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Monday, 05 January 15
FIVE ENERGY SURPRISES FOR 2015: THE POSSIBLE AND THE IMPROBABLE - KURT COBB
 The coming year is likely to be as full of surprises in the field of energy as 2014 was. We just don't know which surprises! I am not predicting that any of the following will happen, and they will be surprises to most people if they do. But, I think there is an outside chance that one or more will occur, and this would move markets and policy debates in unexpected directions.
1. U.S. crude oil and natural gas production decline for the first time since 2008 and 2005, respectively. The colossal markdown in world oil prices has belatedly been followed by a slightly smaller, but nevertheless dramatic markdown in U.S. natural gas prices. The drop in prices has already resulted in announcements from U.S. drillers that they will curtail their drilling operations significantly next year.
But drilling that is already contracted for will likely go forward, and wells waiting for completion will be completed. It can be costly to pull out of drilling contracts. And, failing to complete already successful wells and bring them into production is downright foolish since the costs incurred in drilling the wells including future debt payments remain. In those circumstances, some revenue at lower prices is preferable to no revenue at all.
Having said all that, scaled-down drilling plans when combined with what's left in drillers' immediate inventory both to drill and complete may not be enough to overcome the prodigious production decline rates from existing wells in deep shale deposits of oil and gas which have provided almost all the recent growth in U.S. production. The decline rates are 60 to 91 over three years for tight oil plays and 74 to 88 percent over three years for shale natural gas plays.
If low prices continue for a second year, the cheers for "Saudi" America will disappear. It was never to be anyway. What America has left is high-cost oil and natural gas. And, even at high prices both were likely to peak and decline in the next 5 years. Now, low prices may bring peak production rates in the coming year for both U.S. oil and natural gas--peaks that may never be seen again.
2. World crude oil closes below $30 per barrel. I think that such a price would only last a short time unless the world is in the throes of the next Great Depression. But since OPEC has reaffirmed that it will continue to pump oil at current rates until non-OPEC production declines, look for this game of chicken to create increasing inventories of oil worldwide for several months. The underlying cause for rising oil inventories is slowing economic growth in much of Asia, especially China, and economic stagnation in Europe and Japan. Any pickup in worldwide growth would send oil significantly higher than where it is today as oil demand increases.
3. Developments in solar thermal energy show that it can solve the storage problem for electricity from renewable energy. The difficulty with renewable energy supplying electricity is that electricity is very expensive to store (and so we do very little of this). Storage is important because renewable energy production comes when the wind blows and the sun shines, but not always when we need it. A breakthrough in solar thermal may be in the offing that would overcome previous limits on temperatures generated by solar thermal capture devices and make it possible to store heat cheaply enough to run solar electric generating plants around the clock at high output.
4. A climate agreement in Paris calls for binding greenhouse gas emissions limits. Expectations are exceedingly low for next summer's international climate conference to be held in Paris. The aim is to agree on binding limits for carbon emissions for the world's nations. Few people think that will happen no matter what the urgency of the matter.
But we cannot know what climate events might occur between now and the Paris conference that would change the outcome. It would have to be big, on the order of an ice shelf plopping into the ocean and raising sea-level enough to notice. Nevertheless, I would say that such a disturbing event becomes more likely with time and might be necessary to move the world's nations to a binding emissions agreement.
Even some progress in the direction of a binding agreement will have the world's energy analysts talking about stranded assets, a reference to the oil, natural gas and coal that would have to be left in the ground in order to avoid breaching agreed limits on carbon emissions. That would have significant consequences for the companies whose work is extracting and refining hydrocarbons.
5. Oil prices reach $100 per barrel before December 31, 2015. This is the other extreme from surprise No. 3. Almost all analysts expect oil prices to remain low, and many believe we are now entering a new era of cheap oil. (I, of course, don't buy it.) An earlier and more dramatic drop in production than anticipated and a greater rise in demand than anticipated could easily bring prices back above $100. I think this is more likely to happen later in 2016. But the timetable for a return to prices above $100 could be accelerated by many factors not now apparent.
I regard none of these events as likely which is why they would be surprises. But even one of these surprises would result in large financial gains or losses for many. And, either of two of them--binding greenhouse gas emissions limits or a breakthrough in renewable energy storage--would have giant consequences for the entire world.
About Author:
Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights.
Views and opinions / conclusion expressed herein are personal views of the author and not that of COALspot.com.
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Friday, 30 January 15
U.S. YEAR-TO-DATE COAL PRODUCTION REACHED 65.7 MMST
COALspot.com – United States the world's one of the largest coal producers, produced approximately 19.9 million short tons (mmst) of coal ...
Friday, 30 January 15
CAN BULKER CONVERSIONS SPOIL THE TANKER MARKET'S PARTY? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Oversupply of tonnage has always been in the back of the head of ship owners when it comes to taking advantage of favorable market conditions. As s ...
Thursday, 29 January 15
CHINA ENERGY DEMAND MUST BE REVIEWED DUE TO FUNDAMENTAL ECONOMIC CHANGES - WOOD MACKENZIE
New patterns emerging as energy demand growth decoupled significantly from GDP growth for the first time in 2014
Wood Mackenzie says 2014 was ...
Thursday, 29 January 15
CAPE MARKET IS STILL STRUGGLING WITH LOW DEMAND AND LOW COMMODITY PRICES
Handy
Supramax rates are heading south with slipping rates all across the block. USG activity is slow with mid-week levels in the mid 8.000s, Fea ...
Wednesday, 28 January 15
MARKET INSIGHT - STELIOS KOLLINTZAS
With most traders having returned to action from year end festivities, we have already seen signs of activity in the specialized product markets. L ...
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- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Vedanta Resources Plc - India
- Maharashtra Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Sojitz Corporation - Japan
- Sinarmas Energy and Mining - Indonesia
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- Riau Bara Harum - Indonesia
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Sree Jayajothi Cements Limited - India
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Trasteel International SA, Italy
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- MS Steel International - UAE
- Indian Energy Exchange, India
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- Siam City Cement - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Chamber of Mines of South Africa
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Madhucon Powers Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- Iligan Light & Power Inc, Philippines
- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- Binh Thuan Hamico - Vietnam
- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- Star Paper Mills Limited - India
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Australian Coal Association
- Electricity Authority, New Zealand
- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Electricity Generating Authority of Thailand
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- Edison Trading Spa - Italy
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- Videocon Industries ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Rio Tinto Coal - Australia
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