Oil and Gas Issues

[kassy]

The Plastics Pipeline: A Surge of New Production Is on the Way
A world awash in plastic will soon see even more, as a host of new petrochemical plants — their ethane feedstock supplied by the fracking boom — come online. Major oil companies, facing the prospect of reduced demand for their fuels, are ramping up their plastics output.

...

Companies like ExxonMobil, Shell, and Saudi Aramco are ramping up output of plastic — which is made from oil and gas, and their byproducts — to hedge against the possibility that a serious global response to climate change might reduce demand for their fuels, analysts say. Petrochemicals, the category that includes plastic, now account for 14 percent of oil use, and are expected to drive half of oil demand growth between now and 2050

...

Global emissions linked to plastic — now just under 900 million tons of carbon dioxide equivalent annually — could by 2030 reach 1.3 billion tons, as much as almost 300 coal-fired power plants, the Center for International Environmental Law found. If output grows as planned, plastic would use up between 10 and 13 percent of the carbon emissions allowable if warming is to stay below 1.5 degrees Celsius, the center reported.

Those emissions come from nearly every stage of plastic’s life. First, there is the energy-intensive nature of oil and gas extraction. Then, ethane cracking requires enormous amounts of power, with a concomitantly large greenhouse gas footprint. The Shell plant has a permit allowing it to emit as much carbon dioxide annually as 480,000 cars.

An estimated 12 percent of all plastic is incinerated, releasing more greenhouse gases, as well as dangerous toxins, including dioxins and heavy metals. Industry is promoting an expansion of incineration in waste-to-electricity plants, which it describes as a source of renewable energy. What’s more, new research suggests plastic in the environment releases greenhouse gases as it degrades — a potentially vast and uncontrollable source of emissions.

https://e360.yale.edu/features/the-plastics-pipeline-a-surge-of-new-production-is-on-the-way

[Sciguy]

The Permian is the only place in the US where the shale growth is continuing.

https://oilprice.com/Energy/Energy-General/Texas-Is-Already-Feeling-The-Shale-Slowdown.html

Texas Is Already Feeling The Shale Slowdown
By Nick Cunningham - Dec 18, 2019

There are more signs of a drilling slowdown in U.S. shale.

The EIA said that the U.S. will add 30,000 barrels per day (bpd) between December and January, down by half or two-thirds from routine monthly increases last year. Within that number, the Permian is still expected to grow by a sizable 48,000 bpd in January, but that is offset by outright declines in the Anadarko basin (-15,000 bpd) and the Eagle Ford (-9,000 bpd).

As the numbers suggest, the Permian is really the only place where U.S. shale is still growing, but there are questions over how long that can continue. The rig count in the Permian is down to 400, off by almost 100 rigs from a year ago. Spending cuts are taking hold and the pace of drilling has slowed. There tends to be a lag of several months between shifts in rig counts and the effects on production.

More importantly, there are several headwinds facing the industry that are beyond mere cyclical swings. First, the industry has lost substantial access to capital. The glory days of debt-fueled drilling are long gone.

The article also explains that some of the metrics related to well completions and well productivity improvements appear to have been fudged to make them seem more impressive than they are.  It goes on to explain that the parent-child well interference is becoming more of a problem.

Then the story returns to the larger problem of financing.

It will take time before the significance of this problem is fully known, but the one thing that is for sure is that there is a slowdown in activity. According to Rystad Energy, shale investment is set to fall by 6 percent in 2019 and by another 12 percent in 2020.

[gerontocrat]

What happens when regulation of a polluting industry becomes a sick joke?

Say hello to The Texas Railroad Commission, not so much a regulator, more the oil & gas industry's bestest friend.

https://oilprice.com/Energy/Energy-General/Emissions-Soar-As-Permian-Flaring-Frenzy-Breaks-New-Records.html
Emissions Soar As Permian Flaring Frenzy Breaks New Records

The flaring and venting of natural gas in the U.S. continues to soar, reaching new record highs in recent months.

The volume of gas that was burned or simply released into the atmosphere by oil and gas drillers reached 1.28 billion cubic feet per day (Bcf/d) in 2018, according to the EIA, up from 0.772 Bcf/d in 2017.

The practice is a disaster on many levels. It is wasteful, it worsens air quality and it exacerbates climate change. Venting gas is much worse than burning it since it releases methane into the atmosphere, a potent greenhouse gas.

The New York Times documented several “super emitters” in the Permian, (see images attached) using infrared cameras to visually capture the epidemic. The NYT even recorded an oil worker walking into an invisible plume of leaking methane. 

But shale drillers continue the practice and regulators have shown little interest in regulating them. Even though venting is off limits in North Dakota and restricted in Texas, flaring has largely gone unchecked while methane leaks at virtually every stage of the extraction process.

In the third quarter of 2019, the Permian basin alone vented and flared 752 million cubic feet of natural gas per day, up sharply from 661 mcf/d in the first quarter, according to Rystad Energy. “This represents a new all-time high. Oil production in the Permian Basin is growing at an accelerated pace again, and we observe high, sustained levels of flaring and venting of associated gas in the basin,” Artem Abramov, head of shale research at Rystad, said in November.

Some oil companies trumpet their reduced rate of flaring, but others have flared at higher rates. “A significant number of operators have exhibited a clear downwards shift in flaring intensity in 2019. Yet there are other examples of a recent increase in flaring intensity, which are primarily represented by some operators active in the Eastern Midland Basin,” Abramov said.

“It’s a black eye for the Permian basin,” Pioneer Natural Resources Chief Executive Officer Scott Sheffield said earlier this year. “The state, the pipeline companies and the producers -- we all need to come together to figure out a way to stop the flaring.”

One thing that could be done would be for the Texas Railroad Commission, which regulates the industry in the state, to deny permits to companies that allow them to flare. But the Railroad Commission has not denied a single request from an oil producer for a flaring permit in years, despite the spike in flaring. The number of permits granted has shot up from around 500 in 2010 to 5,500 in 2018, according to the EIA. There is essentially no cop on the beat.

Earthworks, an environmental group, has extensively documented methane leaks from oil and gas operations, and has filed over 103 complaints with the Texas Commission on Environmental Quality. “Our field research and complaints of oil and gas operations are doing the job that Texas regulators ought to be doing to protect the public,” Earthworks’ Senior Policy Counsel Aaron Mintzes said in a statement.

The situation reached absurd levels a few months ago when the Texas Railroad Commission approved a company’s request to flare even though the company had pipeline access readily available. One of the main reasons that flaring has reached astronomical levels is because pipeline capacity has not kept up with the surge in gas production. Because the industry is really chasing oil, all of the gas is surplus. And because there is nowhere to put it, they flare it.

That’s the argument anyways. But Williams Cos., a pipeline giant, is suing the Texas Railroad Commission over the agency’s recent decision to grant a flaring permit to Exco Operating Co. Exco has wells in the Eagle Ford that are already connected to a pipeline, but Exco balked at paying the fees. Instead, it just wanted to burn the gas. It’s worth reemphasizing this – the company doesn’t actually need to flare the gas for any technical reason, it just doesn’t want to pay to ship it.
Related: Iran: We Won’t Agree To Any Production Cuts In The Future

The Railroad Commission granted the permit. Now, Williams Cos. is suing the commission for failing to uphold the state’s own regulations on flaring.

Coming under fire, the Railroad Commission has sought to defend itself. “That’s a very unique case that we almost never see,” Ryan Sitton, a Republican commissioner at the agency, said on Bloomberg Television Thursday, referring to the Exco case. “All we did was grant a permit for seven months to allow the producer to continue to flare while we try to work this out.” Bloomberg notes that the Railroad Commission has issued around 7,000 permits this year, allowing companies to vent or flare.

“At the end of the day, you’ve got 27 million Texans, and what they want is affordable, reliable energy,” Sitton said. “And they want our energy industry to do well.”

Meanwhile, natural gas is often likened to a “bridge fuel,” but it is now the main driver of higher greenhouse gas emissions globally. “Gas is a major concern,” Bill Hare, chief executive officer of Climate Analytics, told Bloomberg. “Governments are acting as if this fossil fuel is somehow clean. Yet gas was responsible for half the increase in CO2 emissions from fossil fuel consumption in 2017-18.”

By Nick Cunningham for Oilprice.com

Images from https://www.nytimes.com/interactive/2019/12/12/climate/texas-methane-super-emitters.html?smid=nytcore-ios-share&utm_source=1500+CWP+List+Daily+Clips+and+Updates&utm_campaign=509ecdfd8d-EMAIL_CAMPAIGN_2019_12_12_09_06&utm_medium=email&utm_term=0_4369a4e737-509ecdfd8d-84301401

[TerryM]

Capitalism apparently is the villain when it's cheaper to vent CO2 than to capture it for sale. Strict policing becomes necessary once financial incentives turn negative, and strict policing may be impossible in the oil fields.


Could a bonus for burning gas drive prices up until it again became profitable to capture and ship gas? It's a convoluted strategy, but these are strange times that may require convoluted strategies.


Terry

[gerontocrat]

Capitalism apparently is the villain when it's cheaper to vent CO2 than to capture it for sale. Strict policing becomes necessary once financial incentives turn negative, and strict policing may be impossible in the oil fields.

Terry

"Eisenhower's farewell address to the nation"  January 17, 1961.
Extracts .....

As we peer into society's future, we – you and I, and our government – must avoid the impulse to live only for today, plundering for our own ease and convenience the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

[/size]

Since then that complex has spread into finance, technology - everywhere, and one symptom is the desire of those who presume to govern us for a totally unregulated capitalism, and sometimes (as now) the power to make it happen.

So no surprise the Texas Railroad Commission is just a fig-leaf to provide cover to these scum.

Capitalism is a villain, and behaves as a villain when it owns the whole joint.

[sidd]

I always remind myself that in a draft of that speech the phrase was "military-industrial-congressional comples"

sidd

[kassy]

FWIW

Nord Stream 2: Trump approves sanctions on Russia gas pipeline

President Donald Trump has signed a law that will impose sanctions on any firm that helps Russia's state-owned gas company, Gazprom, finish a pipeline into the European Union.

The sanctions target firms building Nord Stream 2, an undersea pipeline that will allow Russia to increase gas exports to Germany.

The US considers the project a security risk to Europe.

...

Congress voted through the measures as part of a defence bill last week and the legislation, which described the pipeline as a "tool of coercion", was signed off by Mr Trump on Friday

The Trump administration fears the pipeline will tighten Russia's grip over Europe's energy supply and reduce its own share of the lucrative European market for American liquefied natural gas.

https://www.bbc.com/news/world-europe-50875935

[gerontocrat]

Doesn't it feel so good to us Europeans to know the USA is looking after us so bigly.

[TerryM]

It appears as if Europe also views Nord Stream 2 as essential to Europe's energy security - just not in the same manner as the Americans see it.
Terry

[rboyd]

Energy security is in the eye of the beholder ...

[sidd]

Ukraine and Russia make nice: withdraw lawsuits, sign gas deal going thru 2024

https://www.gulf-times.com/story/651243/Gazprom-and-Ukraine-agree-on-gas-transit-settle-le

https://finance.yahoo.com/news/gazprom-ukraine-agree-transit-volumes-111318445.html

sidd

[NeilT]

Doesn't it feel so good to us Europeans to know the USA is looking after us so bigly.

Different viewpoints.

Russia has a track record of bullying trade dependents and has a totally different view of what "fair" means.  To be fair, the US stands accused of this too.

However Russian courts have regularly colluded with the state to enable state sponsored "theft" of foreign investment into Russian developments.

If you take the emotion out of it, it comes down to logic.  NATO exists because of the historic threat of Eastern aggression. The US and the UK are the two largest forces in NATO and guarantee the security of the whole in the largest part.

So when the smallest part of the NATO "force", starts to make themselves trade dependent on a potential aggressor, from whom NATO shelters them, expect the shelter to be a bit miffed.

On the other hand, you could argue that the US just wants to sell shale fracked gas to the EU, but there is no real evidence that a pipeline is being built to do that...

[gerontocrat]

At the height of the cold war Europe imported gas (or was it oil?) from the Soviet Union. Remember the Bond movie when a Russian is sent to the West through the pipeline?

Trade is trade - my first decent camera was a Zenit from Russia. And Polish jam was great. (It still is, usually far higher fruit content).

Trump at the behest of the oil & gas lobby are trying to lock Europe and others to importing LNG from the USA if there is a need to import the stuff. Crude demands that Europe at least I hope will reject.

The best answer, of course, is to not need LNG.

[NeilT]

The best answer, of course, is to not need LNG.

No argument with that.

[Sciguy]

Coal mining and new coal power plants are already in trouble as more and more banks refuse to finance them.  It looks like oil is next.

https://oilprice.com/Energy/Energy-General/Is-This-The-Beginning-Of-The-End-For-Fossil-Fuels.html

Is This The Beginning Of The End For Fossil Fuels?
By Anes Alic - Dec 26, 2019

The eventual death of oil and thermal coal won’t come from environmentalists, or even directly from renewable energy--it will come when big banks decide to stop financing it, rendering it ‘unbankable’.

That’s exactly what Goldman Sachs has just done, in a first for a major finance institution.

As of last week, Goldman Sachs is the first big U.S. bank to rule out financing new oil exploration or drilling in the Arctic, as well as new thermal coal mines anywhere in the world.

As Jason Disterhoft, a senior campaigner at Rainforest Action Network, has noted, the so-called Big Six banks tend to move in lockstep, and the other five will no doubt feel some pressure to up the ante by forgoing financing fossil fuel projects.

Other major overseas banks have already ruled out financing for Arctic drilling.

Goldman Sachs, however, is the first major U.S. firm to do so.

The move by the bank has raised hopes (and fears) that other major financial institutions in the US will follow its lead. 

More than a dozen of the world's largest banks including UniCredit, Royal Bank of Scotland and Barclays have also pledged to stop drilling in the Arctic.

The Arctic is not the only region in the world where Wall Street is feeling the heat.

Earlier in the year, several green groups from the U.S., the UK and the Netherlands asked the world’s largest banks not to underwrite Saudi Aramco’s IPO.

The value of clean energy companies is soaring across the globe, while stocks of fossil fuel companies continue being pummeled.

There’s an undeniable shift in global financial markets leading some to believe the world is at a watershed moment. The Institute for Energy Economics and Financial Analysis (IEEFA) has said:

"The world could well look back on 2019 as the tipping point..." and "[The moment] when global capital markets accepted the technology-driven inevitability [of a] crossover from polluting thermal coal and increased uptake of sustainable clean renewable energy."

[Sciguy]

It's been known that fracked oil wells have a very steep decline rate.  However, oil companies predicted that fracked wells would continue to produce for years at lower rates once the decline rate stabilized, and investers merrily bought into that assumption.  Now it appears that fracked oil wells aren't producing as much oil after their steep initial decline as the oil companies predicted.  Given that investors have been backing away from fracking operations over the past year, this isn't going to help draw more investment for the oil companies.

https://oilprice.com/Energy/Energy-General/Is-The-Shale-Boom-Running-On-Fumes.html

Is The Shale Boom Running On Fumes?
By Nick Cunningham - Dec 30, 2019

Shale drilling does not produce as much oil and gas as the industry promised, raising questions about the productivity, profitability and, ultimately, the longevity of the fracking boom.

The Wall Street Journal published a damning investigation into the productivity of thousands of shale wells, finding that as time has passed, oil and gas production from shale wells has proved to be more disappointing than previously thought. The report adds more evidence to the conclusion that the WSJ came to nearly a year ago, which raised serious questions about problems endemic to shale drilling.

After an initial burst of production, shale wells decline rapidly, a fact that has been widely known since the fracking boom began more than a decade ago. However, companies promised that these wells would stay online for years, perhaps even decades, even though they would produce at a small fraction of their initial peak.

But as time has passed, wells drilled years ago are now producing a lot less than previously thought. The WSJ collected data on the 29 largest shale producers. A year ago, the WSJ found that wells produced from those companies were on track to extract 10 percent less oil and gas over their lifespans than the companies promised. Now, with new data, the WSJ finds that those wells could produce 15 percent less than initially advertised.

That adds up to a gap of around 1.4 billion barrels of oil and gas over 30 years, the WSJ says, or around $60 billion at current prices. Put another way, the 29 largest shale companies are set to produce $60 billion less value than they initially told investors.

 

In the end, the overarching problem is that shale drilling is plagued by steep decline rates and the inability to generate positive cash flow, at least at its current size. The latest WSJ report finds that the decline rate may be steeper than previously thought.

The upshot is that the shale boom could be on borrowed time. As Hughes wrote in his November report for the Post Carbon Institute, while “the ‘shale revolution’ has provided a reprieve from what just 15 years ago was thought to be a terminal decline in oil and gas production in the U.S., this reprieve is temporary, and the U.S. would be well advised to plan for much-reduced shale oil and gas production in the long term.”

[sidd]

Externalized costs arising from regulatory capture:

"Fourteen years later, not one assessment of the damage to natural resources after the two 2005 hurricanes has been completed. None of the 140 parties thought to be responsible for the spills has been fined or cited for environmental violations. And no restoration plans have been developed for the impacted ecosystems, fish, birds or water quality"

"some of the very same companies responsible for spills have gotten reimbursements totaling $19 million from a federal trust fund that allows private parties to submit claims for expenses incurred cleaning up their spilled oil"

"Since the 2005 spills, little action has been taken to help prevent something similar from recurring"

"Louisiana out-spills every other state."

"If the spills never gets assessed, a public notice is never filed."

"No such notices have been filed for the 2005 spills."

“It’s the laws of physics. Oil is lighter than water, so those tanks are gonna be lifted off their foundations. It’s an act of God. So, they’re not responsible.”

“We don’t normally penalize [companies] for act of God events,”

https://www.propublica.org/article/how-oil-companies-avoided-environmental-accountability-after-10.8-million-gallons-spilled

sidd

[TerryM]

I have no respect for your gods, nor for the actions taken by your gods.


Ramen!
Terry

[kassy]

Climate change hope for hydrogen fuel

A tiny spark in the UK’s hydrogen revolution has been lit – at a university campus near Stoke-on-Trent.

Hydrogen fuel is a relatively green alternative to alternatives that produce greenhouse gases.

The natural gas supply at Keele University is being blended with 20% hydrogen in a trial that's of national significance.

...

As a fuel, hydrogen functions in much the same way as natural gas. So staff in the university canteen say cooking on the 20% hydrogen blend has made no difference to their cooking regime.

The project – known as HyDeploy - is the UK’s first live trial of hydrogen in a modern gas network. Keele was chosen because it has a private gas system.

Its hydrogen is produced in an electrolyser - a device that splits water (H2O) into its constituents: hydrogen and oxygen. The machine is located in a glossy green shipping container in the corner of the university’s sports field.

The gas distribution firm Cadent, which is leading the project, says that if a 20% blend were to be rolled out across Britain, it would reduce emissions of CO2 by six million tonnes - equivalent to taking 2.5 million cars off the road.

The hydrogen could be generated pollution-free by using surplus wind power at night to split water molecules using electrolysis.

https://www.bbc.com/news/science-environment-50873047

[sidd]

Oil prices jump: USA asassinates Soleimani

https://www.aljazeera.com/ajimpact/oil-prices-surge-attack-kills-top-iran-military-leader-200103021441832.html

sidd

[Tor Bejnar]

Some of this article says what Sidd posted ...
As tension in Middle East is rises, so too does price of oil
AP - MATT O'BRIEN - 5 minutes ago

PROVIDENCE, Rhode Island (AP) — The global benchmark for crude oil rose above $70 a barrel Monday for the first time in over three months amid rising tensions between Iran and the United States.

The Brent contract for oil touched a high of $70.74 a barrel, the highest since mid-September after an attack on Saudi crude processing facilities. Stocks moved in the opposite direction with Iran vowing “harsh retaliation” for an American drone strike that killed Iranian Gen. Qassem Soleimani.

“While it is unclear how and when Iran might retaliate, we expect global oil prices to remain elevated in the short-term ...

Some of it, though, may not be accurate any more:

At the same time, some experts say the effect of a Middle Eastern geopolitical crisis on oil prices may not be as great as it once was. The U.S. energy industry, for instance, can ramp up shale oil production in places such as Texas.

[Tom_Mazanec]

Is the oil industry able to support a world that consumes 105 million barrels of oil per day in 2025?
https://ogst.ifpenergiesnouvelles.fr/articles/ogst/full_html/2019/01/ogst190315/ogst190315.html

Received: 10 October 2019
Accepted: 8 November 2019

Abstract

This paper investigates the significant risk of a supply crunch in the oil market by 2025 and beyond, given current pace of investment and growth of world demand. We focus particularly on today’s upstream sector and the challenges it faces in meeting the ever-increasing demand for oil. We then study different production scenarios for U.S. unconventional oil potential and draw conclusions on its potential capability to offset the weakening context of conventional oil supply (declining production, declining discoveries, insufficient investment, persistent geopolitical risks and environmental pressures). We conclude that with growing oil demand, the probability of an oil crunch by 2025 is far from null.

[Sciguy]

Peak oil demand is projected to occur within a decade.

https://insideevs.com/features/387794/peak-oil-demand/

Are We In Peak Oil Demand?

OPEC says demand for oil will continue to rise into the early 2040's, then peak and fall off towards the end of that decade. Most oil companies agree with those projections, while BP (British Petroleum) is probably the least bullish of the big oils seeing the mid-2030's as the point of POD, with consumption hitting over 125 million bpd. Currently, we are around 100 MM bpd consumption. Of that consumption, 55% is burned in transportation, 30% of that is used in personal ground transportation, and 25% is in all other forms of transport: aircraft, ships, trains.

The IEA (International Energy Agency) predicts POD in the mid-2030's, but that's just one of its scenarios. It supplies a number of different views depending on conditions, such as the speed with which EVs are adopted, the impact of PHEVs, and ride-sharing services. However, even in its most aggressive scenario, peak ICE does not hit until the mid-2020s, while many others forecast peak ICE will have already occurred. The IEA also predicts that only 30 million EVs will be on the road in 2040.
 
GS (Goldman Sachs) sees POD in 2024. Its forecast is for demand to grow at 1.2 MMbpd for 2019 and 2020, respectively, 50,000 barrels per day lower than the earlier forecast.  This is the general consensus of most analysts, that POD will occur mid-decade.

The most aggressive view I could find regarding the onset of POD was from ARK Invest. Its view is that we are already in POD or very close to it. ARK believes that demand for oil will slow and stall at around 100 MMbpd, then plateau and begin to fall in just a few years. Moreover, ARK asserts that, in 2022, oil production will decline and never recover, with close to 30 million EVs on the road in 2024, 15 years sooner than big oil predicts.

If ARK's view is correct, then we should already be seeing signs of falling production and/or lower prices for products produced from oil.

[Sciguy]

Oil companies have begun to write down billions of projected reserves and future revenues.

https://www.vice.com/en_in/article/m7qa9n/the-hidden-signs-that-the-oil-industry-is-heading-for-a-reckoning

The Hidden Signs That the Oil Industry Is Heading for a Reckoning
Despite the millions Big Oil is spending to slow and delay action on climate change, the world is shifting decisively away from fossil fuels.
by Geoff Dembicki
05 January 2020

A major U.S. oil and gas producer whose business model is premised on denying the urgency of global temperature rise was forced last month to acknowledge reality. In a move that reverberated across the financial world, Chevron, a funder of campaigns disputing the need for aggressive climate change policies, announced that up to $11 billion worth of its fossil fuel projects are effectively worthless.

But there's more to the story than that. Despite the millions of dollars oil and gas companies are spending to slow and delay action on climate change, the world is shifting decisively away from fossil fuels, and the painful financial impacts are impossible for the planet's worst polluters to deny. In other words, Big Oil could be in much more trouble than it wants to admit.

In early October, BP wrote down up to $3 billion of its fossil fuel assets. That was followed a week later by a gigantic $12.4 billion write-down linked to shale oil drilling from the oil field services giant Schlumberger. And in December, the Spanish oil and gas giant Repsol cut $5 billion worth of climate-damaging projects. Though each of these was due to unique company circumstances, observers also see the write-downs as previews of a much larger financial reckoning.

We are potentially only years away from the oil and gas industry entering a punishing financial spiral that wreaks hundreds of billions of dollars in damages. That was the warning of a recent report from the United Nations-backed group Principles for Responsible Investment (PRI), which predicted by the year 2025 that 10 of the world's largest oil and gas companies could collectively lose a third of their value.

"When oil demand goes down in our scenario, oil prices will fall with it," said Thomas Kansy, principal of the group Vivid Economics, which did the modeling for the PRI report. "The market for their product is disappearing."

[Buddy]

Oil and gas companies are going to suffer just as milk companies are suffering now.

Borden and Dean Foods are two milk producers that have entered bankruptcy in the last month because of declining PER CAPITA milk consumption in the US.  And while TOTAL consumption has been about flat for several decades because of increased population, they still couldn’t make it work because of margins getting squeezed.

THAT is what is going to happen to oil .... only worse.  Because consumption via land transport will slowly go to zero .... not just decrease.  And markets are continuing to adjust.

Any oil “rallies” we have in the coming 5 years or so will be “dead cat bounces” and opportunities for some investors to finally sell their long shares .... or “go short” the oil market.

[gerontocrat]

Meanwhile.....

https://www.theguardian.com/business/2020/jan/03/royal-dutch-shell-may-fail-to-reach-green-energy-targets
Royal Dutch Shell may fail to reach green energy targets
With a year to go, oil firm’s $2bn investment is well below its own guidance of $4bn-$6bn

Shell is considered a climate leader within the oil industry despite spending a fraction of its total budget on new energies, which include biofuels, hydrogen and electricity investments.

Data from Rystad Energy, a Norwegian consultancy, shows that Europe’s five largest oil companies – Shell, BP, Total, Eni and Equinor – together spent a total of $5.5bn on renewable energy projects to date, compared with a combined total budget of almost $90bn last year alone.

Stephen Kretzmann, the executive director of Oil Change International, said executives “trumpet their relatively tiny investments in renewables” but continue to “pour more fuel on the fire of global warming every day”.

He said: “It used to be the case that some people believed that an oil company that invested even only a small portion of their resources in renewable energy was worthy of praise… because it makes us feel better to believe that the people who run these powerful companies get it.”

Oil bosses have voiced support for global climate targets in public but the industry continues to invest an estimated 1% of its annual spending budget on clean energy while producing more fossil fuel products than the Paris Climate Agreement allows.

“The executives that run the carbon companies definitely do not get the part about the need for them to make less of the thing that is driving climate disaster,” Kretzmann added. “The big problem isn’t too little investment in renewables - it’s too much investment in, and government support for, fossil fuels.”

[rboyd]

The 2019 drop in US emissions, may only be a blip due to all the new oil and gas projects...

Oil and gas emissions are reversing progress from coal’s decline

Arizona’s Navajo Generating Station, a gargantuan coal plant responsible for more than 16 million tons of greenhouse gas emissions per year, shut down in November. Its closing capped a decade in which coal generation in the United States was cut in half — a development recently credited with reducing nationwide greenhouse gas emissions by 2 percent last year.

But thanks in large part to the booming oil and gas industry, that slight decline in emissions is likely just a blip on the radar. Emissions from a single proposed petrochemical complex in Louisiana’s St. James Parish, for example, would replace the lion’s share of the greenhouse gas pollution prevented through closing the Navajo Generating Station. Once built, the $9.4 billion Formosa plastics plant is expected to release more than 13.6 million tons of greenhouse gases per year.

The St. James facility is just one of dozens of new polluting plants expected to contribute to ballooning emissions from the U.S. oil and gas industry in the coming years. According to a new report published Wednesday by the Environmental Integrity Project, or EIP, a nonprofit in Washington, D.C., the industry is slated to pump an additional 227 million tons of planet-warming gases into the atmosphere in 2025 — a 30 percent increase over 2018 emissions — bringing its total emissions close to one billion tons per year. That’s equivalent to the full-time greenhouse gas pollution of well over 200 major coal-fired power plants.

Schaeffer cautioned that the numbers projected by the EIP are most likely underestimates. For one, the report only tallies emissions from the largest facilities that are required to secure permits under the Clean Air Act. “There are thousands of smaller [facilities] that aren’t picked up in our numbers — compressor stations, tank batteries, big storage terminals, gas processors, and so on,” Schaeffer said.

There are also signs that companies are underreporting emissions data. As oil and gas producers run out of pipeline capacity to transport fossil fuels from drilling sites to refineries and markets, they’re increasingly burning it off into the air in a process called flaring. Companies operating in the Permian Basin reported flaring about 1.37 million tons of natural gas in 2017, but independent satellite analyses by environmental groups and research firms indicate the actual number is about double that. Similarly, emissions from accidents — like the massive 2016 Aliso Canyon leak in southern California — and other malfunctions and maintenance activities are either not reported or are undercounted, the report noted.

https://grist.org/energy/oil-and-gas-emissions-are-reversing-progress-from-coals-decline/

[gerontocrat]

In Europe and the USA the story is surely no longer coal, but oil and natural gas.

Not a clue about what will happen in the rest of the world, but I just can't see major reductions in CO2 emissions from fossil fuels and cement going down substantially for a few years yet, even in the most optimistic scenarios.

Wouldn't it be nice to be wrong.

[Shared Humanity]

In Europe and the USA the story is surely no longer coal, but oil and natural gas.

Not a clue about what will happen in the rest of the world, but I just can't see major reductions in CO2 emissions from fossil fuels and cement going down substantially for a few years yet, even in the most optimistic scenarios.

Wouldn't it be nice to be wrong.

I find it difficult to be cheered up by stories of actual progress for specific projects or underlying trends in fossil fuels or renewables when I look at these kinds of graphs.

[Sciguy]

In Europe and the USA the story is surely no longer coal, but oil and natural gas.

Not a clue about what will happen in the rest of the world, but I just can't see major reductions in CO2 emissions from fossil fuels and cement going down substantially for a few years yet, even in the most optimistic scenarios.

Wouldn't it be nice to be wrong.

I find it difficult to be cheered up by stories of actual progress for specific projects or underlying trends in fossil fuels or renewables when I look at these kinds of graphs.

We're making progress, and the full impacts of renewables being cheaper than fossil fuels are only just starting to be felt in terms of projects being completed and new investment decisions being made.

The progress made to date has already cut about 1.5 - 2.0 degrees C from the "business as usual" scenarios.

https://thebreakthrough.org/issues/energy/3c-world

A 3C World Is Now “Business as Usual”
Dec 18, 2019

The world is on a path to warm around 3C above pre-industrial levels by 2100 under policies and commitments currently in place. This is a far cry from the 1.5C and 2C targets enshrined in the Paris agreements, but is also well short of the 4C to 5C warming in many “business as usual” baseline scenarios that continue to be widely used.

Two recently released reports — the International Energy Agency (IEA) 2019 World Energy Outlook (WEO) and the UN Environment Program (UNEP) 2019 Emissions Gap Report — both reflect current trends in clean energy technology costs and deployment and make the case that global emissions will be relatively flat over the next few decades. These estimates are on the low end of those in the latest set of fully integrated baseline scenarios featured in the energy modeling literature that intend to depict a world without climate policy — the Shared Socioeconomic Pathways (SSPs), developed for the upcoming 2021 IPCC 6th Assessment Report (AR6).

Estimating 21st century emissions

IEA projections only run through 2040, so using them to constrain end-of-century temperatures involves large uncertainties regarding what will happen after that point. The IEA’s CPS is between the IPCC SSP4-6.0 and SSP2-4.5 scenarios in 2040, while the IEA’s STPS is a bit below SSP2-4.5. However, both SSP4-6.0 and SSP2-4.5 show declining emissions between 2040 and 2100, driven in part by carbon prices assumed in the models underlying those scenarios – something that is not necessarily guaranteed to happen in the future.

The figure below compares the IEA fossil fuel emissions projections to a number of different emissions scenarios being used in the upcoming IPCC 6th Assessment Report (AR6). Each colored line represents a different emissions scenario used as inputs into CMIP6 climate models, while the grey shaded area shows the range of no-policy baseline scenarios in the SSP database.

At the same time, it is likely possible for the world to reduce emissions below 2040 levels by the end of the century even in the absence of additional climate policies. For example, the same IEA scenarios that suggest the world is on track for around 3C warming are often criticized as being too conservative regarding renewables. The figure below shows the IEA’s forecast of solar capacity growth in the STPS scenario for each World Energy Outlook report between 2006 and 2018. It is clear that the past reports have substantially underestimated the rate of solar capacity additions, and even the current projection of relatively flat capacity additions through 2040 may be too low.

[Sciguy]

And once the effects of renewables being cheaper than fossil fuels are widely known, the reductions will come quickly.  The case of coal in the US is a good example.

Renewables reached parity with coal in 2017 to 2018, depending on the amount of solar insolation or wind in the area.  In 2019, coal use was down 18% from the previous year. 

https://www.washingtonpost.com/climate-environment/us-greenhouse-gas-emissions-fell-slightly-in-2019/2020/01/06/568f0a82-309e-11ea-a053-dc6d944ba776_story.html

U.S. greenhouse gas emissions fell 2.1 percent last year almost entirely because of a sharp drop in coal consumption, according to the Rhodium Group, a private data research firm.

Coal-fired electric power generation, which had rebounded slightly in 2018, fell by a record 18 percent to the lowest level since 1975, the Rhodium study said. Coal burning produces carbon dioxide, which fuels climate change.

Some of the coal was replaced by cheaper natural gas in previous years, but the announcements of retirements of coal plants in 2019 was mostly about them being replaced by solar or wind farms, not natural gas plants.  The reason is that once you pay for the capital cost of installing the solar panels or wind turbines, the "fuel" costs are zero.  Natural gas can't compete with that, even at the current low prices due to the worldwide glut of natural gas.

[Sciguy]

The natural gas glut and lack of profits have lead to a decline in production one of the US' largest gas basins, the Macellus shale.

https://oilprice.com/Energy/Natural-Gas/Low-Gas-Prices-Crush-Appalachia-Shale-Boom.html

Low Gas Prices Crush Appalachia Shale Boom
By Nick Cunningham - Jan 09, 2020

Low natural gas prices have finally brought the decade-long shale gas boom in Appalachia to a halt.

Gas production in Appalachia declined by about 1 billion cubic feet per day (Bcf/d) over the past 30 days, bringing output down to an average of 32.7 Bcf/d, according to S&P Global Platts Analytics. That helped drag down overall U.S. gas production to 91.8 Bcf/d, a 1.7 percent decline from 93.4 Bcf/d in November.

Natural gas prices fell sharply last year, ending the year down more than 25 percent. The rig count in the Marcellus fell by 1 last week, dropping the total to 40. Eight months ago there were 65 rigs operating in the area.

Front-month gas contracts are trading at about $2.12/MMBtu, although at the wellhead prices can be much weaker. S&P said that prices at Dominion South, a hub in the Marcellus, have averaged just $1.78/MMBtu in the past month. S&P says that average breakeven prices are $1.80/MMBtu, but that likely understates the price level that drillers need, given the struggles that many have gone through.

The other thing working against natural gas – and is a big problem for Appalachian gas drillers – is that associated gas production in the Permian is expected to continue to rise. Associate gas from the Permian now rivals that of the Marcellus, and crucially, output is not sensitive to price since it is not the primary objective of companies operating there.

It’s not clear if gas production in the Marcellus will continue to decline – analysts see it stabilizing – but at the very least, the drilling boom has come to an end.

[gerontocrat]

Meanwhile.....

https://skepticalscience.com/fossil-fuel-political-giving-outdistances-renewables-13-to-1.html
Fossil fuel political giving outdistances renewables 13 to one

[Sciguy]

Yet another large gas company admits that they can't keep going in the current ponzi scheme.

https://oilprice.com/Energy/Natural-Gas/US-Gas-Giant-Downgraded-ToJunkStatus.html

U.S. Gas Giant Downgraded To Junk Status
By Nick Cunningham - Jan 14, 2020

The largest natural gas driller in the United States just announced a massive write-down for its assets, offering more evidence that the shale sector faces fundamental problems with profitability.

In a regulatory filing on Monday, Pittsburgh-based EQT took a $1.8 billion impairment for the fourth quarter, as the natural gas market continues to sour. EQT said that the write down comes as a result of the “changes to our development strategy and renewed focus on a refined core operating footprint,” which is a jargon-y way of saying that some of its assets are now worth much less.

…

So far, the company’s problems continue. Natural gas prices slid sharply in 2019, and are at rock-bottom levels, particularly for the time of year. According to the FT, while Henry Hub natural gas prices for February delivery trade at $2.24/MMBtu, they are only trading at around $1.83/MMBtu at the Dominion South hub in Pennsylvania.

EQT itself admits that it can’t succeed in this environment. “Gas prices are down. It has a big impact, the difference between $2.75 gas and $2.50 gas,” Toby Rice said in December “A lot of this development doesn’t work as well at $2.50 gas.”

Moody’s cut EQT’s credit rating on Monday to Ba1 with a negative outlook, moving it into junk territory after the gas giant said it would issue new bonds to refinance debt. “EQT's significantly weakening cash flow metrics in light of the persistent weak natural gas price environment and the company's intent to refinance its 2020 maturities in lieu of debt reduction through repayment drives the ratings downgrade,” Moody’s senior analyst Sreedhar Kona said.

These problems are obviously much larger than EQT. Range Resources recently slashed its dividend in order to pay off debt, while also taking out another $550 million in new debt in order to pay off maturing debt this year. Meanwhile, Chesapeake Energy, the second largest gas producer, is now trading at pennies on the dollar and faces the prospect of being delisted from the New York Stock Exchange.

EQT’s predicament reflects the broader financial questions that have long plagued the shale industry. Fracking can produce lots of oil and gas, but steep decline rates make profits elusive. If the largest gas producer in the country is struggling, and has a credit rating in junk territory, then something is wrong with the business model.

[Sciguy]

The US Energy Information Administration (EIA) projects that 76% of the new electrical generating capacity additions in the US in 2020 will be wind and solar.  Natural gas will only have 22% of the new capacity.

https://wolfstreet.com/2020/01/15/us-demand-for-electricity-declined-in-2019-stagnated-for-a-decade-but-2020-capacity-additions-are-wild/

Of the 42 GW of new capacity that the EIA expects to start commercial operations in 2020, wind accounts for 44%; solar for 32%; and natural gas for 22%. The remaining 2% of the additions will come from hydropower and battery storage. There are no coal-fired power plants scheduled to start commercial operations this year. But the capacity additions of wind and solar are breaking all records (chart via EIA):

Perhaps in more alarming news for the gas industry is that fairly new natural gas plants are starting to be retired.

Of the 11 GW in scheduled capacity retirements in 2020, coal power plants will account for 51%, natural gas power plants for 33%, and nuclear power plants for 14%:

Of the 3.7 GW in natural gas power plants to be retired, 60% will be in California, mostly plants built in the 50s and 60s. But interestingly, the Inland Empire Energy Center, an efficient, modern (10 years old) combined-cycle plant with a capacity of 0.7 GW will also be retired because it has been operating under capacity for years.

[BeeKnees]

The US Energy Information Administration (EIA) projects that 76% of the new electrical generating capacity additions in the US in 2020 will be wind and solar.  Natural gas will only have 22% of the new capacity.

Disappointing the the amount of new gas matches the amount of fossil fuel retirements.  Hopefully storage will start to kill the need for new gas in the not to distant future.

[ArcticMelt2]

A new record for US oil production - exactly 13 million barrels per day.

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

[Gray-Wolf]

This encouraged me!

https://grist.org/climate/exxons-law-firm-tried-to-recruit-harvard-students-instead-they-protested/

[Sciguy]

A new record for US oil production - exactly 13 million barrels per day.

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

There are increasing signs that the peak is near.

https://oilprice.com/Energy/Crude-Oil/Just-How-Serious-Is-The-Shale-Slowdown.html

Just How Serious Is The Shale Slowdown?
By Nick Cunningham - Jan 15, 2020

U.S. shale growth may be slamming on the breaks, although analysts differ over how significant the slowdown will be.

The EIA says that U.S. shale growth will slow down this year, but the agency still has growth at a rather optimistic 1.1 million barrels per day (mb/d), putting the annual 2020 average at 13.3 mb/d. The agency does see a more dramatic slowdown in 2021, with growth of just 0.4 mb/d.

But other market watchers are warning that the shale boom might be closer to a peak than is commonly thought. Adam Waterous, an investor at Waterous Energy Fund, says that the Permian basin is either at or near a peak in production. “The North American oil market has been grossly overcapitalized, which is not sustainable,” he told Bloomberg. “It’s impossible to continue to have uneconomic production and capex.”

Even if the EIA is closer to the mark, the figures of over 1 mb/d of growth refers to an annual average. U.S. production ended the year at around 12.9 mb/d, according to the weekly data, so achieving 13.3 mb/d may be a bit less impressive than the annual changes suggest. “The momentum is declining significantly,” Commerzbank said in a note. “The decline in drilling activity and the rising costs of exploration are likely to slow the rate at which production is expanded.”

“The average cumulative production per well over the first twelve months of output has been on the rise since mid-2015 until April 2018, when it peaked, and has slightly fallen since,” JBC Energy said in a report.

The energy consultancy said that initial production rates increased in the North Dakota in recent years, but the tradeoff was steeper decline rates. The widely-cited productivity improvements in well design, along with an intensification of sand, water, lateral length, etc., all aimed at producing more oil and gas from a given well – those improvements are being offset by steeper decline rates, JBC said.   

[ArcticMelt2]

Ken Feldman, and for natural gas in the USA when is peak production expected?

There is even faster growth.

https://www.eia.gov/dnav/ng/hist/n9050us2M.htm

[Sciguy]

The Permian oil field is expected to peak this year.

https://oilprice.com/Energy/Energy-General/Will-The-Permian-Peak-This-Year.html

Will The Permian Peak This Year?
By Anes Alic - Jan 16, 2020

Ticker: Just a few years back, the U.S. shale industry was drowning in a sea of hubris, with pompous  experts making outrageous claims such as the Permian Shale is a near-infinite resource thanks to the basin’s explosive production growth in the latter half of the last decade.

Analysts and investors who still harbor the “Too Big to Fail” mentality as far as U.S. shale is concerned are, sadly, mired in a depressing cognitive dissonance. The signs of the time are everywhere, and the question is no longer whether shale production can continue indefinitely but rather how much longer before it finally gives out.

One big investor has a rather depressing answer to the latter.

Adam Waterous, CEO at Waterous Energy Fund, says US shale production will peak in 2020 and then begin a steep decline thereafter. He argues that the financial position of Permian oil has clearly become untenable and production is much closer to peaking than many current forecasts suggest.

Steve Schlotterbeck, former CEO of the largest natural gas producer EQT, claims the average shale company has destroyed 80% of shareholder value (excluding capital) over the past decade. The US energy sector has emerged as the worst performer over the timeframe, with its weighting in the S&P 500 falling from 13% at the peak of the shale boom to just 4% currently--unmistakable signs of capital flight.

Oil field service companies are selling off assets.

https://oilprice.com/Energy/Energy-General/Why-Oilfield-Service-Giants-Are-Dumping-Assets.html

Why Oilfield Service Giants Are Dumping Assets
By Irina Slav - Jan 17, 2020

The three biggest oilfield service providers have all announced asset sales as they adapt to an environment featuring laxer demand for their services, Reuters reports.

Halliburton is selling its pipeline and process services business and hopes to find a buyer and finalize the sale by the end of June.

Schlumberger and Baker Hughes are selling various business operations, according to unnamed sources who spoke to Reuters, that could fetch up to $200 million each.

Combined, the asset sales sought by the big three, which hold a combined 26 percent of the oilfield services market, could generate $800 million.

[Sciguy]

Ken Feldman, and for natural gas in the USA when is peak production expected?

According to the EIA's short term outlook, US natural gas consumption will peak this year.

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

Natural Gas Consumption. Total domestic U.S. natural gas consumption averaged an estimated 85.3 billion cubic feet per day (Bcf/d) in 2019, and EIA expects it will increase by 1.4 Bcf/d (1.7%) in 2020 before decreasing by 1.0 Bcf/d (1.2%) in 2021.

As far as production, that 1.4% increase projected by the EIA is in doubt.  Signs of financial trouble in the gas shale patch have been popping up for months.

https://www.houstonchronicle.com/business/energy/article/Has-the-peak-of-the-shale-revolution-come-and-14532327.php

Has the peak of the shale revolution come and gone?
Photo of Jordan Blum
Jordan Blum Oct. 15, 2019

The shale revolution transformed the United States into the world’s biggest producer of oil and natural gas in a little more than a decade. But now the industry is facing the prospect that the shale boom has peaked and the best days are behind it as drilling activity declines, jobs dwindle, and many of the prime oil-producing spots are depleted.

Shale’s future is still a matter of debate, but there’s little doubt the energy sector has suffered through a weak 2019 with a more challenging 2020 on the horizon amid middling oil prices, abundant supplies, rising bankruptcies, growing climate change concerns and historically low Wall Street sentiment. The trends are dire enough that energy analysts at the New York investment research firm Evercore ISI this month declared, “The oil ‘shale revolution’ is over. Finally.”

The U.S. shale sector stubbornly persevered through the brutal oil bust that started in late 2014, returning to growth mode two years later. But since the end of 2018, drilling activity has steadily declined, with the number of operating rigs plunging 20 percent nationally over the past year. The rig count in the heart of the shale boom, the Permian Basin in West Texas, is down 15 percent.

The shale boom really started to take off in 2006, initially focusing on natural gas as it spread from the Haynesville shale in East Texas and Louisiana to the Eagle Ford shale. Outside of Texas, the Marcellus Shale in Pennsylvania and the Bakken also took off.

As the shale revolution shifted from gas to crude oil earlier in this decade, the focus turned to the Permian Basin, triggering a new land rush in West Texas and southeastern New Mexico. But rapid growth is leading to diminishing returns for many companies as the most prolific oil reservoirs are drained and newer wells prove less productive.

Some shale fields (like the Marcellus) are primarily natural gas.  The oil fields (like the Bakken and Permian) produce a mix of oil and gas.  The overproduction of gas has lead to very low prices so that the oil producers in the Permian and Bakken just burn it off instead of selling it to market.

https://www.eia.gov/todayinenergy/detail.php?id=42195

December 6, 2019
Natural gas venting and flaring increased in North Dakota and Texas in 2018

The volume of U.S. natural gas that was reported as vented and flared reached its highest average annual level of 1.28 billion cubic feet per day (Bcf/d) in 2018, according to the U.S. Energy Information Administration’s (EIA) Natural Gas Annual, which contains updated data about vented and flared natural gas. In 2018, the percentage of U.S. natural gas that was vented and flared increased to 1.25% of gross withdrawals, up from 0.84% the previous year. Two states, North Dakota and Texas, accounted for 1.1 Bcf/d, or 82% of the reported U.S. vented and flared natural gas.

https://finance.yahoo.com/news/burn-pay-shut-down-three-000000966.html

Burn, Pay, Or Shut It Down: Three Evils For Permian Drillers
[Oilprice.com]
Julianne Geiger
Oilprice.comJanuary 1, 2020

There was a time when natural gas was a welcomed byproduct of crude oil drilling, and drillers in the prolific Permian basin enjoyed this consolation prize--at least when natural gas prices were on the rise. All good things come to an end, though, and the amount of natural gas now exceeds the capacity to get rid of it.

With pipeline capacity fully exploited and natural gas prices squarely in the red, Permian drillers today are faced with three lousy choices: burn off the natural gas, pay to have the gas removed, or slow oil drilling activities to staunch the flow of natural gas.

Crude oil and natural gas are like two peas in a pod: when you find oil, you often find gas.

Crude oil is pumped out of the well, and a small amount of natural gas comes almost inevitably comes with it.

But over time, this ratio changes: less oil, more natural gas.

Now, there is simply too much natural gas, and drillers in the American shale patch must face the not-so-pleasant music, with only one question remaining: which shale drillers can hold on until more pipeline capacity comes online?

For the oil companies, they can at least make money on the oil.  For the natural gas producers, well, they're screwed.

https://finance.yahoo.com/news/u-natural-gas-boom-last-230000315.html

The U.S. Natural Gas Boom Is On Its Last Legs
[Oilprice.com]
Tsvetana Paraskova
Oilprice.comJanuary 15, 2020

Weak natural gas prices amid abundant supply and a falling rig count across the United States will slow down U.S. natural gas production growth this year, and some basins will even see production declines, analysts say.

Due to the shale revolution, natural gas production in the U.S. has been growing rapidly over the past decade, and growth accelerated over the past two years. But now companies are struggling with negative cash flows as prices stay low, and investors are not rewarding production growth if they don’t have returns.

This year, gas production in the SCOOP/STACK is set to slow down to 3.2 Bcf/d, down from the 3.4 Bcf/d average production in 2019, according to S&P Global Platts Analytics. In the broader Midcon Producing region—including the SCOOP/STACK, Cleveland Tonkawa, Mississippi Lime, and Granite Wash plays—production in 2020 is set to average 6.6 Bcf/d, down from 6.8 Bcf/d in 2019, according to Platts Analytics’ forecasts based on the current rig count in the areas.

In 2019, the Marcellus and Utica basins saw pipeline relief but “aggressive gains in production continued to surprise and caused renewed price weakness this past fall,” Enverus said. In the Permian, promising economics will continue to be challenged by pipeline capacity shortages, while Haynesville’s growth last year was likely limited to Tier 1 acreage, “which is the only area reliably in the money with a $2.13/MMBtu gas breakeven,” according to Enverus.

The EIA’s latest estimates in the January Short-Term Energy Outlook (STEO) show that U.S. dry natural gas production is set to rise by 2.9 percent annually in 2020, due to higher associated gas production from oil-directed rigs and easing of the pipeline capacity constraints out of the Appalachian and Permian basins.

Next year, production will drop by 0.7 percent on the year due to expected low natural gas spot prices in 2020, which will reduce drilling activity in the Appalachian basin, the EIA said.

[Sigmetnow]

Protests Target a ‘Carbon Bomb’ Linking Two Major Pipelines Outside Boston

WEYMOUTH, Massachusetts — After endless public hearings, drawn-out government appeals and fruitless legal proceedings, a band of community and climate activists was left to this: Sitting in the path of a concrete truck at the site where a large natural gas compressor is being built outside Boston.

They were five years on in their bid to block a facility that would play a crucial role in completing a pipeline project that seeks to ship hydraulically fractured gas from New Jersey to Canada. The site in Weymouth is near two low-income communities with sizable minority populations already facing high levels of pollution from other fossil fuel infrastructure.

"The Fore River Basin is already toxically overburdened with close to 10 different polluting facilities within a one mile radius," said Alice Arena, president and executive director of Fore River Residents Against the Compressor Station and a Weymouth resident. "It is highly populated, it is [an] environmental justice [community] and it is unconscionable to be adding another polluting facility." ...

https://insideclimatenews.org/news/17012020/Massachusetts-protest-pipeline-carbon-bomb-boston-weymouth-fore-river

—-
A federal appeals court decision Jan. 7 tossed out a state permit for construction of a natural gas pipeline compressor station
In Virginia, anti-pipeline activists feel ‘justice was served’ with court ruling

The momentous decision by a three-judge panel from the Richmond-based 4th U.S. Circuit Court of Appeals is potentially a huge setback for Dominion Energy’s pipeline and a gargantuan gain for environmental justice in a state where that topic is only recently being broached. ...

https://energynews.us/2020/01/15/southeast/in-virginia-anti-pipeline-activists-feel-justice-was-served-with-court-ruling/

[Sciguy]

In addition to the current glut of natural gas (that is expected to continue for the next few years), planned capacity for natural gas exceeds what is likely to be needed.

https://www.ft.com/content/a4955606-36ec-11ea-a6d3-9a26f8c3cba4

US gas exporters fight to survive supply glut
Prices fall around the world and planned capacity exceeds what will be needed

Multibillion dollar gas export projects that are central to the Trump administration’s push for “energy dominance” are locked in a battle for survival as prices fall and the market faces a supply glut.

Liquefied natural gas is a critical outlet for the US’s surfeit of cheap natural gas and the country is on track to pull ahead of Australia and become the world’s biggest exporter by 2024, the International Energy Agency has said.

Companies ranging from Royal Dutch Shell and Total to utilities and smaller independent groups are racing into the LNG export market, but planned capacity exceeds what is likely to be needed.

The consultancy McKinsey predicts that only one in 10 proposed export terminals will ever be built.

The global LNG glut has also pushed down prices outside the US as customers use their negotiating power with exporters. The Japan-Korea Marker, a regional benchmark, has been trading at about $5 per million British thermal units, well below the level when most US export projects were conceived.

There's a lot more in the article.  It explains the current plans from large LNG exporting countries and goes into details about the pricing needed for projects to work.  The large construction companies that specialize in building LNG terminals are in financial distress.  Investment decisions for these projects are being deferred and all the while renewables are getting cheaper.

All of those projections from the IEA and UN Emissions Gap assume that most of the proposed LNG projects will be built (and that new renewable energy projects will flatline for most of the 2020s).  These projections ignore the economic reality that wind and solar are becoming increasingly cheaper than the more mature fossil fuel power plants that they're replacing.

[BeeKnees]

High levels of radiation in brine from fracking is making those exposed to it ill.

'Oil-and-gas wells produce nearly a trillion gallons of toxic waste a year. An investigation shows how it could be making workers sick and contaminating communities across America'

https://www.rollingstone.com/politics/politics-features/oil-gas-fracking-radioactive-investigation-937389/amp/

[Sigmetnow]

Oil and gas sector ‘losing its social licence to operate’, UK boss warns

Tim Eggar, chairman of the UK’s Oil and Gas Authority (OGA), sent shockwaves through the industry on Wednesday (15 January) when he said growing public awareness about climate change was putting the sector’s very survival at stake.

Shifting public attitudes towards climate change is “the biggest challenge” facing the oil and gas industry, Eggar said in a speech to industry leaders this week.

“Clearly, climate change is happening right now. That debate is over,” he told industry delegates in Aberdeen, according to a transcript of his speech published on the OGA’s website.

The oil and gas industry must “act much, much faster and go farther in reducing the carbon footprint” he said, adding: “This requires ambitious thinking, capital investment and bold leadership. Action not just talk or more analysis.”

Failing to do so would have dire consequences for the oil and gas sector, Eggar warned, saying the industry’s very survival is at stake.

“The licence to operate for the industry has changed fundamentally and – unlike the oil price – forever,” he said. “If the industry wants to survive and contribute to the energy transition it has to adapt,” he stressed. ...

https://www.euractiv.com/section/energy/news/oil-and-gas-sector-losing-its-social-licence-to-operate-uk-boss-warns/

[Buddy]

XOM .... $60 before $90.  Could resolve within the coming 3 - 6 months (to $60 or below).

Further, oil price continues to face head winds ... and could be bad news for Donnie’s boss, Vladimir Putin.  One more reason Putin decided to change their “constitution”.

https://oilprice.com/Energy/Crude-Oil/The-Twin-Threats-Facing-Big-Oil.amp.html

[Sigmetnow]

The real threat to oil prices:  the communicable disease scare.  Asian air travel has grown immensely since it plummeted during the SARS outbreak in 2002.

Coronavirus outbreak could shave $3 from oil prices, Goldman warns
Wed, Jan 22 2020

The coronavirus outbreak in China could shave $3 from oil prices thanks to a slowdown in air travel, Goldman Sachs warned in a note to clients.

Using the 2002-2003 outbreak of SARS as a reference case, the firm said coronavirus could cause jet fuel demand to drop by 170,000 barrels per day, with overall demand declining by 260,000 barrels per day.

This is roughly 1.6 times larger than the slowdown caused by SARS due to the rapid growth in Asian air travel since the early 2000s. ...

https://www.cnbc.com/2020/01/22/coronavirus-could-shave-3-from-oil-prices-goldman-warns.html

[Sciguy]

The IEA warns that the big oil companies haven't done enough to address the climate crisis (and btw, they're in danger of failing financially).

https://oilprice.com/Energy/Crude-Oil/The-Twin-Threats-Facing-Big-Oil.html

The “Twin Threats” Facing Big Oil
By Nick Cunningham - Jan 21, 2020

The global oil and gas industry is facing the “twin threats” of the loss of profitability and the loss of social acceptability as the climate crisis continues to worsen. The industry is not adequately responding to either of those threats, according to a new report from the International Energy Agency (IEA).

But, of course, as climate policy begins to tighten, oil demand growth will slow and level off. Most analysts say that it won’t require a big hit to demand in order for the financial havoc to really begin to devastate the balance sheets of the majors. Demand only needs to stop growing.

The IEA said there are things the industry can do right now – and should have done a long time ago. Roughly 15 percent of the energy sector’s total greenhouse gas emissions comes from upstream production. “Reducing methane leaks to the atmosphere is the single most important and cost-effective way for the industry to bring down these emissions,” the IEA said. But, the Permian is flaring more gas than ever, and methane leaks at every stage of the extraction and distribution process. Drillers have promises improvements, but the industry’s track record to date is not good.

[Buddy]

Key sentence from above:   “Demand only needs to stop growing.”