AuthorTopic: Hills Group Oil Depletion Economic and Thermodynamic Report  (Read 71321 times)

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🛢️ What Will Follow The Biggest US Rig Count Collapse In History
« Reply #255 on: May 13, 2020, 04:29:43 AM »
That's an EZ question to answer.  Further economic mayhem.

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https://oilprice.com/Latest-Energy-News/World-News/What-Will-Follow-The-Biggest-US-Rig-Count-Collapse-In-History.html

What Will Follow The Biggest US Rig Count Collapse In History
By Rystad Energy - May 11, 2020, 1:30 PM CDT


The Covid-19 pandemic has caused the largest horizontal rig count collapse ever recorded in the US, a Rystad Energy analysis of Baker Hughes data shows. The total horizontal oil rig count fell below 270 rigs last week, a 57% decline from the peak of 624 rigs seen in the middle of March 2020. Horizontal gas drilling was down to 70 rigs last week, which is 54% below the previous peak seen in June 2019.

The magnitude of the decline in horizontal oil drilling makes this downturn even more unique, compared to the previous downturn of 2015-2016, where declines all the way from the peak to the trough reached around 53% to 54%.

While we have not reached the bottom yet, we have most likely passed the peak pace of decline, both in absolute and percentage terms. After several weeks of observing a decrease of 50-55 rigs per week, the oil rig count was down by only 32 rigs last week. On a two-week basis, a 23.4% fall was recorded last week – certainly moderate in comparison to the peak two-week decline level of 25.6% seen the week before.

“The oil price crisis and the impact of Covid-19 has resulted in the most dramatic collapse of the US Land rig market in history. There are two key trends around basin mix; the share of Permian increased in terms of total horizontal oil drilling from around 62% to about 73%, while the share of gas in total horizontal drilling increased from 12% to 21%. We anticipate that both of these shares will continue to climb in the next few weeks.,” says Artem Abramov, Rystad Energy’s Head of Shale Research.

The number of counties with active horizontal oil drilling across the whole country has kept declining. Last week, North Slope in Alaska, Walker Ridge in Louisiana, and Ellis County in Oklahoma saw the departure of their last active rigs. This brought the total number of active counties in the country from 49 to 46, a record-low level in modern history.

Meanwhile, the number of active counties has stabilized in the state of Texas at 28 counties, and in the Permian Basin at 18 counties.

Total horizontal rig count in the Permian fell below 200 rigs and now exhibits more than 50% decline from the peak in March 2020. The three largest sub-basins, Delaware New Mexico, Delaware Texas and Midland North, are now diverging rapidly from each other in terms of the magnitude of decline. Delaware Texas is rapidly losing its rigs having fallen from the peak of 118 rigs to 44 rigs, due to both structural declines and the reallocation of some rigs to sweet spots in New Mexico.

Midland-focused operators with Delaware exposure have always prioritized activity outside Delaware acreage. Drilling in Delaware New Mexico stabilized last week, although additional declines might still be observed in the next few weeks. The relative resiliency of Delaware New Mexico can be largely explained by the lack of drilling activity declines realized by ExxonMobil and Devon Energy, which together account for around 50% of the active rigs now in the sub-basin.

The Midland North Basin is seeing more significant declines than Delaware New Mexico, though these declines are really driven by the eastern portion of the basin, which hosts Howard and Glasscock counties. Midland County, for example, exhibits only 44% decline from the peak, which is comparable to Lea County in New Mexico.

Outside of the Permian, declines persist in Eagle Ford, Bakken and SCOOP & STACK. The total horizontal rig count in these three basins combined is down to 59 rigs which is around a 66% decline from the peak activity level seen in early 2020. Horizontal drilling has been relatively flat in DJ and PRB basins in recent weeks, following a period of material downward adjustment.

Gas-focused drilling has kept declining gradually, although Haynesville is now exhibiting some signs of stabilization. Total horizontal gas drilling in Appalachia, which includes Marcellus and Utica, is already down to 35 rigs. The rig count could fall below 30 by the end of 2Q20 before stabilizing in the second half of the year.

By Rystad Energy
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🛢️ Is EIA Data Disguising A Disastrous Decline In U.S. Shale?
« Reply #256 on: May 14, 2020, 03:45:49 AM »
EIA data is about as reliable as BLS data.  ::)

RE

https://oilprice.com/Energy/Crude-Oil/Is-EIA-Data-Disguising-A-Disastrous-Decline-In-US-Shale.html

Is EIA Data Disguising A Disastrous Decline In U.S. Shale?
By Nick Cunningham - May 13, 2020, 7:00 PM CDT


The Trump administration claims that the U.S. is “transitioning to greatness,” and that energy companies are going to see “massive gains.” U.S. Secretary of Energy Dan Brouillette says there is “stability” in the oil market, and that economic activity will “explode” on the other side of the pandemic. Thanks to the leadership of President @realDonaldTrump, the transition to greatness is well underway, and our economy along with our U.S. energy companies are going to see massive gains on the other side of this pandemic. pic.twitter.com/EZ2DFnlcUw

Meanwhile, back in reality, U.S. oil production continues to decline as drillers shut in wells and cut back spending. Output has already declined by 1.1 million barrels per day (mb/d), and more losses are likely. New data from Rystad Energy predicts U.S. oil production declines of roughly 2 mb/d by the end of June.

“Actual production cuts are probably larger and occur not only as a result of shut-ins, but also due to a natural decline from existing wells when new wells and drilling decline,” Rystad said in a statement.

Energy expert Philip Verleger, in an article for Energy Intelligence reports that the magnitude of output declines is much larger. His latest research shows that production as of May 10 is down by almost 4 million bpd from its peak as the below chart shows.

Source: PK Verleger LLC

To be sure, the U.S. government is doing quite a bit to try to bailout the oil industry. A new report finds that some 90 oil and gas companies will benefit from the Federal Reserve’s corporate bond buying program. The Trump administration is also quietly reversing environmental protections on the oil and gas industry.

But in the face of a historic meltdown in the oil market, even handouts from Uncle Sam won’t stop declines. The U.S. oil industry continues to idle drilling rigs at a tremendous clip, and the rig count is down by more than half in two months. “[W]e think that the last time there was so little drilling activity in the US was the 1860s during the first decade of the Pennsylvania oil boom,” Standard Chartered analysts said. The investment bank said that the contraction was notably acute in Oklahoma, where rigs fell to just 11 across the state, down 89 percent from the same period a year earlier.

Related: Has Demand For Oil Already Peaked?

The sharp decline in rigs, drilling and completion activity means that the steep decline rates endemic to shale drilling will overwhelm what little new production comes online. Standard Chartered said that if activity were to remain stuck at current levels, U.S. production in the five main shale basins would fall by 2.89 mb/d by the end of 2020.

Those declines would come on top of the output that has only been shut in temporarily. Standard Chartered envisions a “squashed-W pattern” for supply, in which temporarily idled output comes back online in a few months, but more structural declines continue thereafter.

The EIA, characteristically, is much more optimistic about the state of U.S. supply. The agency said on Tuesday that it only sees a 0.5 mb/d decline in oil production this year, compared to 2019 levels. Notably, Secretary of Energy Dan Brouillette says production will increase in the third and fourth quarters as the economy roars back.

Others aren’t so sunny. A report from Wood Mackenzie released on Wednesday says that oil demand will take years to recover.

“Production is falling sharply in the US, and some producers are reluctant to sell forward,” Commerzbank wrote in a note.

But while some oil drillers have hesitated to lock in hedges, others have decided that they can stomach hedges at extremely low prices, not because they can profit at such low levels, but likely only to guard against another meltdown. “The strike prices achieved in the latest surge of hedging have been low, these appear to be hedges designed to improve the probability of survival should market conditions deteriorate further,” analysts at Standard Chartered wrote in a report.

“Some of the hedges have been fixed at very low prices: one company has a USD 20.73/bbl WTI hedge for Q2, another has three-way collars for Q3 and Q4 with a floor of USD 25/bbl Brent,” Standard Chartered added.

The unease from some drillers regarding oil prices is understandable. The Secretary of Energy may predict “greatness” ahead, but others see a long, protracted economic recovery.

By Nick Cunningham of Oilprice.com
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🛢️ U.S. Rig Count Collapse Continues Despite Soaring Oil Prices
« Reply #257 on: May 23, 2020, 12:02:26 AM »
https://oilprice.com/Energy/Energy-General/US-Rig-Count-Collapse-Continues-Despite-Soaring-Oil-Prices.html

U.S. Rig Count Collapse Continues Despite Soaring Oil Prices
By Julianne Geiger - May 22, 2020, 12:00 PM CDT


Baker Hughes reported on Friday that the number of oil and gas rigs in the US fell again this week by 21, falling to 318, with the total oil and gas rigs sitting at 665 fewer than this time last year—a more than 67% drop off in a single year.

The number of oil rigs decreased for the week by 21 rigs, according to Baker Hughes data, bringing the total to 237—a 560-rig loss year over year. It is the fewest number of active oil rigs in play since mid-2009.

The total number of active gas rigs in the United States held at 79 according to the report. This compares to 186 rigs a year ago.

The significant fall in the rig count over the last couple of months is also reflected in the EIA’s estimate for oil production in the United States, which fell again this week to 11.5 million barrels of oil per day on average for week ending May 15, which is 1.6 million bpd off the all-time high and 100,000 bpd lower than the week prior. It is the seventh straight weekly production decline.

Canada’s overall rig count decreased by 2 rigs this week, to 21 rigs. Oil and gas rigs in Canada are now down 57 year on year.

At 12:08 pm, WTI was trading down 2.92% at $32.93. Although down on the day this is nearly $4 up week over week. The Brent benchmark was trading down 3.22% at $34.90 on the day, but up nearly $3 per barrel week over week. The price dip on Friday is courtesy of market fears after China on Friday did not release annual economic outlook as was expected. 

By Julianne Geiger for Oilprice.com
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☀️ America's Oil & Gas Capital Is Turning To Renewables
« Reply #258 on: May 29, 2020, 08:42:27 AM »
A Clusterfuck waiting to happen.   ::)

RE

https://oilprice.com/Latest-Energy-News/World-News/Americas-Oil-Gas-Capital-Is-Turning-To-Renewables.html

America's Oil & Gas Capital Is Turning To Renewables
By Michael Kern - May 28, 2020, 8:30 PM CDT


When we think of Texas, we think of Big Oil. Even more so in its largest city, Houston. Home to some of the world’s largest private energy companies, Houston lives and dies on oil. But it is also the biggest buyer of….renewable energy.

The city of Houston has committed to purchasing 100% renewable energy as a part of a renewed collaboration with NRG Energy. Throughout the seven-year agreement, the city predicts seeing the cost of electricity for the community falling, resulting in $9.3 million saved every year.

Mayor Sylvester Turner noted, “All they see in the city of Houston is Chevron and Shell and Exxon. They kind of look past the city of Houston, but there are some incredible things that are happening in the city of Houston when we start talking about renewables.”

This new deal is just the most recent in a string of initiatives helping to push the city in a more eco-friendly direction. In addition to the renewables pledge, the city is also building new bike lanes and encouraging the use of electric cars. It's even proactively courting Elon Musk to move Tesla Inc. and SpaceX to the "Space City" in hopes the offer will help other businesses see Houston for what it really is, rather than simply the global capital of the oil & gas business.

The strategy also looks to expand Houston's investments in its own renewable resources, with the goal of powering the city with 100% renewable energy by 2025, rather than purchasing it. Houston is currently the biggest customer of renewable energy in the country, according to the United States EPA.

Houston’s chief sustainability officer Lara Cottingham explained, “As a city, we have a really long and strong history of sustainability. From a sustainability perspective, we’ve been the largest municipal user of renewable energy for some time now.”

By Michael Kern for Oilprice.com
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Re: ☀️ America's Oil & Gas Capital Is Turning To Renewables
« Reply #259 on: May 29, 2020, 09:20:51 AM »
A Clusterfuck waiting to happen.   ::)

RE

https://oilprice.com/Latest-Energy-News/World-News/Americas-Oil-Gas-Capital-Is-Turning-To-Renewables.html

America's Oil & Gas Capital Is Turning To Renewables
By Michael Kern - May 28, 2020, 8:30 PM CDT


When we think of Texas, we think of Big Oil. Even more so in its largest city, Houston. Home to some of the world’s largest private energy companies, Houston lives and dies on oil. But it is also the biggest buyer of….renewable energy.

The city of Houston has committed to purchasing 100% renewable energy as a part of a renewed collaboration with NRG Energy. Throughout the seven-year agreement, the city predicts seeing the cost of electricity for the community falling, resulting in $9.3 million saved every year.

Mayor Sylvester Turner noted, “All they see in the city of Houston is Chevron and Shell and Exxon. They kind of look past the city of Houston, but there are some incredible things that are happening in the city of Houston when we start talking about renewables.”

This new deal is just the most recent in a string of initiatives helping to push the city in a more eco-friendly direction. In addition to the renewables pledge, the city is also building new bike lanes and encouraging the use of electric cars. It's even proactively courting Elon Musk to move Tesla Inc. and SpaceX to the "Space City" in hopes the offer will help other businesses see Houston for what it really is, rather than simply the global capital of the oil & gas business.

The strategy also looks to expand Houston's investments in its own renewable resources, with the goal of powering the city with 100% renewable energy by 2025, rather than purchasing it. Houston is currently the biggest customer of renewable energy in the country, according to the United States EPA.

Houston’s chief sustainability officer Lara Cottingham explained, “As a city, we have a really long and strong history of sustainability. From a sustainability perspective, we’ve been the largest municipal user of renewable energy for some time now.”

By Michael Kern for Oilprice.com

Houston is a clusterfuck that already happened. Is still happening.....but actually, renewables in Texas are a decent move...because....we still have a ton of hitherto untapped wind.

Wind is a much better EROEI than solar. At least 3X better, maybe a lot more, depending on who you believe.

What makes the desert beautiful is that somewhere it hides a well.

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🛢️ A Nightmare Scenario For Offshore Oil
« Reply #260 on: May 31, 2020, 01:20:38 AM »
https://oilprice.com/Energy/Energy-General/A-Nightmare-Scenario-For-Offshore-Oil.html

A Nightmare Scenario For Offshore Oil
By Editorial Dept - May 30, 2020, 6:00 PM CDT


Between low demand, soaring inventories, depressed prices, a global pandemic, and now, hurricane season, it seems a perfect storm is forming around the offshore oil industry.  The world's offshore oil market, responsible for 30 percent of all the world's oil production, is facing an impossible set of challenges. With oil sitting at half the price of its yearly high, and doubts forming around the future of demand, in addition to the ongoing COVID-19 pandemic wreaking havoc on the global economy, companies are struggling to rein in capital spending and are beginning to rethink the future of key projects.

The crisis has pushed much of the world's oil production onshore in favor of more flexible rigs and lower operational costs.

Many new offshore projects have even been put on hold as the new reality of the oil market sets in. Companies are now scrambling to suspend federal lease deadlines as the near-term looks increasingly uncertain.

The industry's growing troubles come just as Royal Dutch Shell was forced to airlift a number of coronavirus-infected employees from one of its offshore platforms, highlighting the risks associated with confining workers on offshore rigs during a pandemic.

And Shell isn't the only company grappling with outbreaks.

Related: Oil Prices Are Unlikely To Break $40 This Year

In recent weeks, hundreds of workers at offshore rigs in the Gulf of Mexico, the North Sea, Mozambique, Canada, and Kazakhstan have been infected with COVID-19.

The outbreaks add to the growing list of trials and tribulations the offshore industry is grappling with.

Many firms operating offshore rigs have yet to recuperate from the last oil price collapse in 2014-2015 when prices fell from $100 to below $40, weighing on the entire industry.

“Offshore drillers and offshore vessel providers will generally be unable to pay their total outstanding debt of 2020 based on their cash flow from operating activities, unless they are able to make sufficient capital expenditure cuts,” Jon Marsh Duesund, a partner at energy research firm Rystad Energy explained, adding, “Otherwise, they will have to turn to capital markets for refinancing.”

And with the global economy teetering on the brink, the industry may not be able to secure the funds it needs to stay afloat.

By Michael Kern for Oilprice.com
« Last Edit: May 31, 2020, 01:23:07 AM by RE »
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🛢️ The Oil & Gas Sector Could Already Be In Terminal Decline
« Reply #261 on: June 18, 2020, 02:50:41 AM »
https://oilprice.com/Energy/Crude-Oil/The-Oil-Gas-Sector-Could-Already-Be-In-Terminal-Decline.html

The Oil & Gas Sector Could Already Be In Terminal Decline
By Robert Rapier - Jun 17, 2020, 12:00 PM CDT


The fossil fuel industry has faced serious headwinds for several years, but the rise of renewables combined with the fall in consumption as a consequence of the global corona crisis is pushing it over the edge and into “terminal decline”. Although global coal consumption continues to grow slowly, its use has peaked in developed regions. According to the 2019 BP Statistical Review of World Energy, U.S. coal consumption fell by more than 40% in the past decade, while in the EU it has seen a nearly 27% drop.

The primary culprits behind coal’s decline are competition from cheap natural gas brought on by the shale gas boom in the U.S., as well as a surge of renewable capacity aided by legislation aimed at curbing carbon dioxide emissions.

Victims of Their Own Success

But the natural gas and subsequent oil boom were victims of their own success. Even though demand growth for both of these commodities has been robust over the past decade, prices have plunged. So while it’s unsurprising that the coal industry has suffered immense financial stress over the past decade, the same is true of the oil and gas industry. Despite strong demand growth for its products, the prices of oil and natural gas have fallen by more than 50% in recent years.

The fossil fuel industry has faced an oversupply problem, as well as a public relations problem. Even before the COVID-19 pandemic, the industry was already seen by many as one on its way out, and therefore it struggled to attract investors. Nevertheless, it seemed likely that the industry would enjoy at least another decade of dominance before renewables and electric vehicles combined to put the industry into permanent decline.

COVID-19 Rapidly Changed the Outlook

But COVID-19 has caused a significant change in the industry outlook. In the early stages of the pandemic, China’s economy slowed as the country grappled to contain the virus. This slowdown had a negative impact on fossil fuel demand. As oil demand began to soften, OPEC tried to work with Russia to reduce production. Talks failed, a subsequent price war broke out between Saudi Arabia and Russia, and oil prices collapsed. 
Related: India Looks To Double Oil Refining Capacity By 2030

As COVID-19 spread to other countries and quarantines were implemented, oil prices ultimately fell into negative territory, which had never happened before with a major benchmark. Power demand fell as businesses closed and people stopped travelling or commuting. This created a perfect storm that obliterated fossil fuel demand in April. Global oil demand fell by as much as 30 million BPD, followed by gas and coal demand. Even demand for liquefied natural gas (LNG), which has seen strong growth in recent years, plummeted, and cargos destined for Asia had to be rerouted to Europe, adding to a supply glut there.

Meanwhile, renewables may see a small negative impact from the pandemic in the short term – but the move toward green energy may gain momentum as the COVID-19 threat fades. Underlying demand for clean energy is rising.  Further, the investment climate for fossil fuels will continue to worsen over time, so the industry may find itself struggling to attract new capital even after the crisis.

A Place for Nuclear Power

However, existing infrastructure of fossil fuels will create some headwinds for renewables, as well as nuclear power, the world’s largest source of low-carbon energy. The industry will hardly give up its primacy without a fight.

What this looks like can be observed in Lithuania, which had placed its chips on a new LNG terminal in 2014 to reduce the country’s dependence on Russian gas. However, the Klaip?da terminal was never profitable, and to this day operates at only a fraction of its capacity while incurring costly maintenance fees shouldered by gas consumers. To curb its losses, Klaip?da now receives LNG cargoes from Russia too.

Part of the problem is that the LNG market price was already depressed before the COVID crisis. In 2015, when the terminal went online, the price was lower than the price Lithuania paid to Statoil, which forced the state to levy high terminal fees to cover for the losses from selling gas. Now, with the pandemic having further collapsed fossil fuel prices, the fees are going up accordingly, with no contribution to energy security.
Related: Oil Markets May Not Fully Recover Until 2022

The decision to bank on LNG under these circumstances is seen as one of the factors leading Lithuania to campaign against a nuclear power plant in Astravets in neighbouring Belarus. Besides constantly questioning the plant’s safety – contrary to international assessments – Lithuania has passed laws prohibiting the purchase of energy from Belarus after the power plant begins operations later this and next year. Furthermore, Lithuania is aggressively lobbying Brussels and other capitals in the region for a full boycott of electricity imports from Belarus. If implemented, this could lead to millions of additional CO2 emissions in the region.

The New Energy Order?

The fact remains that the world could find itself with an energy shortfall if the crisis is long-lasting and fossil fuels disappear faster than originally expected. That could hit the power sector because of falling coal and natural gas production, at a time that global demand for electric vehicles is growing.

Nuclear power can be part  of a low-carbon sustainable future along with renewable energy. Indeed, the International Energy Agency estimates that in order to meet the world’s sustainability targets the current rate of nuclear capacity additions, which is about 10-12 gigawatts of electricity (GWe) per annum, must be at least be doubled. With the current crisis impacting the fossil fuel sector, capital budgets are being slashed. That implies a decline in output, which could be larger than the capacity of variable renewables to absorb. The current glut of energy supply may turn into a series of severe intermittent shortages when sun doesn’t shine, and wind doesn’t blow.

Although it would be premature to suggest that the current pandemic marks the end of fossil fuels, it might not be a stretch to call this the beginning of the end. It’s important to focus on the overall system performance and ensure that the transition to a low carbon future is sustainable itself.

By Robert Rapier for Oilprice.com
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🛢️ China’s Oil Industry Is In Crisis
« Reply #262 on: June 23, 2020, 01:50:25 AM »
https://oilprice.com/Energy/Crude-Oil/Chinas-Oil-Industry-Is-In-Crisis.html

China’s Oil Industry Is In Crisis
By Tsvetana Paraskova - Jun 22, 2020, 12:00 PM CDT

    The low oil prices and the economic slowdown from the COVID-19 pandemic have hit the finances of Chinese companies hard.
    Another Chinese oil firm has defaulted on a dollar-denominated bond.
    Hilong Holding is currently assessing the impact of the default on its other indebtedness.


Another Chinese oil firm has defaulted on a dollar-denominated bond, bringing the total value of defaults in all sectors of China’s offshore bond market to US$4 billion so far this year, more than double the value of defaults in the same period last year, Bloomberg estimates.

 

Oil equipment and oil services company Hilong Holding said on Monday that it is defaulting on a US$165-million bond after an insufficient percentage of noteholders had agreed to swap the notes with new debt. The minimum acceptable level of noteholders to agree to the debt exchange offer was 80 percent, while just 63.45 percent had agreed to tender notes for the exchange offer. 

 

“As previously announced, without a consummation of the Exchange Offer, the Company does not and will not have alternative financing means available to repay the Existing Notes upon maturity,” which was June 22, the company said.

 

Hilong Holding is currently assessing the impact of the default on its other indebtedness, it said.

Related: Why The $17.5 Billion Write-Down Is Just The Beginning For BP

 

Earlier this month, Fitch Ratings downgraded Hilong Holding’s Long-Term Foreign-Currency Issuer Default Rating to CC from B to reflect the high refinancing risk related to the US$165-million 7.25% senior unsecured notes due on June 22. According to Fitch, low oil prices may result in a longer-term deterioration in Hilong Holding’s credit metrics as sales decline and margins contract.

 

The low oil prices and the economic slowdown from the COVID-19 pandemic have hit the finances of Chinese companies, including such in the oil industry, and defaults in its so-called offshore bond market have accelerated in recent months.

 

Last month, Hong Kong-listed oil exploration firm MIE Holdings Corporation defaulted on a dollar-denominated bond, becoming the first victim from the oil sector in China’s offshore bond market. Independent oil refiner Shandong Qingyuan Group later also failed to pay a principal installment of a US$1-billion loan. 


By Tsvetana Paraskova for Oilprice.com
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🛢️ Saudi Arabia Eyes Total Dominance In Oil And Gas
« Reply #263 on: July 01, 2020, 12:13:54 AM »
https://oilprice.com/Energy/Crude-Oil/Saudi-Arabia-Eyes-Total-Dominance-In-Oil-And-Gas.html

Saudi Arabia Eyes Total Dominance In Oil And Gas
By Julianne Geiger - Jun 30, 2020, 7:00 PM CDT


Saudi Arabia’s Energy Minister Prince Abdulaziz claimed last week that the Kingdom will be the world’s biggest hydrocarbon producer “even” in 2050.

“I can assure that Saudi Arabia will not only be the last producer, but Saudi Arabia will produce every molecule of hydrocarbon and it will put it to good use … It will be done in the most environmentally sound and safe way and the most sustainable way,” Abdulaziz said when asked about the oil market outlook in 2050 during a virtual conference convened by Saudi Arabia’s Future Investment Initiative Institute (FII-I).

Abdulaziz added that Saudi Arabia “will be the last and biggest producer of hydrocarbon even then,” referring to 2050.

But is Saudi Arabia’s the world’s leading hydrocarbon producer now? And what is its legitimate prospect for being the largest hydrocarbon producer in 2050?

‘Hydrocarbon’ Explained

To unpack what the prince is claiming, we first must understand the hydrocarbon classification. A hydrocarbon is an organic compound that contains only carbon and hydrogen. This encompasses petroleum, natural gas, and condensates.

Is Saudi Arabia the world’s largest hydrocarbon producer?

Saudi Arabia’s oil production in 2019, which includes crude oil, all other petroleum liquids, and biofuels--this would include natural gas plant liquids and condensate--was an average of 11.81 million bpd, according to the Energy Information Administration (EIA). At 12% of the world’s total, it’s no wonder why Saudi Arabia holds so much market sway, especially when in cahoots with the rest of the OPEC members.

Russia, too, is right up there, producing an average of 11.49 million bpd, or 11% of the world’s total. This is also no wonder, then, that when you put Russia and Saudi Arabia together to “stabilize” the world’s oil supply to balance it with demand, it creates a crude oil production powerhouse that is unmatched.

But individually speaking, Saudi Arabia is not king of the oil production hill, for its nemesis--the country that sought to undo every production quota OPEC could come up with, is the United States. On its own, the United States produced 19.51 million barrels of oil (and other petroleum liquids) per day, besting both Saudi Arabia and Russia, and controlling 19% of the world’s oil supplies.

The rest of the countries on their own are significantly further down the list, with not one of them producing more than half of third-place Russia. Still, Canada and China--#4 and #5 respectively--are still worth mentioning.

But Saudi Arabia expects to be the largest hydrocarbon producer “still” in 2050. If they are not so now, what are the chances they will be so thirty years from now?

Perhaps out of step with Saudi Arabia’s grand Vision 2030 plan, The Kingdom is still hoping to be top dog for petroleum production decades from now.

The EIA, in its Annual Energy Outlook 2020, has forecast that global production of crude oil and lease condensate, natural gas plant liquids, dry natural gas, and coal in the United States will reach 90.29 quadrillion Btus in its reference case.  For crude oil and lease condensate, the EIA expects that the United States will be on par with where it is today, in its reference case. For natural gas plant liquids production, the EIA anticipates an increase by 2050.

Source: EIA Annual Energy Outlook 2020

The reason for the EIA assuming oil production will level off in 2022 and holding fairly steady through 2045 is the anticipated decline in well productivity, forcing tight oil producers to hunt for oil is less prolific areas.

For Saudi Arabia, it’s 30-year hydrocarbon plan or abilities are more of an unknown. It has the world’s second-largest crude oil reserves, and it does have plans to add natural gas production in the coming years as it looks to step away from its near-total reliance on crude oil.

For natural gas, Saudi Arabia announced earlier this year that it may actually bring forward its plans to export natural gas by 2030. It did not, however, provide details about this plan, or how it would be implemented.

But it’s detailless plans may run into some trouble. For starters, while Saudi Arabia has an excess of low-cost associated gas reserves that it could tap, the production of said gas would be limited to the amount of crude it can produce. And crude oil production is periodically--and profoundly so right now--capped by OPEC agreements that keep the Kingdom’s fossil fuel ambitions in check.

But the EIA sees the OPEC countries besting non-OPEC countries on the production front by 2050

By 2050, the EIA sees the production of crude oil, lease condensate, natural gas plant

liquids (NGPLs) and other liquid fuels from 2018 to 2050 reaching 121.5 million barrels per day (b/d) in 2050, or about 21% more than 2018 levels.

For crude oil and lease condensate, the EIA sees OPEC members increasing production by 9.5 million bpd, and nonOPEC countries increasing their crude oil and lease condensate production by 8 million bpd. This translates into a 27% increase for OPEC countries and a 17% increase for non-OPEC countries, according to the EIA’s International Annual Energy Outlook.

Overall, the EIA expects the OPEC countries to produce 56% of total global production in 2050.

Most of that production increase that OPEC nations (27%) will see will come from the Middle East, which is expected to increase by 35% to 2050.

Meanwhile, production in Russia (14%) and Canada (123%) are expected to increase at a quicker rate than the United States (8%) and Brazil (50%).

Using historical production figures courtesy of BP and forecasts published by peakoilbarrel, the top four oil producers remain in their positions through 2050.

Toeing the Saudi Line

Prince Abdulaziz’s chest-puffing seems to be in line with Saudi Arabia’s previous assertions that oil will be alive and well in 2050 despite attempts to spur the world along an energy transition. Even as far back as 2007, Aramco said it could boost reserves to as many as 1 trillion barrels by 2027, adding that it would be 2050 or later before production peaks. 

But some of Saudi Arabia’s forecasts of fossil fuel’s future were more sober-minded, even seeing a phasing out of fossil fuels by the middle of this century, Ali al-Naimi, Saudi Arabia’s oil minister at the time said in 2015.

“In Saudi Arabia, we recognize that eventually, one of these days, we are not going to need fossil fuels. I don’t know when, in 2040, 2050 or thereafter,” al-Naimi said, adding that Saudi Arabia was therefore planning on becoming a “global power in solar and wind energy.”

By Julianne Geiger for Oilprice.com
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🛢️ Big Oil confronts possibility of terminal demand decline
« Reply #264 on: July 06, 2020, 12:08:15 AM »
After a lifetime of work as a Planet Killer, clearly it is time for Morriarty to be put out to pasture.   :icon_sunny:

RE

https://news.yahoo.com/big-oil-confronts-possibility-terminal-demand-decline-033948222.html

Big Oil confronts possibility of terminal demand decline
[AFP]  Julien MIVIELLE
   AFP•July 4, 20


    Is this the sunset of the oil industry? (AFP Photo/Paul Ratje)
    Owing to the coronavirus, in recent months the concept of peak demand for oil has come into vogue (AFP Photo/SCOTT HEPPELL)
    IEA executive director Fatih Biron does not believe that lifestyle changes such as teleworking will cause demand for oil to decline substantially (AFP Photo/Ye Aung THU)

1 / 3
Is this the sunset of the oil industry?
Is this the sunset of the oil industry? (AFP Photo/Paul Ratje)

Although crude prices have rebounded from coronavirus crisis lows, oil execs and experts are starting to ask if the industry has crossed the Rubicon of peak demand.

The plunge in the price of crude oil during the first wave of coronavirus lockdowns -- futures prices briefly turned negative -- was due to the drop in global demand as planes were parked on tarmacs and cars in garages.

The International Energy Agency (IEA) forecast that average daily oil demand will drop by eight million barrels per day this year, a decline of around eight percent from last year.

While the agency expects an unprecedented rebound of 5.7 million barrels per day next year, it still forecasts overall demand will be lower than in 2019 owing to ongoing uncertainty in the airline sector.

Some are questioning whether demand will ever get back to 2019 levels.

"I don't think we know how this is going to play out. I certainly don't know," BP's new chief executive Bernard Looney said in May.

The COVID-19 pandemic was in full swing then with most planes grounded and white-collar workers giving up the commute to work from home.

"Could it be peak oil? Possibly. I would not write that off," Looney told the Financial Times.

- Summited? -

The concept of peak oil has long generated speculation.

Mostly, it has been focused on peak production, with experts forecasting that prices would reach astronomical levels as recoverable oil in the ground runs out.

But in recent months, the concept of peak demand has come into vogue, with the coronavirus landing an uppercut into fuel demand for the transportation sector followed by a knock-out punch from the transition to cleaner fuels.

Michael Bradshaw, professor at Warwick Business School, said environmental groups are already lobbying to prevent the Paris agreements becoming another casualty of the pandemic, stressing the need for a Green New Deal for the recovery.

"If they are successful, demand for oil might never return to the peak we saw prior to COVID-19," he said in comments to journalists.

The transport sector may never fully recover, Bradshaw posited.

"After the pandemic, we might have a different attitude to international air travel or physically going into work," he said.

- 'Science fiction' -

Other experts say we haven't reached the tipping point yet, and might not for a while.

"Many people have said, including some CEOs of some major companies, with the lifestyle changes now to teleworking and others we may well see oil demand has peaked, and oil demand will go down," IEA executive director Fatih Birol said recently.

"I don't agree with that. Teleconferencing alone will not help us to reach our energy and climate goals, they can only make a small dent," Firol added while unveiling a recent IEA report.

Moez Ajmi at consulting and auditing firm E&Y dismissed as "science fiction" the idea that a definitive drop in oil demand could suddenly emerge.

He expects a slow recovery in demand even if the coronavirus leaves the global economy weakened.

That weakness would also likely slow adoption of greener fuels.

"It will take time for fossil fuels, which today still account for some 80 percent of primary global consumption to face real competition" from rival energy sources, he said.

Meanwhile, the oil industry could face financing challenges.

Bronwen Tucker, an analyst at Oil Change International, says the industry is now under pressure from investors.

After "a pretty big wave of restrictions on coal and some restrictions on oil and gas, the risks to oil and gas investment right now feel a lot more salient," she said.

The industry is already writing down the value of assets to face up to the new market reality of lower demand and prices.

Royal Dutch Shell said this past week that it will take a $22 billion charge as it re-evaluates the value of its business in light of the coronavirus.

Last month, rival BP reduced the worth of its assets by $17.5 billion.

"This process has further to run, and we expect further large impairments to occur across the sector," said Angus Rodger of specialist energy consultancy Wood Mackenzie.
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🛢️ Shale CEO: U.S. Has Passed Peak Oil
« Reply #265 on: July 14, 2020, 04:08:21 AM »
https://oilprice.com/Latest-Energy-News/World-News/Shale-CEO-US-Has-Passed-Peak-Oil.html

Shale CEO: U.S. Has Passed Peak Oil
By Julianne Geiger - Jul 13, 2020, 4:30 PM CDT


Crude oil production has already peaked in the United States, according to a leading independent oil producer in the U.S. shale patch.

Chief executive of Parsley Energy Matt Gallagher said that the peak production that the United States hit back in March—13.1 million bpd on average—represented shale’s glory days, ne’er to be repeated, according to the Financial Times.

That forecast comes as the Energy Information Administration published its monthly Drilling Productivity Report, which shows the month of August should see even less production from the seven largest shale plays in the United States than July saw—and that wasn’t pretty for shale producers.

In August, the EIA expects production in the seven largest shale plays to fall another 56,000 bpd, to 7.49 million barrels. Oil production for July is estimated at 7.546 million barrels, down from an estimated the 7.632 million barrels per day that it estimated for July in last month’s report.

In August, just like July, the biggest production dropoff in absolute terms is expected to be in the Eagle Ford, with a projected loss of 23,000 bpd, to 1.106 million bpd. Anadarko and Niobrara basins are each expected to drop by 18,000, and the Permian basin is expected to fall by 13,000 bpd.

“I don’t think I’ll see 13m [barrels a day] again in my lifetime,” Gallagher told the Financial Times.

His prediction doesn’t look as crazy as previous calls for peak oil, considering that the production level of 7.5 million bpd that the EIA is anticipating for next month represents a two-year low.

The EIA expects U.S. production to come in at 11.6 million bpd this year, and 11.0 million bpd next year, according to the latest Short-Term Energy Outlook. It’s longer term projections, however, made before the coronavirus pandemic, are for increased production over the next decade.

OPEC, too, is expecting crude oil production, including lease condensate, to increase in the United States over the next decade, before falling off.

By Julianne Geiger for Oilprice.com
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Even with the "high" price for NG up here, my energy bill still only averages $40/mo.  :icon_sunny:

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https://www.adn.com/opinions/2020/07/17/unhappy-about-high-alaska-natural-gas-prices-there-arent-easy-solutions/

Unhappy about high Alaska natural gas prices? There aren’t easy solutions.

    pencil Author: Tim Bradner | Opinion
    clock Updated: 14 hours ago calendar Published 14 hours ago

Hilcorp's Platform A on Sunday, April 2, 2017. (Bill Roth / ADN)

Despite the problems in our economy, let’s count ourselves lucky in some respects. What seemed a serious shortfall in regional energy for Southcentral Alaska a decade ago has been averted.

In 2010 the natural gas fields in the Cook Inlet Basin were being depleted. Utilities like Enstar Natural Gas, Chugach Electric Association, Anchorage’s city-owned Municipal Light and Power and the municipality itself were practicing electricity “brownouts” — and even neighborhood “blackouts” — if gas for power generation were to run low on cold winter days.
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It seemed outlandish, but there were serious worries that gas pressure could drop low enough to trip gas meters and shut down furnaces, which could cause buildings to freeze. Utilities began planning for imports of liquefied natural gas, or LNG, to supplement local supplies.

The key problem was that the major gas producers at the time, Chevron Corp. and Marathon Oil Co., weren’t drilling and developing new gas, although geologists said there was plenty of potential for new gas in Cook Inlet.

All that seems a distant memory. Chevron and Marathon left in 2012 and 2013 after selling their aging gas and oil fields to Hilcorp Energy, a medium-sized Texas-based independent company. Hilcorp specializes in reinvigorating aging fields, and it did just that in Cook Inlet, investing big in an aggressive redevelopment program.

We now seem to have plenty of gas thanks to Hilcorp and also a state initiative that facilitated construction of a regional gas storage facility, so that surplus gas produced in summer can be stored for winter.

But let’s keep in mind that we’re paying a price for this.

Let’s give credit to Hilcorp, which is a well-run business. But the company has now come to dominate the regional gas market because there’s no other big supplier. That’s not Hilcorp’s fault.

Still, people note that natural gas prices in Alaska are about four times the national average. Hilcorp’s average sales price across all of its contracts is about $7.50 per thousand cubic feet, or mcf, people familiar with the contracts say. This compares to the average price for gas at Henry Hub, a major Lower 48 gas trading exchange, of $1.78 per mcf for July so far, according to Alaska Department of Revenue data.

What might Hilcorp’s production costs be? That’s confidential, but some people are able to draw an analogy by comparing production costs at the Beluga River onshore gas field, which is operated and partly owned by Hilcorp.
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Because Beluga River is partly owned by the city-owned Municipal Light and Power, some of its costs are public, and the production costs for April and May were $2.47 per mcf for May and $2.15 per mcf for April.

This is in an aging onshore Beluga field and wouldn’t apply to the more expensive offshore fields, where Hilcorp also gets gas, or its newer onshore Kenai Peninsula gas wells. Also, remember that the margin between sales price and cost is what pays for steady development and drilling work needed to find new gas within the producing fields.

Still, being virtually the sole supplier in the region there is little pressure on Hilcorp to keep a lid on prices over time. There could be new demands on gas supplies, too. Two big mining projects, Donlin Gold and Pebble, both plan to import gas from Cook Inlet to provide power.

There’s no guarantee these will be built, but if they are constructed, new demand will likely push regional prices up. These will be private gas sales contacts not subject to public regulatory review.

Some think that the Regulatory Commission of Alaska should try to squeeze down Hilcorp’s gas prices for utilities, or at least require the company to make more information available on costs and particularly estimates of remaining gas reserves. None of this information is public now.

A better solution in bringing down regional prices would be to get new competition into the market. One way to do this is to help small companies that have found new gas, like BlueCrest Energy near Anchor Point, get gas into the market.

Another way to get more competition is encourage imported liquefied natural gas, or LNG, which was looked at in 2011. LNG is now very cheap on world markets. The mothballed ConocoPhillips LNG plant at Nikiski, near Kenai, could easily be converted to a regional LNG import facility.

In fact, Marathon Oil, which now owns the plant, is thinking of this to supply energy for its oil refinery, which is nearby. The company has even applied to the Federal Energy Regulatory Commission for permission to work on the conversion. Marathon has a lot of issues on its plate on a corporate level, however, so this project may be on the back burner.

However, there are companies interested in investing in Cook Inlet’s gas supply infrastructure to import LNG and to compete with Hilcorp for regional utility contracts. The belief is that spot cargoes on LNG can be purchased in Asia and landed in Cook Inlet for about $4 per mcf.

There would be additional costs with regasification and storage at Nikiski, but the $3.50 per mcf difference between the landed cost and what Hilcorp is sells gas for leaves room to pay the added costs and offer utilities an attractive price. All this may be academic, however, because Marathon owns this facility and will decide itself what to do with the plant.

Hilcorp’s recent contract with Enstar Natural Gas runs until 2033, and another contract with Matanuska Electric Association runs to 2028. These utilities are the biggest regional purchasers, since Chugach Electric and ML&P mostly supply themselves from their share from the Beluga field.

While this seems to indicate the market is locked up, Enstar does have a provision in its contract with Hilcorp allowing the utility to purchase other gas.

The big Alaska LNG Project could have brought gas to Southcentral Alaska at lower cost — $5 per mcf was estimated — but this project faces challenges.

Summing up, as amazing and distressing as the difference is between Lower 48 prices and what we pay here, there are no easy solutions. We just have to suck it up.

But at least we have the gas. Our homes are warm and the lights are on. That’s worth a lot, actually.

Tim Bradner is copublisher of the Alaska Legislative Digest and Alaska Economic Report.
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🛢️ Exxon Is Showing Us Exactly Who It Cares About
« Reply #267 on: August 01, 2020, 02:08:01 AM »
Is this supposed to be a surprise?  ???   :icon_sunny:

RE

https://earther.gizmodo.com/exxon-is-showing-us-exactly-who-it-cares-about-1844562165

Exxon Is Showing Us Exactly Who It Cares About
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Exxon CEO Darren Woods (second from right) clapping at the New York Stock Exchange because money.
Photo: Richard Drew (AP)

Exxon is a known corporate miscreant, and nothing it does to preserve profits should come as a surprise anymore. And yet.

In the face of a crippling pandemic and job crisis, the company has decided to do what it does best: maximize shareholder value. A Reuters exclusive report on Thursday said the company is hellbent on paying out dividends to shareholders, and as part of a scheme to do so, it’s reportedly considering job and spending cuts. The company denied it, though Reuters pointed to circumstantial evidence the oil behemoth has been laying the groundwork that could make it easier to fire people based on performance metrics late last year as the pandemic worsened.

And really, would it be that surprising? The only thing that matters to Exxon is making rich people more money. It lied about climate change for decades and put the entire biosphere at stake. Laying off a few thousand workers in the middle of a pandemic so it can pay out shareholders as promised is like a picnic in the park for the company. Nevertheless, it neatly illustrates a few key points about this moment in time.
Illustration for article titled Exxon Is Showing Us Exactly Who It Cares About
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The first is that Big Oil is struggling mightily. Since the coronavirus ripped around the world and has stubbornly clung in the U.S. thanks to wildly incompetent and malevolent leadership, the economy has crashed. Unemployment is sky-high, the U.S. has seen its slowest economic growth rate ever, and basically nobody has any money to do anything (or they fear they might die if they do). Amidst this, oil companies have seen demand crater and profits disappear. It’s not just Exxon; other big firms like BP and Shell have also gone through layoffs and slashed earnings expectations while smaller firms are going bankrupt or just foregoing paying loans. Shell has said point-blank it isn’t sure its business will ever come back. The whole thing is a mess!

The second is their responses for dealing with the mess, which are telling, particularly Big Oil’s plans to layoff workers. Whether its Exxon’s reported coming wave of layoffs to pay out dividends or BP’s CEO calling laying off 10,000 people in its pursuit of moving beyond petroleum (vomit) the “right thing” to do, it’s clear as day workers are disposable in the face of profit or shifts in the market. It’s not that fossil fuel companies have a monopoly on hating workers and having a hard-on for shareholders. That’s a fixture of capitalism that’s been reinforced by the broken political system in the U.S. that has spent decades gutting worker protections and making it easier for the very rich to make even more money just by being rich.

The last thing to note is that this is all now happening at warp speed and at a scale rarely seen in a single industry, let alone in the face of a pandemic and a climate crisis that both threaten all of humanity. The fossil fuel era is ending as we speak. The question now is how fast it collapses. Rather than acknowledging that and taking care of the people who built it, Big Oil is using the last dollars extracted out of the burnt husk of our planet to line the pockets of the wealthiest among us.

If you can’t imagine what comes next, then take a look at coal. Its collapse over the past decade-plus in the U.S. reveals what’s coming for Big Oil. And we can see the wreckage left behind in the form of disinvestment in coal communities, coal miners with black lung, and companies that refuse to pay into the fund to help them deal with it while CEOs live in lavish mansions built with ill-begotten profits. The reported consideration by Exxon to slash its workforce to keep profits juiced is just a glimpse of what the next decade could look like for oil rig workers, pipeline builders, and others whose livelihoods are tied up in the fossil fuel industry.

Democrats like Rep. Alexandria Ocasio-Cortez and others pushing for a just transition for workers through a period of managed decline while holding fossil fuel companies to account for the damage they’ve wrought have the right idea. It’s just a question of if they can get a strong enough grip on power to actually implement their plans before too many workers fall through the cracks.
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Yesterday 6:38PM

“In the face of a crippling pandemic and job crisis, the company has decided to do what it does best: maximize shareholder value. A Reuters exclusive report on Thursday said the company is hellbent on paying out dividends to shareholders,”

In reality, for ALL public companies in the USA, the board of directors is obligated to do what is in the best interest of shareholders.

There is actually a legal precedent on this.

https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/a-duty-to-shareholder-value

Never expect any of these companies to ever do more than do what is best for shareholders.

And THAT is why we need government, government regulation, social security and adequate taxes on corporations to pay for all that.
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🛢️ Why Energy Demand Is Plummeting In The U.S.
« Reply #268 on: August 03, 2020, 01:03:16 AM »
https://oilprice.com/Energy/Crude-Oil/Why-Energy-Demand-Is-Plummeting-In-The-US.html

Why Energy Demand Is Plummeting In The U.S.
By Haley Zaremba - Aug 02, 2020, 10:00 AM CDT


All the way back in April (which may as well be years ago at the rate that the news cycle is moving these days) Oilprice reported that in the throes of the novel coronavirus pandemic, which had relatively recently washed over the United States, had caused the nation’s energy consumption to fall to a stunning 16-year low.  According to NPR’s Planet Money podcast, which reported on this statistic at the time, this was a figure that was a particularly good indicator of just how badly the domestic economy was doing. ““How much electricity the country uses tends to match how much the economy is growing or shrinking really closely,” said Cardiff Garcia, one of the show’s hosts, on the April 13 Indicator podcast. “It can tell us how much worse the economy is getting in real-time, and it should also tell us when the economy has started to recover.”

But now, as it turns out, a 16-year low was nothing. No big whoop. Chump change. This week, Fox Business, in a collaborative report with the Associated Press reported that the United States’ nationwide energy consumption  actually dipped to an incredible more-than 30-year low earlier this year. “The drop was driven by less demand for coal that is burned for electricity and oil that’s refined into gasoline and jet fuel, the U.S. Energy Information Administration said,” as paraphrased by Fox Business. “That’s the lowest monthly level since 1989 and the largest decrease ever recorded in data that’s been collected since 1973.”

Prior to the economic devastation and drop in energy demand wrought by the COVID-19 pandemic, the largest drop in United States history was recorded in December 2001, “after the Sept. 11 attacks shocked the economy and a mild winter depressed electricity demand”.

Related: Economic Turmoil Leaves Oil Trapped At $40

The quantity of electricity consumed what’s not the only energy metric that saw drastic change this spring; the way that people used energy also saw a huge transformation. “In South Korea, Italy, and Seattle telework and residential internet usage have soared 40% in just weeks,” tallied a Forbes report released toward the beginning of the pandemic in February. “In France 80% of internet traffic is now Facebook, YouTube, and Netflix, and providers are pledging to ensure ‘digital discipline.’”

While telecommuting is not a new invention, and a full 24 percent of the U.S. workforce worked from home in the last year, “coronavirus isolation has already boosted that, and could be a watershed event for digital connecting,” Forbes wrote. As Oilprice reported at the time, “these new legions of telecommuters, their tablet-happy toddlers, and kids adjusting to attending school online are eating up huge amounts of bandwidth. This translates to a lot of families around the world ponying up a lot of money for their internet package and electricity bills as we head into what is certain to be a particularly brutal recession.”

And that’s just one half of an equation, and the other side isn’t looking great either. While business owners are celebrating having the cost of keeping the lights on taken off their hands, “After the virus clears and we’re left with a recession, landlords may have a hard time convincing corporate tenants to keep paying pricey overhead for employees who still got the work done, remotely,” says Forbes. “It can cost $20,000, according to JLL, to kit out the average 150 square feet of office space per worker. And, depending on your city, $300 or more per employee per month for rent, plus $50 per employee per month in supplies and snacks, and $20 per month to keep the lights on, air-conditioned and computers charged.”

But no matter who is footing the bill, the energy industry is losing out in the end. Energy demand is down--WAY down--and it’s taking hundreds of thousands of jobs along with it. Of course, energy demand will inevitably rebound, but the question is whether the source of energy will look the same in the future. While death knells are sounding for global coal and U.S. shale, many world leaders, from both the public and private sector, are pushing for investment into green energy as the more stable energy sector of the future.

By Haley Zaremba for Oilprice.com
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🛢️ Exxon: 20 Percent Of Global Oil And Gas Reserves May Be Wiped Out
« Reply #269 on: August 06, 2020, 08:24:10 AM »
How horrible for the shareholders!   ;D

RE

https://oilprice.com/Latest-Energy-News/World-News/20-Of-Global-Oil-Gas-Reserves-Could-Be-Wiped-Out-If-Crude-Prices-Dont-Recove.html

Exxon: 20 Percent Of Global Oil And Gas Reserves May Be Wiped Out
By Julianne Geiger - Aug 05, 2020, 5:30 PM CDT


After a grim Q2 season for Big Oil, the world’s third-most valuable energy company is warning that 20% of the world’s oil and gas reserves may no longer be viable, according to Bloomberg.

According to Exxon Mobil, one-fifth of the world’s oil and gas reserves will no longer qualify as “proved reserves” at the end of this year if oil prices fail to recover before then.

A flurry of oil and gas companies have written off billions in oil and gas assets as the value of those assets in the current oil price climate is no longer what it once used to be. Exxon was not among them.

Exxon is currently reviewing its oil and gas assets, the results of which should be available by November.

But Exxon has caught some flack for not making many asset adjustments over the last decade, while its Big Oil peers have.

Exxon recorded its worst quarterly loss in modern history in the second quarter of this year, booking a loss of $1.1 billion, compared to earnings of $3.1 billion in Q2 2019.

Still, Exxon is not moving to cut its dividend, which analysts expect will cost the oil major $15 billion. It is, however, moving to make some job cuts, pension matching contribution cuts, and other cost discipline issues, according to various sources.

A large portion of Exxon’s shareholders are retail investors, Exxon continues to make their dividend a priority.

Exxon has been demoted from the world’s second-most valuable energy company last month, as Reliance Industries unseated the supermajor from its long-held position.

By Julianne Geiger for Oilprice.com
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