Renewable Revolution

The Party is OVER

Agelbert NOTE: Whereas I agree with Richard that the fossil fuel based energy "party" is definitely over, I believe his proposed method for transitioning to clean energy lacks teeth. He totally ignores the political power of entrenched dirty energy interests. They will NOT be convinced nicely on a "make profits from clean energy" argument, no matter how proven and admittedly valid it is, BECAUSE clean energy is mostly distributed energy which is difficult to game through price shocks and fabricated scarcity though convenient wars and war scares.   

THAT is "real world" that the propagandists for the fossil fuel industry ALWAYS remind us of when we show, point by point, that renewable energy is actually cheaper than dirty energy above and beyond environmental considerations.

What the fossil fuelers WILL NOT SAY until you carefully destroy their "we are your loyal energy supplying servants doing it all for your own human civilization good and you owe us for it"    is that the fossil fuel industry's POWER in the market place is POLITICAL POWER, not competitive energy source power from "supply and demand".

This edifice of degraded democracy requires centralized political corruption, as well as gamed energy pricing (i. e. control of the energy spigot). Without this control, their "business model" collapses in a tsunami of bankruptcies and the abandonment of all their "help" by their friends in government who they can no longer buy. The "real world" also involves BOPPING, not just buying. But the fossil fuel industry relies on purchased friends in government to do that when gamed laws and regulations don't suffice.

That "real world" was always a clever, but ruthless, scam to market an uncompetitive dirty energy resource.

That is why I do not believe the transition to clean energy will be as painful as Richard Heinberg believes. However, he is right that fossil fuels, even with their "subsidy" swag, are no longer affordable simply because, besides the added expense of obtaining them, we can no longer "afford" (as if we ever could) to ignore the damage that burning them visits on our biosphere in general and Homo SAPS in particular. The "business model" of the fossil fuel industry, by definition, REQUIRES the rejection of any responsibility for the deleterious effect their product has on the perpetuation of the human species.

IOW, the "real world" of the fossil fuelers is a type of cherry picking insanity. They really do believe that they can industrially **** where everybody but them eats in a finite biosphere where EVERY pollutant reduces the viability of the biosphere that their "real world" REQUIRES in order for them to survive.

Basically, the fossil fuel industry is composed of thugs. Those thugs can continue to be murderous thugs as long as they can funnel a lot of money into their pockets and into the pockets of the governments they corrupt.

All we have to do is NOT "return to the caves", as the propagandist **** will claim, but reduce our footprint to the bare necessities and continue to use more clean energy and less dirty energy. Then the money for the thugs will dry up as it is starting to do now. To clarify how that works, please understand that the fossil fuel industry relies on volume sales. Profits from volume sales operate on the margins. All you need is a 5% to 10% annual INCREASE (i.e. decrease in demand for fossil fuels) in demand destruction from renewable energy for a decade or so to destroy the fossil fuel empire.

Then the crooks they can no longer buy in government will "get the renewable energy religion".      That is why the fossil fuelers like the Koch Brothers are always trying to pre-empt the growth of (E.g. Electric vehicles and wind turbines) products that run on and/or generate Renewable Energy. The fossil fuel industry is far more fragile than the MKing's of this world will have you believe. They are fighting to keep their swag and protection racket going. It worked for the last 50 years.   


But the annual DROP in volume sales is killing the fossil fuel industry    . THAT is the REAL real world of clean energy thermodynamic efficiency overcoming the corrupt fabrication the fossil fuel industry has saddled us with for about a century. Let's hope it's not too late.

Staff Writers March 2, 2016

The U.S. rig count lost a dozen rigs last week, marking two and half months of consecutive declines. The number of rigs drilling for oil and gas in the United States fell by 12 rigs to 502 as of February 26 compared to 1,267 rigs a year ago, according to Baker Hughes.The drops marked the tenth straight week of falling U.S. rig counts, Reuters said.


The U.S. gas rig count ticked up by one to 102 rigs but that gain was offset by a loss of 13 oil rigs that pushed the U.S oil rig count down to 400 from 986 rigs a year ago. The directional drill count fell to 47 rigs after a one rig loss while the horizontal rig count slid by 17 rigs to 397, down from 946 a year ago.

The vertical rig count jumped to 58 rigs thanks to an eight rig gain but was still down from 194 rigs operating during the same week last year.

Texas once again posted the most rig losses of any major producing state after losing five rigs last week.

Louisiana was the only major producing state to post a rig gain as its rig count ticked up by two.

New Mexico lost three rigs last week while Alaska and California gained two rigs each. Ohio, Pennsylvania, Utah and Wyoming each lost one rig last week.

 Rig counts in Arkansas, Colorado, Kansas, North Dakota and Oklahoma held steady from the previous week.

The Eagle Ford Basin, located in Texas, lost the most rigs of all the major producing basins last week after drillers dropped seven rigs.

The Permian Basin, also located in Texas, lost one rig.

The Arkoma Woodford Basin, the Granite Wash Basin, the Haynesville play and the Utica Basin also lost one rig a piece.

The Cana Woodford added three rigs last week, the only major basin to post a rig gain. Rig counts in the Williston Basin, home of the Bakken shale play, and the Marcellus Basin held steady from last week. Canada’s rig count fell by 31 to 175 rigs after drillers dropped 26 oil rigs and five gas rigs. The Gulf of Mexico saw its count tick up by two to 27 rigs last week.

http://petroglobalnews.com/2016/03/u-s-rig-count-falls-by-12/

Staff Writers March 1, 2016

Malaysia’s Petronas said Tuesday that it will cut up to 1,000 jobs after reporting a 56 percent drop in full year after-tax profits.

The company expects to cut under 1,000 positions and said it is undertaking “exhaustive efforts” to “re-deploy affected employees.” Further details about the layoffs have not been disclosed.

Petronas added that it will “further embark on a separation exercise for these employees as needed, which is expected to be completed over the next six months.”

Petronas booked $59 billion (RM248 billion) in revenues for the full year of 2015, down 25 percent year-over-year.

Full year after-tax profit came in at $5.06 billion, down 56 percent from the prior year, while profit after-tax excluding identified items fell 42 percent year-over-year to $9.64 billion.

“The company anticipates its financial performance for 2016 to continue to be affected by the prolonged volatility in oil prices and is intensifying efforts to cushion the impact to remain competitive and sustainable,”  the company said.

The company’s upstream production grew 3 percent from 2014    levels thanks to enhanced production and new production streams from Malaysia and Indonesia along with additional production from Azerbaijan.

However, low oil prices dragged the company’s upstream after-tax profit down to $4.72 billion (RM19.6 billion) for 2015, a 64 percent decline from the previous year. 

Non-cash impairments of $4.33 billion pulled upstream profits down by an additional $385 million for the full year.

The company’s downstream business saw its full year profit margin rise 50 percent from the prior year to $2.14 billion (RM8.9 billion).

Chairman and CEO Datuk Wan Zulkiflee said the company’s cash flow from operations “is unlikely to be able to cover the remaining CAPEX and its RM16 billion dividend commitments to the Government.”

Petronas will reduced its capital expenditure and operational expenditure budgets by about $12 billion over the next four years, beginning with reductions of between $3.62 billion to $4.82 billion in 2016.

“I am confident of our internal initiatives laid out to strategically respond to the external challenges. These will navigate PETRONAS securely through the current downturn, and position us in a more resilient and competitive stead for future growth,” Datuk Wan Zulkiflee said.


http://petroglobalnews.com/2016/03/petronas-cutting-up-to-1000-jobs/

Staff Writers March 1, 2016

Whiting Petroleum announced Wednesday that it will suspend completion activities as it slashed its capital budget by 80 percent.

The Colorado-based company said it will suspend completion operations in the second quarter of this year.

The company has not said when it expects to resume completion activities.
Whiting has set its 2016 capital budget at $500 million, a decrease of about 80 percent from its 2015 capital expenditures.

The company plans to spend the majority of its 2016 capital budget in the first half of the year as it completes projects initiated in 2015 and winds down completion operations.

Whiting’s projected spend rate is expected to decline to $80 million per quarter in the second half of the year.

The company expects to invest $440 million of its 2016 capital budget on development activity primarily in its core Bakken and Niobrara areas  :evil4:, representing 88 percent of the total budget.

The company’s 2016 capital budget reflects the suspension of completion operations.

Whiting projects that it will have an inventory of 73 drilled uncompleted wells in the Williston Basin Bakken/Three Forks play and 95 drilled uncompleted wells in the DJ Basin Niobrara play at the end of 2016.   

“This inventory of drilled uncompleted wells  should afford Whiting a highly capital-efficient means to resume growth  upon a rebound in oil prices,”  the company said.

Whiting produced 14.3 million barrels of oil equivalent (MMBOE) in the fourth quarter 2015, with crude oil and natural gas liquids (NGLs) accounting for 88 percent of production.

The company said its better than forecast production results were thanks to enhanced completions in the Williston Basin and an increase in gas capture rates across its acreage.

Whiting saw its proved reserves jump to a record high of 820.6 MMBOE in 2015, a 5 percent year-over-year increase despite asset sales of 53.2 MMBOE and an SEC 2015 oil price deck 47 percent lower than 2014.

As of the end of 2015, proved developed reserves accounted for 49 percent of proved reserves and crude oil and NGLs accounted for 87 percent of proved reserves.

Whiting booked a fourth quarter 2015 net loss available to common shareholders of $98.68 million, compared to a loss of $353.68 million in the prior year quarter, on $423.51 million in revenues.

Full year net income available to common shareholders fell to a loss of $2.21 billion,  compared to a full year 2014 net income of $64.8 million in 2014, on full year revenues of $2.05 billion.

“We are focused on returns and balance sheet strength. Our 2016 budget reflects these priorities as we plan to run two rigs in the Bakken and two rigs in the Niobrara for the balance of the year…We believe this conservative strategy should help us to maintain our liquidity position and leave us well positioned to capitalize on a rebound in oil prices,” Whiting’s chairman, president and CEO James J. Volker said.   


http://petroglobalnews.com/2016/03/whiting-petroleum-suspends-completions-slashes-capital-budget/

Staff Writers March 7, 2016

Anadarko Petroleum said Tuesday that it will cut its 2016 capital budget in half this year as it slashes its U.S. rig count.

The Houston-based company has reduced its year-over-year capital investments by almost 50 percent to between $2.6 billion to $2.8 billion.

Anadarko’s U.S. onshore activities will see the biggest reduction this year with that area’s budget being cut by nearly $2.5 billion year-over year to $1.1 billion.

The company will reduce its U.S. onshore rig count by 80 percent to five operated rigs, down from an average of 25 in 2015, while focusing on base production and “retaining flexibility” to leverage its inventory of about 230 drilled but intentionally uncompleted wells.

Anadarko has earmarked $700 million for its activities in the Gulf of Mexico where the company intends to focus on its capital-efficient tieback oil opportunities and on advancing appraisal activities.

The company will allocate another $700 million for its international activities that will include efforts to advance its Paon oil discovery in offshore Côte d’Ivoire toward potential development with one appraisal well, a drillstem test and two exploration wells.

Anadarko said once its activities in Côte d’Ivoire are complete, its rig is scheduled to return to Colombia to conduct additional exploration drilling activities.
The company also expects to achieve first oil at the TEN complex in offshore Ghana in the third quarter of 2016.

Anadarko added that it “expects minimal funding in 2016” as it works “three parallel paths toward a Final Investment Decision” for its Mozambique LNG project.
The company also announced plans to monetize up to $3 billion of assets in 2016, with $1.3 billion in monetizations announced or closed year to date.

Adjusted for divestitures, Anadarko expects its total 2016 sales volumes to be between 282 to 286 million barrels of oil equivalent, down from 292 million barrels in 2015.

The company expects oil sales volumes to account for 308,000 313,000 barrels per day.

Last month, Anadarko cut its quarterly dividend on its common stocks to $0.05 per share, down $0.22 per share from prior levels.

The company expects the dividend reduction to provide $450 million of additional cash.

“In 2016, we will continue our disciplined and focused approach, preserving and building value by leveraging our best-in-class capital allocation, enhancing operational efficiencies and continuing an active monetization program,” Anadarko chairman, president and CEO Al Walker said. 

http://petroglobalnews.com/2016/03/anadarko-petroleum-slashes-capital-budget-in-half/

Staff Writers March 9, 2016
inShare8

U.S. drillers dropped just over a dozen rigs last week, marking the eleventh straight week of a U.S. rig count decline.

The number of oil and gas rigs operating in the United States fell by 13 to 489 rigs as of March 4, a significant drop from the 1,192 rigs operating during the same time last year  , according to Baker Hughes.

According to data provided by Baker Hughes, the last time the U.S. rig count dipped below 490 was in April 1999.

Oil drillers dropped eight rigs last week, pulling the oil rig count down to 392 from 922 a year ago, while the gas rig count dipped by five to 97 rigs.

The directional drill count fell to 42 rigs after also losing five rigs and the vertical rig count held steady at 58 rigs.

The horizontal rig count slid by eight to 389 rigs compared to 895 rigs during the same period last year. 

Texas posted a four rig loss last week and North Dakota and Oklahoma lost three rigs a piece.

Colorado booked a two rig drop while Louisiana, New Mexico and West Virginia each posted a one rig loss.

Rig counts in Arkansas, California, Kansas, Ohio, Pennsylvania and Wyoming were unchanged from last week.

The Permian Basin in Texas posted the largest rig loss of all the major U.S. basins after drillers in the play dropped six rigs.

The Williston Basin, home of the Bakken shale play, saw its rig count drop to 33 rigs last week after losing three rigs.

The DJ-Niobrara, Eagle Ford, Marcellus and Mississippian basins each lost one rig last week.

The Cana Woodford, the Granite Wash and Haynesville basins added one rig each last week.

Canada’s oil and gas rig count fell by 46 last week to 129 rigs after losing 33 oil rigs and 13 gas rigs.

The rig count in the U.S. Gulf of Mexico dropped to 24 after losing three rigs, down from 49 rigs a year ago.

http://petroglobalnews.com/2016/03/u-s-rig-count-falls-lowest-level-since-1999/

Staff Writers March 10, 2016

Energy XXI Ltd. may be seeking bankruptcy protection after reporting a $1.31 billion net loss for the second quarter of 2016.

According to Reuters, the company may be looking to file for Chapter 11 protection as early as next week if it can’t refinance its debt.

“Absent a material improvement in oil and gas prices or a refinancing or some restructuring of our debt obligations or other improvement in liquidity, we may seek bankruptcy protection to continue our efforts to restructure our business and capital structure,” the Houston-based company said in the filing.

Energy XXI had about $4 billion in liabilities as of December 31, a figure that would make the company’s bankruptcy filing the second-largest energy firm bankruptcy since oil prices began falling in July 2014, Reuters said.

The company said in the filing that it’s evaluating various alternatives with respect to its revolving credit facility, but added “there is no certainty that we will be able to implement any alternatives or otherwise resolve our covenant issues.”

Energy XXI added in the filing that it may have to liquidate its assets and “may receive less than the value at which those assets are carried on our consolidated financial statements.”

The company missed an $8.8 million senior notes interest payment on February 16 and has been trying to secure a restructuring deal with its debt holders before a 30 day grace period ends on March 17, according to the filing.

Energy XXI suspended its quarterly dividend on February 26 citing the “current commodity price environment and the need to preserve liquidity.”

Just three days later, the company was notified by the Listing Qualifications Department of the Nasdaq Stock Market that its common stock did not meet the minimum bid price of $1.00 per share required by Nasdaq rules.

The notice has no immediate effect on the listing or trading of the company’s common stock    and it will continue to trade on the NASDAQ Global Select Market under the symbol “EXXI.”

Energy XXI has an automatic grace period that ends on August 22 to achieve compliance with the minimum bid price requirement.

The company reported an adjusted EBITDA of $50.1 million on revenue of $184.6 million its fiscal 2016 second quarter that ended on December 31, down from an adjusted EBITDA of $244.2 million on revenue of $503.0 million in the year-ago quarter.

Net loss attributable to common shareholders in the 2016 fiscal second quarter totaled $1.31 billion, or $13.81 per diluted share, compared with a fiscal 2015 second quarter net loss attributable to common shareholders of $278.8 million, or $2.97 per diluted share.

Net loss attributable to common shareholders in the 2016 fiscal second quarter included a non-cash impairment charge on the company’s oil and gas assets of $1.43 billion, or $15.00 per diluted share, “primarily due to sustained lower commodity prices.”

http://petroglobalnews.com/2016/03/energy-xxi-ltd-may-seek-bankruptcy-protection-next-week/

Agelbert NOTE: Chaper 11 is a VERY interesting type of "bankruptcy" protection. You do remember all the comments from predatory capitalists in general (and fossil fuelers in particular) about how, "If you can't compete, you should go out of business and be responsible about accepting your FAILURE", right? 

Well, when a corporation, thanks to those "responsible" limited liability laws out there, files for Chapter 11 Bankruptcy, the court assigns a trustee to handle the priority of the distribution of payments to creditors. The corporations, once the Chapter 11 law came into being, immediately proceeded to game the court trustee selection process (for obvious reasons.  ).

The "trustee" is usually about as objective as the corporation is about how much to pay the creditors. What that translates to, dear readers, is that certain creditors get nickel and dimed and certain creditors get less than that (i.e. next to nothing). Said creditors CANNOT sue for compensation while the Chapter 11 process is going on AND said creditors CAN BE SUED for breach of contract if they stop providing services and/or products contracted prior to the bankruptcy (the corporation in bankruptcy can keep this game going for a YEAR or more). IOW the Court is legally COERCING creditors to continue providing contracted services to a Corporate DEADBEAT!


But here's the really fun part, if you are part of the management of the corporation that, through incompetence, stupidity or whatever is legally AVOIDING paying its debts (Chapter 11 is for CORPORATIONS, not for people.  ). The executives can continue getting FULL compensation throughout the process while employees are given pink slips, told their matching 401K funds legally might not be there, all the businesses that lent money and services to this corporation get a ridiculously small percentage of the debt payment due to them AND stock holder dividends disappear.   

So, this fine fellow running Energy XXI into the ground is probably planning to get away with ZERO economic pain and a nice golden parachute, while all the people lower down on the Predators 'R' US pecking order get the SHAFT.

It's all quite legal. It's also irrational and destructive of the economy on behalf of a few greedballs ("job creators" my ASS!) who wheedle their way to top management. While Energy XXI is being babied for no good reason, every creditor is being pushed towards bankruptcy, also for absolutely no good reason.

It is one more reason that the claim that "our version of Capitalism is basically just and rewards those who work hard while it punishes those who don't" is pure and unadulterated BALONEY.

So, when that hopefully happens soon, let's all cheer when Energy XXI goes into Chapter 7  . The less "Acquire, Exploit and Deliver" polluting piggery out there, the better.   

But, in the meantime, let's continue to BOO Chapter 11. It's corporate welfare queenery, PERIOD.

Staff Writers March 14, 2016

The U.S. Energy Information Administration lowered its Brent crude price forecast on Tuesday despite an estimated 80,000 barrel per day drop in U.S. crude production.              In its latest short-term energy outlook, the agency said it now expects Brent crude prices to average $34 per barrel in 2016, down $3 per barrel from last month’s forecast.

The report forecast an average Brent crude price of $40 per barrel in 2017, down $10 per barrel from the agency’s previous estimate.

Forecast West Texas Intermediate crude prices are expected to average the same as Brent in 2016 and 2017.

However, the agency added that current values of futures and options contracts “suggest high uncertainty in the price outlook.”

Brent was trading at $40.01 per barrel around 12:30 p.m. on Thursday while WTI was trading at $37.49 per barrel.

U.S. crude oil production averaged an estimated 9.4 million barrels per day in 2015, and is forecast to average 8.7 million bpd in 2016 and 8.2 million bpd in 2017, the report said.

EIA estimates that crude oil production in February averaged 9.1 million bpd, down 80,000 bpd from January’s level.

Natural gas working inventories were 2.536 trillion cubic feet on February 26, 46 percent higher than the same week last year and 36 percent higher than the previous five-year average for the same week.

EIA forecasts that inventories will end the winter heating season at 2.288 tcf, a 54 percent year-over-year increase.

Henry Hub spot prices are forecast to average $2.25/million British thermal units in 2016 and $3.02/MMBtu in 2017, compared with an average of $2.63/MMBtu in 2015.

http://petroglobalnews.com/2016/03/eia-lowers-2016-brent-price-forecast/