Oil and Gas Issues

[rboyd]

The UK sold the majority of its oil and gas (and its gold!) when prices were cheap, and destroyed its coal industry on political grounds (smash the miners union and cow the others) as much as economic ones. Now its a growing net importer of energy and will be allowing foreign corporations to own and run its nuclear plants (with the outflow of earnings abroad).

Post-Brexit it will not be a more independent entity, rather it is leaving the joint strength of the EU to be exposed to one-sided trade deals with countries like the US and yet more looting by domestic and foreign elites via tax havens managed by the City of London. Yep ... enjoy your Brexit.

[TerryM]

As loyal Canadians we don't want to focus on the folly of selling off the nations gold.


As far a Brexit goes I think you're spot on. Leaving Europe will push the Brits into the waiting arms of the Americans. Not the best place to be if you value your sovereignty.


IMHO
Terry

[rboyd]

I am British Canadian so failure on both counts with respect to the gold, and for not properly managing oil and gas revenues like the Norwegians!

[TerryM]

I am British Canadian so failure on both counts with respect to the gold, and for not properly managing oil and gas revenues like the Norwegians!

I was out of the country for ~40 years and missed the brouhaha over oil exports between Ottawa & Alberta. Alberta's win was/is Canada's loss, and it's a devastating loss.
It's a damn shame that a tiny minority of Right Wing fanatics in a very small (in population) Province can bully the National Gov. & screw over the vast majority of their countrymen.


At least that's my understanding of how we missed out on a Norwegian style energy plan.
Terry

[Sigmetnow]

The oil majors are pumping more oil, from fewer rigs, causing oil oversupply and oil field services bankruptcies.  Today, China slapped retaliatory tariffs on U.S. crude oil, putting it “on a path toward the year’s lows near $50 a barrel.”

Baker Hughes data reveal the biggest weekly drop in the U.S. oil-rig count since April

Baker Hughes BHGE, -1.67% on Friday reported that the number of active U.S. rigs drilling for oil declined by 16 to 754 this week. That was the biggest weekly decline since late April, when Baker Hughes reported a weekly drop of 20 oil rigs. The total active U.S. rig count, meanwhile, also fell by 19 to 916, according to Baker Hughes. October West Texas Intermediate crude CLV19, -3.61% continued to trade sharply lower following news of China's plans for retaliatory tariffs on U.S. goods. Prices were down $1.99, or 3.6%, at $53.36 a barrel.

https://www.marketwatch.com/story/baker-hughes-data-reveal-the-biggest-weekly-drop-in-the-us-oil-rig-count-since-april-2019-08-23

Is There Any Hope for Oilfield Services Companies?
Industry dynamics haven't been wonderful for companies like Schlumberger, Halliburton, and National Oilwell Varco.

Just recently, oilfield services companies reported their Q2 earnings. They were bad, but Q3 is forecasted to be even worse.
The lifeblood of oilfield services companies is drilling and completing wells. After discovery, drilling is the next step in hydrocarbon extraction. It's little more than drilling a hole vertically, and then usually horizontally, to get to the reserves. Oilfield services companies make money by leasing rigs and contracting their crews to companies like ExxonMobil or Chevron, known as the operators of the well.
Drilling declines
The best way to keep tabs on the health of drilling activities is the Baker Hughes rig count. Released weekly and free to access, the rig count provides a good reading on drilling activity, allowing investors to gauge if new wells are being brought online.
The rig count has been declining for months now as drilling activities are heavily stalling in the face of $55 a barrel oil and a lack of pipelines available to transport reserves out of plays like the Permian Basin in West Texas, the largest oilfield in the United States.
…
Oil majors are becoming more and more cost-conscious, focused intently on reducing breakeven prices per barrel to sustain profitably during downturns. Meanwhile, the oilfield services companies have seen quarter after quarter declines with no floor insight to bounce back from. Until that floor is found, it may be prudent to conclude that there is little hope in sight for oilfield services companies.

https://www.fool.com/investing/2019/08/23/is-there-any-hope-for-oilfield-services-companies.aspx

Oil prices may drop back toward the year’s lows near $50 a barrel.

China announced plans for retaliatory import tariffs on U.S. goods on Friday, sinking U.S. oil prices and putting them on a path toward the year’s lows near $50 a barrel.
China will take retaliatory measures on the U.S., specifically on crude oil, Jace Jarboe, a futures and options broker with Daniels Trading in Chicago, told MarketWatch.
“China is currently the largest importer of oil in the world and the U.S. happens to be the largest producer of crude oil,” he said, so the oil market “responded with an abrupt selloff.”
In Friday dealings, West Texas Intermediate crude oil for October delivery CLV19, -3.14% lost $1.88, or 3.4%, to $53.47 a barrel. The day’s loss pulled futures prices down about 2.6% for the week.

Prices “could be track to head back lower towards the lows of both June and August near $50-$51,” before balancing out and finding support, said Jarboe.
Adding pressure to oil prices, Federal Reserve Chairman Jerome Powell at the Jackson Hole, Wyo. Economic policy symposium said “global growth is deteriorating,” and “that’s certainly a bearish outlook for both equities and energies,” Jarboe said. “If this sentiment is continued, we could hear talk of an additional rate cut, which could lead to a boost in oil prices over time like equities.”

https://www.marketwatch.com/story/oil-prices-may-drop-back-toward-the-years-lows-near-50-a-barrel-2019-08-23

[Sigmetnow]

U.S.:  South Portland, Maine:  Air Monitoring Reveals Troubling Benzene Spikes Officials Don’t Fully Understand
Are the fumes emanating from the storage tanks of the nation's easternmost oil port harming their kids?

The process of loading and unloading petroleum products is ripe for emissions, according to Wilma Subra. She's an environmental health expert based in Louisiana who has worked with communities facing emissions problems. "Wherever you have the hook-ups is where you have the potential leaks," she explains, because emissions can leak out past rubber gaskets. "And then as it's filling the tank, you get agitation. It doesn't have a calm surface anymore. So, you're causing a lot of volatiles in the headspace between the liquids and the top of the tank."

https://insideclimatenews.org/news/23082019/south-portland-oil-tank-pollution-testing-results-voc-benzene-source

—-
U.S.:  2015 North Dakota liquid gas spill much bigger than reported

BISMARCK, N.D. — A 2015 pipeline spill of liquid natural gas in western North Dakota is hundreds of thousands of gallons larger than originally reported and may take another decade to clean up, state health officials said Tuesday. ...

https://toronto.citynews.ca/2019/08/20/2015-north-dakota-liquid-gas-spill-much-bigger-than-reported/

[DrTskoul]

You are not "causing" volatiles with mixing of the incoming liquid unless it's a stratified tank. You are displacing the vapor with the added liquid and have a bad vapor recovery system.

[Sciguy]

The trade war between the US and China is slowing investment in new LNG infrastructure.

https://oilprice.com/Energy/Energy-General/A-Perfect-Storm-Is-Brewing-For-US-LNG.html

According to the Bank of America Merrill Lynch, a number of companies may delay their final investment decisions on new LNG capacity to next year because of U.S.-Chinese trade tensions. Bloomberg reports these include Tellurian and NextDecade, as well as other companies focused exclusively on LNG.

While the companies themselves are not too talkative when it comes to possible obstacles to the so-called second wave of LNG projects in the U.S., the facts are not encouraging: China has imported no U.S. LNG since March, according to data from ClipperData. Bloomberg data is even gloomier: it suggests no U.S. LNG has made its way into China since February. No wonder, since Beijing first imposed a 10-percent tariff on the commodity and then upped this to 25 percent in retaliation for U.S. tariffs.

Yet there is another aspect of the trade war that is more damaging to U.S. LNG producers. To secure funding for these projects that typically cost billions, U.S. companies need long-term commitments to convince banks the projects are viable. Chinese buyers were the natural choice for these long-term commitments but this is no longer the case as Chinese investors shun U.S. projects amid the war.

To add insult to injury, the gas price context is increasingly unfavourable and could add justification to delays in final investment decisions. U.S. energy companies are producing too much gas at a time when domestic demand is stalling and global demand is being met by a growing number of countries. LNG projects are also suffering the effects of low gas prices. As RBC recently forecast, this year, the natural gas market will remain oversupplied, and this oversupply will extend into 2020 as well.

[Sigmetnow]

Senator Ed Markey:
“If BP thought it could have squeezed a nickel out of drilling in the Arctic Refuge, it wouldn’t have hesitated to annihilate it. Their exit is further evidence that there is absolutely no reason to turn the Refuge over to the oil and gas industry. All risk, no reward.”

BP to quit Alaska after 60 years with $5.6 billion sale to Hilcorp
https://www.reuters.com/article/us-bp-divestiture-idUSKCN1VH21N

[TerryM]

Senator Ed Markey:
“If BP thought it could have squeezed a nickel out of drilling in the Arctic Refuge, it wouldn’t have hesitated to annihilate it. Their exit is further evidence that there is absolutely no reason to turn the Refuge over to the oil and gas industry. All risk, no reward.”

BP to quit Alaska after 60 years with $5.6 billion sale to Hilcorp
https://www.reuters.com/article/us-bp-divestiture-idUSKCN1VH21N

Shell quit in '15, now BP's pulled out - how long before all the majors have fled?
Terry

[bligh8]

Fitch: US shale oil output growth slowing
Despite relaxation of transport constraints in the Permian basin, a slowdown in oil-production growth in US shale plays will continue, says Fitch Solutions Macro Research.

https://www.ogj.com/general-interest/economics-markets/article/14037456/fitch-us-shale-oil-output-growth-slowing



Aug 1st, 2019
"Despite relaxation of transport constraints in the Permian basin, a slowdown in oil-production growth in US shale plays will continue, says Fitch Solutions Macro Research.
The firm cites oil-price stability, caution by exploration and production companies, and weakening allure of oil and gas in capital markets.
Fitch notes that the US Energy Information Administration expects Permian basin shale production to grow by 16.7% in August after increasing by 44.7% in August last year. And it says similar trends are evident in the Bakken and Eagle Ford plays."

“With the next major capacity additions not slated to come online until the end of third-quarter 2019, the summer months could see another squeeze on takeaway capacity and, consequently, production growth,” it says.
Due online this year are the 400,000-b/d EPIC, 670,000-b/d Cactus, and 900,000-b/d Gray Oak pipelines.
Fitch does not expect the capacity additions to return production growth to its 2018 high, partly because 2018 growth occurred against a low base.
The firm expects growth in total US shale liquids production of 9.4% this year and 6.9% in 2020, compared with 15.7% last year."

Volume vs. value
And companies have shifted emphasis from production growth to investment value since 2014.
Even so, the producing industry continues to rely heavily on external financing from sources becoming wary.
“This could further drag on growth as financial conditions deteriorate,” Fitch says.
A drop of more than 50% in debt and equity issuance by US exploration and production companies in first-half 2019 from first-half 2018 is part of a trend only partly explained by increased capital discipline and deleveraging.

“It likely also reflects less appetite to lend to the sector at previous, more favorable rates,” Fitch says. “Sentiment around the oil and gas sector is weak in general, with concerns over long-term sustainability blending into concerns over shorter-term price pressures.”

bligh

[bligh8]

Haynes and Boone: North American E&P bankruptcies on the rise
Bankruptcies filed by North American oil and gas producers are experiencing an uptick this year following a substantial decrease in 2017 and 2018, according to an Aug. 12 report by Haynes and Boone.

"Bankruptcies filed by North American oil and gas producers are experiencing an uptick this year following a substantial decrease in 2017 and 2018, according to an Aug. 12 report by Haynes and Boone. The firm has monitored the number of North American oil and gas producer bankruptcies since 2015."

"The initial wave of bankruptcies in 2015-16 consisted of more than 100 bankruptcy filings. That number decreased during 2017-18 with 24 bankruptcy filings in 2017 and 28 in 2018. So far this year, however, the number has been rising. There have been 26 bankruptcies filed as of Aug. 12, with 20 filings since the beginning of May when H&B last reported its findings.
Over the entire period, 192 producers have filed for bankruptcy since the firm began tabulating E&P filings, involving some $106.8 billion in aggregate debt.
During 2015-19, Texas has seen the largest number of filings with 87; followed by Canada, 18; and Colorado, 10."

"Natural gas and natural gas liquids prices continue to be cited as a main contributor to the filings, and since the beginning of this year, said Haynes and Boone, “Oil has been range-bound in the $50s[/bbl] without any clear indication that prices are heading north anytime soon.”

As for what’s next, the firm said that it’s too early to predict, but “it is clear that for certain financially troubled producers wounded by the crash in 2015, some stakeholders may have given up hope that resurgent commodity prices will bail everyone out.” It added, “For these producers the game clock has run out of time to keep playing ‘kick the can’ with their creditors and other stakeholders.”

bligh

[Sigmetnow]

9/1/19, 7:32 AM
“Exxon Mobil Corp. is poised to drop out of the S&P 500 Index’s 10 biggest companies for the first time since the index’s inception some 90 years ago the consummation of a long-term trend of tech titans replacing industrial giants in the top ranks of US stock market” — Bloomberg
https://twitter.com/tesla_truth/status/1168124546429308928

[rboyd]

9/1/19, 7:32 AM
“Exxon Mobil Corp. is poised to drop out of the S&P 500 Index’s 10 biggest companies for the first time since the index’s inception some 90 years ago the consummation of a long-term trend of tech titans replacing industrial giants in the top ranks of US stock market” — Bloomberg
https://twitter.com/tesla_truth/status/1168124546429308928

I sense that the top of the technology bubble is now approaching, just like the dot com crash. Then the "tech titans" will rapidly shrink with respect to other industries - just like Nortel, Cisco, 724 and Worldcom did. The Nasdaq will deflate nuch faster than the Dow Jones.

[Sigmetnow]

9/1/19, 7:32 AM
“Exxon Mobil Corp. is poised to drop out of the S&P 500 Index’s 10 biggest companies for the first time since the index’s inception some 90 years ago the consummation of a long-term trend of tech titans replacing industrial giants in the top ranks of US stock market” — Bloomberg
https://twitter.com/tesla_truth/status/1168124546429308928

I sense that the top of the technology bubble is now approaching, just like the dot com crash. Then the "tech titans" will rapidly shrink with respect to other industries - just like Nortel, Cisco, 724 and Worldcom did. The Nasdaq will deflate nuch faster than the Dow Jones.

“Valuation” can be a very subjective thing, so a tech re-evaluation is quite possible.  But oil and gas companies are valued according to the amount of oil and gas properties they own that are expected to produce profits in the future.  It’s long been projected that an oil crash would be the next big event on the way to the death of fossil fuels.

Global Warming’s Terrifying New Math
https://www.rollingstone.com/politics/politics-news/global-warmings-terrifying-new-math-188550/

[rboyd]

Could not agree more about the future crash in oil and gas corporation valuations, but would not discount the ability to drag things on for quite a while. The survival of fracking in the face of continually negative profitability and cash flows is a good example of how things can last much longer than we (including me) ever thought possible.

The faster China can drive its EV market, and therefore force the rest of the world to do so, the quicker these corporations will wither away.

[Sciguy]

Interesting article on the failure of US oil production to meet forecasts and the coming debt storm that will roll through the industry in the coming years.

https://oilprice.com/Energy/Energy-General/Oil-Production-Growth-In-US-Grinds-To-A-Halt.html

Oil Production Growth In U.S. Grinds To A Halt
By Nick Cunningham - Sep 02, 2019, 6:00 PM CDT
Join Our Community
 
Lower oil prices and ongoing financial stress in the U.S. shale industry are creating headwinds for drillers, and it appears increasingly likely that supply growth could undershoot forecasts.
U.S. oil production fell in June to 12.082 million barrels per day (mb/d), according to new data released by the EIA on Friday. That is a decline of 33,000 bpd from May – not a huge drop off, but a decline nonetheless.

In previous months, maintenance at offshore oil fields made up a big chunk of the declines. While the overall figures for the entire U.S. appeared to disappoint, temporary declines offshore masked ongoing growth in the Permian. But this time around, blame cannot simply be pinned on offshore maintenance.
Remarkably, production in Oklahoma fell by a rather substantial 58,000 bpd, a sign of problems in Oklahoma’s SCOOP and STACK plays, which have proved to be somewhat of a disappointment. Anecdotally, companies have said that they were pivoting away from Oklahoma’s shale because of higher-than-expected costs and lower-than-expected production volumes. The latest EIA data suggests that lower investment in Oklahoma could be taking a toll.

What should we make of all of this? It’s only one month’s worth of data, but it represents another disappointment. The EIA maintains that the U.S. will average 12.3 mb/d in 2019, which is looking increasingly optimistic. The U.S. only averaged 11.95 mb/d in the first six months of the year, so output would need to dramatically accelerate in order to bring the overall average up. It would seem that the agency may soon be forced to revise down annual growth estimates.
To be sure, the weekly EIA estimates have output currently at 12.5 mb/d, which indeed is significantly higher than June figures. But these numbers are rougher estimates, and are subject to revision. For instance, at the time weekly EIA data in June estimated output was averaging 12.2 mb/d. But the monthly data that was just published, which is seen as more accurate, show that production was actually 12.08 mb/d.
This may seem like nitpicking, but the point is that unless production surged in July and August, the current estimates of 12.5 mb/d for late August may need to be revised down. The EIA itself said that production probably fell in July to 11.7 mb/d (in its most recent Short-Term Energy Outlook), due to temporary outages offshore from Hurricane Barry.

Most oil forecasters expected explosive production growth to continue through this year and into 2020. But with June U.S. production at 12.082 mb/d, output is only about 80,000 bpd above levels seen at the end of 2018. In other words, growth has been pretty slow this year.
Financial stress is really setting in, forcing drillers to cut back. The rig count fell by 12 in the last week of August, part of an ongoing slide since reaching a peak late last year. Bankruptcies are on the rise. As the Wall Street Journal notes, an estimated 26 U.S. oil and gas companies have declared bankruptcy this year, which is close to the full-year 2018 total. More are expected.
Worse, there is a tsunami of debt that comes due in the years ahead. According to the WSJ, roughly $9 billion worth of debt was set to mature over the second half of 2019. But a whopping $137 billion in debt matures between 2020 and 2022, a massive total that stems from the huge debt issuance following the oil market meltdown a few years ago. A serious reckoning is just around the corner.

[Alexander555]

When they frac they first drill vertical, until they get close to the layer where they want to be. And than they start to drill horizontal. On average 3 km. Does somebody knows how far they frac the area left and right from the borehole ? How far is the pressure cruching that layer ?

[Sciguy]

When they frac they first drill vertical, until they get close to the layer where they want to be. And than they start to drill horizontal. On average 3 km. Does somebody knows how far they frac the area left and right from the borehole ? How far is the pressure cruching that layer ?

10 km (6.2 miles)

https://drillers.com/directional-drilling-everything-you-ever-wanted-to-know/

Techniques such as multilateral, horizontal and extended reach drilling (ERD) are enhanced oil recovery (EOR) methods that can increase the yield of a downhole dramatically. It’s possible for ERD specialists to drill for more than 10 kilometers/6.2 miles.

[Alexander555]

  I was looking for a number in square miles or km. And they are talking about 5 to 10 square miles for one rig, but is that the fracing ? And is one rig the same as one borehole ? Because there are 1,7 million shale oil and gas wells in the US. At least that's what the next site makes me think, and it has the worth "frac" in the name. If there are 1,7 boreholes that cover 5 square miles, that means that 8,5 million square miles are used . And the entire US is something like 6,5 million square miles. So probably something is'nt correct. https://www.fractracker.org/2015/08/1-7-million-wells/

[Alexander555]

The shale oil is not a direct competitor for the windturbines and solar panels, but the shale gas is. It's that big supply from the last years that brought prices down, or at least prevented them from going up. If that supply would get smaller, the price for electricity will go up. And that will turn these solar panels and windturbines into little goldmines. But it will not replaces most use of oil in the short term.

[Richard Rathbone]

  I was looking for a number in square miles or km. And they are talking about 5 to 10 square miles for one rig, but is that the fracing ? And is one rig the same as one borehole ? Because there are 1,7 million shale oil and gas wells in the US. At least that's what the next site makes me think, and it has the worth "frac" in the name. If there are 1,7 boreholes that cover 5 square miles, that means that 8,5 million square miles are used . And the entire US is something like 6,5 million square miles. So probably something is'nt correct. https://www.fractracker.org/2015/08/1-7-million-wells/

It might go as high as 20 per square mile in the most densely drilled areas. This article implies densities that high have been used but are sub-optimal.

https://www.slb.com/-/media/files/stimulation/industry-article/201711-jpt-frac-hits-tight-spacing-large-completion-volumes

 

[Alexander555]

They are talking about 400, 660 and 1300 feet between the wells. Lets take the 660 feet , or 200 meters. That's 200 meters wide and 3000 meters long. So one well covers 0,6 km2. And 1,7 million times 0,6 km2 is 1,02 million square km. Or a little more than 10 % of the US. Sounds already pretty substantial.

[gerontocrat]

This article from 2015 says the 2 million wells drilled since 1900 have taken up 30,000 km2 of land.
In 2015 they reckoned 50,000 new wells per year, so say 250,000 by 2020 adding say) 10% 3,000 km2 to that 30,000 km2.

Abandoned wells are often lost from the records, and are likely to leak.
Trump is trying to make this a lot worse.

https://www.sciencemag.org/news/2015/04/thirty-thousand-square-kilometers-land-lost-oil-and-gas-development

[Alexander555]

That's 33000km2 on the surface, and 1,1 million km2 below the surface.

[vox_mundi]

Danish Pension Fund Dumps Oil Majors On Climate Change Concerns
https://dw.com/en/danish-pension-fund-dumps-oil-majors-on-climate-change-concerns/a-50288283

A Danish pension fund has said it would sell its stake in major oil companies as their business models are incompatible with the goals set out in the Paris climate agreement.

The $20 billion fund says oil companies including ExxonMobil and Royal Dutch Shell are not doing enough to meet goals set out in the Paris Agreement. But the fund has ruled out a blanket ban on fossil fuel companies.

[Sigmetnow]

Schedule a reminder:  January 20, 2021.

Elizabeth Warren (@ewarren) 9/6/19, 4:26 PM

On my first day as president, I will sign an executive order that puts a total moratorium on all new fossil fuel leases for drilling offshore and on public lands. And I will ban fracking—everywhere.

https://twitter.com/ewarren/status/1170070887887986690

[blumenkraft]

You can either trust her, the one how adopted the climate plan for political reasons, or vote for the one who actually made the plan because it's an urgent issue in his mind. No bullshit with Bernie but honest convincement.

Yes, Warren hows what to say to placate the public, but is she willing actually deliver? There is no doubt in my mind she is just another Obama.

Bernie is the real deal.

[Sigmetnow]

You can either trust her, the one how adopted the climate plan for political reasons, or vote for the one who actually made the plan because it's an urgent issue in his mind. No bullshit with Bernie but honest convincement.

Yes, Warren hows what to say to placate the public, but is she willing actually deliver? There is no doubt in my mind she is just another Obama.

Bernie is the real deal.

I support Bernie, too.  But Warren has punchier tweets.   

[Sigmetnow]

BP Is Selling Off Its Alaska Oil Assets. The Buyer Has a History of Safety Violations

Hilcorp is a relatively new player in Alaska's oil and gas industry. The Houston-based company's business strategy has been to purchase older oil and gas fields and try to make them profitable—a track-record experts say it hopes to repeat with its new acquisitions.

Since entering Alaska in 2012, Hilcorp has rapidly expanded across the state, from the underwater gas fields in Cook Inlet to the oil fields along the North Slope.

As it has done so, it has amassed a long list of safety and environmental violations. Among the most egregious incidents: three workers were nearly killed in an accident in 2015; a methane leak from an underwater pipeline was not stopped for months in 2017; and in late 2018, an oilfield worker was killed at Milne Point on the North Slope.

The company's litany of violations led to unusually strong language from state regulators, who wrote in a letter to Hilcorp in 2015 saying that a disregard for regulatory compliance was "endemic to Hilcorp's approach to its Alaska operations," and that "Hilcorp's conduct is inexcusable." ...

https://insideclimatenews.org/news/28082019/bp-hilcorp-sale-alaska-oil-gas-pipeline-prudhoe-bay-safety-concerns

[rboyd]

BP Is Selling Off Its Alaska Oil Assets. The Buyer Has a History of Safety Violations

Capitalism at its best - company with deep pockets and some reputational risk sells off a risky property to a company with much less reputational risk and will probably just declare bankruptcy if properly challenged by the state. Everybody involved (who is rich) wins.

[Sciguy]

The economics of power generation are rapidly changing in favor of renewables and battery storage.  That means that many of the gas plants and pipelines being designed and built today will run at lower capacity factors and be retired before the end of their useful lives.

https://www.bloomberg.com/news/articles/2019-09-09/gas-plants-will-get-crushed-by-wind-solar-by-2035-study-says

Gas Plants Will Get Crushed by Wind, Solar by 2035, Study Says
By David R Baker
‎September‎ ‎9‎, ‎2019‎ ‎3‎:‎00‎ ‎AM‎ ‎PDT

Natural gas-fired power plants, which have crushed the economics of coal, are on the path to being undercut themselves by renewable power and big batteries, a study found.

By 2035, it will be more expensive to run 90% of gas plants being proposed in the U.S. than it will be to build new wind and solar farms equipped with storage systems, according to the report Monday from the Rocky Mountain Institute. It will happen so quickly that gas plants now on the drawing boards will become uneconomical before their owners finish paying for them, the study said.

As gas plants lose their edge in power markets, the economics of pipelines will suffer, too, RMI said in a separate study Monday. Even lines now in the planning stages could soon be out of the money, the report found.

“Our story for gas plants is, if you build it, they won’t run -- they won’t run at their expected capacity factors,” said Mark Dyson, who co-wrote both reports. “And that filters down to pipelines, too.”

[Sigmetnow]

As gas plants lose their edge in power markets, the economics of pipelines will suffer, too, RMI said in a separate study Monday. Even lines now in the planning stages could soon be out of the money, the report found.

“Our story for gas plants is, if you build it, they won’t run -- they won’t run at their expected capacity factors,” said Mark Dyson, who co-wrote both reports. “And that filters down to pipelines, too.”

Need to keep up the pipeline protests for just a few more years... until this becomes obvious to everyone.

[Tom_Mazanec]

Democrats step on shaky political ground with fracking bans
https://lasvegassun.com/news/2019/sep/11/democrats-step-on-shaky-political-ground-with-frac/

An all-out prohibition on the controversial natural gas extraction process — backed by Sens. Kamala Harris, Bernie Sanders and Elizabeth Warren — has been well received by the liberal and climate-focused voters closely watching the primary. But the proposal also threatens to antagonize unions and voters in areas that depend on oil and gas for jobs.

That opposition may be fiercest in some of the states Democrats care about most. Banning fracking could have a dramatic impact on the economy in Pennsylvania, a state Democrats consider a must-win in their pursuit of the White House. It could also jeopardize the party's hold on Colorado, a swing state trending its way, not to mention Democrats' dreams of winning statewide in Texas, the headquarters of the energy industry and home to 137,000 natural gas wells.

As Earth faces climate catastrophe, US set to open nearly 200 power plants
http://www.heatisonline.org/contentserver/objecthandlers/index.cfm?ID=8984&Method=Full

To avoid a climate change apocalypse, carbon dioxide emissions need to fall by as much as 45% from 2010 levels by 2030,  according to the U.N. Intergovernmental Panel on Climate Change.

Instead, utilities and energy companies are continuing to invest heavily in carbon-polluting natural gas. An exclusive analysis by USA TODAY finds that across the United States there are as many as 177 natural gas power plants currently planned, under construction or announced. There are close to 2,000 now in service.

All that natural gas is “a ticking time bomb for our planet,” says Michael Brune, president of the Sierra Club. “If we are to prevent runaway climate change, these new plants can’t be built."

[Juan C. García]

Key facts about the new EPA plan to reverse the Obama-era methane leaks rule

President Trump’s EPA is moving to roll back 2016 Obama administration methane leak regulations for key parts of the oil and gas industry, another example of what seems an across-the-board repudiation of Obama-era environmental and climate change initiatives. The new proposal, if made final, is certain to face legal challenges, with its ultimate fate perhaps being decided only by the administration in office in 2021.

EPA Administrator Andrew Wheeler in late August signed and later announced a proposed rule that would significantly weaken the methane leak reporting regulations. The proposed approach generally would allow transmission and storage sectors of the industry to self-regulate and self-report leaks of the highly-potent greenhouse gas.

https://www.yaleclimateconnections.org/2019/09/key-facts-about-the-new-epa-plan-to-reverse-the-obama-era-methane-leaks-rule/?utm_source=Weekly+News+from+Yale+Climate+Connections&utm_campaign=7bcca7c66c-Weekly_Digest_of_September_09_2019&utm_medium=email&utm_term=0_e007cd04ee-7bcca7c66c-59294245

The Wheeler's proposed rule:
https://www.epa.gov/sites/production/files/2019-08/documents/frn_oil_and_gas_review_2060-at90_nprm_20190828revised_d.pdf

[Sigmetnow]

Houston, Texas

Greenpeace protesters close Houston bridge ahead of Democratic debate

If a seven-hour televised forum on climate change is not enough to draw attention to the importance of the issue, perhaps activists hanging from a bridge will.

That seemed to be the thinking of nearly two dozen Greenpeace demonstrators Thursday as they forced the Houston Ship Channel to get partially shut down by suspending themselves from a side of the span to protest the use of fossil fuels.

The stunt, which prompted authorities to close at least two lanes of the Fred Hartman Bridge in Baytown, Texas, came hours ahead of the evening’s Democratic presidential candidates debate in nearby Houston.

At around 10 a.m. Central Time, Greenpeace USA tweeted a photo of the activists dangling alongside several colorful, fluttering banners with a caption that said:

"We challenge every candidate on stage tonight to promise to hold the fossil fuel industry accountable if they become president.''

That was followed by the hashtag #PeopleVsOil.

As we hang here, the Democratic candidates are getting ready for the #DemDebates just a few hours from now here in Houston.

We challenge every candidate on stage tonight to promise to hold the fossil fuel industry accountable if they become president. #PeopleVsOilpic.twitter.com/k0Qwl0zWxl

— Greenpeace USA (@greenpeaceusa) September 12, 2019

https://www.usatoday.com/story/news/nation/2019/09/12/greenpeace-protesters-close-houston-bridge-ahead-democratic-debate/2302462001/

After originally saying the protesters could remain for 24 hours, law enforcement later moved in and lowered them one by one into boats and arrested them:

Greenpeace protesters who closed Houston Ship Channel arrested and charged
https://www.chron.com/news/houston-texas/houston/article/Greenpeace-protesters-arrested-charged-14436988.php

[vox_mundi]

Major Saudi Arabia Oil Facilities Hit by Drone Strikes
https://www.bbc.com/news/amp/world-middle-east-49699429
https://www.theguardian.com/world/2019/sep/14/major-saudi-arabia-oil-facilities-hit-by-drone-strikes



Drones attacked the world’s largest oil processing facility in Saudi Arabia and a major oilfield operated by Saudi Aramco early on Saturday, the kingdom’s interior ministry said, sparking a huge fire at a processor vital to global energy supplies.

Video: https://mobile.twitter.com/GlobalNews77/status/1172773837785698304
https://mobile.twitter.com/AhmadAlgohbary/status/1172693484618342400

No one immediately claimed responsibility for the attacks on Abqaiq and the Khurais oil field, but Yemen’s Houthi rebels have previously launched drone assaults deep inside of the kingdom.

... The Abqaiq plant turns sour crude into sweet crude, producing up to 7 million barrels a day. Aramco says it is the world's largest "crude oil stabilisation plant".

Saudi security forces foiled an attempt by al-Qaeda to attack the Abqaiq facility with suicide bombers in 2006.

The Khurais oilfield came on line in 2009 and is the nation's second-largest after Ghawar. Khurais reportedly produces 1.5 million barrels a day with estimated recoverable oil reserves of more than 20 billion barrels.



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

https://www.bloomberg.com/amp/news/articles/2019-09-14/saudi-aramco-contain-fires-at-facilities-attacked-by-drones

Saudi Arabia’s oil production was disrupted after a fleet of 10 explosive drones targeted the heart the kingdom’s oil industry, starting fires at the world’s biggest oil processing plant at Abqaiq

State oil company Saudi Aramco said the fires were contained but a person with knowledge of the matter said the attack had hit production without giving details.

The strike is the biggest attack on Saudi Arabia’s oil infrastructure in more than a decade and highlights the vulnerability of the network of fields, pipeline and ports that supply 10 percent of the world’s crude oil. An outage at Abqaiq, where crude from several of the country’s largest oil fields is processed before being shipped to export terminals, would jolt global energy markets.

“Abqaiq is the heart of the system and they just had a heart attack,” said Roger Diwan, a veteran OPEC watcher at consultant IHS Markit. “We just don’t know the severity.”



A satellite picture from a NASA near real-time imaging system published early on Saturday showed a huge smoke plume extending more than 50 miles over Abqaiq,. Four additional plumes to the south-west appear close to the Ghawar oilfield, the world’s largest. While that fields wasn’t attacked, its crude is sent to Abqaiq and the smoke could indicate flaring. When a facility stops suddenly, excess oil and natural gas is safely burned in large flaring stacks.

[vox_mundi]

Saudi Arabia Reportedly Shuts Down Half Its Oil Production After Drone Attack
https://www.cnbc.com/amp/2019/09/14/saudi-arabia-is-shutting-down-half-of-its-oil-production-after-drone-attack-wsj-says.html

Saudi Arabia has shut down half of its oil production after drones attacked the world's largest oil processing facility in the kingdom, The Wall Street Journal reported.

The closure will impact almost five million barrels of crude production a day, about 5% of the world's daily oil production, the WSJ reported, citing sources familiar with the matter.

... there are concerns that escalating tensions in the region could pose a broader risk, potentially threatening the fifth of the world's oil supply that goes through the critical Strait of Hormuz.

.

... The Saudi Air Force has been pummelling targets in Yemen for years. Now the Houthis have a capable, if much more limited, ability to strike back. It shows that the era of armed drone operations being restricted to a handful of major nations is now over.

Drone technology - albeit of varying degrees of sophistication - is available to all; from the US to China, Israel and Iran... and from the Houthis to Hezbolllah.

[vox_mundi]

It's a 'target-rich' environment ...

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

Iran’s Threat to Saudi Critical Infrastructure: The Implications of U.S.-Iranian Escalation
https://www.csis.org/analysis/irans-threat-saudi-critical-infrastructure-implications-us-iranian-escalation

... This report argues that while Saudi Arabia has vulnerabilities in its oil, desalination, electricity, SCADA, shipping, and other systems, Iran has thus far adopted a calibrated approach. Tehran has conducted irregular attacks to infrastructure using offensive cyber weapons, naval ships to impede oil tankers, and partners like the Houthis in Yemen. The United States should focus on deterring further Iranian escalation, refraining from actions that threaten the regime’s survival, and providing a political “off ramp” for Iran to de-escalate.

 ...

Oil Infrastructure Risks

... From Gas Oil Separation Plants (GOSPs) the majority of Saudi oil is moved to stabilization plants, which offer a potentially more vulnerable target in the event of escalating hostilities. Saudi oil is mostly “sour,” which means that it contains significant amounts of hydrogen sulfide that must be removed prior to shipping.42 This process occurs at one of five stabilization facilities, located in Abqaiq, Juaymah, Jubail, Qatif, and Ras Tanura.43 Of these, Abqaiq is the most vulnerable. It is the world’s largest oil processing facility and crude oil stabilization plant, with a capacity of more than 7 million barrels per day (bpd).44 Though the Abqaiq facility is large, the stabilization process is concentrated in specific areas highlighted in Figure 3—including storage tanks and processing and compressor trains—which greatly increases the likelihood of a strike successfully disrupting or destroying its operations.


Figure 3: Abqaiq Processing and Stabilization Plant

Saudi Arabia’s export mechanisms are also potentially vulnerable, including its system of pipelines and its ports along the Persian Gulf and Red Sea. Its primary domestic pipeline is the 746-mile Petroline (also known as the East-West Pipeline), which connects processing facilities in eastern Saudi Arabia to export facilities along the Red Sea like Yanbu, thus allowing crude oil exports to bypass the Strait of Hormuz.48 The Petroline’s capacity is currently 5 million bpd, but expansion is currently underway to significantly increase that capacity over the next several years.49 To move oil to Red Sea ports, which are located at a higher elevation than eastern processing facilities, the Petroline operates using a series of pumping stations. An attack on any of these pumping stations could halt the flow of oil in that direction.

... Natural renewable water resources are scarce in Saudi Arabia, Kuwait, Qatar, Oman, and the United Arab Emirates. Limited rainfall and excessive consumption have depleted groundwater to unsustainable levels.53 As a result, water desalination is vital to acquiring potable water.54 Gulf Cooperation Council countries host 43 percent of the world’s total desalination plants (7,500 of 17,500) and account for about 70 percent of the global total production capacity for desalinated water.55 In Saudi Arabia, desalination accounts for over 70 percent of the potable water used in cities, and desalinated water has replaced groundwater as the primary source of drinking water throughout the country.56

The world’s largest desalination plant is Ras al-Khair, located on the Persian Gulf coast of Saudi Arabia just north of Jubail. The plant was commissioned in 2014 and has a daily production capacity of 1.025 million cubic meters of desalinated water.57 The majority of the water produced (some 800 [million] cubic meters per day) goes directly to Riyadh, while the other 200 [million] cubic meters is distributed to neighboring regions. Ras al-Khair is a hybrid plant, which uses multistage flashing and reverse osmosis technologies to remove salt from the water pumped in from the Gulf. The eight multistage flashing units heat the seawater   to produce steam, then condense the steam to form desalinated water, while the seventeen reverse osmosis units force seawater through semi-permeable membranes to remove the sodium and chloride.58 The multistage flashing units and other components of the desalination process are highlighted in Figure 6.



... In 2009, leaked U.S. State Department diplomatic cables suggested that a hostile act against Saudi Arabia’s desalination plant at Jubail would force Riyadh to evacuate “within a week,” as the plant at that time provided Riyadh with over 90 percent of its drinking water.59 Ras al-Khair is now Saudi Arabia’s (and the world’s) largest desalination plant and is also vulnerable to an Iranian attack. In one assessment, analysts noted that “every desalination plant built is a hostage to fortune; they are easily sabotaged; they can be attacked from the air or by shelling from off-shore; and their intake ports have to be kept clear, giving another simple way of preventing their operation.”

Cyberattacks also present a serious threat to Saudi desalination plants like Ras al-Khair. Beyond these types of attacks, Saudi Arabia and its neighbors need to worry about the water quality itself. An intentional (or even an unintentional) oil spillage near Ras al-Khair, for example, would render the water unusable for desalination, a concern which was realized during the Gulf War after Iraq deliberately opened the valves at a Kuwaiti oil terminal and created a massive oil slick in the Gulf.

[Tom_Mazanec]

The plant was commissioned in 2014 and has a daily production capacity of 1.025 million cubic meters of desalinated water.57 The majority of the water produced (some 800 cubic meters per day) goes directly to Riyadh, while the other 200 cubic meters is distributed to neighboring regions.

Is the daily output 1000 cubic meters or 1,000,000 cubic meters?

[vox_mundi]

Good catch. Error on original article. Maybe CSIS will hire you as proof reader.

[vox_mundi]

Pompeo: Iran Behind Attack on Saudi Oil Facilities Claimed by Houthi Rebels
https://www.theguardian.com/world/2019/sep/14/pompeo-iran-saudi-arabia-oil-yemen-houthi
https://www.google.com/amp/s/amp.cnn.com/cnn/2019/09/14/politics/pompeo-drone-strikes-saudi-oil/index.html

US secretary of state Mike Pompeo has accused Iran of attacking Saudi oil plants by tweet on Saturday, providing no evidence that Iran was behind the attacks. Donald Trump’s top diplomat also said Tehran was engaging in false diplomacy (... pot calling kettle black)

... Responding to Pompeo’s tweet on Saturday, the Democratic senator Chris Murphy, a member of the foreign relations committee, wrote:

... “This is such irresponsible simplification and it’s how we get into dumb wars of choice.

“The Saudis and Houthis are at war. The Saudis attack the Houthis and the Houthis attack back. Iran is backing the Houthis and has been a bad actor, but it’s just not as simple as Houthis = Iran.”

... The Republican senator Lindsey Graham, a leading Trump ally, disagreed.

“It is now time for the US to put on the table an attack on Iranian oil refineries if they continue their provocations or increase nuclear enrichment (... after Trump ripped up the nuclear agreement that Iran was abiding by),” the South Carolina senator said on Twitter.

https://mobile.twitter.com/LindseyGrahamSC/status/1172913311458955265

... Pompeo also called for other countries to denounce Iran and promised American efforts to help support the energy market. (...after Trump shat on our allies)

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

Higher oil prices bail out frakers ... BoJo  in lockstep ... War by Christmas. ... win-win (/sarc)

[Tom_Mazanec]

A Recipe For $100 Oil
https://www.forbes.com/sites/rrapier/2019/09/14/a-recipe-for-100-oil/#486ce5284dbb

Over the years, I have often been asked about scenarios that could rapidly drive oil prices higher. My response is always that the worst case scenario is an incident that takes a large amount of oil production offline in Saudi Arabia.

[vox_mundi]

Saudi Arabia Drone Attack Is a Strike at Oil’s Future
https://www.bloomberg.com/amp/opinion/articles/2019-09-14/saudi-arabia-drone-attack-is-a-strike-at-oil-s-future

... this escalation could be interpreted as Iran’s response to Washington’s “maximum pressure” campaign – if Tehran can’t export, then neither should Saudi, may be the zero-sum thinking at play here.

What is clear is that the oil market has entered a new and dangerous period. Crown Prince Mohammed bin Salman, who spearheaded Saudi Arabia’s intervention in Yemen, will almost certainly have to respond, especially if the attack really has knocked out a lot of oil supply for an extended period. In that case, he is also watching his IPO plans for Saudi Arabian Oil Co., or Saudi Aramco, literally go up in smoke.

... In the short-term, a risk premium combined with absent Saudi barrels would present a windfall opportunity for other producers (including struggling U.S. shale operators).

... while polling suggests the climate change issue resonates with an increasing proportion of Americans, history suggests it is pretty tough to get them to focus on energy issues unless, as in 2008, prices are high. That could end up being the case in 2020, if it plays out against a backdrop of Middle Eastern conflict, high pump prices and consequent damage to economic growth.

... we have just been reminded of the fragility inherent in an energy system built on centralized supply and extended supply chains. For proponents of energy (and climate) security via electrification and energy efficiency, few things would bolster their arguments better than the spectacle of an oil market thrown into chaos by some drones taking shots at a single facility most people have never heard of.

[vox_mundi]

Saudi Officials Say Oil Production to Return to Normal Levels by Monday
https://www.wsj.com/amp/articles/saudi-officials-say-oil-production-to-return-to-normal-levels-by-monday-11568491979

Officials in Saudi Arabia indicated it would return to normal levels of oil production by Monday, as they sought to reassure world markets after a drone attack Saturday on one of the kingdom’s most productive oil facilities prompted it to cut its crude production in half.

... Markets haven’t seen a shutdown on the scale of Saudi’s five million barrels since Iraq invaded Kuwait in 1990. That conflict, which led to an international military intervention, saw the loss of four million barrels a day.

... the biggest effects would be felt in Asia. It is estimated that China, Japan, India, Korea and Taiwan account for roughly four million barrels a day of consumption of crude from Saudi Arabia.

[Alexander555]

It's burning in minimum 5 locations, 10 drones were used. This pic is from nasa worldview, yesterday.

[blumenkraft]

Investors with $11 trillion in assets pledge shift from fossil fuels, report says

CAPE TOWN – Institutional investors holding assets worth $11 trillion have now pledged to divest from fossil fuel assets, a significant jump in the number committing to clean energy, a report said on Monday.

A growing number of investment and wealth funds have been looking to pull away from fossil fuels and shift to renewables, especially since the 2015 Paris Agreement on climate change

...

The $11 trillion figure represents around 16 percent of the total global equity markets in 2018, the organizers said, citing World Bank figures.

Link >> https://www.japantimes.co.jp/news/2019/09/10/business/investors-11-trillion-assets-pledge-shift-fossil-fuels-report/

[vox_mundi]

The Saudis misspoke ...

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

Saudi Arabia Aims to Restore a Third of Lost Oil Output Monday
https://www.wsj.com/amp/articles/saudi-arabia-aims-to-restore-a-third-of-lost-oil-output-by-monday-11568568391

Saudi Arabia’s national oil company expects to restore roughly a third of crude output disrupted in a weekend attack by day’s end Monday, Saudi officials said, but the strikes will likely leave the country short of full production capacity for weeks.

The damage from Saturday’s attacks risks sending shock waves through energy markets and damaging the kingdom’s long held position as the world’s most predictable and prodigious supplier of crude. Officials had earlier expressed hope that Saudi Arabia could resume full production...

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

Satellite images examined by AP appear to show damage at heart of attacked Saudi oil processing facility

Aramco, the national oil company, has determined that its facilities were hit by missiles, people familiar with the matter told The Wall Street Journal. A U.S. government assessment determined that up to 15 structures at Abqaiq were damaged.

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

Saudi's Full Oil Supply Could Take Weeks to Resume
https://mobile.reuters.com/article/amp/idUSKBN1W006C

Saudi Arabia's return to its full oil supply capacity after Saturday's attacks on Aramco oil plants could take "weeks not days", a source close to the matter told Reuters on Sunday.

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

Saudi Attack Likely Originated in Iran or Iraq, Senior Administration Official Says ... (and we know how honest they are)
https://amp.cnn.com/cnn/2019/09/15/politics/iran-satellite-images-saudi-arabia-oil-attack/index.html

The official pointed to the angle at which Saudi oil facilities were attacked, the numbers of points of impact and other information to argue that it is unlikely the attacks were carried out by Yemen. Instead, the official suggested the attack most likely originated in Iran or Iraq.

"It is very difficult to see how these things could have come from anywhere but Iran or Iraq," the senior administration official said.

The official said 19 Saudi targets were struck in Saturday's attack and argued that such an attack could not be carried out with 10 drones, which the Houthis claimed to have used.

"You can't hit 19 targets with 10 drones like that," the official said.

The official, drawing on commercial satellite imagery shared with CNN, also noted that "all the points of impact on Saudi facilities were on the northwest side of them, which is somewhat difficult to do from Yemen." The official could not say whether it's possible drones from Yemen could have angled around to attack northwest facilities.

... The official declined to say what retaliatory options the administration was considering and said that "the President wants all options on the table."

... senior counselor Kellyanne Conway said on Sunday that it was "important" to have a president like Donald Trump because he and his administration officials don't "study" or form "commissions" in order to inform decisions before they're made.

https://www.newsweek.com/kellyanne-conway-trump-doesnt-study-before-making-decisions-1459322?amp=1

[vox_mundi]

And so it begins ...

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

Trump Says US 'Locked and Loaded' after Saudi Arabia Attack, as Oil Prices Soar
https://www.theguardian.com/world/2019/sep/16/trump-says-us-locked-and-loaded-after-saudi-arabia-oil-attack-as-crude-prices-soar-iran-aramco



... Trump tweeted: “[We] are locked and loaded depending on verification, but are waiting to hear from the Kingdom [of Saudi Arabia] as to who they believe was the cause of this attack and under what terms we would proceed!”, saying that he had “reason to believe that we know the culprit”

It is the first time the president has hinted at a potential American military response to the attack.

Trump also announced that he had authorised the release of oil from the US Strategic Petroleum Reserve “if needed” and had instructed agencies to expedite approvals of oil pipeline projects so as to meet global supply of oil, tweeting: “PLENTY OF OIL!”

Lindsey Graham, one of Trump’s foreign policy supporters in the Senate, said talks with Iran are now off the agenda saying: “The Iranian regime is not interested in peace – they’re pursuing nuclear weapons and regional dominance.” (... after TRump ripped up the agreement)

... A senior commander from Iran’s Revolutionary Guards warned that the Islamic republic was ready for “full-fledged” war.

“Everybody should know that all American bases and their aircraft carriers in a distance of up to 2,000km around Iran are within the range of our missiles,” the head of the Revolutionary Guards Corps’ aerospace force, Amirali Hajizadeh, was quoted as saying



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

https://mobile.twitter.com/stevebruskCNN/status/1173350862850314240

Looks like Pompeo was there too.  So...POTUS, VPOTUS, SECDEF, and SECSTATE......probably not a social call. And John Bolton's replacement is... Mohammed Bonesaw Salman!

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

OPEC has no spare capacity

[Alexander555]

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