gas Issues
« Reply #2926 on: March 22, 2019, 12:10:49 AM »
The resulting crash in oil prices as the marginal demand is removed should help kill any new oil production plans.

In Norway gasoline sales started to decline in 2017.
https://www.ssb.no/en/energi-og-industri/statistikker/petroleumsalg/aar

In Norway in October 2018 10% of passenger cars were plugins.
https://insideevs.com/10-norways-passenger-vehicles-plug-ins/

In Norway in 2017 plugins were over 50% of new car sales.
https://electrek.co/2018/01/03/electric-car-market-share-norway-tesla-record-deliveries/

There are many other variables and the dates don't line up but before we get to 50% of new car sales or 10% of cars on the road plugin vehicles we should see gasoline demand fall.

Those are plugins which include cars with smaller battery and gasoline backup the numbers are lower for ZEV's

Sigmetnow

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Re: Oil and Gas Issues
« Reply #2927 on: March 22, 2019, 01:39:16 AM »
Chinese electric buses making biggest dent in worldwide oil demand
Quote
Electric vehicles have displaced about 3 percent of total oil consumption growth since 2011, a larger share than ever before. And so far, more than three-quarters of that oil displacement has come from electric buses, Bloomberg reports.

The report estimates that “for every 1,000 electric buses on the road, 500 barrels of diesel are displaced each day.” The same number of battery-powered electric vehicles only displaces 15 barrels of oil a day, by comparison.
...
Bloomberg estimates that gas and diesel displacement will increase 96,000 barrels a day this year due to EVs, making the lost cumulative demand 352,000 barrels a day since 2011. But global oil demand is also on the rise, growing 12 million barrels a day over the same period.

Future estimates see a much larger impact, as EVs could displace 6.4 million barrels of demand each day by 2040. ...
https://electrek.co/2019/03/20/chinese-electric-buses-oil/

2 million bpd is less than 3 doublings of the cumulative lowered demand.  Bloomberg previously saw 2 million barrels a day happening as early as 2023. That would create a glut of oil equivalent to what triggered the 2014 oil crisis.
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Sigmetnow

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Re: Oil and Gas Issues
« Reply #2928 on: March 27, 2019, 04:40:41 PM »
Big oil pumps $1 billion into climate change lobbying, execs laugh about Trump access
Quote
Major oil companies have spent $1 billion on climate lobbying that is “overwhelmingly in conflict” with the Paris Agreement, according to one new report. And another report reveals oil execs laughing about their newfound access within the Trump administration.

While many oil companies have made a public show of their green energy investments, InfluenceMap reports that ExxonMobil, Royal Dutch Shell, Chevron, BP and Total have used more than $1 billion in shareholder funds since the Paris Agreement on “misleading climate-related branding and lobbying.” These efforts are “designed to maintain the social and legal license to operate and expand fossil fuel operations.” ...
https://electrek.co/2019/03/25/big-oil-climate-lobbying/
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Tor Bejnar

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Re: Oil and Gas Issues
« Reply #2929 on: March 29, 2019, 04:06:03 PM »
West Texas Intermediate Crude Oil is approaching $60 (per Bloomberg)
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vox_mundi

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Re: Oil and Gas Issues
« Reply #2930 on: March 30, 2019, 11:04:41 PM »
U.S. Judge Scraps Trump Order Opening Arctic, Atlantic Areas to Oil Leasing   
https://mobile.reuters.com/article/amp/idUSKCN1RB0FP

A federal judge in Alaska has overturned U.S. President Donald Trump’s attempt to open vast areas of the Arctic and Atlantic oceans to oil and gas leasing.

The decision issued late Friday by U.S. District Court Judge Sharon Gleason leaves intact President Barack Obama’s policies putting the Arctic’s Chukchi Sea, part of the Arctic’s Beaufort Sea and a large swath of Atlantic Ocean off the U.S. East Coast off-limits to oil leasing.

Trump's attempt to undo Obama’s protections was “unlawful” and a violation of the federal Outer Continental Shelf Lands Act, Gleason ruled.
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Sigmetnow

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Re: Oil and Gas Issues
« Reply #2931 on: April 02, 2019, 07:47:15 PM »
Shell’s exit from US refining lobby a first — and a sign of the times on climate
Quote
Royal Dutch Shell announced plans Tuesday to leave a U.S. refining lobby over climate-related policy positions. Although it’s a first for an oil and gas company, it’s also another sign of increasing climate accountability among companies and investors.
...
Shell gives a number of reasons for leaving AFPm, including AFPm’s lack of stated support for the goal of the Paris Agreement. The review simply states, “Shell supports the goal of the Paris Agreement.” Shell said other factors leading to its decision included:

• AFPm’s lack of support for carbon pricing.
• AFPm’s opposition of government action to shape policy frameworks for low-carbon technologies.
• AFPm’s support of the EPA’s proposed rollback of U.S. fuel economy standards.
• AFPm’s lack of a position on the role of natural gas and the reduction of methane emissions.
https://electrek.co/2019/04/02/shell-exit-refining-lobby/
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Ken Feldman

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Re: Oil and Gas Issues
« Reply #2932 on: April 04, 2019, 01:43:53 AM »
The EU is addressing fugitive methane emissions from oil and gas production and distribution:

https://www.energycentral.com/c/ec/momentum-building-methane-europe%E2%80%99s-climate-blind-spot

Quote
Although not legally binding, the new European Parliament resolution is the final climate resolution of the current mandate, meaning it will help raise expectations for the new Parliament taking office on July 1, 2019. Rapid policy development on methane emissions should be a top priority for the new Parliament and feature prominently in the questions for the incoming Commission’s parliamentary hearings in September 2019.

Global methane emissions from the oil and gas sector need to be on a rapidly declining pathway. As one of the world’s largest consumers of gas, Europe can and must play a significant role in driving action at a global scale. Fortunately, methane emissions from the oil and gas sector have been recognized as low hanging fruit, with the technologies and approaches to mitigating them well known and inexpensive.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #2933 on: April 05, 2019, 08:40:02 PM »
The recent financial disclosure from Saudi Aramco had some interesting facts beyond the headline that it's the most profitable company in the world.

https://www.forbes.com/sites/rrapier/2019/04/01/saudi-aramcos-breakeven-oil-price-is-higher-than-expected/#2ec50ad61c02

Quote
However, I found the most significant item in the prospectus to be that Saudi Aramco struggled to break even in 2016 when Brent crude averaged about $45 per barrel. Net income in 2016 was only $13 billion, and free cash flow a mere $2 billion. Contrast that with the $111 billion in income and $86 billion in free cash flow the company made in 2018 (when Brent crude averaged $71.34/bbl), and it looks like Aramco's breakeven price is just about $40/bbl.

Shared Humanity

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Re: Oil and Gas Issues
« Reply #2934 on: April 05, 2019, 10:10:00 PM »
Liquid fuels consumption continues its steady climb.

https://www.eia.gov/outlooks/steo/report/global_oil.php

gerontocrat

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Re: Oil and Gas Issues
« Reply #2935 on: April 08, 2019, 04:05:39 PM »
Norway perhaps actually costing itself a load of moolah by reducing involvement in oil.

https://www.bloomberg.com/news/articles/2019-04-08/norway-is-walking-away-from-billions-of-barrels-of-oil-and-gas?srnd=premium-europe
Norway Is Walking Away From Billions of Barrels of Oil
Quote
Western Europe’s biggest petroleum producer is falling out of love with oil.

To the dismay of the nation’s powerful oil industry and its worker unions, the opposition Labor Party over the weekend decided to withdraw its support for oil exploration offshore the sensitive Lofoten islands in Norway’s Arctic, creating a solid majority in parliament to keep the area off limits for drilling.

The dramatic shift by Norway’s biggest party is a significant blow to the support the oil industry has enjoyed, and could signal that the Scandinavian nation is coming closer to the end of an era that made it one of the world’s most affluent.
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Tor Bejnar

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Re: Oil and Gas Issues
« Reply #2936 on: April 08, 2019, 04:37:31 PM »
Per Bloomberg, Stocks down, Oil up (today): the relationship is not a surprise.
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sedziobs

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Re: Texas to double oil production, be bigger than Saudi Arabia, by 2015
« Reply #2938 on: April 11, 2019, 05:37:27 PM »
Probably belongs in the Oil and Gas Issues thread.

SteveMDFP

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Re: Texas to double oil production, be bigger than Saudi Arabia, by 2015
« Reply #2939 on: April 11, 2019, 05:40:17 PM »
https://www.nextbigfuture.com/2019/04/texas-oil-production-could-more-than-double-by-2025-and-surpass-saudi-arabia.html
See also https://www.nextbigfuture.com/2019/04/us-oil-and-ngl-could-be-more-than-saudi-arabia-and-russia-by-2025.html

This is interesting, and disturbing.  The great challenge for the world will be ensuring that these fossil fuels remain in the ground. 

BTW, Neven doesn't like a proliferation of new threads/topics on the Forum.  This might have gone in the "Oil and Gas Issues" thread, I think:
https://forum.arctic-sea-ice.net/index.php/topic,861.0.html

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Tom_Mazanec

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Re: Texas to double oil production, be bigger than Saudi Arabia, by 2015
« Reply #2940 on: April 11, 2019, 06:44:57 PM »
Sorry, I looked over the subforum headings and some threads and didn't see it.
Please move this, Neven.
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GoSouthYoungins

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Re: Oil and Gas Issues
« Reply #2941 on: April 13, 2019, 04:52:31 AM »
Does anyone on these forums work in pumps or lubrication or fuel?!?! It is truly incredible to watch ppl using the things produced by society act as if society is immoral for living withing this reality. I am all for building a new reality. But currently, this is the reality which we have. Deal with it...invent a new one. Bitching is just pathetic.

The solution is to understand and then create a new economically incentivized reality.
big time oops

Sigmetnow

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Re: Oil and Gas Issues
« Reply #2942 on: April 22, 2019, 04:13:10 PM »
U.S. to end all waivers Iran oil imports, crude price jumps
Quote
Secretary of State Mike Pompeo on Monday reiterated that Washington’s goal was to bring down exports of Iranian oil to zero and added the United States had no plans to give any grace period beyond May 1 for countries to comply. ...
https://www.reuters.com/article/us-usa-iran-oil/u-s-to-end-all-waivers-iran-oil-imports-crude-price-jumps-idUSKCN1RX0R1
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SteveMDFP

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Re: Oil and Gas Issues
« Reply #2943 on: April 22, 2019, 05:10:45 PM »
U.S. to end all waivers Iran oil imports, crude price jumps

Damn.  Though we'd all like to see less oil pumped and shipped, this is high-handed and a step closer to war.  If effective, it gives Iran powerful incentives to go ahead and develop nuclear weapons.  That will give Trump an excuse to launch strikes--without support of any remaining allies.

Of course, it also will massively accelerate the world's demands to shift trade away from the US dollar, to bypass US controls on global trade.  I expect cryptocurrencies to benefit.

Tor Bejnar

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Re: Oil and Gas Issues
« Reply #2944 on: April 22, 2019, 05:17:33 PM »
For an image of the jump in oil price:
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Sebastian Jones

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Re: Oil and Gas Issues
« Reply #2945 on: April 23, 2019, 10:14:53 PM »
Jeff Rubin used to work for one of Canada's big 5 banks, where he was the chief economist.
He has never been shy to opine about energy issues; he was a prominent peak oil Cassandra until fracking (temporarily?) changed the rules. In the linked interview he speaks of carbon pricing policy and the coming  laws around cleaning up shipping emissions. The latter, he reckons, could dramatically change the global supply chain system.https://theloadstar.com/exclusive-interview-jeff-rubin-what-happens-when-oil-globalisation-and-environment-collide/

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Re: Oil and Gas Issues
« Reply #2946 on: April 25, 2019, 05:58:25 AM »
China, Turkey resist Empire sanctions:  will continue importing oil from Iran

https://www.ibtimes.com/china-turkey-defy-us-will-continue-import-iran-oil-2787220

sidd

Tom_Mazanec

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Re: Oil and Gas Issues
« Reply #2947 on: April 25, 2019, 06:08:23 PM »
Can someone tell me the plausibility of this report by Philip K. Verleger, Jr.?

$200 Crude, the Economic Crisis of 2020, and
Policies to Prevent Catastrophe
https://www.pkverlegerllc.com/assets/documents/180704200CrudePaper.pdf
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etienne

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Re: Oil and Gas Issues
« Reply #2948 on: April 25, 2019, 06:46:14 PM »
I already heard of that problem. I would say : don't worry, Trump will still be president and would not allow that to happen. Well, I even believe that any president would take extreme measures in case of extreme event. I don't see this as our major problem. I am more worried about depletion and discoveries of conventional oil, and of climate change which is even worse.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #2949 on: April 25, 2019, 08:03:31 PM »
Can someone tell me the plausibility of this report by Philip K. Verleger, Jr.?

$200 Crude, the Economic Crisis of 2020, and
Policies to Prevent Catastrophe
https://www.pkverlegerllc.com/assets/documents/180704200CrudePaper.pdf

The requirement to switch to ultra low sulphur diesel is real.  And it will spur higher prices, which will make other options, including renewable diesel and bio-diesel, economic alternatives.  Here's a website analyzing the issue.

http://www.altenergystocks.com/archives/2018/07/the-low-sulfur-diesel-crisis-of-2020-and-how-to-prevent-it/

Quote
An an Exxon Mobil found in a study on marine biodiesel:

The results obtained during the biodiesel trial have shown no negative impacts. Biodiesel has been used for many years in similar engines in land-based applications with no adverse effects. Biodiesel blends (B5 and B7) can be utilized in the marine environment onboard a properly operated and maintained vessel with a diesel engine. As with any fuel, proper storage and handling are key in maintaining fuel quality to ensure trouble-free operation.

How much excess capacity is available?

The estimates we have received suggest that as much as 1 billion gallons per year in excess capacity is in place around the world — or 65,000 barrels per day. Enough to support 7 percent blends of one million barrels per day. And, when you think about it, global biodiesel and renewable diesel could all be put to use in supporting a transition to low-sulphur fuels — and with as much as 4 billion gallons of capacity, there’s enough to support the 2 million barrels per day volumes that analysts say are needed — at 14 percent blends. That supports compliance via all that Arab Heavy .

Combined with some fuel switching to LNG, and targeting the right crudes for expanded diesel supply — we might find that global recession might well be averted. And, should actions not be taken to bring a supply of biodiesel and renewable diesel into marine fuels — we might find that $9 per gallon US fuel prices might well provide the incentive necessary to re-invigorate the discussions around alternatives.