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Author Topic: Fossil Fuel Profits Getting Eaten Alive by Renewable Energy!  (Read 4996 times)

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AGelbert

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Half of U.S. Fracking Industry Could Go Bankrupt as Oil Prices Continue to Fall 

Andy Rowell, Oil Change International | January 18, 2016 9:29 am

So the slide continues with no end in sight. As expected this morning, the oil price has fallen below $28 a barrel on the back of the historic news over the weekend of sanctions being lifted on Iran.

This is the lowest level for oil since 2003.

The American shale industry needs oil at about the sixty to seventy dollar a barrel level in order to survive. Photo credit: Los Angeles Times

The American shale industry needs oil at about the 60 to 70 dollar a barrel level in order to survive. Photo credit: Los Angeles Times

The markets are spooked that the lifting of sanctions means the imminent introduction of half a million or so more barrels of oil per day from Iran into an already oversupplied market. The country has the world’s fourth largest reserves of oil.

Speaking earlier today at the Asia Financial Forum in Hong Kong, Stuart Gulliver, CEO of HSBC said “Major producers are currently delivering 2-2.5 million barrels per day more than demand, so the question is how long they can continue to overproduce for at that level.”

Already struggling with oversupply from various countries, the market now has Iran to contend with too.

After years of isolation due to sanctions, Iran reportedly has a significant amount of oil to place on the international market immediately. Analysts from Barclays said simply: “Iranian exports come at a very bad time.”

That can only mean one thing: a market awash with oil, which will only add a downwards pressure on the already low oil price.

The numbers are becoming brutal reading for the industry: The oil price has collapsed more than 70 percent since mid-2014.

And there is no respite in store. In his speech, HSBC chief executive, Stuart Gulliver, said he predicted the price of oil to be somewhere between $25 and $40 in a year’s time.

The American shale industry needs oil at about the 60 to 70 dollar a barrel level in order to survive.

Having limped along last year hoping for a rebound in prices this year, the industry is heading for deep trouble.


Last week, one analyst predicted that half of U.S. shale oil producers could go bankrupt before the oil price rebalances itself.   

Fadel Gheit, a senior oil and gas analyst at Oppenheimer & Co believes it could be two years before oil stabilizes near $60, which is still below the break-even point for many shale producers.

“Half of the current producers have no legitimate right to be in a business where the price forecast even in a recovery is going to be between, say, $50, $60. They need $70 oil to survive,” he told CNBC.

Even the big boys are taking a hit.

Last week, BHP Billiton was forced to writedown the value of its U.S. oil and gas assets by $US7.2 billion (Aus$10.4bn), admitting it needed $US60 a barrel oil to be “cashflow positive.”

But the reality is that under $30 dollar a barrel, it is only a matter of time before we see a range of bankruptcies in the shale industry.

“At this price range, nothing is safe,”     says Jesse Thompson, an economist at the Federal Reserve Bank of Dallas. And he could well be proved right.

http://ecowatch.com/2016/01/18/fracking-industry-bankrupt/

Agelbert NOTE:
A picture is worth a thousand words Imminent Bankruptcies.   

 



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AGelbert

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The Houston economy is DOOMED by profit over planet greed and stupidity.   

Houston, we have a (greed based profit over planet) problem: It's called HOUSTON.

Houston-Area Energy Employment as of December ’14
   
Sector Employment Share of Total Employment (%)
Oil and gas extraction, oilfield services 107,400 3.7%
Chemical manufacturing 37,000 1.3%
Petroleum products manufacturing 9,500 0.3%
Pipeline transportation 10,400 0.4%
Oilfield equipment manufacturing 43,500 1.5%
Misc. parts and components manufacturing 41,500 1.4%
Engineering (energy-related) 39,000 1.3%
TOTAL 288,300 9.9%



(It's a bit less in 2016.  ;D).


Snippet 1

Quote
The Texas Workforce Commission reports that the Houston metro area added 4,800 jobs in November, which was the third weakest November in the past 25 years. The region typically adds 10,000 to 12,000 jobs in the month.

Snippet 2
Quote
An Inauspicious Start — ’15 proved to be difficult for the oil and gas industry. Over the course of the year, drilling permits fell 41.6 percent, the North American rig count fell 61.4 percent, and the price of crude fell 29.6 percent. That’s on top of the declines the industry already suffered in ’14.

Snippet 3

Quote

’16 will be even tougher for the industry.  ;D

http://www.houston.org/pdf/research/quickview/Economy_at_a_Glance.pdf

Oil crash job losses in Texas may be steeper than previously thought - November 12, 2015  


They could have switched to Renewable Energy LONG ago. But their GREED prevented them from doing it. 



So, I am GLAD that they face an economic depression for their profit over planet piggery.   


For those who want to cry for the lost jobs in Houston, pretend we are ducks and the biosphere is our pond.


THIS is a metaphorical picture of what EVERYBODY employed in the fossil fuel industry in Houston SUPPORTS 24/7 so they can MAKE MONEY.        

 

 

And I am NOT interested in hearing what Eddie, the Texas champion of Capitalism, has to say to rationalize this MURDEROUS insanity.   



The Fossil Fuelers   DID THE Climate Trashing, human health depleteing CRIME,   but since they have ALWAYS BEEN liars and conscience free crooks, they are trying to AVOID   DOING THE TIME or     PAYING THE FINE!     Don't let them get away with it! Pass it on!

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AGelbert

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NYC’s Biggest Pension Fund Lost $135 Million From Oil and Gas Holdings

350.org | January 26, 2016 9:26 am

A new report from Advisor Partners revealed that in one year alone, New York City’s largest pension fund lost around $135 million from their holdings in the top 100 oil and gas companies. The Teacher’s Retirement System of the City of New York, representing more than 200,000 teachers, educators and workers, incurred a 25 percent reduction in returns of their $60 billion fund from investments in oil and gas.

Protestors call on the State of New York to divest from fossil fuels. Photo credit: Adam Welz for 350.org / Flickr

“If it’s wrong to wreck the climate, it’s wrong to profit from that wreckage—but our city’s pension funds are incurring nothing but losses by investing in fossil fuels,” Mimi Bluestone, a member of the United Federation of Teachers and a campaigner with 350NYC, said. “The money lost from oil and gas investments just in the last year is equivalent to putting about 7,000 students through school for a year. It’s time for New York City to get out of the business of climate destruction.”

The findings of this report add significant momentum to activists calling for fossil fuel divestment. Organizers with 350NYC have been campaigning for the city council to divest the city’s five pension funds from all fossil fuels for over three years. During the Paris climate talks, it was announced that more than 500 institutions representing over $3.4 trillion in assets under management have committed to some level of fossil fuel divestment.

ExxonMobil and Chevron were the largest contributors to the fund’s declining performance, causing losses surpassing $39 million. In November, New York Attorney General Eric Schneiderman launched an investigation into Exxon’s climate lies after groundbreaking reports revealed that the corporation knew about climate change for decades, yet poured resources into discrediting their research and sowing doubt among the public. California Attorney General Kamala Harris has also launched an investigation.

“Oil & gas companies are volatile investments. The fact that these companies underperformed both the U.S. and broader global index by more than 25 percent confirms the riskiness of these companies,” Rahul Agrawal, CIO of Equities for Advisor Partners, said. “Portfolio managers should carefully reassess their exposure to these securities before investing in them.”

New York City Comptroller Scott Stringer and Mayor Bill De Blasio have already issued urgent calls for the city’s pension funds to divest from coal. Coal is on its way out, oil prices are plummeting and major fossil fuel companies are filing for bankruptcy, slashing jobs and cancelling projects.

On Wednesday, prominent financial and political figures, including Scott Stringer, will gather at the United Nations for the Investor Summit on Climate Risk hosted by Ceres.

“The prudence of divesting from coal is so legible it is quickly becoming the norm. Oil and gas are on a more asperous decline, making it harder for investors to see the mounting risk associated with the industry. New York City’s pension funds need to divest now, as cautious, long-term investors,” Brett Fleishman, senior analyst with 350.org, said.

“With this summit happening right in their backyard, NYC’s comptroller and pension fund managers must communicate exactly what they’re doing to incorporate ever-increasing climate risk mitigation and to protect the future of New York City’s workers.”
http://ecowatch.com/2016/01/26/nyc-pension-oil-gas-holdings/


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AGelbert

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HESS POLLUTING ENERGY PIG   ON THE MOVE...... TOWARDS DROWNING IN RED INK.

Hess slashes 2016 E&P budget by 20 percent   

Staff Writers  January 28, 2016   

Hess slashed its 2016 exploration and production capital and exploratory budget by 20 percent on Tuesday, citing low oil prices.

The New York-based company now plans to spend $2.4 billion on exploration and production activities this year, a 40 percent reduction     ;D from 2015 levels and about 20 percent below the company’s preliminary 2016 guidance.

Twenty percent of the budget, or $470 million, has been allocated for unconventional shale, $610 million, or 25 percent of the budget, has been allocated for production and $820 million, or 34 percent of the spend, has been allocated to developments. 

Hess also earmarked $500 million, or 21 percent of its 2016 budget, for exploration and appraisal activities.

As part of the company’s unconventional spend, Hess has earmarked $425 million to operate two rigs and bring 80 new wells online in the Bakken shale play in North Dakota.

The company will also spend $45 million to drill five wells and bring 14 new wells online in the Utica shale play in Ohio during the first quarter of 2016.

Hess added that the rig will be released after the Utica wells are complete.  ;D

Just over half of the production budget will go towards production activities in the deepwater Gulf of Mexico, including the drilling and completion of a production well and completion of a water injection well at the Tubular Bells field, a production well at the Conger Field and a water injection well at the Shenzi field.

Hess holds a 57.1 percent operating stake in Tubular Bells, a 37.5 percent operating stake at the Conger field and a 28 percent stake at Shenzi.

The company has allocated $140 million of its production budget to complete the current stage of the Phase 3 drilling campaign at its operated South Arne Field in Denmark by the end of the first quarter and for operations at the BP operated Valhall Field in Norway.

As part of its exploration and appraisal budget, Hess plans to spend $250 million to drill up to four wells on the Stabroek Block in offshore Guyana that include evaluating the Liza discovery, a drill stem test and additional exploration activities.

The company also plans to spend $175 million for drilling in the deepwater Gulf of Mexico including an appraisal well to delineate the Chevron operated Sicily discovery, an exploration well at the ConocoPhillips operated Melmar prospect, a large Paleogene four way structure in the Perdido Fold Belt, and other exploration activities

The majority of the overall budget has been allocated to activities in the United States    , with that region receiving $1.4 billion.

The company plans to spend $140 million in Europe, $40 million in Africa and $820 million in Asia and other regions.



Hess’s net production is forecast to average between 330,000 and 350,000 barrels of oil equivalent per day this year, unchanged from the company’s preliminary guidance issued in October.

The company’s Bakken net production is forecast to average between 95,000 and 105,000 barrels of oil equivalent per day in 2016.

“We take a long term view    to managing our business and we will continue to invest in our growth projects and prospects, including exploration and appraisal activities.

However, in response to the current low oil price environment, we have significantly decreased our 2016 capital and exploratory expenditures and we plan to reduce activity at all of our producing assets,” Hess president and COO Greg Hill said.

Hill added that the company will “continue to pursue further cost reductions and efficiency gains across our portfolio.”
 
http://petroglobalnews.com/2016/01/hess-slashes-2016-ep-budget-by-20-percent/

   





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AGelbert

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And now a summary of the latest news from the fossil fuel polluting Welfare Queens worldwide. 

Halliburton posts $28 million Q4 loss
http://petroglobalnews.com/2016/01/halliburton-swings-to-28-million-q4-loss/

Petrobras cutting management staff by 30 percent
http://petroglobalnews.com/2016/01/petrobras-cutting-management-staff-by-30-percent/

Hess slashes 2016 E&P budget by 20 percent
http://petroglobalnews.com/2016/01/hess-slashes-2016-ep-budget-by-20-percent/

Keppel: Sete Brasil hasn’t paid us for over a year

http://petroglobalnews.com/2016/01/keppel-takes-160-million-q4-write-down-tied-to-petrobras-scandal/

Dong Energy writing down E&P arm by $2.3 billion  

Quote

Denmark-based Dong Energy warned on Tuesday that it will write down the value of its upstream arm by just over $2 billion, citing low oil prices and reduced reserves.
http://petroglobalnews.com/2016/01/dong-energy-writing-down-ep-arm-by-2-3-billion/

Agelbert NOTE: ANY reduction in UPSTREAM pollution piggery is good news for the biosphere.

Upstream_(petroleum_industry): The oil and gas industry is usually divided into three major sectors: upstream, midstream and downstream. The upstream oil sector is also commonly known as the exploration and production (E&P) sector.[1][2]


Meanwhile, TEXANS keep LITERALLY dying on behalf of the fossil fuel industry "business model". Perhaps the fossil fuelers like MKing should stop referring to the oil industry workers as the "salt of the earth". SUCKERS for Big OIL is more like it.    


Texas man killed in pipeline construction accident
http://petroglobalnews.com/2016/01/texas-man-killed-in-machinery-accident/



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AGelbert

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Chevron slides to $558 million Q4 loss
Staff Writers  February 1, 2016   
Chevron reported a $588 million fourth quarter loss on Friday as low oil prices weighed on upstream earnings.

The company reported a loss of $588 million, or $0.31 per diluted share, for the fourth quarter of 2015, down significantly from earnings of $3.5 billion in the fourth quarter of 2014.

Full year 2015 earnings fell to $4.6 billion, or $2.45 per diluted share, down from $19.2 billion, or $10.14 per diluted share, in 2014.

Sales and other operating revenues in the fourth quarter of 2015 were $28 billion, compared to $42 billion in the year-ago period.

The company’s upstream segment slid to a $1.36 billion loss in the fourth quarter, down from earnings of $2.67 billion in the prior year quarter.

The upstream segment posted a loss of $1.96 billion for the full year of 2015, a significant drop from $16.89 billion in earnings reported in 2014.

Low oil prices and higher exploration costs dragged the company’s U.S. upstream operations to a $1.95 billion loss in fourth quarter 2015, down from earnings of $432 million a year earlier.

Weak crude prices also weighed on Chevron’s international upstream operations with the area posting $593 million in fourth quarter earnings compared with $2.24 billion in the fourth quarter of 2014.

The company’s average sales price per barrel of crude oil and natural gas liquids was $35 in fourth quarter 2015, down from $66 a year ago.

Chevron’s downstream segment fared better with full year earnings of $7.6 billion, up from $4.33 billion in 2014, and fourth quarter earnings of $1.01 billion, down from $1.51 billion in the fourth quarter of 2014.

International downstream operations earned $515 million in fourth quarter of 2015, down from $629 million during the same period in 2014.

U.S. downstream earnings fell to $496 million in fourth quarter 2015 from $889 million a year earlier, primarily due to “to the absence of 2014 gains on asset sales,” Chevron said.

Fourth quarter earnings tied to all other activities came it at a $238 million loss, up from a $720 million loss in the prior year quarter, and a full year loss of $1.05 billion compared to a loss of $1.98 billion in 2014.

Chevron earned $6 billion in proceeds from asset sales in 2015 and has said it has planned further sales for 2016 to 2017.

Net charges in fourth quarter 2015 were $238 million, compared with $720 million in the year-ago period.

Chairman and CEO John Watson said he expects cuts to operating expenses and capital spending on par with the $9 billion the company slashed from its 2015 spend compared to the  previous year.

Watson said that the company added about 1.02 billion barrels of net oil equivalent proved reserves in 2015.

The additions, still subject to final reviews, equate to about 107 percent of the company’s net oil-equivalent production for the year.

The largest additions were from production entitlement effects in several locations and drilling results for the Permian Basin in the United States and the Wheatstone Project in Australia.

At year-end, balances of cash, cash equivalents, time deposits and marketable securities totaled $11.3 billion, a decrease of $1.9 billion from the end of 2014.

Total debt as of December 31, 2015 stood at $38.6 billion, an increase of $10.8 billion from a year earlier.

Chevron’s worldwide net oil-equivalent production was 2.67 million barrels per day in fourth quarter 2015, up from 2.58 million barrels per day in the 2014 fourth quarter.

Capital and exploratory expenditures in 2015 were $34 billion, down from $40.3 billion in 2014.

Expenditures for upstream represented 92 percent of the companywide total in 2015, Chevron said.

“Our 2015 earnings were down significantly from the previous year, reflecting a nearly 50 percent year-on-year decline in crude oil prices.

We’re taking significant action to improve earnings and cash flow in this low price environment,”  Watson said. 

http://petroglobalnews.com/2016/02/chevron-posts-558-million-q4-loss/
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AGelbert

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Feb 1, 2016 Authors Amory B. Lovins    Chief Scientist

As Oil Prices Gyrate  , Underlying Trends Are Shifting To Oil's Disadvantage 


Why should equity markets tank when oil prices do? Beats me  ;D. Among many sources of jitters, this shouldn’t be a big one (though The Economist demurs). When oil prices fall 70+ percent, oil companies and their lenders and investors suffer, so do oil-dependent communities, but oil users (far more numerous) rejoice and respend. The net macroeconomic effect sounds as positive as the middle-class tax cut that it effectively is — the OPEC-monopoly-rent tax that Congress has long seemed determined to pay to the Saudis rather than to the Treasury, finally if accidentally being respent at home.

Surely investors understand — don’t they? — that oil is a commodity. As I explained elsewhere, oil prices go down because they went up before, and they go up because they went down before.

Get used to it.  Commodities do that; it’s their job. If you don’t like it, don’t buy them. Buy constant-price, and usually cheaper, efficiency and renewables instead, as the national and global market is doing. Then you can avoid loop-the-loop roller-coaster rides and get your energy services cheaper, cleaner, and more reliably.




Quote
Those who claimed low oil prices would crash renewables (other than biofuels) were wrong.

Those who claimed low oil prices would crash renewables (other than biofuels) were wrong. The reason is simple. Wind and solar power make electricity. Oil makes less than four percent of world and under one percent of U.S. electricity, so oil has almost nothing to do with electricity. Thus in 2015, as oil prices kept skidding, global additions of renewable power set a new record, adding about 121 GW of wind and solar power alone. Renewables’ $329 billion investment was up 4% from 2014, says Bloomberg New Energy Finance (which tracks each transaction), but it added 30 percent more capacity because renewables got much cheaper. Solar power is booming even in the Persian Gulf, where it beats $20 oil.

Natural gas does compete with solar and windpower, and its price tends to move with oil’s, but cheaper gas doesn’t much affect renewable power either. That’s because new wind and solar power often beat even the operating costs of the most efficient gas-fired power plants anyway, even without counting the market value of gas’s price volatility.



Yet as oil prices gyrate, it’s important to understand that underlying trends are shifting too, to oil’s disadvantage It’s happened before. In the 1850s, whalers—America’s fifth-largest industry—were astounded to run out of customers before they ran out of whales. Over five-sixths of their dominant market (lighting) vanished to competitors—oil and gas both synthesized from coal—in the nine years before Drake struck “rock oil” (petroleum) in Pennsylvania in 1859. Two decades later, Edison’s electric lamp beat whale oil, coal oil, town gas, and John D. Rockefeller’s lighting kerosene. Today in turn, most  traditional lighting is being displaced by white LEDs, which each decade get 30x more efficient, 20x brighter, and 10x cheaper. By 2020 they should own about two-thirds of the world’s general lighting market.

Agelbert NOTE: Not mentioned by Lovins, and adding to his argument  ;D, is the fact that the tax on ethanol, either for drinking or use as fuel for lighting, post Civil War made kerosene "cheaper" by Law, NOT because it was cheaper to produce. THAT was a huge factor in getting Rockefeller the fortune he used to corrupt our government on behalf of fossil fuels.


LEDs inside-out are PVs—photovoltaics, turning light into electricity. PVs often, and very soon generally, beat just the fossil-fuel cost of running traditional power plants. PVs are now less capital-intensive than Arctic oil, not counting the ability to use electrons more effectively than molecules. Costly frontier hydrocarbons like Arctic oil can’t sell for a high enough price to repay their costs. Their revenue model has been upside-down for years. Had Shell persevered instead of abandoning its $7-billion Arctic investment, and had it found oil, it wouldn’t have won durable profits.

Oil companies since 1860 and electric utilities since 1892 have sold energy commodities—molecules or electrons—rather than the services customers want, such as illumination, mobility, hot showers, and cold beer. This business model means that when customers use the energy commodity more efficiently to produce the service they want, the provider loses revenue, not cost. That’s bad for both electric utilities and hydrocarbon companies, because most (and for oil, ultimately all) of the commodity they sell can be displaced by far cheaper energy productivity.

That displacement is already well underway. Renewable electricity merits and gets lots of headlines, but in 2014 it raised U.S. energy supplies only a third as much as the energy saved in the same year by greater efficiency.

Over the past 40 years, Americans have saved 31 times as much energy as renewables added. Those cumulative savings are equivalent to 21 years’ current energy use. They’re simply invisible: you can’t see the energy you don’t use. But globally, it’s a bigger “supply” than oil, and inexorably, it’s going to get much, much bigger.

Oil companies worry about climate regulation, but they’re even more at risk from market competition. The oil that’ll be unburnable for climate reasons is probably less than the oil that’ll be unsellable because efficiency and renewables can do the same job cheaper. An oil business that sputters when oil’s at $90 a barrel, swoons at $50, and dies at $30 will not do well against the $25 cost of getting U.S. mobility—or anyone else’s, since the technologies are fungible—completely off oil by 2050. That cost, like the $18 per saved barrel to make U.S. automobiles uncompromised, attractive, cost-effective, and oil-free, is a 2010–11 analytic result; today’s costs are even lower and continue to fall.

In short, like whale oil in the 1850s, oil is becoming uncompetitive even at low prices before it became unavailable even at high prices. 

Today’s oil glut, we hear, is caused by fracking, a bit by Canadian tar sands, and most of all by the Saudis’ awkward (though impeccably logical  ;D) unwillingness to give up their market share to higher-cost competitors. But less noticed, and equally important, is that demand has not lived up to irrationally exuberant forecasts.

Gasoline demand has trended down in the U.S. for the past eight years and in Europe for the past ten, for fundamental and durable reasons of technology, urban form, shifting values, and superior ways to get mobility and access. Suppliers have invested to supply more oil than customers want to buy. Had crimped budgets not curtailed investment budgets, oil companies would still be building pre-stranded production assets as fast as they could.

As frontier oil becomes costlier while accelerating demand-side innovations spread from rich to developing countries, led by China, oil companies face discouraging fundamentals. They’re stuck with the least attractive 6% of global reserves while parastatals keep the rest, and even that last 6% can be confiscated or taxed away at any time. Oil companies are price takers in a volatile market. They’re extraordinarily capital-intensive. They have decadal lead times. They have high technical, geological, and political risks. They’re politically fraught and interfered with; some firms have also suffered self-inflicted reputational damage that sullies the rest. Oil companies’ shrinking reserves and geographies force them into riskier and costlier projects while investors demand lower risk and higher return. Their service companies have turned into formidable competitors. Their permanent subsidies are coming under scrutiny and pressure Most of the reserves underpinning their balance sheets are unburnable or unsellable or both—far costlier than demand-side competitors, even at today’s oil prices, and increasingly challenged even on the supply side—so financial regulators are sniffing around mark-to-market.

What a recipe for headaches! Why be in a business like that? With mature provinces in decline and fiercely contested, prices volatile, ingenuity strained, exploration pushed to the ends of the earth at spiraling cost and risk, and unforeseen competitors inexorably taking away demand, should hydrocarbon companies ignore, deny, resist, diversify, hedge, finance, transform, or decline? That strategic choice is stark, tough, and increasingly urgent.

And that’s before we add oil’s volatile geopolitics—focused chiefly on the world’s most unstable and dangerous region where a Rubik’s Cube of ancient feuds ensures that, as one expert famously taught, “However bad things are in the Middle East, they can always get worse.”

One troubling scenario concerns the brittleness of Saudi Arabia’s vital 10 million barrels of oil per day—5–10 times the world oil market’s surplus. Most Saudi oil flows through terminals at Ras Tanura and Ju‘aymah and through the Abqaiq processing plant (which al Qa‘eda tried to attack a decade ago and then planned to fly hijacked planes into). These highly concentrated facilities have also been attacked, so far ineffectually. It could take decades to fix damaged key components.

Who might want to do that? Da‘ish or al Qa‘eda would win a twofer: damaging Western economies and toppling the Saudi monarchy (whose export of intolerant Wahhabist ideology, ironically, inspired jihadism in the first place). Oil exporters severely damaged by low oil prices, such as bystanders Nigeria and Venezuela, lack capability to limit Saudi output. But two very interested neighbors might not.

Iran is right across the Gulf, with two big airbases a quarter-hour’s flight from the Saudi oil chokepoints. Iran is a bitter rival, the opposite pole of the tense Shi‘a-Sunni axis, and influential with the disaffected Shi‘a population that predominates in the eastern Saudi region around the main oilfields. Iran is currently in a tiff with the Saudi leadership. Its versatile and creative military and paramilitary forces and proxies don’t not always seem under full political control. Reentering the oil market with the lifting of nuclear sanctions, Iran would like to earn more money per barrel.

Also now active in the neighborhood is militarily formidable Russia—the world leader in secret, disguised, and proxy warfare *. President Putin’s impressive ability to retain power by seeming to protect the Russian people from crises he manufactures cannot work without a viable domestic economy. At today’s oil price, Russia is likely to deplete its stability funds this year and its foreign reserves by about next year, so Mr. Putin may see a much higher oil price (plus lifted Ukraine sanctions) as an existential necessity.

*Agelbert NOTE: I disagree with Lovins that Russia is the "world leader in secret, disguised, and proxy warfare". Russia is WAY BEHIND "our" (see U.S. oligarchs) M.I.C. in that regard.

Ras Tanura and Saudi Aramco have weathered cyberattacks. (Both Iran and Russia have lately cyberattacked their neighbors—Turkey and Ukraine respectively.) There are also many options for physical attack, some hard to forestall. So far, Saudi forces have defeated both cyber- and physical attacks on key oil facilities. But attackers need succeed only once, and they could be highly motivated.

A successful attack, strangling Saudi oil output for years (and then repeatable), could make oil prices soar more than they’ve plunged. Massive global inventories could help cushion the blow, efficiency and renewables could be surged, behaviors would change, but most of 10 million at-risk barrels per day lack ready replacements. Now, that could justify a skittish Dow.

All the more reason to buy efficiency and renewables instead of oil. We’ll profit more and sleep better.

This article originally appeared on Forbes.com.

Photo courtesy of IrenicRhonda via Flickr, Creative Commons license (CC BY-NC-ND 2.0).

http://blog.rmi.org/blog_2016_02_01_as_oil_prices_gyrate_underlying_trends_are_shifting_to_oils_disadvantage
« Last Edit: February 04, 2016, 08:21:08 pm by AGelbert »
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Anadarko Petroleum posts $1.25 billion Q4 loss

Staff Writers  February 5, 2016   

Texas-based Anadarko Petroleum
said Tuesday that it may cut its 2016 budget by 50 percent after reporting a $1.25 billion fourth quarter net loss.

The company reported a fourth quarter net loss attributable to common stockholders of $1.250 billion, or $2.45 per diluted share,  including certain items typically excluded by the investment community in published estimates.

Anadarko said these items increased the net loss by $954 million on an after-tax basis.

The company reported a net loss attributable to common stockholders of $6.69 billion for the full year of 2015, or $13.18 per diluted share.

Cash flow from operating activities in the fourth quarter of 2015 was $257 million and discretionary cash flow totaled $810 million.

Full-year 2015 net cash used in operating activities was $1.877 billion and discretionary cash flow for the year totaled $4.657 billion.

Anadarko chairman, president and CEO Al Walker said the company anticipates recommending an initial 2016 budget of $2.8 billion to its board, nearly 50 percent lower than its actual 2015 capital investments and almost 70 percent lower than its 2014 spend.

“As we consider capital allocation for 2016, greater market dislocation appears likely, and the need to again materially lower our capital spending, while continuing to pursue value creation and  preservation, is our best course of action,” Walker said.

Walker added that the company reduced its spending in 2015 by more than $3 billion year-over-year, down nearly 40 percent from 2014.

Anadarko’s full-year sales volumes of crude oil, natural gas and natural gas liquids totaled 305 million barrels of oil equivalent (boe), or an average of 836,000 boe per day.

Fourth quarter 2015 sales volumes of crude oil, natural gas and NGLs averaged  779,000 boe per day.

Anadarko said it organically added 407 million boe of proved reserves in 2015 before the effects of price revisions and incurred oil and natural gas exploration and development costs of $5.8 billion.

The company estimates its proved reserves as of the end of 2015 totaled  2.06 billion boe, with nearly 80 percent of its reserves categorized as proved developed.

At year-end 2015, Anadarko’s proved reserves were comprised of 52 percent liquids and 48 percent natural gas.

Anadarko said it ended 2015 with $939 million of cash on hand, an amount that reflects remittance of the $5.2 billion final payment resolving the Tronox Adversary Proceeding.

“As discussed last year at this time, we did not expect oil prices to recover in 2015 and believed it could take well into 2016 before markets would stabilize on a sustained basis, costs would become more aligned with the new operating environment and investments in short-cycle assets would be more attractive. Therefore, value enhancement drove our capital-allocation philosophy,” Walker said.

http://petroglobalnews.com/2016/02/anadarko-petroleum-posts-1-25-billion-q4-loss/

   
 
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A Renewables Revolution Is Toppling the Dominance of Fossil Fuels in U.S. Power 

February 4, 2016 — 12:01 AM EST Updated on February 4, 2016 — 4:59 PM EST

Renewable energy  was the biggest source of new power added to U.S. electricity grids last year as falling prices and government incentives made wind and solar increasingly viable alternatives to fossil fuels.

Developers installed 16 gigawatts of clean energy in 2015,
or 68 percent of all new capacity, Bloomberg New Energy Finance said in its Sustainable Energy in America Factbook released Thursday with the Business Council for Sustainable Energy. That was the second straight year that clean power eclipsed fossil fuels.

The biggest growth came from wind farms, with 8.5 gigawatts of new turbines installed as developers sought to take advantage of a federal tax credit that was due to expire at the end of 2016; Congress extended it in December.

This is a long-term trend,” said Colleen Regan, a BNEF analyst who follows North American power markets. “System costs have really come down for renewables, which makes the case for installing them a lot stronger.”

Demand for energy, meanwhile, flatlined in the U.S. last year, holding steady even as the gross domestic product grew 2.4 percent, BNEF said. Since 2007, U.S. energy consumption has dropped 2.4 percent while GDP has grown by 10 percent.

U.S. clean-energy investments rose to $56 billion last year, up 7.5 percent from 2014. The majority, $30.2 billion, went to solar. Investors pumped $11.6 billion into wind energy and $11.1 billion into technology to improve grids, boost efficiency, develop storage systems and other ways to better manage power usage.

Power from natural gas-fired plants accounted for 25 percent of capacity added to grids last year.  >:( Nearly one third of all electricity in the U.S. is now generated by gas, putting it nearly on par with coal.

A record number of coal plants were shuttered in 2015, with 11 gigawatts of capacity coming off line by the end of October, and plants with another 3 gigawatts of capacity expected to close in November and December. Natural gas, meanwhile, continues to surge.

“It looks good for gas to be a larger share of electricity generation than coal in 2016,” Regan said.

http://www.bloomberg.com/news/articles/2016-02-04/renewables-top-fossil-fuels-as-biggest-source-of-new-u-s-power

Agelbert NOTE: While getting rid of coal is important, the gas that should supplant it is NOT fracked gas, which is almost as polluting as coal, when all the flaring damage and ground water pollution damage is figured in. Fracked Natural gas is an OBSCENITY!  


COW POWER is the ONLY kind of TRULY NATURAL GAS that should be used for whatever in our society:


http://www.greenmountainpower.com/innovative/cow/how-it-works/



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AGelbert

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What may doom human society to climate change death by profit over planet is, uh, see video below...


Thanks for sharing


Az,

You are welcome.   

Check this out. It seems the DEMAND DESTRUCTION for oil continues despite the low prices.        

EIA: U.S. crude inventories above 500 million barrels for first time ever  :o  ;D
Staff Writers  February 10, 2016   
 
U.S. crude inventories rose above 500 million barrels for the first time ever last week after a larger than expected gain.

According to the U.S. Energy Information Administration, total U.S. commercial crude oil inventories were 502.7 million barrels as of January 29 after adding 7.8 million barrels.

U.S. crude inventories now stand at 132 million barrels above the five-year average.

The crude stock jump also marks the first time that U.S. inventories have exceeded 500 million barrels, the EIA said.

Crude inventories at Cushing, Oklahoma, the delivery point for the West Texas Intermediate futures contract traded on the New York Mercantile Exchange, stood at 64.17 million barrels last week, or 58 percent above the five-year average.

Total U.S. distillate inventories, including heating oil and diesel fuel, are now 22 million barrels above the five-year average at 159.69 million barrels.

U.S. motor gasoline inventories also passed historical highs last week after growing by 5.9 million barrels to 254.4 million barrels and now sit “well above the upper limit of the average range,” the EIA said.

Net crude oil imports climbed to about 7.51 million barrels as of January 29, up from 6.93 million during the same period last year.

The EIA added that, despite the supply gut, there “is still traditional, on-land storage space available  ;)” and there has been no information  ;) to indicate thatwidespread amounts of crude oil are being purchased for floating storage.”   



 

West Texas Intermediate was trading at $33.13 per barrel near noon on Thursday as a weakening U.S. dollar helped offset concerns about growing inventories. 

http://petroglobalnews.com/2016/02/eia-oil-gasoline-stocks-grew-more-than-expected/



« Last Edit: February 10, 2016, 09:30:43 pm by AGelbert »
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Coalition airstrike destroys Islamic State oil and gas plant in Syria (with video)

The Combined Joint Task Force released two videos on Wednesday showing a coalition airstrike destroying an oil and gas plant in Syria controlled by Islamic State.

The black-and-white videos shows aerial footage of a Combined Joint Task Force airstrikes destroying the Daesh gas and oil plant near Dayr Az Zawr, Syria on February 2.

The strike was intended to “disrupt and destroy” illicit oil production at the plant, according to the video.

The attack was just one of four airstrikes conducted against ISIL by coalition forces in Syria on February 2, according to the Combined Joint Task Force.

The strikes were conducted as part of Operation Inherent Resolve, the coalition’s operation to eliminate the ISIL in Iraq, Syria and the wider international community.

The Combined Joint Task Force has estimated that Islamic State earns about two-thirds of its revenues through oil production, Business Insider said.

Although it’s difficult to determine exactly how much oil IS produces, the group was believed to control at least 60 percent of Syria’s production capacity in late 2015, according to CNBC.

Quote
Syrian oil production has “essentially ceased”  ;) since ISIS and its affiliates began taking over the country’s oilfields in 2014, according to the U.S. Energy Information Administration.

http://petroglobalnews.com/2016/02/coalition-airstrike-destroys-islamic-state-oil-and-gas-plant-in-syria-with-video/

Agelbert NOTE:
I guess the worldwide oil glut (EIA: U.S. crude inventories above 500 million barrels for first time ever.) threatening the profits of the "coalition" has nothing to do with destroying facilities that were known to the "coalition" OVER A YEAR AGO when they just could not find, for some reason, these facilities until the Russians began "taking care of business".




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AGelbert

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Newz Flash.  This isn't the early 90s, its a quarter century later.

Correct. The 90's in the oil business was after a worse crash, dating back to 1986.


In a few years, when the boomers are shaken out, debt recycled through the bankruptcy courts, when the dead weight workers have moved on to window and car sales, and the existing production taken over by those who know how to do the business when it is work, hard, day in and day out, work, THEN it will be like the 90's.

We haven't even hit the big shake out/bankruptcy/mergers phase yet.

 


Hey MKing, in the 1980's, low oil prices crashed renewables. YOU have been predicting REPEATEDLY here that the SAME "supply and demand" mechanism will work for your oil pig pals again today. You are wrong. Amory Lovins is right.


Quote
Those who claimed low oil prices would crash renewables (other than biofuels) were wrong.

Oil companies since 1860 and electric utilities since 1892 have sold energy commodities—molecules or electrons—rather than the services customers want, such as illumination, mobility, hot showers, and cold beer. This business model means that when customers use the energy commodity more efficiently to produce the service they want, the provider loses revenue, not cost. That’s bad for both electric utilities and hydrocarbon companies, because most (and for oil, ultimately all) of the commodity they sell can be displaced by far cheaper energy productivity.

Over the past 40 years, Americans have saved 31 times as much energy as renewables added. Those cumulative savings are equivalent to 21 years’ current energy use. They’re simply invisible: you can’t see the energy you don’t use. But globally, it’s a bigger “supply” than oil, and inexorably, it’s going to get much, much bigger.

Oil companies worry about climate regulation, but they’re even more at risk from market competition. The oil that’ll be unburnable for climate reasons is probably less than the oil that’ll be unsellable because efficiency and renewables can do the same job cheaper. An oil business that sputters when oil’s at $90 a barrel, swoons at $50, and dies at $30 will not do well against the $25 cost of getting U.S. mobility—or anyone else’s, since the technologies are fungible—completely off oil by 2050. That cost, like the $18 per saved barrel to make U.S. automobiles uncompromised, attractive, cost-effective, and oil-free, is a 2010–11 analytic result; today’s costs are even lower and continue to fall.

In short, like whale oil in the 1850s, oil is becoming uncompetitive even at low prices before it became unavailable even at high prices.    ;D


http://blog.rmi.org/blog_2016_02_01_as_oil_prices_gyrate_underlying_trends_are_shifting_to_oils_disadvantage
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AGelbert

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Maersk Drilling Sees Rig Overcapacity Lasting for ‘Foreseeable Future’  ;D

February 11, 2016 by Reuters
OSLO, Feb 11 (Reuters) – As much as one third of the global offshore fleet of oil drilling rigs could be idled in 2016 as energy firms scale back investments on the back of weak crude prices, the head of Danish conglomerate A.P. Moller-Maersk’s rig unit said on Thursday.

“I would probably estimate that we have in 2016 between 25 percent to one third of the fleet suffering from idle times,” Maersk Drilling Chief Executive Claus Hemmingsen told Reuters.

“The current outlook for the oil companies bringing new projects to the market is very uncertain and not very optimistic … there will be oversupply in the foreseeable future,” he added.

Shares of some independent rig owners such as Norway’s Seadrill have dropped by more than 90 percent in the last two years as the price of crude plunged by around three quarters.

(Reporting by Ole Petter Skonnord, writing by Terje Solsvik, editing by Gwladys Fouche)
(c) Copyright Thomson Reuters 2016.

https://gcaptain.com/maersk-drilling-sees-rig-overcapacity-lasting-for-foreseeable-future/
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IEA: Crude supply, demand gap widening in 2016        

SNIPPET:

The International Energy Agency said Tuesday that it expects the gap between global crude supply and demand to widen further this year as OPEC continues to ramp up production.

The IEA said in its February Oil Market Report that it expects global oil demand growth to “ease back considerably” this year to 1.2 million barrels per day, down from a five-year high of 1.6 million bpd in 2015.

The decline is primarily driven by slowing demand in Europe, China and the United States.

http://petroglobalnews.com/2016/02/iea-raises-crude-supply-glut-forecast/

Agelbert Note: Yes Virginia there is a MAD SCAMBLE  going on among oil pigs  to contract floating storage, no matter what you may have heard to the contrary.  ;)
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U.S rig count plummets by 48 in big fall

Staff Writers  February 11, 2016   
 
The U.S. rig count plummeted by 48 rigs last week, one of the largest weekly declines since the rig count began falling in late 2014.

According to Baker Hughes, the number of oil and gas rigs fell to 571 rigs as of February 5 after shedding 48 rigs, a significant drop from the 1,456 rigs operating during the same week last year.

The majority of the decline was tied to a 37 rig drop in the oil rig count that pushed the number of U.S. oil rigs down to 467 from 1,140 rigs a year ago.

The U.S. gas rig count fell to 104 after losing 17 rigs while the horizontal rig count sank by 29 to 458 rigs compared to 1,088 rigs last year.

The directional drill count dropped by five rigs to 53 and the vertical rig count slid down by 14 to 60 rigs.

Texas once again posted the largest rig count drop of any major state after losing 19 rigs last week, with four of those rigs drops coming from the Eagle Ford basin and two rigs being dropped in the Permian Basin.

Oklahoma posted an eight rig loss and Louisiana lost five rigs last week.

Drillers in Pennsylvania shed three rigs while North Dakota, Utah and Wyoming each lost two rigs.

Ohio booked a one rig loss last week.

Rig counts in Alaska, Arkansas, California, Colorado, Kansas, New Mexico and West Virginia held steady from the previous week.

The Williston Basin, home of the Bakken shale play, saw its rig count fall to 42 after a two rig drop, a significant decline from the 137 rigs operating in the basin last year.

The Marcellus Basin lost three rigs last week and the Utica Basin shed one rig.

The Gulf of Mexico saw its rig count slide down to 26 rigs after a two rig loss.

Canada’s rig count jumped to 242 rigs after adding six gas rigs and five oil rigs but was still shy of the 381 rigs drilling in the same week of last year.

http://petroglobalnews.com/2016/02/u-s-rig-count-plummets-by-48/
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