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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

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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!
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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/
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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?
Refugees welcome

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!"
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"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?
Quote
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.

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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/

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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.”

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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.”

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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

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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.

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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

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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.

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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.

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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.

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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.
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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.