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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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Wednesday, 21 January 15
PANAMAX MARKET MOVED SIDEWAYS OVERALL LAST WEEK - INTERMODAL
COALspot.com: The positive sentiment in which the week prior ended carried on through-out last week as well, the end of which marked the first posi ...
Wednesday, 21 January 15
SHIFT IN INTERNATIONAL COAL TRADE TO THE PACIFIC BASIN WILL CONTINUE - IMF
COALspot.com: The shift in international coal trade to the Pacific Basin will continue, IMF said in its latest Medium-Term Coal Market Report.
...
Wednesday, 21 January 15
MARKET INSIGHT - VASSILIS LOGOTHETIS, INTERMODAL
The World Bank has lowered its forecast for global growth in 2015 to 3% down from its previous level of 3.4% amid rising concerns over the economic ...
Wednesday, 21 January 15
THERMAL COAL PRICE OUTLOOK DEPENDENT ON INDIAN IMPORT DEMAND - MATTHEW BOYLE, CRU
COALspot.com: Supply and demand side developments in India will be an important determinant of future market dynamics and prices for thermal coal a ...
Wednesday, 21 January 15
PORT OF NEWCASTLE COAL EXPORTS JUMP 16.19% ON MONTH TO 15.80 MIL MT IN DECEMBER' 14
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.136 billi ...
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- Central Java Power - Indonesia
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Simpson Spence & Young - Indonesia
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bharathi Cement Corporation - India
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- Pendopo Energi Batubara - Indonesia
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Ministry of Finance - Indonesia
- Tata Chemicals Ltd - India
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Siam City Cement PLC, Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- The University of Queensland
- ASAPP Information Group - India
- Deloitte Consulting - India
- Therma Luzon, Inc, Philippines
- Australian Commodity Traders Exchange
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Parry Sugars Refinery, India
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Karaikal Port Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aditya Birla Group - India
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Petron Corporation, Philippines
- Central Electricity Authority - India
- MS Steel International - UAE
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- Orica Mining Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- ICICI Bank Limited - India
- Gujarat Sidhee Cement - India
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
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