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rboyd

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Re: Oil and Gas Issues
« Reply #3350 on: November 23, 2019, 12:15:00 AM »
Ken, we will agree to disagree.

Sigmetnow

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Re: Oil and Gas Issues
« Reply #3351 on: November 23, 2019, 06:34:18 PM »
U.S. Suspends More Oil and Gas Leases Over What Could Be a Widespread Problem
Fossil Fuel leases totaling hundreds of thousands of acres have been suspended as courts rule against the BLM for ignoring climate impact.
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The Trump administration's relentless push to expand fossil fuel production on federal lands is hitting a new snag: its own refusal to consider the climate impacts of development.

The federal Bureau of Land Management's Utah office in September voluntarily suspended 130 oil and gas leases after advocacy groups sued, arguing that BLM hadn't adequately assessed the greenhouse gas emissions associated with drilling and extraction on those leases as required by law.

The move was unusual because BLM suspended the leases on its own, without waiting for a court to rule.

Some environmental advocates say it could indicate a larger problem for the bureau.

"It is potentially a BLM-wide issue," said Jayni Hein, natural resources director at the Institute for Policy Integrity at NYU School of Law, which has been involved in similar litigation in other states. "It could have the effect of suspending even more leases across the West, and not just for oil and gas, for coal as well."
...
https://insideclimatenews.org/news/17112019/oil-gas-leases-suspended-climate-impact-federal-nepa-assessment-blm-utah-colorado-wyoming
People who say it cannot be done should not interrupt those who are doing it.

vox_mundi

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Re: Oil and Gas Issues
« Reply #3352 on: November 24, 2019, 08:50:31 PM »
Pennsylvania to Spend $3 Million Studying Link Between Fracking, Cancer
https://www.wtae.com/article/pennsylvania-to-spend-dollar3-million-studying-if-there-is-link-between-fracking-cancer/29895258#

Pennsylvania will spend $3 million to study the potential health effects of the natural gas industry.

The study will focus on southwestern Pennsylvania, where more than two dozen people have contracted Ewing’s sarcoma, a rare bone cancer.

The victims’ families have been pushing for a study.

“The statistics are 250 cases per year in the United States and we have 28 cases centered around the Pittsburgh area in the last 10 years," said Christine Barton, of North Strabane, Washington County.

Her 22-year-old son, Mitch Barton, has Ewing’s sarcoma.

The Bartons, like many other victims' families, live near a gas drilling operation. They do not believe that's a coincidence.


“We just want an environmental investigation. Could there be something in the air, the water, the soil, that's causing these rare cancers?” Christine Barton said.

Governor Wolf said he does not believe there is an environmental link between fracking and cancer, but he does want the state to thoroughly investigate.

“I'm a strong supporter of the gas industry but I'm also a strong supporter of making sure we do it right, and this kind of study is really going to be important in making sure we do it right,” Wolf said.

https://www.opensecrets.org/expends/vendor.php?year=2018&vendor=Tom+Wolf+For+Governor
“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 #3353 on: November 25, 2019, 06:02:36 PM »
US refineries have processed the less crude oil than last year.  That's the first yearly decrease since the great recession in 2009.

https://oilprice.com/Energy/Energy-General/US-Refiners-Reduce-Crude-Processing-For-First-Time-Since-2009.html

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US Refiners Reduce Crude Processing For First Time Since 2009
By Tsvetana Paraskova - Nov 24, 2019

Refineries across the United States have reduced their total crude oil processing so far in 2019, as demand for oil products both in America and abroad has weakened, according to EIA data compiled by Reuters market analyst John Kemp.

Year to date, U.S. refiners’ crude processing has declined for the first time since the 2008-2009 crisis.

Faced with weaker demand at home and weakening demand abroad, and amid a fuel glut in Asia, refiners in the U.S. have processed lower volumes of crude oil so far this year. The cutting of rates has helped refiners avoid a fuel glut domestically, but lower processing rates have built an oversupply in crude, Kemp notes.

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According to EIA’s latest weekly inventory report, in the week to November 15, the utilization rate at U.S. refineries stood at 89.5 percent. This compares with utilization of 92.7 percent for the same week last year and with 91.3 percent for the week to November 17 two years ago.

The cumulative daily average crude oil input to refineries has been 16.593 million barrels of oil (bpd) so far this year. This is down from last year’s cumulative daily average crude oil input of 16.908 million bpd, or a 1.9 percent decline year on year, EIA’s data shows.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3354 on: November 26, 2019, 06:06:16 PM »
Want to make $35 million?  Start with $1 billion and invest in fracking companies.

https://oilprice.com/Energy/Energy-General/Why-The-Latest-Shale-Bust-Is-Different.html

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Why The Latest Shale Bust Is Different

In 2019 through third quarter, 32 oil and gas drillers have filed for bankruptcy, according to Haynes and Boone.

Since the end of September, a gaggle of other oil and gas drillers have filed for bankruptcy, including last Monday, natural gas producer Approach Resources. This pushed the total number of bankruptcy filings of oil and gas drillers since the beginning of 2015 to over 200. Other drillers, such as Chesapeake Energy, are jostling for position at the filing counter.

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Now there are stories circulating of how billionaires, who in 2016 believed the hype that the fracking bust was over, have gotten tangled up and lost tons of money on their bets. Bloomberg recounts one such story, of the brothers Farris and Dan Wilks in Texas.

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Bloomberg notes:

“Eight of the 10 biggest holdings in a portfolio spanning more than 50 investments have dropped since June 2018, when they were worth almost $1 billion. In a filing last week, they reported stakes in just seven entities worth a total of only $35.7 million. The combined value of those remaining holdings plunged by $171.2 million, or 88%, since they were initially disclosed.”

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Shale oil and gas drilling is awful for the land, water, and the broader environment. But so are all other methods of supplying power and fuel to an economy, including mountain-top coal mining, burning coal, hydro (which destroys entire canyons and rivers), nuclear power (nuclear waste, Fukushima, Chernobyl), even wind and solar power (the “fuel” is free and clean but producing and placing the equipment creates its own problems). When it comes to power and fuel, there are only compromises, some worse than others, and fracking is one of them.

And it’s brutal on investors at prevailing prices. The industry has been cash-flow negative from get-go. The high prices of oil and gas the industry needs to be cash-flow positive are being prevented by prolific shale oil and gas production. Executive compensation packages have been self-designed to reward richly any increases in production, hence no-matter-what increases in production.

And investors who believed the industry’s ceaseless hype are now grappling with reality – that their money was drilled into the ground and is gone.

TerryM

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Re: Oil and Gas Issues
« Reply #3355 on: November 26, 2019, 06:15:33 PM »
^^
I've little empathy for those investors in particular.
Terry

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3356 on: November 26, 2019, 06:19:34 PM »
I think I'd be able to scrape by on $35 million.

Tom_Mazanec

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Re: Oil and Gas Issues
« Reply #3357 on: November 26, 2019, 06:33:54 PM »
But you'd be like Montgomery Burns, kicked out of the Billionaires Club!
SHARKS (CROSSED OUT) MONGEESE (SIC) WITH FRICKIN LASER BEAMS ATTACHED TO THEIR HEADS

TerryM

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Re: Oil and Gas Issues
« Reply #3358 on: November 26, 2019, 06:45:27 PM »
I think I'd be able to scrape by on $35 million.
It might depend on your age, your dependants, and everyone's expectations.
Terry

gerontocrat

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Re: Oil and Gas Issues
« Reply #3359 on: November 26, 2019, 07:31:38 PM »
I think I'd be able to scrape by on $35 million.
It might depend on your age, your dependants, and everyone's expectations.
Terry
Give me 35 million and I'll let you know (sometime, maybe).

Hell, give me 35,000 and I'll rub along with that.
"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)

TerryM

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Re: Oil and Gas Issues
« Reply #3360 on: November 26, 2019, 07:40:36 PM »
^^
Yah - but you're an old man. 8)
Money's like hair. Don't want to run out of either before you run out of years. ::)


Terry

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3361 on: November 26, 2019, 09:59:55 PM »
While the oil frackers are going bankrupt, the LNG market has hit a global supply glut.

https://oilprice.com/Energy/Natural-Gas/Global-LNG-Markets-Are-Circling-The-Drain.html

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Global LNG Markets Are Circling The Drain
By Tsvetana Paraskova - Nov 26, 2019

Low natural gas prices from Europe to Asia, ample supply amid more than sufficient storage, and weaker demand growth this year have combined to create a perfect storm in the global liquefied natural gas (LNG) market.

The LNG glut is already seen in Asian spot prices, which have been falling for five weeks in a row—an unusual price movement just ahead of the winter season in the northern hemisphere. Weighed down by a wave of new supply from the United States, Australia, and Russia, LNG prices in Asia are now down by more than 40 percent from this time last year.   

With prices weak and demand tepid, some of the U.S. LNG exports may have to be curtailed when winter ends, analysts and investment banks say.

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According to Citigroup and Morgan Stanley, U.S. LNG exporters may be forced to shut in both production and exports in the second or third quarter next year, as prices could plunge after the winter to levels that will be unprofitable for U.S. producers to export. Morgan Stanley doesn’t rule out that around half of the current U.S. LNG exports could be curtailed in Q2 and Q3 next year, if weather is typical for the seasons.   

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Yet, earlier this month, Pavilion Energy, a Singaporean buyer of a U.S. cargo LNG, canceled the loading of the cargo but will still pay for it, as both Asia and Europe struggle with the LNG glut. Some other customers of U.S. LNG cargoes are also reportedly considering paying for those cargoes but not loading them, traders have told Reuters.

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LNG prices in Asia and natural gas prices at the Dutch gas hub Title Transfer Facility (TTF) are almost half the level they were at this time last year.

Storage in Europe is full, as low LNG spot prices amid abundant supply and weaker Asian spot demand have helped Europe to fill its storage tanks to more than average levels this summer.

In Asia, milder weather in the world’s top two LNG importers—Japan and China—leads to weaker demand amid ample supply. Last week, Asian LNG spot prices for January delivery dropped to US$5.70 per million British thermal units (MMBtu), down by US$0.20 from the previous week, market participants told Reuters.

While the lower LNG prices create some demand in India, for example, overall demand in Asia this winter is certainly not growing at the record-breaking pace of the past three years. The reason—supply is more than enough, as new volumes continue to come out of the U.S., Australia, and to an extent, Russia.

Sigmetnow

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Re: Oil and Gas Issues
« Reply #3362 on: November 27, 2019, 08:45:59 PM »
Another Texas chemical plant explosion after EPA deregulates
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There was a chemical explosion at TPC Group chemical plant, which makes products for chemical and petroleum companies, in Port Neches, Texas, early this morning.

Witnesses said the explosion felt like a bomb went off, and could be felt as far away as neighboring Louisiana. Residents living within a half mile of the plant were told to leave their homes.

The massive chemical explosion caused extensive damage across the small city and injured at least three employees. A chemical fire continues to burn at the site.

The Houston Chronicle reports:

Just earlier this year, TPC was fined $214,000 for excessive emissions and pollution — including a failure to report incidents — by the Texas Commission on Environmental Quality.

The Houston campus was noted for releasing excess volumes of nitrogen oxide, carbon monoxide, sulfur dioxide and various volatile organic compounds.

...
https://electrek.co/2019/11/27/egeb-epa-deregulation-chemical-plant-explosion-port-neches/
People who say it cannot be done should not interrupt those who are doing it.

Sigmetnow

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Re: Oil and Gas Issues
« Reply #3363 on: November 28, 2019, 04:32:48 AM »
Another Texas chemical plant explosion after EPA deregulates
Quote
There was a chemical explosion at TPC Group chemical plant, which makes products for chemical and petroleum companies, in Port Neches, Texas, early this morning.

Witnesses said the explosion felt like a bomb went off, and could be felt as far away as neighboring Louisiana. Residents living within a half mile of the plant were told to leave their homes.

The massive chemical explosion caused extensive damage across the small city and injured at least three employees. A chemical fire continues to burn at the site.
...
https://electrek.co/2019/11/27/egeb-epa-deregulation-chemical-plant-explosion-port-neches/

Update: Another explosion at the plant occurred this afternoon.

“On Wednesday afternoon, there was a second massive explosion, forcing officials to issue a mandatory evacuation for the four-mile radius surrounding the plant. At a press conference Wednesday night, Jefferson County Judge Jeff Branick said that there were also a number of smaller explosions throughout the day.

"We're extremely grateful that nobody was killed," he said.”


Port Neches explosions: 60,000 people forced to evacuate after explosions at Texas chemical plant - CBS News
https://www.cbsnews.com/news/explosion-texas-plant-port-neches-chemical-plant-texas-tcp-fire-lanxess-charleston-south-carolina-emergency-today/
People who say it cannot be done should not interrupt those who are doing it.

ArcticMelt2

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Re: Oil and Gas Issues
« Reply #3364 on: November 29, 2019, 04:27:11 PM »
You seen the latest figures on oil production in the United States?

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W

The situation in natural gas production is identical:

https://www.eia.gov/dnav/ng/hist/n9070us2m.htm

Looks like scenario 8.5 is the most realistic of the predictions IPCC.

New technologies of extraction from shale bring us closer to the climate of the Mesozoic.

blumenkraft

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Re: Oil and Gas Issues
« Reply #3365 on: November 29, 2019, 05:42:14 PM »
"Yes, we can!" <- remember?
"Is a thin line 'tween heaven and here" - Bubbles

ArcticMelt2

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Re: Oil and Gas Issues
« Reply #3366 on: November 29, 2019, 07:56:46 PM »
"Yes, we can!" <- remember?

Under Obama (2008-2016), shale production grew as fast as it does now.

2008 - 2016 - growth from 5 to 9 million barrels per day

2016 - 2019 - growth from 9 to 13 million barrels per day

gerontocrat

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Re: Oil and Gas Issues
« Reply #3367 on: November 29, 2019, 09:25:41 PM »
"Yes, we can!" <- remember?

Under Obama (2008-2016), shale production grew as fast as it does now.

2008 - 2016 - growth from 5 to 9 million barrels per day

2016 - 2019 - growth from 9 to 13 million barrels per day
But that might be the max...

https://www.arkansasonline.com/news/2019/nov/28/texas-oil-explorers-claim-growth-foreca/
Texas oil explorers claim growth forecasts contradict industry slowdown

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Capital-hungry producers are being starved of funding, stocks have plunged and there's been zero appetite for public offerings, making the downturn potentially more enduring than previous price-related busts.

Frank Lodzinski, an industry veteran of almost five decades who's chief executive officer at shale explorer Earthstone Energy Inc., said  "I can't remember another time when oil was $55 and the industry was in such shambles."
"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)

Sigmetnow

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Re: Oil and Gas Issues
« Reply #3368 on: December 01, 2019, 08:44:10 PM »
"... I'm not sure that those tanks were built for those levels of wind," said the mayor of South Portland, ME, where residents are worried over petroleum storage tanks along the waterfront.

With Giant Oil Tanks on Its Waterfront, This City Wants to Know: What Happens When Sea Level Rises?
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Using a medium scenario for sea level rise, there is a 27 percent chance of at least one flood of 5 feet above the current high tide line happening here between now and 2050. By 2060, that risk jumps to 69 percent. According to Climate Central, a flood of that size would bring water up past some of the tanks owned by Citgo and Global Partners, as well as South Portland Terminal, which partners with Irving and Buckeye Partners.
...
Then I followed up with the mayor, Claude Morgan, who lives on a street that could be underwater due to sea level rise.

"If lots of tanks went in a big storm, I don't know if we would be prepared to handle that," he told me. "Could it be contained? Probably, but what's the damage after? It's serious stuff, and we know it. We don't have our heads in the sand, but we can't snap our fingers and fix it overnight."

He sounded skeptical about Wilson's belief that the berms could help mitigate flooding around the tanks. "Just casually eye-balling the berms, they're not like levees," he said, "and we know even levees break."

"As the world heats, our winds are going to get wilder and wilder, and I'm not sure that those tanks were built for those levels of wind," Morgan said. "Would they fail catastrophically under certain air pressures? Anything is possible."
https://insideclimatenews.org/news/26112019/sea-level-rise-oil-tank-flood-risk-gulf-maine-south-portland-emergency-plan
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Ken Feldman

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Re: Oil and Gas Issues
« Reply #3369 on: December 02, 2019, 10:21:24 PM »
You seen the latest figures on oil production in the United States?

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W

The situation in natural gas production is identical:

https://www.eia.gov/dnav/ng/hist/n9070us2m.htm

Looks like scenario 8.5 is the most realistic of the predictions IPCC.

New technologies of extraction from shale bring us closer to the climate of the Mesozoic.

OPEC+ has had to cut production to avoid an oil glut and a crash in prices due to the US production increase.

https://www.marketwatch.com/story/expectations-grow-for-deeper-oil-production-cuts-by-opec-and-its-allies-2019-12-02

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OPEC+ will consider deepening existing oil production cuts by about 400,000 barrels per day to 1.6 million barrels per day, Thamer Ghadhban, Iraq’s oil minister, told reporters in Baghdad, according to a report from Reuters Sunday. The current OPEC+ agreement calls for an output cut of 1.2 million barrels a day from late 2018 levels through March 2020.

The IEA, not known for being very good in forecasts about the growth of renewable energy or electric vehicles, predicts demand for oil will peak in the 2020s leading to a long plateau.  That's the best case scenario for oil, as rapid adoption of EVs would basically cause a huge decrease in the demand for oil.

https://oilprice.com/Energy/Crude-Oil/IEA-Peak-Oil-Demand-Is-Less-Than-A-Decade-Away.html

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Global oil demand will reach its peak in the mid-2020s and plateau around 2030, the International Energy Agency said in its World Energy Outlook for 2019.

Until about 2025, the IEA said, global oil demand will expand by about 1 percent annually, exceeding 100 million bpd and reaching 105.4 million bpd. After that growth will shrink substantially and demand will reach a plateau at less than 110 million bpd—106.4 million bpd.

There is currently a glut of natural gas, decreasing prices.

https://oilprice.com/Energy/Natural-Gas/Global-LNG-Markets-Are-Circling-The-Drain.html

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Low natural gas prices from Europe to Asia, ample supply amid more than sufficient storage, and weaker demand growth this year have combined to create a perfect storm in the global liquefied natural gas (LNG) market.

The LNG glut is already seen in Asian spot prices, which have been falling for five weeks in a row—an unusual price movement just ahead of the winter season in the northern hemisphere. Weighed down by a wave of new supply from the United States, Australia, and Russia, LNG prices in Asia are now down by more than 40 percent from this time last year.   

With prices weak and demand tepid, some of the U.S. LNG exports may have to be curtailed when winter ends, analysts and investment banks say.

And wind and solar plants are predicted to do to natural gas power plants and pipelines what they've done to coal, making them stranded assets.

https://rmi.org/wp-content/uploads/2019/09/clean-energy-portfolio-two-pager.pdf

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Clean energy technology costs have reached a tipping point The past decade has seen a dramatic reduction in the costs of wind, solar, and storage technologies. At the same time, sophisticated utilities and market operators are increasingly able to procure grid reliability services from these non-traditional resources. As a result, leading US utilities are now prioritizing investment in “clean energy portfolios” (CEPs)—combinations of renewables, storage, and demand-side management strategies—that can cost-effectively provide the same reliability services as traditional gas-fired power plants.

CEPs have declined in cost by 80% since 2010, and are now lower-cost on a levelized basis than new gas plants. Within the next 10–20 years, continued cost declines will allow new CEPs to undercut the operating costs of existing gas plants. However, US utilities and independent power producers are replacing retiring coal, nuclear, and old gas capacity on a nearly 1:1 basis with new gas-fired power plants—nearly 70 GW of capacity is announced for construction within the next five years, and at least another 20 GW of new gas proposed as part of longer-term utility resource plans.

TL;DR - RCP 8.5 is no longer possible.  Fossil fuels are on the way out, much faster than anyone would have predicted two years ago.


Ken Feldman

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Re: Oil and Gas Issues
« Reply #3370 on: December 03, 2019, 06:01:25 PM »
It seems that the latest IEA and EAI projections for continued production of oil growth aren't taking into account actual investment and employment data from the oil fields.

https://oilprice.com/Energy/Energy-General/Even-Shale-Veterans-Dont-Buy-The-Bullish-Production-Forecasts.html

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Even Shale Veterans Don't Buy The Bullish Production Forecasts
By Tsvetana Paraskova - Dec 02, 2019

While acknowledging that U.S. shale growth is slowing down, analysts and experts continue to predict that total American crude oil production will rise by around 1 million barrels per day in 2020.

But U.S. exploration and production companies, the ones with the boots on the ground in the Permian and other major American shale plays, acknowledge that the slowdown is and will be much worse than what the EIA, the International Energy Agency (IEA), or OPEC predict. 

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Signs of the U.S. production growth slowdown are already evident in the Permian economic indicators this year.

Job growth in the Permian Basin has been sluggish this year, the Dallas Fed said last week. Employment was little changed at an annualized -0.2 percent year to date to October—and this was the first time since 2016 that Permian Basin employment has lagged job growth in Texas. Mining, logging and construction, the largest employment sector in the Permian, contracted at a 13.9 percent annualized rate in October, dragging total employment down. Year to date, the sector has fallen by 4.7 percent, according to the Dallas Fed.

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“Most people will ascribe the low U.S. growth to capital discipline. But I think the larger reason is what I've been talking about for several years the shift to Tier 2 and 3 drilling locations in all shale plays and increasing parent-child issues in the Permian,” Papa said, and warned that the growth slowdown will likely continue after 2020.

“I'll also note that this is likely not just a 2020 event. I believe U.S. shale production on a year-over-year growth basis will be considerably less powerful in 2021 in later years than most people currently expect,” the shale industry’s pioneer said.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3371 on: December 04, 2019, 06:42:02 PM »
Haliburton to lay of 800 workers in the US shale patches.

https://oilprice.com/Latest-Energy-News/World-News/Halliburton-Slashes-800-Oklahoma-Jobs-As-Shale-Slowdown-Bites.html

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Halliburton Slashes 800 Oklahoma Jobs As Shale Slowdown Bites
By Tsvetana Paraskova - Dec 03, 2019

Oilfield services provider Halliburton has notified the Oklahoma Office of Workforce Development that it would dismiss 800 employees, the Oklahoma agency’s spokesman David Crow tells The Associated Press, as oilfield services firms continue to cut costs amid slowing U.S. shale growth.

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El Reno’s mayor Matt White told The Oklahoman that Halliburton’s decision to permanently eliminate more than 800 jobs did not come as a complete surprise, because officials had expected potential layoffs for some time amid slowing activity in Oklahoma’s oil and gas sector.

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Two months ago, Halliburton said it would lay off 650 workers across four U.S. states—Colorado, New Mexico, North Dakota and Wyoming—due to “local market conditions.”

“Making this decision was not easy, nor taken lightly, but unfortunately it was necessary as we work to align our operations to reduced customer activity,” Halliburton said in early October.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3372 on: December 04, 2019, 06:45:35 PM »
Low prices caused by the global supply glut are forcing Canadian tar sands miners to cut back jobs and new investment.

https://oilprice.com/Latest-Energy-News/World-News/Pipeline-Crisis-Forces-Canadian-Oil-Giants-To-Cut-Jobs.html

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Pipeline Crisis Forces Canadian Oil Giants To Cut Jobs
By Irina Slav - Dec 03, 2019

Two of Canada’s largest oil sands producers, Husky Energy and Suncor, had some bad news for investors this week. Husky said it will slash capital spending for next year and 2021 by more than US$370 million (C$500 million) combined, while Suncor warned it will spend only as much on oil projects next year as it will this year.

Husky also said it will cut 370 jobs next year in a further sign that the industry’s troubles continue to take their toll.

Quote
These are not the only two oil sand producers that are holding their purse strings tight. MEG Energy last month said it will spend less in 2020 than it spent in 2019. The company announced an initial budget of US$188 million (C$250 million) for 2020, down by US$15 million (C$20 million) from what analysts expected. However, MEG has kept its production targets unchanged.

Now, the lower spending plans no doubt have a lot to do with the chronic shortage of pipeline capacity for the heavy oil that Alberta produces. It also has a lot to do with the production curtailment introduced by the previous Alberta government and maintained by the current one in a bid to keep a floor under oil prices. While the cuts exclude smaller producers, all large oil companies in Alberta are subject to the limits.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3373 on: December 04, 2019, 07:09:02 PM »
The oil glut, negative rates of return on fracked wells, and overall abysmal future for the oil industry is even affecting the Texas economy.

https://www.dallasnews.com/business/energy/2019/11/27/dallas-fed-permian-basin-slowdown-is-creating-a-drag-on-texas-jobs-machine/

Quote
Dallas Fed: Permian Basin slowdown is creating a drag on Texas’ jobs machine
Employment is down this year, after adding nearly 17,000 jobs last year.

The world’s biggest shale patch is now officially a drag on jobs creation in the Lone Star state.

Employment in the Permian Basin of West Texas has fallen by 400 jobs through the first 10 months of the year, a massive change from the 16,700 jobs added through the same period last year, according to a report Wednesday from the Federal Reserve Bank of Dallas.

“Permian Basin job growth has been sluggish this year,” according to the report. “This marks the first time since 2016 that Permian Basin employment has lagged Texas job growth.”

Quote
After years eye-rolling at shale skeptics, Texas wildcatters are now saying global analysts are underestimating just how severe the industry’s slowdown is.

What’s ticking folks off these days is how the International Energy Agency in Paris and the Energy Information Administration in Washington still predict robust U.S. production growth next year, despite the dire reality on the ground. The IEA expects an increase of 900,000 barrels a day, while the EIA forecasts 1 million, which would mean practically replicating this year’s expansion.

Those projections don’t jibe with the vibe in Texas, home to about half of U.S. crude output. Capital-hungry producers are being starved of funding, stocks have plunged and there’s been zero appetite for public offerings, making the downturn potentially more enduring than previous price-related busts.

“All I know is, after 47 years, they’re usually wrong.” Frank Lodzinski, an industry veteran of almost five decades who’s chief executive officer at shale explorer Earthstone Energy Inc. said of the forecasts. “I can’t remember another time when oil was $55 and the industry was in such shambles.”

Quote
Gloomy views from Texas could have something to do with recent developments in the Lone Star state. Just as the industry was recovering from the last downturn, more than 1,000 layoffs have been announced this year as drillers and their hired hands seek to cut costs. Investment banks have also had to trim staff locally thanks to a lack of dealmaking.

Oil analysts and investors are “a depleted and demoralized crowd, shell-shocked by the heavy losses inflicted from being the single epically losing sector on the record-breaking S&P 500 battlefield,” Mizuho analyst Paul Sankey said in a recent note to clients during a visit to Houston.

Sigmetnow

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Re: Oil and Gas Issues
« Reply #3374 on: December 04, 2019, 09:43:07 PM »
...
Halliburton Slashes 800 Oklahoma Jobs As Shale Slowdown Bites ...

Will be interesting to see if Oklahoma loses the tendency for earthquakes it gained as its oil business increased.

Below:  earthquakes over the past 7 days, all magnitudes.
People who say it cannot be done should not interrupt those who are doing it.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3375 on: December 05, 2019, 08:11:43 PM »
China's demand for natural gas has been slowing, reducing producer's hopes of an end to the natural gas glut.

https://oilprice.com/Energy/Natural-Gas/Natural-Gas-Set-To-Fall-Even-Further.html

Quote
Natural Gas Set To Fall Even Further
By Irina Slav - Dec 05, 2019

Slowing gas demand in China is set to pressure international gas prices further, adding to the burden of producers, some of whom already have to deal with excess supply.

Bloomberg quoted a researcher from China’s economic planning authority, who said at a BloombergNEF event in Shanghai that over the next five years, China’s demand for gas will slow down, especially in the liquefied natural gas department. The reasons for the slowdown will be economic: forecasters expect slower GDP growth in the world’s second-largest economy. Not last because of the continued trade war with the United States.

For LNG exporters, however, the bad news is rising domestic production and the launch of a new pipeline that will send 38 billion cubic meters of gas to China by 2024.

Quote
China has been the biggest driver of global gas demand in recent years, while the United States has been the driver of supply growth. This growth has been so spectacular it resulted in negative gas prices on several occasions this year. As a result, now gas producers are slowing down the pace of growth, freezing spending for 2020.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3376 on: December 05, 2019, 08:18:07 PM »
While a lot of the bad news about fracking has been focused on oil, it turns out that the natural gas frackers are in even worse shape.

https://oilprice.com/Energy/Natural-Gas/Shales-Debt-Fueled-Drilling-Boom-Is-Coming-To-An-End.html

Quote
Shale’s Debt-Fueled Drilling Boom Is Coming To An End
By Nick Cunningham - Dec 04, 2019

The financial struggles of the U.S. shale industry are becoming increasingly hard to ignore, but drillers in Appalachia are in particularly bad shape.

Quote
But E&P companies focused almost exclusively on gas, such as those in the Marcellus and Utica shales, are in even worse shape. An IEEFA analysis found that seven of the largest producers in Appalachia burned through about a half billion dollars in the third quarter.

Gas production continues to rise, but profits remain elusive. “Despite booming gas output, Appalachian oil and gas companies consistently failed to produce positive cash flow over the past five quarters,” the authors of the IEEFA report said.

Quote
The outlook is not encouraging. The gas glut is expected to stick around for a few years. Bank of America Merrill Lynch has repeatedly warned that unless there is an unusually frigid winter, which could lead to higher-than-expected demand, the gas market is headed for trouble. “A mild winter across the northern hemisphere or a worsening macro backdrop could be catastrophic for gas prices in all regions,” Bank of America said in a note in October.

The problem for Appalachian drillers is that Permian producers are not really interested in all of the gas they are producing. That makes them unresponsive to price signals. Gas prices in the Permian have plunged close to zero, and have at times turned negative, but gas production in Texas really hinges on the industry’s interest in oil. This dynamic means that the gas glut becomes entrenched longer than it otherwise might. It’s a grim reality plaguing the gas-focused producers in Appalachia.

Quote
Even Cabot Oil & Gas, which posted positive cash flow in the third quarter, has seen its share price fall by roughly 30 percent year-to-date. “Even though Appalachian gas companies have proven that they can produce abundant supplies of gas, their financial struggles show that the business case for fracking remains unproven,” IEEFA concluded.

gerontocrat

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Re: Oil and Gas Issues
« Reply #3377 on: December 05, 2019, 08:34:28 PM »
China's demand for natural gas has been slowing, reducing producer's hopes of an end to the natural gas glut.
Not clear if the growth in China gas demand is slowing, or the actual absolute amount of gas being used is declining.

Only difference is how quickly a lot of US producers go bust.
"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)

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3378 on: December 05, 2019, 08:42:50 PM »
China's demand for natural gas has been slowing, reducing producer's hopes of an end to the natural gas glut.
Not clear if the growth in China gas demand is slowing, or the actual absolute amount of gas being used is declining.

Only difference is how quickly a lot of US producers go bust.

It's hard to get real economic data on China.  There are indications that much of their meteoric growth since 2000 has been spent on boondoggle projects like airports that have no flights, ghost cities waiting for people to move into them, and coal power plants that sit idle more than half the time.  There is some speculation that the real growth rate in the next few years will barely be above 1%, not near 6% which is the official target.

As your comment implies, it's bad news for exporting countries (with the possible exception of Russia that has the pipelines to China).  There's no need for expensive LNG port facilities that would take the exports from the US or the middle east when they can just supply it from domestic sources or the Russian pipeline.

Tor Bejnar

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Re: Oil and Gas Issues
« Reply #3379 on: December 10, 2019, 09:13:29 PM »
Exxon Mobil prevails in lawsuit over climate regulations
By The Associated Press - December 10, 2019, 12:04 PM

Quote
Exxon Mobil prevailed Tuesday in a closely watched lawsuit over the costs of climate change, with a judge saying there was no proof the energy giant duped investors about the toll that regulations could take on its business.

New York Attorney General Letitia James' office didn't prove the company made any material misstatements "that misled any reasonable investor,” state judge Barry Ostrager in Manhattan wrote in dismissing the case.

“Nothing in this opinion is intended to absolve Exxon Mobil from responsibility for contributing to climate change through the emission of greenhouse gases,” he added. “But Exxon Mobil is in the business of producing energy, and this is a securities fraud case, not a climate change case.”
...
:'(
Arctic ice is healthy for children and other living things.

TerryM

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Re: Oil and Gas Issues
« Reply #3380 on: December 11, 2019, 02:51:35 AM »
From Frigid New York to Sunny California, the American Judicial System again proves that laws are written to control the "little people". The wealthy, and their assets, are exempt.
Terry

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3381 on: December 11, 2019, 06:09:12 PM »
The glut in natural gas may lead to an organization similar to OPEC for gas exporters, OGEC.

https://oilprice.com/Energy/Natural-Gas/Creating-The-OPEC-Of-Natural-Gas.html

Quote
Creating The OPEC Of Natural Gas
By Irina Slav - Dec 10, 2019

With global gas supplies growing faster than demand and forecasters warning of a deepening glut, it was only a matter of time before analysts began talking about a gas version of OPEC with the power to control international prices. But is an OGEC even possible?

There is already an organization of gas exporters. It’s called the Gas Exporting Countries Forum and involves a dozen countries, led by Russia, Qatar, and Iran. The list of members also includes Nigeria—Africa’s top LNG producer—Egypt, which has recently staked a claim in the international gas market with a number of discoveries, and Libya.

Quote
We are now in a situation of oversupply, and this oversupply is only set to deepen. The conditions seem to be perfect for a gas OPEC, as energy researcher Nikos Tsafos from the Center for Strategic and International Studies wrote in a recent commentary. Like Mummadov, Tsafos also notes the increase in spot market-traded LNG, the expansion in LNG capacity, and the already present overhang in supply, all of which are factors favoring “OPEC behaviour.”

Yet there is one important factor that is likely to discourage this OPEC behaviour for the time being. Two of the largest LNG exporters in the world are not GECF members, and they are highly unlikely to become members. These are, of course, the United States and Australia, both of which have been busy boosting their LNG export capacity in the past few years. Today, the U.S. is the fourth-largest gas exporter globally, after Russia, Qatar, and Norway. Norway, by the way, is as unlikely as the other two to join GECF.

gerontocrat

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Re: Oil and Gas Issues
« Reply #3382 on: December 11, 2019, 06:34:13 PM »
For every headline on oil & gas production under threat, there is another headline saying the buggers just won't stop.

https://www.theguardian.com/commentisfree/2019/dec/10/canada-trudea-climate-crisis
Trudeau will fuel the fires of our climate crisis if he approves Canada's mega mine

Quote
This week, the Canadian government is in Madrid telling the world that climate action is its No 1 priority. When they get home, Justin Trudeau’s newly re-elected government will decide whether to throw more fuel on the fires of climate change by giving the go-ahead to construction of the largest open-pit oil sands mine in Canadian history.

Approving Teck Resources’ Frontier mine would effectively signal Canada’s abandonment of its international climate goals. The mega mine would operate until 2067, adding a whopping 6 megatonnes of climate pollution every year. That’s on top of the increasing amount of carbon that Canada’s petroleum producers are already pumping out every year.

Oil and gas is now the largest climate polluter in the country, exceeding all greenhouse gases from transportation. Even without Teck Frontier, there are 131 megatonnes per year in approved tar sands projects just waiting for companies to begin construction. No wonder the industry is on track to take up 53% of Canada’s emissions budget within the next 10 years.
"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)

Sigmetnow

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Re: Oil and Gas Issues
« Reply #3383 on: December 11, 2019, 09:05:38 PM »
Chevron is writing down as much as $11 billion worth of assets, and it could cost the entire market
Wed, Dec 11 2019
Quote
Chevron is writing down as much as $11 billion worth of assets, and it could cost the entire market.

Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, said that depending on the final charge, it could reduce 2019's fourth-quarter overall S&P 500 earnings by $1.32 per share.

That would represent a big chunk of the fourth quarter's earnings as companies in the index are estimated to earn $40.40 a share in the current quarter, according to S&P Dow Jones. The whole S&P 500 is expected to earn $158.50 a share for the full year, according to estimates.
This is a big impact for the 24th-largest company in the index.

On Tuesday, Chevron said that the write-down of between $10 billion and $11 billion would be for the current quarter as the company revalues some of its assets, including shale gas production sites in Appalachia and deep-water projects in the Gulf of Mexico.

The nation's second-largest oil company also announced a $20 billion capital spending budget for 2020, and said it was considering offloading some of its natural gas projects as prices continue to falter.
...
https://www.cnbc.com/2019/12/11/chevron-11-billion-writedown-could-hit-the-entire-market.html


Edit:
ICYMI:  In 2012, Bill McKibben estimated a total of $20 trillion in fossil fuel assets need to be written off.

Global Warming's Terrifying New Math - Rolling Stone
https://www.rollingstone.com/politics/politics-news/global-warmings-terrifying-new-math-188550/
« Last Edit: December 11, 2019, 09:15:48 PM by Sigmetnow »
People who say it cannot be done should not interrupt those who are doing it.

sidd

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Ken Feldman

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Re: Oil and Gas Issues
« Reply #3385 on: December 13, 2019, 06:51:37 PM »
The IEA thinks the oil glut will continue through early 2020, even with recently announced supply cuts from major producers and the continuing bankruptcies in the US shale industry.

https://oilprice.com/Energy/Crude-Oil/IEA-An-Oil-Glut-Is-Inevitable-In-2020.html

Quote
IEA: An Oil Glut Is Inevitable In 2020
By Nick Cunningham - Dec 12, 2019

Despite the OPEC+ cuts, the oil market is still facing a supply surplus in 2020, according to a new report from the International Energy Agency (IEA).

OPEC+ announced additional cuts of 500,000 bpd, which sounds more impressive than it is because the group was already producing under its limit. In November, for instance, OPEC was producing 440,000 bpd below the agreed upon ceiling.

Quote
The IEA cut its forecast for non-OPEC supply growth from 2.3 mb/d to 2.1 mb/d, due to weaker growth from Brazil, Ghana and the United States. The U.S. typically gets all of the attention, but disappointing news from Brazil and Ghana also led the IEA to revise forecasts lower.

They dare not call it peak demand.

Quote
But even the combined effect of slower non-OPEC production growth and the OPEC+ cuts is not enough to erase the glut entirely. “[W]ith our demand outlook unchanged, there could still be a surplus of 0.7 mb/d in the market in 1Q20,” the IEA said.

“Even if they adhere strictly to the cut, there is still likely to be a strong build in inventories during the first half of next year,” the IEA warned.

Still, the IEA continues to ignore the reality in the US shale patch.

Quote
The agency has consistently been at the optimistic end of the spectrum regarding shale growth, even as major investment banks long ago slashed their forecasts. The IEA cut its U.S. supply forecast by 110,000 bpd from last month’s report, but at 1.1 mb/d, its figure still seems generous. The IEA is betting that the oil majors, who are less responsive to lower prices and problems with cash flow, will continue to scale up drilling.

Meanwhile, a new report from IHS Markit highlights the accelerating rate of decline among the U.S. shale complex, a decline rate that grows in tandem with production increases. “Oil and gas operators in the Permian Basin, the most prolific hydrocarbon resource basin in North America, will have to drill substantially more wells just to maintain current production levels and even more to grow production, owing to the high level of recent growth,” IHS said in a statement. The base decline rate in the Permian has “increased dramatically” since 2010.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3386 on: December 14, 2019, 12:09:12 AM »
Fracked wells deplete quickly and drillers typically pick the "sweet spots" in a basin to drill first, as it results in the best rates of return.  When you start seeing news stories about wells depleting faster in a basin, it means that the sweet spots have been taken.  This would appear to be the case for the US' largest fracked oil basin, the Permian.

https://www.businesswire.com/news/home/20191212005134/en/“Base-Decline”-Rate-Oil-Gas-Output-Permian

Quote
December 12, 2019
Data from the new IHS Markit Automated Well Forecasting Technology showed that the base decline rate of the more than 150,000 producing oil and gas wells in the Permian Basin has “increased dramatically” since 2010. The surge in shale drilling and output in recent years has been accelerating that inherent production decline because newer, younger wells decline much faster than older wells. 

HOUSTON--(BUSINESS WIRE)--Oil and gas operators in the Permian Basin, the most prolific hydrocarbon resource basin in North America, will have to drill substantially more wells just to maintain current production levels and even more to grow production, owing to the high level of recent growth, according to an analysis by IHS Markit (NYSE: INFO), a world leader in critical information, analytics and solutions.

"Base decline is the volume that oil and gas producers need to add from new wells just to stay where they are—it is the speed of the treadmill,” said Raoul LeBlanc, vice president of Unconventional Oil and Gas at IHS Markit. “Because of the large increases of recent years, the base decline production rate for the Permian Basin has increased dramatically, and we expect those declines to continue to accelerate. As a result, it is going to be challenging, especially for some companies with cash constraints, just to keep production flat.”

The new IHS Markit production outlook expects total U.S. oil production growth to flatten by 2021 due to a major slowdown in growth from U.S. shale. The new IHS Markit outlook for oil market fundamentals for 2019-2021 expects total U.S. production growth to be 440,000 barrels per day in 2020 before essentially flattening out in 2021. Modest growth is expected to resume in 2022. But those volumes would still be in stark contrast to the boom levels of recent years, LeBlanc said.

The article goes on to explain that in the 2010, when most of the wells in the Permian were conventional, the decline rate was 13%.  Now, with a much higher production rate and most of the wells being fracked, the decline rate is 40%, or 1.5 million barrels per day.
« Last Edit: December 14, 2019, 12:17:00 AM by Ken Feldman »

rboyd

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Re: Oil and Gas Issues
« Reply #3387 on: December 15, 2019, 07:45:30 AM »
The escalating Red Queen problem, the greater the fracking output the more wells that have to be drilled to keep up the output. Its amazing how long that this unprofitable game has been kept going, very informed people thought that it would have peaked years ago.

If the frackers start cutting back significantly on capex the output will start dropping rather quickly. Maybe we are at that point now, but I have learnt not to hold my breath waiting for it.

NeilT

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Re: Oil and Gas Issues
« Reply #3388 on: December 15, 2019, 02:08:04 PM »
I read that article and didn't come to the same conclusion.

Whilst there is a bit of the Red Queen involved, the article skips over a simple reality.

Where do the older wells come from that provide the base profits? They are the young wells which are still operating.

This is more of an investor issue than a reserves issue.  Each new well is a fund of money to drill new wells as it will never be as productive as in the first year.

However once the first year is over the production does not vanish, it continues at a lower level.

So if you use the profits from the first year to fund the drilling of new wells, then pay the investors from the 1yr+ Wells, you have a sustainable model.

Even more, the supply continues to grow as the older wells do not stop producing. So, in reality, the supply continues to grow. Granted it is always on a bubble of first year drilling, but it is not fizzing out and leaving nothing behind it.

The reality is in the numbers.  Over around a decade production has grown from 800,000 barrels pd to 3.5m.  If this story of the Red Queen were totally fixed, that would have been impossible. It is more a case of supply growth requires continual investment to keep the bubble going. This continual investment is not something investors like.  They want to buy in and milk the profits once supply starts. Should have picked a different market.

I would expect this to level out somewhere around a few hundred thousand wells. Which means we have a few more decades to go with fracking.

Sadly.
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Juan C. García

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Re: Oil and Gas Issues
« Reply #3389 on: December 15, 2019, 05:58:27 PM »
Quote
These Cities Want to Ban Natural Gas. But Would It Be Legal?

With concerns about natural gas's impact on climate change rising, several Massachusetts cities and towns have started exploring outright bans on new natural gas hookups in commercial and residential buildings.

Berkeley, California, passed the first such ban in the country this past summer, and other West Coast cities have since followed with similar restrictions.

But in Massachusetts, as Cambridge discovered on Wednesday, it might be harder—if not impossible—to do.

The reason: the city ordinances and town bylaws in Massachusetts may conflict with existing regulations that are governed by the state. During a Cambridge City Council committee meeting Wednesday, the city's attorney advised that a proposed gas ban there might not stand up to legal scrutiny. The state attorney general's office is also reviewing the legality of a ban approved last month by the Boston suburb of Brookline on natural gas heating in new buildings.
https://insideclimatenews.org/news/12122019/natural-gas-ban-cities-legal-cambridge-brookline-massachusetts-state-law-berkeley-california?utm_source=InsideClimate+News&utm_campaign=74e4651c94-&utm_medium=email&utm_term=0_29c928ffb5-74e4651c94-327962825
Which is the best answer to Sep-2012 ASI lost (compared to 1979-2000)?
50% [NSIDC Extent] or
73% [PIOMAS Volume]

Volume is harder to measure than extent, but 3-dimensional space is real, 2D's hide ~50% thickness gone.
-> IPCC/NSIDC trends [based on extent] underestimate the real speed of ASI lost.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3390 on: December 16, 2019, 06:35:16 PM »
I read that article and didn't come to the same conclusion.

Whilst there is a bit of the Red Queen involved, the article skips over a simple reality.

Where do the older wells come from that provide the base profits? They are the young wells which are still operating.

This is more of an investor issue than a reserves issue.  Each new well is a fund of money to drill new wells as it will never be as productive as in the first year.

However once the first year is over the production does not vanish, it continues at a lower level.

So if you use the profits from the first year to fund the drilling of new wells, then pay the investors from the 1yr+ Wells, you have a sustainable model.

Even more, the supply continues to grow as the older wells do not stop producing. So, in reality, the supply continues to grow. Granted it is always on a bubble of first year drilling, but it is not fizzing out and leaving nothing behind it.

The reality is in the numbers.  Over around a decade production has grown from 800,000 barrels pd to 3.5m.  If this story of the Red Queen were totally fixed, that would have been impossible. It is more a case of supply growth requires continual investment to keep the bubble going. This continual investment is not something investors like.  They want to buy in and milk the profits once supply starts. Should have picked a different market.

I would expect this to level out somewhere around a few hundred thousand wells. Which means we have a few more decades to go with fracking.

Sadly.

Neil,

The frackers haven't made profits, they've been losing money.

They kept telling investors that profits were just around the corner, but in the meantime, they keep increasing production hoping to capture market share, which just increased supplies to the point of depressing the price.  Thus, they ensured more losses.

Investors are done with fracking.  More and more frackers are going bankrupt.  They keep pumping oil out of existing wells to defray some fixed costs, but they don't have the money to keep drilling new wells.  The most hopeful news articles from the oil patch describe it as a "slowdown", but the reality is that frackers can't hope to compete with the easy oil from the middle east and Russia that can be produced at much lower cost.

https://www.theepochtimes.com/profit-and-debt-pressures-spark-slowdown-in-shale_3174835.html

Quote
Profit and Debt Pressures Spark Slowdown in Shale
By Tom Ozimek
December 15, 2019

Fracking insiders said that the dynamic growth of shale in recent years is suffering a slowdown as industry investors demand higher returns and lower debt.

Shale producers such as Pioneer, Range Resources, EQT Corp, and Whiting Petroleum have reduced production targets and cut staff, aiming to meet investors’ bottom-line demands for more profit and less leverage.

Quote
Producers have reduced the number of oil rigs operating for a record 12th month in a row, sidelining a quarter of the country’s drilling rigs in the past year, according to service firm Baker Hughes.

https://asreport.americanbanker.com/articles/lack-of-credit-is-latest-blow-to-the-struggling-shale-industry

Quote
Lack of credit Is latest blow to the struggling shale industry
November 22 2019

Banks have begun trimming back the credit lines of America’s shale producers, further undercutting a beleaguered industry that’s been struggling to rebuild investor confidence.

Laredo Petroleum Inc. and Oasis Petroleum Inc. are among at least six producers whose ability to secure short-term loans against their oil and natural gas reserves have dropped by 10% or more, according to data in earnings statements and filings. The declines offer the first hint of results from a semi-annual bank review of the industry’s borrowing capacity that generally runs through December.

For the first time since 2016, an industry survey done prior to the review found most respondents expected to see declines. The noose is tightening at a time when producers have seen their market values plunge 21% this year. Meanwhile, at least 15 producers have already filed for bankruptcy during the year.

Quote
n some cases, producers are struggling under debt loads accumulated in earlier, more heady times. But other issues are at play as well: Some have drilled their best locations and are now turning to lower-quality sites. And some have been drilling wells too close together, resulting in a loss of overall performance.

At the same time, energy is the only sector yielding negative returns in the high-yield debt market, falling over 2% compared to a nearly 12% gain for its index.

In some cases, a borrowing-base cut can send a company spinning into bankruptcy. If a driller has already borrowed heavily on its credit line, and the new limit is lower than the outstanding balance, the company is overdrawn and has to repay the excess to the lender.




blumenkraft

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Re: Oil and Gas Issues
« Reply #3391 on: December 17, 2019, 10:29:00 AM »
The frackers haven't made profits, they've been losing money.

Would be correct if you subtract the subsidies and tax benefits.

But the system is rigged in their favour, so they still print money.
"Is a thin line 'tween heaven and here" - Bubbles

gerontocrat

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Re: Oil and Gas Issues
« Reply #3392 on: December 17, 2019, 01:25:39 PM »
The frackers haven't made profits, they've been losing money.

Would be correct if you subtract the subsidies and tax benefits.

But the system is rigged in their favour, so they still print money.
I reckon Ken's got it about right.... (Wall Street ain't happy)

https://ieefa.org/u-s-fracking-industry-awash-with-cheap-gas-but-little-to-show-for-it/
U.S. fracking industry awash with cheap gas but little to show for it
Quote
For the U.S. shale industry, the third quarter was more of the same: new record highs in oil production, but another quarter of negative cash flow.

A sample of 38 publicly-traded oil and gas companies posted $1.26 billion in negative cash flow in the third quarter, according to a study by the Institute for Energy Economics and Financial Analysis (IEEFA). The performance was a deterioration from the previous quarter, which saw marginal positive cash flow. In fact, the results from the second quarter, while unimpressive, were actually the industry’s best showing.

But even barely breaking even didn’t last. “The third quarter’s dismal results cap a decade of disappointments for shale investors, who have waited for years for the industry to generate cash to go along with the enormous volumes of oil and gas it produces,” Clark Williams-Derry and Kathy Hipple wrote in the IEEFA report.

The outlook isn’t great as the industry faces several problems all at once. Despite proving that they can throw huge volumes of oil and gas onto the market, they have been consistently spilling red ink. After roughly a decade of this, the debt has mounted and a wave of obligations falls due in the next few years. The Wall Street Journal reported in August that while the industry had just $9 billion in debt maturing over the remainder of 2019, a whopping $137 billion matures between 2020 and 2022.

And as if such a mountain of debt wasn’t enough, struggling shale drillers have fallen out of favor with Wall Street. Without fresh capital, it’s unclear how E&Ps deal with the debt and also maintain the pace of drilling needed to offset steep decline rates endemic to shale drilling.

The slight positive cash flow reported in the second quarter may turn out to be “the financial high-water mark for the struggling sector,” the IEEFA analysts wrote.

It should be noted that the third quarter earnings were particularly bad because of the slide in oil and gas prices, which is out of the control of individual companies. But much of the industry was not making money even when prices were substantially higher. “To the contrary, since the inception of the fracking boom, oil and gas companies have had to return repeatedly to debt and equity markets for infusions of capital to keep their operations running and their oil and gas flowing,” the IEEFA analysts wrote.

“Until fracking companies can demonstrate that they can produce cash as well as hydrocarbons, cautious investors would be wise to view the fracking sector as a speculative enterprise with a weak outlook and an unproven business model,” Clark Williams-Derry and Kathy Hipple wrote in the IEEFA report.
"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)

blumenkraft

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Re: Oil and Gas Issues
« Reply #3393 on: December 17, 2019, 02:16:36 PM »
Should have said, "Would be even more correct if you subtract the subsidies and tax benefits."
"Is a thin line 'tween heaven and here" - Bubbles

Sigmetnow

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Re: Oil and Gas Issues
« Reply #3394 on: December 17, 2019, 02:23:16 PM »
Goldman Sachs is first big US bank to rule out loans for Arctic drilling
Quote
London(CNN Business) Goldman Sachs (GS) is the first big US bank to say it won't finance new oil projects in the Arctic.

On Sunday, the bank announced a raft of changes to its environmental policies, including a pledge not to finance drilling in the Arctic. The restrictions also rule out projects in Alaska's Arctic National Wildlife Refuge, which President Donald Trump has sought to open to development.

The funding freeze extends to new thermal coal mine and power plant development around the world, as well as projects that "significantly convert or degrade a natural habitat," Goldman Sachs said on its website.

The bank also announced a commitment to invest $750 billion over the next 10 years into areas that focus on climate transition and inclusive growth.
...
The company said it will "phase out" financing of thermal coal mining companies that do not have plans to diversify away from coal. ...
https://amp.cnn.com/cnn/2019/12/16/business/goldman-sachs-arctic/index.html
People who say it cannot be done should not interrupt those who are doing it.

Sigmetnow

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Re: Oil and Gas Issues
« Reply #3395 on: December 17, 2019, 08:07:16 PM »
EPA watchdog: Health monitoring in Houston after Hurricane Harvey was lacking
Quote
AUSTIN, Texas (AP) — A federal watchdog released a report Monday that cast doubt on the public health assurances made after Hurricane Harvey unleashed an environmental assault on the country’s largest petrochemical corridor, saying officials relied on limited data to offer residents peace of mind and that Houston’s air quality monitors had been offline to prevent storm damage.

The report by the U.S. Environmental Protection Agency’s Office of Inspector General paints a picture of state and federal regulators telling those who live in and around the nation’s fourth-largest city — which was inundated with more than 50 inches of rainfall — that there were no public health risks even though it lacked a full range of data to make such a determination.

And while the report says no instances were found of the EPA relaying inaccurate information during Harvey about air quality, it also determined that none of the air-quality sampling done by the federal agency — with a mobile laboratory and with a sensor-equipped plane — proved useful to assessing health risks.
...
The report supports findings by The Associated Press and Houston Chronicle last year that revealed a far more widespread toxic impact than authorities publicly reported after the storm, which slammed into the Texas coast and then hovered over the Houston area for days.

Roughly 500 chemical plants, 10 refineries and more than 6,670 miles (10,734 kilometers) of intertwined oil, gas and chemical pipelines line the nation’s largest energy corridor. Nearly half-a-billion gallons (1,893 million liters) of industrial wastewater mixed with storm water surged out of just one chemical plant — a facility in Baytown, east of Houston on the upper shores of Galveston Bay.

Benzene, vinyl chloride, butadiene and other known human carcinogens were among the industrial toxic substances released into surrounding neighborhoods and waterways following Harvey’s torrential rains. ...
https://apnews.com/fe6a725b992616745ce4d6b2d028e513
People who say it cannot be done should not interrupt those who are doing it.

Juan C. García

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Re: Oil and Gas Issues
« Reply #3396 on: December 18, 2019, 05:42:04 PM »
Quote
Clean energy loses big in year-end spending bill

Lawmakers had one last chance this year to pass legislation that could have spurred the United States to adopt cleaner sources of energy more quickly. But they seems to have just squandered the opportunity.

The $1.4 trillion spending package approved by the House on Tuesday does not include a number of measures aimed at propping up alternatives to power generation and transportation that forgo burning fossil fuels, a primary contribution to the runaway warming climate scientists say the world has precious little time to avert.

Democrats say the week began with a tentative agreement between both parties that contained several of those clean energy provisions. But the White House objected to their inclusion, Democrats said, so they were pulled from the final deal to avoid a government shutdown before the holidays.

“We're missing a huge opportunity,” said Rep. Paul Tonko (D-N.Y.), chair of the House and Commerce subcommittee on climate change and the environment. “To say I'm disappointed is an understatement.” Tonko had led more than 160 House Democrats urging House Speaker Nancy Pelosi (D-Calif.) in an open letter in October to “prioritize” including the clean energy tax credits in the final spending deal with Republicans.

In particular, the oil and natural gas industry, a major ally of President Trump, vigorously lobbied against an expansion of a tax break for buyers of cars that need little to no gasoline to run.
https://www.washingtonpost.com/news/powerpost/paloma/the-energy-202/2019/12/18/the-energy-202-clean-energy-loses-big-in-year-end-spending-bill/5df91f44602ff125ce5b5c76/
Which is the best answer to Sep-2012 ASI lost (compared to 1979-2000)?
50% [NSIDC Extent] or
73% [PIOMAS Volume]

Volume is harder to measure than extent, but 3-dimensional space is real, 2D's hide ~50% thickness gone.
-> IPCC/NSIDC trends [based on extent] underestimate the real speed of ASI lost.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3397 on: December 18, 2019, 05:48:10 PM »
Another story on the Chevron write down includes some interesting details on the state of the natural gas industry in the US currently.

https://oilprice.com/Energy/Energy-General/Chevrons-11-Billion-Write-Down-Is-A-Warning-For-The-Oil-Industry.html

Quote
Chevron’s $11 Billion Write Down Is A Warning For The Oil Industry
By Nick Cunningham - Dec 11, 2019

Chevron said that it would write down $11 billion in assets in the fourth quarter, much of which is tied to natural gas in Appalachia. The impairment is a sign that the waters are getting pretty rough for the oil and gas industry, due to a combination of supply surpluses, low prices, the struggling and unproven business case for large-scale shale drilling, and the looming threat of peak demand.

Quote
The WSJ says the admission that billions of dollars’ worth of assets are worth a lot less than previously thought could force others to “publicly reassess the value of their holdings in the face of a global supply glut and growing investor concerns about the long-term future of fossil fuels.”

The write down is also an indictment of shale gas drilling in Appalachia. Low prices and a track record of not producing any profits has soured investors on the sector. A recent analysis by IEEFA found that the seven largest Appalachian gas drillers burned through a half a billion dollars in the third quarter. “Despite booming gas output, Appalachian oil and gas companies consistently failed to produce positive cash flow over the past five quarters,” the authors of the IEEFA report said.

Quote
In fact, part of the reason why companies are increasingly acknowledging the likelihood of lower long-term prices is because of the energy transition. Supplies are abundant, largely because of the hundreds of billions poured into shale. But on the other side of the ledger, long-term demand looks increasingly shaky. “
  • il companies have struggled to reap the profits of old and are falling out of favor with investors amid fears that electric vehicles and renewable energy, along with government regulations to address a warming planet, will constrain their futures[/b],” the WSJ concluded.

Ken Feldman

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Re: Oil and Gas Issues
« Reply #3398 on: December 18, 2019, 06:33:16 PM »
Quote
Clean energy loses big in year-end spending bill

Lawmakers had one last chance this year to pass legislation that could have spurred the United States to adopt cleaner sources of energy more quickly. But they seems to have just squandered the opportunity.

The $1.4 trillion spending package approved by the House on Tuesday does not include a number of measures aimed at propping up alternatives to power generation and transportation that forgo burning fossil fuels, a primary contribution to the runaway warming climate scientists say the world has precious little time to avert.

Democrats say the week began with a tentative agreement between both parties that contained several of those clean energy provisions. But the White House objected to their inclusion, Democrats said, so they were pulled from the final deal to avoid a government shutdown before the holidays.

“We're missing a huge opportunity,” said Rep. Paul Tonko (D-N.Y.), chair of the House and Commerce subcommittee on climate change and the environment. “To say I'm disappointed is an understatement.” Tonko had led more than 160 House Democrats urging House Speaker Nancy Pelosi (D-Calif.) in an open letter in October to “prioritize” including the clean energy tax credits in the final spending deal with Republicans.

In particular, the oil and natural gas industry, a major ally of President Trump, vigorously lobbied against an expansion of a tax break for buyers of cars that need little to no gasoline to run.
https://www.washingtonpost.com/news/powerpost/paloma/the-energy-202/2019/12/18/the-energy-202-clean-energy-loses-big-in-year-end-spending-bill/5df91f44602ff125ce5b5c76/

Here's an article on the impact of the bill on wind and solar.

https://www.greentechmedia.com/articles/read/u-s-lawmakers-hand-clean-energy-tax-credits-a-loss-though-wind-gets-a-win

Quote
US Lawmakers Stiff Solar, Wind Gets Modest Victory in Tax Deal

Despite months of intense lobbying, the solar industry comes up empty-handed in end-of-year spending legislation.
Emma Foehringer Merchant December 17, 2019

 After months of lobbying, the clean energy industry secured minimal tax credit extensions in the $1.37 trillion end-of-year deal U.S. lawmakers eked out this week to fund the government in 2020.

Of the possible clean energy tax extensions that could have been stuffed into the spending bill, wind was the only winner, and the industry secured just one extra year of incentives.

If the full deal wins congressional passage, as is expected, wind developers can now qualify for the production tax credit through 2020 — a year longer than anticipated. Developers qualifying projects in 2020 will receive 60 percent of the PTC if they bring those projects online by the end of 2024. Projects qualified in 2019 will still receive only 40 percent of the incentive.

Quote
An Investment Tax Credit extension through 2030 would have added 82 gigawatts of solar on top of baseline forecasts, offsetting 363 million metric tons of carbon dioxide over a decade — an amount equal to a fifth of U.S. electricity emissions in 2018 — according to analysis from SEIA and Wood Mackenzie Power & Renewables.

For now, the ITC will phase down to a permanent 10 percent for developer-owned systems in 2022. Though an extension would have fueled growth, its removal will have muted impact on an industry that’s been preparing for its end. Increasingly competitive economics will continue to help solar spread.

Quote
In a statement on the decision, SEIA said it would continue its fight in 2020, specifically citing support for energy storage tax credits. Right now, storage can only receive the ITC if it’s attached to solar or another ITC-eligible project.

Elsewhere in the spending package, lawmakers laid out $38.6 billion for the Department of Energy in fiscal year 2020, an increase of $2.9 billion over 2019. Legislators increased the budget for the Advanced Research Projects Agency – Energy by $59 million, to $425 million, and included $250 million for programs to buoy advanced nuclear reactors.

Sigmetnow

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Re: Oil and Gas Issues
« Reply #3399 on: December 18, 2019, 07:52:07 PM »
U.S. presidential candidate, billionaire and former New York City mayor Michael Bloomberg

Mike Bloomberg has a plan to clean up electricity and it doesn’t need Congress
Quote
... In addition, to head off the current incoming rush of new natural gas plants, Bloomberg’s EPA would issue a draft New Source Performance Standard (something else Obama did that Trump rolled back), which would require all new power plants to use the best available technology — namely, carbon capture and sequestration (CCS) — to reduce GHG emissions (along with NOx, etc.).

That would, at a stroke, cancel 99 percent of those new natural gas plants. (Who knows, maybe a plant or two will figure out how to make CCS feasible.) And because of a quirk of the Clean Air Act, a draft New Source Performance Standards (NSPS) has the force of law as soon as it is issued, but it can’t be challenged in court until it is finalized, which is one reason industry loathes the NSPS provision. (Coal baron Robert Murray took this to the Supreme Court and lost.) Companies will have to begin aligning their future plans around the NSPS the moment a draft is issued. ...
https://www.vox.com/energy-and-environment/2019/12/17/21023873/mike-bloomberg-climate-change-policy-power-natural-gas-coal
People who say it cannot be done should not interrupt those who are doing it.