Oil and Gas Issues

[vox_mundi]

I think Iran will try to replace Saudi-Arabia as the dominant oil player in the region.

Iran doesn't have the capacity or the reserves relative to SA. They have a lot of natural gas, though.





And the only way that oil will continue flowing in that region is if it remains stable - no shooting war.

It appears that ship has sailed.

Observation: As to the coming war, i think there's going to have to be some form of confrontation. I don't think SA can be seen to continue to take hits from Iran without some sort of reprisals.

This nonsense of hiding behind non state actors only washes for so long before it wont be tolerated any more.

The next few weeks should be interesting.

[Alexander555]

Iran has much bigger oil reserves than Russia. With the right investments they can replace Saudi-Arabia as the biggest producer in the region. What do you think Iran has been doing in Yemen all the time ? And for the moment there is much to much oil. Iraq and Lybia are running at full speed, the US has become the biggest producer. Irans production went from 4 million to 2,2 million barrels a day, and the oil price only went down. China keeps adding millions of barrels to its strategic reserves, that's only possible if there is to much oil. There is a big player to much for the moment.

[Tom_Mazanec]

Gas is ‘not a low-carbon fuel’, UK watchdog rules
https://www.ft.com/content/788005cc-d3e9-11e9-8367-807ebd53ab77

UK regulators have issued a warning to Norwegian energy giant Equinor over advertisements on the London Underground that implied gas is a "low-carbon energy" source. It is the first time the watchdog has made such an assessment.

[vox_mundi]

https://twitter.com/W7VOA/status/1173697910489395202

Trump has now made additional statements regarding Iran, saying that he believed that he believed it would be proportional to strikes Iran in response to the strikes in Saudi Arabia. He also said that the United States was "more prepared than any country in history" for a potential war.

“It won’t affect us,” says @POTUS in response to my question about #oil surging nearly $15 today.

Asked if a US military strike on #Iran would be proportional to the attack on Saudi oil facilities, @POTUS responds: “I think that it would.”

QUESTION: “You say the United States is prepared for war” with Iran?

TRUMP: “The United States is more prepared than any country in the history of — in any history.”

https://www.thedrive.com/the-war-zone/29864/everything-you-need-to-know-about-the-attacks-on-saudi-arabias-oil-facilities

[Tom_Mazanec]

Middle East Tensions Could Trigger the Next Oil Shock
https://www.caseyresearch.com/daily-dispatch/middle-east-tensions-could-trigger-the-next-oil-shock/

I would expect the Third Oil Shock’s effect on the oil price to be at least as severe as the first two shocks. Recall that oil prices nearly tripled both times.

In today’s prices, that would likely mean oil shooting to around $200 a barrel…

[Alexander555]

Iran is a rough state. Do you think there is a possibility that Iran did not asked themself the question what the reaction from Saudi-Arabia would be if they would support the Houthies in Yemen. The reaction was the war. But was it predictable or not ? I think the reaction from Saudi-Arabia was predictable. They would not tolerate Iran muddling in their backyard. They knew chaos would be the result. And for what is that chaos used today ?

[TerryM]

Iran is a rough state. Do you think there is a possibility that Iran did not asked themself the question what the reaction from Saudi-Arabia would be if they would support the Houthies in Yemen. The reaction was the war. But was it predictable or not ? I think the reaction from Saudi-Arabia was predictable. They would not tolerate Iran muddling in their backyard. They knew chaos would be the result. And for what is that chaos used today ?

^^
Pushing up the price of Saudi oil?


I'm not sure that the Houthies give a hoot about the price of oil, but they probably do wish that the Kingdom would quit bombing their women and their kids.


Terry

[Alexander555]

The question is how did it started. Ofcourse they want it to stop. The Houthis got support from Iran and started the rebellion against the government of Yemen. The government of Yemen asked for help to the Saudi's . So was it predictable that the Saudies would get involved ? Because now Iran blames the Saudies for killing alle these poor children. And Trump is on the side of the Saudies. So Iran gets some support from the anti-Trump camp, the anti-Trump media. But are they right ?

[SteveMDFP]

The question is how did it started. Ofcourse they want it to stop. The Houthis got support from Iran and started the rebellion against the government of Yemen. The government of Yemen asked for help to the Saudi's . So was it predictable that the Saudies would get involved ? Because now Iran blames the Saudies for killing alle these poor children. And Trump is on the side of the Saudies. So Iran gets some support from the anti-Trump camp, the anti-Trump media. But are they right ?

Saudi-Yemeni relations are long, convoluted, and conflict-ridden.  Saudi has had a very heavy hand in Yemeni domestic matters for a very long time.  This isn't a simple Sunni-Shia conflict, nor a simple Saudi-Iran proxy war.  To some extent, the Houthi movement can be seen as a struggle to maintain Yemen's independence from Saudi Arabia.  See:

Yemen: the Sectarianization of a Political Conflict
https://www.ispionline.it/en/pubblicazione/yemen-sectarianization-political-conflict-19933

[Sigmetnow]

Utilities, which are not dependent on fossil fuel for their livelihood, are turning away from it.

Investors turn heat on Big Oil ahead of U.N. climate summit

LONDON (Reuters) - Investors managing $15 trillion in assets turned up the heat on oil and gas sector on Wednesday ahead of a United Nations summit in New York aimed at accelerating efforts to fight climate change.

Energy companies are on the front line of the global transition to a low-carbon economy, with investors potentially on the hook for hefty losses if the companies do not overhaul their business models in time.

In its most detailed analysis of the energy sector, the Transition Pathway Initiative (TPI) said 31 out of 109 energy firms were aligned with commitments governments have so far made under the 2015 Paris Agreement to curb greenhouse gas emissions.
However, of the 50 oil and gas companies assessed, just two - Royal Dutch Shell Plc and BP Plc - were aligned with existing national emissions targets. The remaining 29 companies on track to meet such commitments were all electric utilities.
…
Current pledges by governments to cut emissions are nowhere near enough to meet the Paris target of keeping the rise in average global temperatures to well below two degrees Celsius, with a goal of limiting warming to 1.5 degrees Celsius.
That means that some companies’ targets can bring them in line with existing national plans under the Paris Agreement, but remain far from adequate to avert the worst of the natural disasters and economic damage forecast for a warming world.
…
The findings echoed a report published this month by financial think-tank Carbon Tracker, which found that big oil companies had approved $50 billion of projects since last year that will not be viable if governments implement the Paris deal.
By contrast, TPI found that nearly half of the utility companies are aligned with national commitments already made under the Paris Agreement, and more than 20% are on target to meet a temperature rise of below 2 degrees Celsius, the TPI said. ...

https://www.reuters.com/article/us-climate-change-summit-investors/investors-turn-heat-on-big-oil-ahead-of-u-n-climate-summit-idUSKBN1W22SN

[vox_mundi]

Trump Administration Weighing Retaliatory Action Against Iran After Saudi Oil Attack
https://www.cnbc.com/amp/2019/09/17/trump-administration-weighing-action-against-iran-after-saudi-oil-attack.html

- The Trump administration is weighing a range of options for a retaliatory action against Iran

- In a national security meeting on Monday, U.S. military leaders provided President Donald Trump with a menu of possible actions against Iran.

- Actions could include a cyberattack or physical strike on Iranian oil facilities or Revolutionary Guard assets.

U.S. military planners have revisited a long-identified list of potential Iranian targets that could constitute a proportional response. Those include a strike on Iran's Abadan oil refinery, one of the world's largest, or Kharg Island, Iran's biggest oil export facility. Attacks on either location would significantly impede Iran's ability to process and sell oil, which the Trump administration has already been working to restrict after pulling out of the Iran nuclear deal.

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

Pentagon Orders Sudden Deployment Drill Of Unprecedented Size For Its Sealift Ships
https://www.thedrive.com/the-war-zone/29885/pentagon-orders-sudden-deployment-drill-of-unprecedented-size-for-fleets-of-sealift-ships

Dozens of reserve logistics ships are getting ready to sail amid concerns about the readiness of these vital support fleets during a major conflict.

U.S. Transportation Command, in cooperation with the U.S. Navy's Military Sealift Command and the Department of Transportation's Maritime Administration, kicked off a massive snap sealift exercise yesterday across the United States. It involves an unprecedented 28 ships from the Ready Reserve Force, a fleet of support ships with merchant marine crews that would be vital during any large scale conflict ...

The exercise, aptly nicknamed Turbo Activation, began on Sept. 16, 2019, and involves crews from the Ready Reserve Force getting no-notice orders to "activate" their ships and get them ready for operations.

It makes good sense to ensure that reserve fleets are ready and able to respond, if necessary. However, Turbo Activations, which first began in 1994, are typically relatively small affairs, often involving between three and five ships in total.

... These are serious issues when one considers that the U.S. military's activated 40 of these ships – 12 more than TRANSCOM is looking to put to sea in this latest exercise – in 2003 to support the U.S.-led invasion of Iraq.



"The activated ships are directed to transition from a reduced operating status to a fully crewed status, with the quarters made habitable and cargo gear ready, within five days," according to a press release from U.S. Transportation Command (TRANSCOM). "Activations are commonly followed immediately by a sea trial."

[Alexander555]

How will it work out, because the petro-dollar is the backbone of the western world. That's why you have so many scientists. That's why you can print money and run large defecits. The moment the petro-dollar falls, the world want need  usd anymore. And he will become a lot weaker. No more cheap imports, no more free health care, no more time to spend on the beach. Or most of your chops will be empty. But you can still buy ar-15's, they are proudly made in the USA. And the bombings of these installation in Saudi-Arabia are an attack on the petro-dollar.

[TerryM]

How will it work out, because the petro-dollar is the backbone of the western world. That's why you have so many scientists. That's why you can print money and run large defecits. The moment the petro-dollar falls, the world want need  usd anymore. And he will become a lot weaker. No more cheap imports, no more free health care, no more time to spend on the beach. Or most of your chops will be empty. But you can still buy ar-15's, they are proudly made in the USA. And the bombings of these installation in Saudi-Arabia are an attack on the petro-dollar.

Yes, The American's will certainly miss their free healthcare.
It works like this:
1- Get sick.
2- Lose job.
3- Lose insurance.
4- Lose savings.
5- Lose home.
6- Declare bankruptcy.
7- Qualify for welfare.
8- Stand in line for Free Healthcare.
Terry

[Tom_Mazanec]

A Generational Dynamics look at the attack:
http://www.generationaldynamics.com/pg/xct.gd.e190918.htm#e190918

Sunday's attack on Saudi Arabia's oil infrastructure is raising concerns in four Asian countries -- China, India, Japan and South Korea -- that the world's oil markets have just taken a sharp turn for the worst that will result in continuing worldwide oil disruption and far higher prices.
The governments of China, India, Japan and South Korea have harsh differences in many areas. China's criminal annexation of the South China Sea has infuriated everyone. Japan and South Korea are having a trading war that is becoming increasingly serious and hostile every day. China and India have numerous border conflicts, and were at war in the 1960s.
But the four countries are united in their concerns about the possibility of oil prices spiking, which would hurt all of their economies. In particular, all four are warning the US against a war with Iran, which would hugely destabilize the global oil markets, and send prices sky high.
Most analysts believe that Iran perpetrated the attack, gut there's a broader problem, but no matter who the perpetrator was. The fact that the attack occurred at all means that it won't be long before more terrorists begin using drones to attack oil infrastructure anywhere and, indeed, any targets anywhere, with permanently high oil prices.

[SteveMDFP]

A Generational Dynamics look at the attack:
http://www.generationaldynamics.com/pg/xct.gd.e190918.htm#e190918

Sunday's attack on Saudi Arabia's oil infrastructure is raising concerns in four Asian countries -- China, India, Japan and South Korea -- that the world's oil markets have just taken a sharp turn for the worst that will result in continuing worldwide oil disruption and far higher prices. . . .

It's an important subject, with global implications.  However, the author quoted here should be recognized as having a particular ax to grind:

"John Xenakis is author of: "World View: Iran's Struggle for Supremacy -- Tehran's Obsession to Redraw the Map of the Middle East""

I personally remain skeptical that Iran launched cruise missiles to effect this attack on Saudi infrastructure.  Plausible, maybe, but far from clear.

[Tom_Mazanec]

The Gulf crisis would be scarier yet if anti-fracking Democrats had their way
https://www.washingtonpost.com/opinions/the-looming-crisis-in-the-middle-east-should-remind-us-of-the-importance-of-fracking/2019/09/16/7446647c-d89b-11e9-a688-303693fb4b0b_story.html

The destructive strike on Saudi Arabian oil production facilities on Saturday, almost certainly carried out by or on behalf of Iran, brings the Middle East a step closer to general war. The long-anticipated test of President Trump’s crisis-management skills might be at hand.

It’s a scary thought. Here’s an even scarier one: Suppose the United States reached this moment without ever having taken advantage of the innovative oil and gas production technique known as hydraulic fracturing, or “fracking,” which enabled drillers to free up previously inaccessible hydrocarbons from shale formations in North Dakota and Texas, among other places.

[TerryM]

<snipped>
It’s a scary thought. Here’s an even scarier one: Suppose the United States reached this moment without ever having taken advantage of the innovative oil and gas production technique known as hydraulic fracturing, or “fracking,” which enabled drillers to free up previously inaccessible hydrocarbons from shale formations in North Dakota and Texas, among other places.

Jeez
I guess Americans - and much of the Western World would have needed to conserve energy - or pay through the nose for it.
The Horror!
Terry

[rboyd]

<snipped>
It’s a scary thought. Here’s an even scarier one: Suppose the United States reached this moment without ever having taken advantage of the innovative oil and gas production technique known as hydraulic fracturing, or “fracking,” which enabled drillers to free up previously inaccessible hydrocarbons from shale formations in North Dakota and Texas, among other places.

Jeez
I guess Americans - and much of the Western World would have needed to conserve energy - or pay through the nose for it.
The Horror!
Terry

I could not agree more Terry, the fracking revolution was one of the worst possible things that could have happened to deter real action on climate change. Without it nations around the world would have had to go into overdrive to move away from oil and consumers and industries would have been incentivized by higher prices to become much more energy efficient.

North America would not have had the fuel for all the new natural gas electricity plants that have been built (just as bad as coal taking into account fugitive methane emissions), and consumers would have started to look at other ways to heat their houses.

AND the US would not be able to illegally sanction Venezuela and Iran given the desperate need for their oil and gas expotts to keep world prces from going through the roof.

[vox_mundi]

Do As We Say; Not As We Do
https://www.defenseone.com/ideas/2019/09/saudi-oil-attacks-arent-game-changing-they-show-how-game-has-changed/159947/

Iran-aligned Houthi rebels in Yemen claimed responsibility for Saturday’s drone attack. But Pompeo, Donald Trump’s top diplomat, blamed the attacks squarely on Iran.

Under international law, a state is accountable for the unlawful actions of a proxy only if an organ of the state ordered the proxy to commit the act. It is not sufficient simply to have provided material support or even encouraged the unlawful act.

For example, in the 1980s, the International Court of Justice found the United States not liable for Contra violations of international humanitarian law, even after concluding that:

... “the United States had financed, organized, trained, supplied, equipped and armed” the Contras, even to the point of providing training materials that discussed “shoot civilians attempting to leave a town, neutralize local judges and officials, hire professional criminals to carry out ‘jobs,’ and provoke violence at mass demonstrations to create ‘martyrs’.”

https://casebook.icrc.org/case-study/icj-nicaragua-v-united-states

[TerryM]

^^
But, but they were Freedom Fighters - Ronny told me so.
You make shooting civilians sound like a bad thing.
Terry

[morganism]

A new way to convert carbon dioxide into the building block for sustainable liquid fuels was very efficient in tests and did not have the reaction that destroys the conventional device.

https://news.stanford.edu/2019/09/16/catalyst-opens-way-sustainable-fuels-carbon-dioxide/

" Stripping oxygen from CO2 to make CO gas is the first step in turning CO2 into nearly any liquid fuel and other products, like synthetic gas and plastics. The addition of hydrogen to CO can produce fuels like synthetic diesel and the equivalent of jet fuel. The team envisions using renewable power to make the CO and for subsequent conversions, which would result in carbon-neutral products."

"One advantage sustainable liquid fuels could have over the electrification of transportation is that they could use the existing gasoline and diesel infrastructure, like engines, pipelines and gas stations."

"one with cerium oxide and the other with conventional nickel-based catalysts. The ceria electrode remained stable, while carbon deposits damaged the nickel electrode, significantly shortening the catalyst’s lifetime."

[Sciguy]

Investment in gas projects will soon be following the path of coal.

https://oilprice.com/Energy/Energy-General/Natural-Gas-Could-Be-Replaced-Within-15-Years-From-Now.html

Natural Gas Could Be Replaced Within 15 Years
By Vanand Meliksetian - Sep 18, 2019

The share of renewables in the U.S. in the overall power production differs from state to state. While gas has become the primary source of electricity production, technological advancements are about to make fossil fuels more expensive and therefore uneconomic compared to renewables. The tipping point could come much sooner than certain utilities and investors are expecting, which could hit current investment plans for gas-fired power plants. 

Technical improvements and costs reductions are having a similar effect on the substitution of natural gas by renewables as the primary source of power production. Cheaper batteries and innovative new ideas regarding the flexibility of the grid are accelerating the transformation towards an environmentally friendly energy industry. Therefore, according to a report from the Rocky Mountain Institute investments in gas-fired power plants could devalue significantly by the year 2035 as power production by alternative means becomes more relevant.

Sound investments based on long-term predictions

The transformation of the U.S.’ power sector is coming much sooner than incumbent producers were expecting. Currently, the combination of solar, wind, storage, and demand response are already more efficient, and therefore cheaper, than the use of fossil fuels.

The changing economics of power production will also affect subsidiary businesses such as the pipeline sector where $30 billion in pipelines are planned. It would impact 95 percent of gas pipelines in use by 2035 due to reduced utilization by 20 to 60 percent. This would effectively create a “financial death spiral” meaning a vicious circle where fewer customers will lead to less income, leading to higher prices, and so forth. 

According to Mark Dyson, an analyst at the Rocky Mountain Institute, “our story for gas plants is, if you build it, they won’t run. They won’t run at their expected capacity factors. And that filters down to pipelines, too.” 

[rboyd]

Investment in gas projects will soon be following the path of coal.

https://oilprice.com/Energy/Energy-General/Natural-Gas-Could-Be-Replaced-Within-15-Years-From-Now.html

The sad thing is that there is a lot of institutional inertia that will mean that some of those planned NG plants will be implemented. Then, as we get near the 2035 period there will be a lot of background lobbying to subsidize NG operators that will extend the death throws for a few years. The end result is that society will end up scrapping large amounts of such investments and some corporations will go bust very quickly (just like the coal companies in the US).

If we had a proper carbon tax (that also properly accounted for fugitive methane emissions) that  crossover date would be brought well forward, cutting off any new NG plants and accelerating the move to renewables. Waiting for technology and market forces alone will be too slow for all of us.

[Tom_Mazanec]

SAUDI ARABIA DENIES ITS KEY ROLE IN CLIMATE CHANGE EVEN AS IT PREPARES FOR THE WORST
https://theintercept.com/2019/09/18/saudi-arabia-aramco-oil-climate-change/

Saudi Aramco, the most profitable corporation in the world, released more than 40 billion metric tons of greenhouse gases between 1992 and 2017, the equivalent of almost 5 percent of industrial carbon dioxide and methane. The company, closely held by the Saudi royal family, is now confronting the challenges of climate change in ways that mirror many western fossil fuel giants: by launching a rebranding effort that positions the firm as an environmental leader.

Is U.S. shale facing an 'unmitigated disaster'?
https://www.eenews.net/stories/1061136849

The booming shale industry could be headed off a financial cliff, experts say, and environmental groups are asking who will clean up thousands of wells drilled miles beneath the surface if businesses go bust.

The meteoric rise of U.S. shale, driven by hydraulic fracturing, continues at a fast pace. Each year, operators bring in more barrels, pushing the United States further ahead of other nations for production.

But many observers say the shale business is overheating, as frackers try to keep up the pace of production at high costs and low oil prices. They are warning that Wall Street money is drying up, and that the rate of bankruptcies could climb dramatically.

[rboyd]

Aramco’s Repairs Could Take Months Longer Than Company Anticipates, Contractors Say

Oil prices going back up in Sunday trading, may have a way to go ($70-$75) i the comtractors are right.

https://www.wsj.com/articles/aramcos-repairs-could-take-months-longer-than-company-anticipates-contractors-say-11569180194

[TerryM]

Aramco’s Repairs Could Take Months Longer Than Company Anticipates, Contractors Say

Oil prices going back up in Sunday trading, may have a way to go ($70-$75) i the comtractors are right.

https://www.wsj.com/articles/aramcos-repairs-could-take-months-longer-than-company-anticipates-contractors-say-11569180194

Hard to get better news than high oil prices!
Even if prices just pop for a few months, that's a few months where renewables will really shine.
Terry

[Tom_Mazanec]

And in a few months we may get another attack.

[TerryM]

And in a few months we may get another attack.

Who is this we you refer to?
Terry

[Tom_Mazanec]

And in a few months we may get another attack.

Who is this we you refer to?
Terry

I was just saying we in the sense of the world, all of us.
Maybe I should have said "they"?

[oren]

Hard to get better news than high oil prices!

Indeed.

[Sciguy]

The beginning of the end of the fossil fuel companies?

https://oilprice.com/Energy/Energy-General/The-47-Trillion-Death-Sentence-For-Oil-Gas.html

The $47 Trillion Death Sentence For Oil & Gas
By Cyril Widdershoven - Sep 23, 2019, 5:00 PM CDT

The future of hydrocarbons is becoming bleak if plans presented by international banks, representing around $47 trillion in value, will be fully implemented.

Around 130 international banks, all present at the UN climate change summit in New York, have committed themselves to decrease their support and investments in the oil and gas sector the coming years. The banking groups have signed the so-called Principles for Responsible Banking, which entails a promise by financial institutions to fully support the implementation of the Paris Agreement, by decreasing hydrocarbon investments while promoting renewables. This statement is going to be a major earthquake for oil and gas companies, threatening upstream and downstream operations worldwide, forcing oil & gas producers to either reduce their impact on the environment or to seek new sources of investment. It is already becoming more difficult for oil and gas companies to find new financing, and on top of this, a large group of institutional investors, representing a value of $11 trillion, are already actively divesting their oil and gas assets.

International banks, such as Deutsche Bank, ABNAmro, Citigroup, Barclays, and ING, are joining the framework. Under the title of action against global warming, the largest financial institutions now seem to be headbutting oil and gas operators. The impact of activist shareholders and NGOs is sending shockwaves through the sector. If the framework is successfully implemented, the hydrocarbon sector shouldn’t fear unrest in the Middle East, but rather their current financiers.

[Tom_Mazanec]

‘Only reason we exist’: why an energy transition is hard to fathom in parts of Alberta
https://thenarwhal.ca/only-reason-we-exist-why-energy-transition-hard-fathom-parts-alberta/

The Municipal District of Greenview received $77 million in taxes and fees from oil and gas companies in 2018 — more than any other municipal district in the province. The Narwhal visited two towns in the region to learn more about life in communities whose fortunes are deeply intertwined with the oil and gas industry

[vox_mundi]

Saudis are Exporting Less Crude to the World Market, Shipping Data Shows
https://www.cnbc.com/amp/2019/09/24/saudis-are-exporting-less-crude-to-the-world-market-shipping-data-shows.html

- Since Saudi Aramco was attacked, Saudi Arabia is exporting as much as 1.5 million barrels per day on average less than it had been exporting.

- Saudi Aramco's trading arm has been buying crude from neighboring countries, including Kuwait and United Arab Emirates, among others, to fulfill its commitments, according to Reuters. S&P Global Platts reports that the kingdom is buying diesel fuel from India and the UAE, and is also looking for jet fuel and naphtha.

- The market does not have problems now, but supplies could get tighter if the outage at Aramco persists.

Saudi's domestic inventories have fallen by 10 million barrels to 56 million barrels since the beginning of September.

... The U.S. could be sending barrels to cover the lower Saudi exports, and the U.S. is expected to export about 3 million barrels a day. That amount could increase as more pipeline capacity comes on line this year, to bring more crude from the Permian Basin in Texas to the Gulf of Mexico.

[Sigmetnow]

NTSB Recommends Stronger Gas Regulations After Merrimack Valley Explosions

BOSTON (AP) — Federal officials are recommending stronger nationwide requirements for natural gas systems following last September’s natural gas explosions and fires in Massachusetts.

The National Transportation Safety Board, which investigates major pipeline accidents, said Tuesday every state should require all natural gas infrastructure projects to be reviewed and approved by a licensed professional engineer.
...
Officials concluded last October that the series of explosions and fires had been caused by a gas line that became overpressurized during a routine replacement of old cast iron pipelines in Lawrence.

A teenager died, dozens of other people were injured and more than 100 structures were destroyed or damaged. Thousands of residents and businesses in Lawrence, Andover and North Andove were also left without natural gas service for heat and hot water for months in some cases. ...

https://boston.cbslocal.com/2019/09/24/ntsb-merrimack-valley-gas-explosions-report-columbia-gas/

[Sciguy]

Unlit gas flares are the largest source of emissions from energy sector.

https://oilprice.com/Latest-Energy-News/World-News/Unlit-Gas-Flares-Cause-Worst-Methane-Leaks.html

Unlit gas flares are the cause of the worst methane leaks produced by the energy industry, data from a Canadian methane monitoring company GHGSat Inc has suggested.
Bloomberg cites the data and explains that unlit flares are gas flares extinguished by either high winds or equipment malfunctions, allowing the methane to escape unchecked. Under normal circumstances, the flame would burn off the unused natural gas, turning methane into carbon dioxide, a much less potent greenhouse gas than methane.
“Unlit flares are larger than any other source we’ve found, in any market segment,” the president of GHGSat Inc. told Bloomberg in an interview. “It’s certainly true in energy assets, but it’s also true overall.”

[Tom_Mazanec]

Per gerontocrat:

Here's one I could have put in the Oil & Gas thread, but just in case it's stupid, I'll put it here.
Does extracting oil and gas from underground cause subsidence? For example, is the area around the Persian Gulf sinking a millimeter or two a year, exacerbating SLR?

Yes, it did belong in the Oil & Gas thread, but, 

Forget SLR, minimal impact.

But... (not only Oil & Gas - over-extraction of groundwater causing big problems in some megacities, e.g. Tehran, Mexico City).  Not talking about a millimetre or two per year, but can be tens of centimetres of ground slump per year in the most vulnerable places. 

Count the ways mankind is screwing up the joint, they are legion.

Also happened in California during the unregulated 30's and 40's - the Trump Vision for the future.

Earthquakes in Oklahoma since fracking started.

https://www.forbes.com/sites/trevornace/2018/03/28/massive-oil-fields-in-texas-are-heaving-and-sinking-at-alarming-rates/#32c0a536c8b3

From a 2006 Paper.
https://www.researchgate.net/publication/242757170_SUBSIDENCE_PREDICTION_CAUSED_BY_THE_OIL_AND_GAS_DEVELOPMENT

Abstract:
Oil and gas development from underground reservoirs disturbs original rock mass balance. The tending of the rock mass to achieve a new, even only temporary balance is manifested in the movements of the ground surface. Movements can affect ground infrastructure like offshore platforms, pipelines and buildings.

1.  Introduction
Surface subsidence of areas where oil, gas and water are exploited are a serious problem in various parts of the World. In the coastal regions, vertical movements of the surface may result in flooding or generate extra costs for securing the banks.

Such problems were encountered, e.g. in the area of Maracaibo Lake in Venezuela (ca. 3.5 m – maximum subsidence), Mexican Gulf, in California (ca. 10 m – maximum subsidence) and in Japan. The subsidence troughs may be huge in size and the damage to the objects standing on them is comparable to those in the mining areas. Considerable deformations of surface usually can be found in the places where thick fluid reservoirs occur and the host rocks have compaction qualities.

[Richard Rathbone]

It happens under the North Sea too. Ekofisk had major subsidence.

https://en.wikipedia.org/wiki/Ekofisk_oil_field#Subsidence

Its not just the Mexican part of the GOM that subsides either. Plenty along the US coast.

[Sigmetnow]

France bans fracking and oil extraction in all of its territories

France’s parliament has passed into law a ban on producing oil and gas by 2040, a largely symbolic gesture as the country is 99% dependent on hydrocarbon imports.
...
No new permits will be granted to extract fossil fuels and no existing licences will be renewed beyond 2040, when all production in mainland France and its overseas territories will stop.
...
France extracts the equivalent of about 815,000 tonnes of oil per year – an amount produced in a few hours by Saudi Arabia.

But centrist president Emmanuel Macron has said he wants France to take the lead as a major world economy switching away from fossil fuels – and the nuclear industry – into renewable sources.

His government plans to stop the sale of diesel and petrol engine cars by 2040 as well.

https://amp.theguardian.com/environment/2017/dec/20/france-bans-fracking-and-oil-extraction-in-all-of-its-territories

[Sigmetnow]

Potential signs....

Oil futures settle lower on energy demand concerns, as Ecuador announces plan to leave OPEC

Oil futures finished with a loss on Tuesday, as a drop in U.S. manufacturing activity fed concerns over a slowdown in energy demand.

Ecuador, meanwhile, announced plans Tuesday to leave the Organization of the Petroleum Exporting Countries on Jan. 1, 2020 as its government seeks ways to boost revenue. "It's not a tremendous amount of oil they produce, but they don't want to have their hands tied to the OPEC production [cut] agreement," said Tariq Zahir, managing member at Tyche Capital Advisors.

November West Texas Intermediate oil CLX19, -0.78% fell 45 cents, or 0.8%, to settle at $53.62 a barrel on the New York Mercantile Exchange.

https://www.marketwatch.com/story/oil-futures-settle-lower-on-energy-demand-concerns-as-ecuador-announces-plan-to-leave-opec-2019-10-01

[rboyd]

The latest US purchasing managers reports puts the US pretty close to recession, so not much support for an increase in oil prices short of a major war in the Middle East or a much bigger attack on the Saudi facilities.

[vox_mundi]

Ecuador In State Of Emergency: End Of Fuel Subsidies Sparks Mass Protests
https://www.npr.org/2019/10/04/767164081/ecuador-in-state-of-emergency-end-of-fuel-subsidies-sparks-mass-protest

Large protests have triggered a state of emergency in Ecuador, after President Lenín Moreno moved ahead with his plan to end fuel subsidies. Moreno says he's ending the "perverse" gasoline subsidy after 40 years because it was distorting Ecuador's economy.

The fuel plan, part of broader economic reforms, triggered anger and mass protests, with demonstrators facing off with police wearing riot gear in Quito and other cities.

... The news agency (Reuters) adds, "Diesel prices rose from $1.03 to $2.30 per gallon on Thursday, while gasoline rose from $1.85 to $2.39."

In addition to the impact on their livelihoods and pocketbooks, critics of Moreno's fuel plan and other policies complain that austerity measures are being imposed on their country because of a multi-billion-dollar loan agreement with the International Monetary Fund.

[Sigmetnow]

Trump administration approves California gas fracking plan

The Trump administration has finalized its plans to open hundreds of thousands of acres of federal land in Central California to oil and gas leasing, paving the way for more fracking to soon begin in the state.

The Bureau of Land Management (BLM) approved the oil and gas exploration plan “based on the administration’s goal of strengthening energy independence and the BLM support of an all-of-the-above energy plan that includes oil and gas underlying America’s public lands,” it said in its record of decision released Friday.
...
“Turning over these spectacular wild places to dirty drilling and fracking will sicken Californians, harm endangered species and fuel climate chaos. We’ll fight tooth and nail to make sure it doesn’t happen,” Lakewood said in a statement from the group.

The Center for Biological Diversity was behind the lawsuit that effectively halted BLM oil and gas leasing in California since 2013. A U.S. District Court ruled that BLM failed to consider the environmental impacts of fracking when evaluating drilling leases, forcing the federal government to restart the planning process.

https://www.sacbee.com/news/politics-government/capitol-alert/article235805237.html

[rboyd]

Fracking approved in California, just in time to keep the volumes up as other fracking regions hit their technical an financial limits?

Will the Fracking Revolution Peak Before Ever Making Money?

This week, the Wall Street Journal highlighted that the U.S. oil and gas shale industry, already struggling financially, is now facing “core operational issues.” That should be a truly frightening prospect for investors in American fracking operations, but one which DeSmog has long been warning of.

This one line from the Journal sums up the problems: “Unlike several years ago, when shale production fell due to a global price collapse, the slowdown this year is driven partly by core operational issues, including wells producing less than expected after being drilled too close to one another, and sweet spots running out sooner than anticipated.”

As we have reported at DeSmog over the last year and a half, the shale oil and gas industry, which has driven the recent boom in American oil and gas production, has been on a more than decade-long money-losing streak, with estimated losses of approximately a quarter trillion dollars. Those losses have continued in 2019.

Over the last 10 years, the fracking industry has made impressive gains with technological improvements that have resulted in lower costs and higher performing wells. But despite these improvements, shale companies have failed to be profitable, and two years ago, industry analysts at Wood MacKenzie were warning about the limits of technology in overcoming geology.

More recently, the industry’s attempts to extract more oil and gas out of the shale — dubbed Fracking 2.0 by the Wall Street Journal — have flopped. Even the longest drilled wells have not made money, indicating a limit to optimal well length. Likewise, attempts to drill many wells in the same area — so-called cube development — haven't been the financial savior the industry needs either.

Perhaps the most important fact in the Wall Street Journal's recent story was only mentioned once: “sweet spots [are] running out sooner than anticipated.”

Sweet spots are the areas of shale basins that have the best-performing wells. David Hughes, earth scientist and author of the 2019 report, “How Long Will The Shale Revolution Last: Technology versus Geology and the Lifecycle of Shale Plays,” has estimated that these sweet spots (also known as “Tier 1 acreage”) make up 15 to 20 percent of a shale basin (also known as a “play”).

There is plenty of evidence — including warnings from industry leaders like Scott Sheffield — that the fracking industry has depleted most of the sweet spots in the major shale plays over the past decade or so. With fewer of those plum acres left, firms are forced to drill in areas with less favorable geology for production, which means spending the same amount of money to drill wells but produce less oil.

And that means shale companies have no way to pay back the huge amount of debt, which they incurred to drill the sweet spots in the first place.

Even though it began as Enron Oil and Gas, a spinoff of Enron, EOG is considered the gold standard of fracking companies and has earned the nickname “the Apple of Oil.”

The Wall Street Journal reported the declining performance of new EOG wells in the Eagle Ford Shale, noting that EOG “declined to comment” on this issue, which is rarely an indication of good news.

Many signs are pointing to the fact that geology — how much oil and gas is present in the shale — will be the defining factor going forward for the U.S. fracking industry.

In June DeSmog reported that Steve Schlotterbeck, former CEO of shale company EQT, told a petrochemical industry conference, “The shale gas revolution has frankly been an unmitigated disaster for any buy-and-hold investor…”

https://www.desmogblog.com/2019/10/03/fracking-revolution-peak-without-profits

[Tom_Mazanec]

Does the rest of the world have "frackable" shale to exploit, or is it mostly in the United States?

[etienne]

Looks like frakable shals are in many places, many countries talked about it or tried (UK, France, Poland...), but extraction seems to be limited to pilot projects. Regulations might make the difference, but geology also.

[rboyd]

China is also having a lot of problems with shale, both geology and geography (far away from major water sources). Results have continued be below forecasts.

[Sciguy]

Trump administration approves California gas fracking plan

The Trump administration has finalized its plans to open hundreds of thousands of acres of federal land in Central California to oil and gas leasing, paving the way for more fracking to soon begin in the state.

The Bureau of Land Management (BLM) approved the oil and gas exploration plan “based on the administration’s goal of strengthening energy independence and the BLM support of an all-of-the-above energy plan that includes oil and gas underlying America’s public lands,” it said in its record of decision released Friday.
...
“Turning over these spectacular wild places to dirty drilling and fracking will sicken Californians, harm endangered species and fuel climate chaos. We’ll fight tooth and nail to make sure it doesn’t happen,” Lakewood said in a statement from the group.

The Center for Biological Diversity was behind the lawsuit that effectively halted BLM oil and gas leasing in California since 2013. A U.S. District Court ruled that BLM failed to consider the environmental impacts of fracking when evaluating drilling leases, forcing the federal government to restart the planning process.

https://www.sacbee.com/news/politics-government/capitol-alert/article235805237.html

LOL.  Another Trump announcement that plays well to his base but will go nowhere.  Due to geology.  And public opposition.

https://www.forbes.com/sites/rrapier/2019/03/10/why-the-shale-boom-left-california-behind/#13da5a1344e5

Geology Poses a Problem
Why did the shale boom leave California behind? California has a significant oil resource in the Monterey Shale. In 2011, the U.S. Energy Information Administration (EIA) estimated that the Monterey Shale could hold up to 23.9 billion barrels of oil. At that time this was more than the Texas Eagle Ford and North Dakota Bakken Shales combined.
However, the EIA later slashed its estimate of recoverable oil in the Monterey Shale by 96% to just 600 million barrels. There are several reasons for this.
The primary reason is that the Monterey Shale is more geologically complex than other shale formations. It is jumbled and folded, which means it can't be as easily exploited by horizontal drilling.
As part of my research, I checked the trajectory and number of wells being drilled in Texas and California. According to the Baker Hughes Interactive Rig Count Map, in early March there were 502 drilling rigs in Texas, with 92% of those drilling horizontal wells. In California there were only 15 drilling rigs, with 20% drilling horizontal wells. So the geology of the Monterey is the single biggest issue.
Environmental Opposition
But there are other barriers.
The resistance to fracking in California is much greater than in Texas, with more restrictive rules and some localized bans. This is especially true in areas where California's oil resource is under prime agricultural land. Farmers are among those concerned both about the competition for scarce water, and that fracking could potentially contaminate the water supply.
As an aside, I would point out that the aquifers are near the surface, where each year farmers put thousands of tons of herbicides, pesticides, and fertilizers directly on the ground. (Source.) There are also highways, cities, and plenty of industrial activity directly above the aquifers. These aquifers are a few hundred feet below the surface, but residents seem more concerned about fracking thousands of feet below the aquifers.
Conclusion: California Shale Boom Unlikely
In any case, even if California residents completely embraced the idea of fracking, it is unlikely that the state would experience the kind of boom seen in places like Texas and North Dakota. Geology has conspired against California.

[Sciguy]

Meanwhile, the frackers in the rest of the US are having trouble getting money to continue their operations.

https://oilprice.com/Energy/Crude-Oil/Capital-Flight-Is-Killing-The-US-Shale-Boom.html

The growth in U.S. shale production is grinding to a halt as low prices put drillers in a financial vice.
The slowdown has been unfolding for much of 2019, but the latest slide in oil prices is another blow to cash-strapped companies.

Rig counts have fallen by 20 percent since last year, drilling is down, hotel rates are down, and employment is in decline. “If you can’t wring out any costs savings then you’ve got to buy less stuff if you want to get your costs down, and that’s the phase we’re entering into,” Jesse Thompson, senior business economist at the Houston branch of the Federal Reserve Bank of Dallas, told Bloomberg.

According to a survey of financial institutions as well as oil and gas firms by law firm Haynes and Boone, the industry is set to see “a decrease in credit availability for producers and a strong interest in alternative sources of capital.”

In other words, lenders are turning off the spigots.
Interestingly, when respondents were asked when equity markets might reopen for upstream oil and gas companies, only 25 percent said 2020, while 47 percent said 2021. A further 14 percent said 2022 and 13 percent said sometime after 2022. That suggests that the vast majority of industry and financial players see several years of restricted access to credit for the shale industry.
Without capital, shale drillers have to take an axe to their spending budgets, which means less drilling and ultimately lower-than-expected U.S. oil production. It also means that bankruptcies are likely to continue to pile up. Through the end of September, there have been 199 oil and gas bankruptcies in North America since 2015, according to Haynes and Boone, and the number of companies folding this year is at the highest since 2016.

[Sciguy]

The long-term outlook for the oil industry is even worse, as the number of new oil field discoveries is at a historic low.

https://oilprice.com/Energy/Crude-Oil/Oil-Discoveries-Hit-70-Year-Low.html

The last three years has been the worst stretch of time in seventy years for new conventional oil discoveries.

A new report from IHS Markit finds that conventional oil discoveries plunged to a seven-decade low and “a significant rebound is not expected.” Conventional exploration – as opposed to unconventional development, including shale – had already been trending down following the 2008 global financial crisis and its aftermath, which overlapped with the rise of horizontal drilling and hydraulic fracturing in several U.S. shale basins.

But the collapse of oil prices in 2014 really knocked conventional exploration – and thus, discoveries – on its back.

[gerontocrat]

What is bad for the World oil industry is good for Norway.

https://www.bbc.co.uk/news/uk-scotland-scotland-business-49954074
A new monster from the deep

90km (56 miles) west of Stavanger, Johan Sverdrup is the daddy of the new North Sea.

He was the man who fathered modern Norwegian parliamentary government in the 1880s. More recently, after its discovery in 2010, his name was given to a humongous offshore oil field.

On 5 October, it began production. It's hard to overstate the bonanza it has brought to Norway's industry and finances, and it's being presented by Equinor, its operator, as a model of how to do offshore energy in the 21st century.

We're in a period of tension between the amazing achievements of offshore engineers to unlock access to fossil fuels on which we continue to depend, at the same time as pushing for an end to that dependence and a shunning of the oil majors.

Footprint
The numbers for Johan Sverdrup are colossal. At peak production of 660,000 barrels per day, it will build up to a third of Norway's output. The field contains 2.7 billion barrels.

The cost of developing it was £7.5bn (US$9.2bn), and getting to first oil has taken only four years from approving the project.

It has come on stream two months ahead of schedule. And being developed during a downturn for the industry, it successfully stripped out nearly a third of the anticipated costs.

A few factors that are particularly noteworthy:

The project has stripped out the huge carbon footprint involved in extracting hydrocarbons. Instead of requiring generators offshore, the platforms are linked to the Norwegian grid by a 62km (39 miles)cable.

Although the cost of developing it has been colossal, it breaks even at an oil price of $20 per barrel (Brent crude is currently trading just below $60). And when you look only at the production cost, once production has plateaued, it will be below $2 per barrel.

The economic benefit of all those development projects has been strongly focussed in Norway. Some 70% of contracts have gone to companies with an address in the country. While saying they are winning contracts amid tough international competition, even with Norway's high labour costs, it has an uncanny knack of keeping contracts in-country. (By contrast, note the recent announcement that Equinor, in a joint venture with Perth-based SSE in the vast Dogger Bank wind farm, is sourcing its turbines from a GE factory in France.)

In the 10 years to take the oil field to full production, the development of the field will have involved 150,000 person-years of work. By using technologies, which were not available when older fields were being developed, it has removed the need for two million hours of offshore work.

Earnings from Johan Sverdrup over five decades of anticipated lifespan, are estimated at £125bn. Of that, in addition to all those jobs, Norway is looking at a gain of £80bn in tax and profit.