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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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Monday, 15 December 14
CFR SOUTH CHINA COAL SWAP LOST $3.37 M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased by US$ 3,37 (-5.33%) month over month and US$ 1.58 (-2.57%) ...
Monday, 15 December 14
Q1' 15 FOB NEWCASTLE COAL SWAP CLOSED AT $ 51.45 ON 12 DEC
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery lost US$ 1.45 per MT (-2.74%) closed at US$ 51.45 on 12 December month over ...
Sunday, 14 December 14
FREIGHT RATES ARE EXPECTED TO BE SOFT NEXT WEEK
COALspot.com: The Baltic Dry Index (BDI), a measure of commodity-shipping costs, fell 12.12 pct to 863 points week ending 12 December 2014.
Th ...
Friday, 12 December 14
LIMITED TRADING AND AN OVERSUPPLY OF TONNAGE PUSHED HANDY SIZE SHIPS TO DOWN IN USG
Handy
We have seen the TA spot market come down this week lead by limited trading and an oversupply of tonnage in the USG, Fearnleys said in its ...
Friday, 12 December 14
U.S WEEKLY COAL PRODUCTION UP 3.4% W/E DECEMBER 6
COALspot.com – United States the world's one of the largest coal producers, produced approximately 19.6 million short tons (mmst) of coal ...
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- Bayan Resources Tbk. - Indonesia
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- GVK Power & Infra Limited - India
- New Zealand Coal & Carbon
- Kaltim Prima Coal - Indonesia
- Electricity Authority, New Zealand
- Indian Oil Corporation Limited
- Indogreen Group - Indonesia
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Binh Thuan Hamico - Vietnam
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- PTC India Limited - India
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- SN Aboitiz Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Bukit Baiduri Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Global Coal Blending Company Limited - Australia
- AsiaOL BioFuels Corp., Philippines
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- Energy Link Ltd, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Billiton Holdings Pty Ltd - Australia
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CIMB Investment Bank - Malaysia
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Tata Chemicals Ltd - India
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- CNBM International Corporation - China
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- GMR Energy Limited - India
- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Planning Commission, India
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Kalimantan Lumbung Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Independent Power Producers Association of India
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Vizag Seaport Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- Australian Commodity Traders Exchange
- ICICI Bank Limited - India
- Indo Tambangraya Megah - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Antam Resourcindo - Indonesia
- Mintek Dendrill Indonesia
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- Indika Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- Maheswari Brothers Coal Limited - India
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Jindal Steel & Power Ltd - India
- Sarangani Energy Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
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