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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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Tuesday, 30 December 14
U.S WEEKLY COAL PRODUCTION ALMOST FLAT AT -0.2%
COALspot.com – United States the world's one of the largest coal producers, produced approximately 19.8 million short tons (mmst) of coal ...
Monday, 29 December 14
CHINESE COAL IMPORTS: REGULATORY RISKS? - CLARKSONS
In recent years, Chinese seaborne coal imports have surged, registering average growth of 67% p.a. between 2009 and 2013 to total 265mt. However, t ...
Monday, 29 December 14
BULK MARKET ENDS YEAR ON SOUR NOTE, SHIPBROKER SEES 'BUMPY ROAD AHEAD' - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
2014 was supposed to be the year that the dry bulk market would stage a comeback and a sustainable one for that matter. However, while for the most ...
Monday, 29 December 14
Q1'15 CFR SOUTH CHINA COAL SWAP CLOSED AT $59.42
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased by US$ 3.51 (-5.58%) month over month and US$ 0.08 (-0.13%) ...
Monday, 29 December 14
SGX'S FOB NEWCASTLE COAL SWAPS IMPROVED W-O-W, LOST M-O-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery lost US$ 1.44 per MT (-2.73%) month over month and gained US$ 0.36 (+0.71%) ...
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- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
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- Xindia Steels Limited - India
- Central Electricity Authority - India
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Chamber of Mines of South Africa
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- ICICI Bank Limited - India
- CNBM International Corporation - China
- Commonwealth Bank - Australia
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- Power Finance Corporation Ltd., India
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Parliament of New Zealand
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- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining and Power Corporation, Philippines
- Bangladesh Power Developement Board
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Gujarat Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Finance - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- South Luzon Thermal Energy Corporation
- Timah Investasi Mineral - Indoneisa
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Posco Energy - South Korea
- Economic Council, Georgia
- Planning Commission, India
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Thiess Contractors Indonesia
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Latin American Coal - Colombia
- Aditya Birla Group - India
- The University of Queensland
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- Ministry of Transport, Egypt
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- Tamil Nadu electricity Board
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Minerals Council of Australia
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Asmin Koalindo Tuhup - Indonesia
- Eastern Energy - Thailand
- Anglo American - United Kingdom
- Bhatia International Limited - India
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- GMR Energy Limited - India
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- GVK Power & Infra Limited - India
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
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