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Yesterday’s Broad Power Outage Likely Caused By Geomagnetic Storm

YESTERDAY’S BROAD POWER OUTAGE LIKELY CAUSED BY GEOMAGNETIC STORM

Prior session, a massive US power grid failure was seen across the entire United States in one simultaneous fashion. San Fransisco, New York, and Los Angeles were the three main areas that were hit the hardest. Each of the areas experienced challenges or shut downs in business commerce. Also, basic infrastructure such as communication networks, mass transportation, and supply chains experienced challenges. To many this seemed apocalyptic with anaylst citing possible cyber attacks amid mounting geopolitical turmoil across the globe. We’re shocked that mainstream media didn’t revive the failing Russian narrative for another round of fake news to confuse the masses. Personally, I don’t think it was a cyber attack or the Russians, but more of a Space Weather Event.

Space weather refers to the environmental conditions in Earth’s magnetosphere, ionosphere and thermosphere due to the Sun and the solar wind that can influence the functioning and reliability of spaceborne and ground-based systems and services or endanger property or human health.

Here is PG&E outage map from yesterday’s event. Widespread. 

This is the Planetary K-Index, which 5 or greater indicates storm-level geomagnetic activity around earth. The latest space weather data signals a geomagnetic storm rolled in on April 20, 2017. During the elevated K-waves >5, San Fransisco, New York, and Los Angeles experienced power grid failures simultaneously.

LATEST SPACE WEATHER WARNINGS

April 22, 2017 @ 08:40 UTC
Geomagnetic Storm Warning (UPDATED)
A moderate (G2) geomagnetic storm is currently in progress thanks to a high speed solar wind stream above 700 km/s. More storming is expected over the next several days as a coronal hole stream rattles our geomagnetic field. Sky watchers at middle to high latitudes should be alert for visible aurora during the next several nights.ALERT: Geomagnetic K-index of 6
Threshold Reached: 2017 Apr 22 0559 UTC
Synoptic Period: 0300-0600 UTC
Active Warning: Yes
NOAA Scale: G2 – Moderate

…click on the above link to read the rest of the article…

Split personalities: We like some science, but not all of it

Split personalities: We like some science, but not all of it

We modern folk are in a bind. We embrace what the sciences and the technology that flows from them have to offer, but we refuse to believe that we live in the world described by those very sciences.

Here I’m not merely talking about climate change deniers who, of course, fit this description. They merrily dial number after number on their cellphones, but they do so without realizing that in their climate change denial they are rejecting the very same science that underpins the phone they are using: physics.

But so many others live in this dual world as well. We humans imagine ourselves set apart from the natural world. And yet, our very bodies are the subject of scientific investigations. So we turn to our minds which we imagine set us apart from the natural world. But what is the mind? Do we not place the mind in the body? Are its manifestations not speech, writing, music, dance, and graphic arts which require the body for their expression.

The science of physics tells us that we live in a thermodynamic system. The universe is a thermodynamic system and so by definition must our Earth be one. Thermodynamic systems produce entropy, lots of it. Some two-thirds of all the energy we use in the United States is wasted. That’s right, wasted. That entropy shows up as climate-changing carbon dioxide in the atmosphere which is also acidifying the oceans. It shows up as barren landscapes left behind by coal and other mining. It shows up as waste heat and waste products flowing from our factories, our homes and our vehicles.

…click on the above link to read the rest of the article…

Wall Street Is Pouring Money Back Into Shale

Wall Street Is Pouring Money Back Into Shale

Wall Street

With oil prices seemingly on firm footing, Wall Street is pouring money back into the shale sector, expecting profits even at $50 per barrel.

The private equity industry raised an estimated $19.8 billion in funds for energy investment in the first quarter of this year, or about three times as much as the same period in 2016. The figures indicate a more aggressive approach from private equity in shale drilling, and rising expectations that the oil market is set to rebound. The data comes from Preqin, and was reported on by Reuters.

The optimism comes even as oil prices have languished in the $50 per barrel range since November, after briefly dipping into the $40s last month. The hopes of a stronger rebound by now have been dashed, and oil analysts have steadily revised their expectations, pushing out their projections for stronger price gains. The extraordinary gains in U.S. crude oil inventories in the first quarter caught the market – and OPEC – by surprise, killing off hopes of oil heading north of $60 per barrel.

But the new money from Wall Street need not depend on $60+ oil. Lenders are confident that their investments will turn out to be profitable even at the prevailing market price today. That is because shale drillers have dramatically cut their costs, pushing breakeven prices down. “Shale funders look at the economics today and see a lot of projects that work in the $40 to $55 range,” Howard Newman, head of private equity fund Pine Brook Road Partners, told Reuters. His firm dumped $300 million in Permian driller Admiral Permian Resources LLC in March.

…click on the above link to read the rest of the article…

The High Cost of Renewable Subsidies

The High Cost of Renewable Subsidies

I have for some time wanted to get to the bottom of renewable subsidies and their impact upon electricity prices. But the complexity and opacity of the system has always defeated me. And then last week a report titled “Status Review of Renewable Support Schemes in Europe” landed in my inbox and it seemed to contain much of the information I was seeking. The headline numbers: the weighted average subsidy paid to renewable generators in EU 26 in 2015 was €110 / MWh. The maximum was €184 / MWh in the Czech Republic and the minimum €16.2 / MWh in Norway and the UK came in at €75 / MWh.

Considering that the wholesale price of electricity in Europe is typically €40 to €60 / MWh we can see that renewables are costing on average about 3 times as much as conventional power (wholesale~50, subsidy~110, total~160). And politicians, who have mandated the use of renewable electricity, are wondering why electricity prices are rising.

The report was published by the Council of European Energy Regulators (CEER)  on 11th April 2017. But since it summarises a vast amount of complex data that has taken considerable time to compile, the reference years reported are 2014 and 2015. The report can be downloaded here.

Figure 1 [Report Table 4] Total renewable electricity produced that received subsidy support in 2015 in MWh.

Figure 2 Sorting total subsidised generation from Figure 1 shows Germany way out in front with 162 TWh of subsidised renewable generation followed by the UK, Italy, Spain and France.

Figure 3 The 4 largest RE producers with categories of generation broken out and normalised to 100%  shows different solutions for different countries. Germany relies mainly on bio energy, solar and onshore wind. The UK on bio energy onshore and offshore wind. Italy on bio energy solar and onshore wind, rather similar to Germany but with more solar and less wind. Spain on solar and onshore wind. It is notable how important bio energy has become. Only time will tell if this leads to deforestation. There seems to be a lot of woodland disappearing in Scotland right now.

…click on the above link to read the rest of the article…

Blowout Week 172

Blowout Week 172

In this week’s Blowout we return to Brexit and its  impacts. It is now reported that following Brexit the UK will “scale down its concern over climate change” and scrap the EU’s 15%-of-total-energy-from-renewables-by-2020 target. Can outright repeal of the 2008 Climate Change Act be far behind?

Telegraph: Britain preparing to scrap EU green energy targets after Brexit

The UK is currently committed to getting 15 per cent of all energy from renewable sources such as wind and solar by 2020. The UK is currently on course to miss the target and incur millions of pounds in fines from the European Union.

Government sources told The Daily Telegraph that the target, under the EU Renewable Energy Directive, is likely to be scrapped after Brexit. It comes after civil service documents, photographed on a train, revealed that Britain plans to scale down its concern over climate change after Brexit. Details of the policy change were contained in the papers of a senior civil servant at the Department for International Trade (DIT) photographed by a passenger earlier this month. The notes say: “Trade and growth are now priorities for all posts — you will all need to prioritise developing capability in this area. Some economic security-related work like climate change and illegal wildlife trade will be scaled down.” The target has led to billions of pounds Government subsidies for renewable power sources such as wind, solar and biomass power plants, which are ultimately paid for by customers through their energy bills. The National Audit Office estimated that green energy subsidies will cost every household £110 a year by 2020.

We follow up with the usual mix of energy and related stories from all over the world, including how OPEC cheated on production cuts, the North Sea revival, Japan makes natural gas from methane hydrates, the growth of nuclear subsidies in the US, more US underground nuclear waste storage planned,

…click on the above link to read the rest of the article…

A Bankruptcy of Nuclear Proportions

Summary

In any given year, a handful of companies file for Chapter 11 bankruptcy in the United States. Rarely, however, does one of these filings reverberate beyond the boardroom and into the realm of geopolitics. Those that do — Lehman Brothers in 2008, or several U.S. automakers in 2008-10 — usually involve hundreds of billions of dollars. But the next big geopolitically relevant bankruptcy may be on the horizon, and the amount of money involved is tiny next to the collapses of the past decade.

Analysis

On March 29, Westinghouse Electric Co., a subsidiary of Japanese conglomerate Toshiba, filed for bankruptcy. The U.S.-based nuclear power company has been building two state-of-the-art nuclear power plants in Georgia and South Carolina, but it has been plagued by delays and cost overruns. The filing sent Toshiba scrambling to cut its losses by March 31, the end of Japan’s fiscal year. The Japanese conglomerate ended up writing down over $6 billion on its nuclear reactor business. But Toshiba’s troubles don’t end there; the firm is also working to sell off a portion of its chip manufacturing holdings.

The U.S. government is worried about what the sale of Westinghouse could mean for the future of traditional nuclear power in the United States and for nuclear power in China, which is keen to learn the secrets of a Western firm such as Westinghouse. The Japanese government, meanwhile, is wary of how Beijing could benefit in the long term, should a Chinese firm acquire Toshiba’s semiconductor unit.

…click on the above link to read the rest of the article…

Australia more vulnerable than ever to fuel import disruptions

Australia more vulnerable than ever to fuel import disruptions

This is because after the closure of 3 oil refineries in Sydney and Brisbane fuel imports have skyrocketed and these additional imports come from and pass through an area where there are high tensions now: the South China Sea and Korea.

Vinson10

Fig 1: USS Carl Vinson

10/4/2017 A US Navy strike group including a nuclear-powered aircraft carrier has moved into a strategic position in the Western Pacific Ocean, just off the Korean peninsula.
http://www.abc.net.au/pm/content/2016/s4651328.htm

Apr 13 2017 U.S. May Launch Strike If North Korea Reaches For Nuclear Trigger
http://www.nbcnews.com/news/world/u-s-may-launch-strike-if-north-korea-reaches-nuclear-n746366

Asian oil supply context

This comes at a time when Asian oil production is on an oil production plateau for 5 years now while oil demand seems to increase forever.

Asia_oil_production_consumption_2005-2015_fill_in-2035

Fig 2: Asia’s oil consumption growth is unsustainable

Asian_refinery_capacities_1965-2015

Fig 3: Stellar growth in Asian refinery capacities

Note that growth in the last 15 years has come only from 3 countries: China, India and South Korea. Singapore’s refining capacity and that of Indonesia, Malaysia, Thailand and Taiwan is basically flat. Japan’s capacity is in decline.

Most of Asia’s oil imports come from the Middle East as this tanker map shows:

Tanker_traffic_ME-Asia_Apr2017
Fig 4: Tanker traffic between the Middle East and Asia
https://www.marinetraffic.com/en/ais/home/centerx:119/centery:-2/zoom:3

Australia net oil importer

Australia_oil_production_vs_consumption_1965-2015Fig 5: Australian oil balance

Australia_crude_condensate_production_1990-Dec2017

Fig 6: Australian oil production decline

Australian crude oil imports

Australian_crude_oil_imports_by_country_2004_Jan2017

Fig 7: Australian crude oil imports

Fig 7 shows:

  • Crude imports from neighbouring Asian countries peaked 12/2007
  • Imports from Vietnam declined dramatically to 2% of imports because Vietnam’s crude production peaked in 2004-05
  • UAE is the only long-term supplier from Middle East (19% of imports)
  • Decline from Asia was compensated by imports from West Africa – good job
  • Crude imports declined from 550 kb/d to around 350 kb/d as Australian refineries closed
  • Before the refinery closures the diversity of crude imports was quite high and – given Australia’s remoteness on the global oil trade map – these refineries did a good job in sourcing crude oil from far away like Russia, Azerbaijan, the Mediterranean and West Africa

…click on the above link to read the rest of the article…

Give Us Another Oil Boom

GIVE US ANOTHER OIL BOOM 

Dear Lord, Y’all give us another oil boom…

If there is one sector of the US economy where an Austrian-style Boom-and-Bust bust has taken place, it is the onshore oil industry – though, by extension, other primary resource industries, such as metals and mining and farming have also suffered in the ongoing aftermath of the general commodity bust.

The good news is that the Austrian prescription for how to deal with a such a calamity has also been followed. The weak have ceded control to the strong – whether by bankruptcy, equity dilution, or co-option and takeover. Prices have been allowed to fall; payrolls – alas, for the unfortunate souls involved – have been cut; the more marginal projects have been put in abeyance, while an unrelenting search for greater efficiency has gone so as to reduce the level of the all-important cut-off between profit and loss.

As a result – and even if we do have to offer a caveat that much of what is afoot is also taking place under the baleful influence of over-easy monetary conditions – the industry has not only found a base, but has even begun to expand once more with no bail-outs, TARPs, or other assistance from a government apparatus (which, if anything has been intensely antagonistic to the industry on ideological grounds), saving only the putative enactment of last autumn’s OPEC agreement to limit output elsewhere.

To put this into context, we could perhaps start with a Moody’s report from the middle of last year which summed matters up by declaring that the oil bust was fully comparable with that vast destruction of value which took place during the first great Tech-Telecom mania at the turn of the century.

…click on the above link to read the rest of the article…

Shale Hotspot Draws In Another Big Oil Player

Shale Hotspot Draws In Another Big Oil Player

Oil rig

The oil price crash that destroyed a lot of smaller oil producers has not spared the finances of even the oldest and largest oil companies. Trying to keep the precious dividends intact and growing, Big Oil is focusing on cost control and cash preservation, and has effectively deferred investments in new ultra-expensive drilling ventures.

One of the biggest companies, U.S. Chevron, is now planning to capitalize on its vast acreage holdings in the Permian. Investments in new mega projects, at least over the next few years, are not currently on the table, chief executive John Watson told Reutersin an interview published this week.

Chevron is now betting big on the Permian; the star shale play straddling West Texas and New Mexico that has seen most of the resurgence since oil prices started steadily recovering in the fourth quarter last year.

Unlike some other (and smaller) producers who have just recently rushed to secure holdings in the shale play, Chevron is not a newcomer to the Permian – the group and its legacy companies have held acreage in the area since the early 1920s.

Now the new oil order is causing the company to shift strategies away from mega drilling projects to secure steady returns in more conservative projects in order to protect dividends and keep them growing.

Chevron reported earnings of $0.22 per share for the fourth quarter of 2016, compared with a loss of $0.31 per share for the fourth quarter of 2015, in line with analyst expectations that it would return to profit, but still missing the EPS estimates by a wide margin. Full-year 2016 results showed a loss of $497 million compared with earnings of $4.6 billion in 2015, which was the first annual loss Chevron has booked since 1980.

…click on the above link to read the rest of the article…

Saudi Arabia Vs. Russia: The Next Oil Price War

Saudi Arabia Vs. Russia: The Next Oil Price War

Oil Refinery

International oil markets could be heading towards a new war, as leading OPEC and non-OPEC producers are vying for increased stakes. The unexpected cooperation between OPEC and non-OPEC countries, instigated by the full support of Saudi Arabia (OPEC) and Russia (non-OPEC) has brought some stabilization to the crude markets for almost half a year. The expected crude oil price crisis has been averted, it seems, leaving enough room when looking at the fundamentals to a bull market in the coming months. As long as Saudi Arabia, Russia and some other major producers (UAE, Kuwait), are supporting a production cut extension, financials will be seeing some light at the end of the tunnel.

The effects of the 2nd shale oil revolution, as some have stated, have been mostly mitigated by a reasonably high compliance of OPEC and non-OPEC members to the agreed upon cuts, while geopolitical and security issues have prevented Libya, Iraq, Venezuela and Nigeria, from entering with new volumes. Stabilization in the crude oil market, as always, is not only fundamentals but also geopolitics and national interests. The latter now could also be the main threat to a successful extension of the OPEC production cuts in the coming months.

Fears are growing that OPEC’s leading producer, Saudi Arabia, is no longer happy with the overall effects it is generating by taking the brunt of the production cuts, while at the same time, other OPEC members, such as Iran and Iraq, are looking at production increases. Saudi Arabia’s other main rival Russia is also not sitting idle. Even if Moscow is still fully behind the official production cuts, Russian oil companies have been aggressively fighting for additional market share in Saudi Arabia’s main client markets, China, India and even Japan. Iraq and Iran, in contrast to what was expected, have been cutting away share in Europe.

…click on the above link to read the rest of the article…

Oil Rigs Rise For 12 Straight Weeks; Threaten Oil Price Recovery

Oil Rigs Rise For 12 Straight Weeks; Threaten Oil Price Recovery

For the 12th week in a row, the number of US oil rigs rose (up another 10 to 672 – the highest since September 2015). US Crude production continues to track the lagged rig count, pouring more cold water on OPEC’s production cut party.

The rig count grows, tracking the lagged oil price in a self-defeating cycle.

And crude production appears to have plenty more room to run.

OPEC’s No.2 Goes Rogue: Plans 600,000 Bpd Oil Output Increase

OPEC’s No.2 Goes Rogue: Plans 600,000 Bpd Oil Output Increase

Iraq oil field

Iraq has plans to boost its crude oil production by 600,000 bpd to 5 million bpd by the end of this year, regardless of its participation in OPEC’s production cut deal. Iraq is the cartel’s second-biggest exporter of crude and has been the most disinclined of all parties to the agreement since its inception, with a lot of observers expecting it to be the first one to cheat.

Iraq’s first problem is that as much as 95 percent of its budget revenues come from crude oil. There are no viable alternatives in sight for revenues at the moment. The second problem that the country has to contend with is its war with Islamic State, which makes these revenues more important than ever.

Amid the final push against IS in Mosul, Iraq is working hard to ensure the sustainable growth of its oil and gas industry—OPEC deal or no OPEC deal. Three months ago, Oil Minister Jabar al-Luaibi saidthat Baghdad is planning to build five new refineries on an investment basis, in addition to fixing and expanding existing refineries that were damaged in the war with IS.

While Al-Luaibi has repeatedly assured media—and indirectly, investors—that Iraq will stick to its OPEC commitment, Iraq is doing whatever it can to boost its returns from its only significant natural resource. Related: Don’t Be Fooled By Daily Oil Prices

As part of these efforts, the government recently started a review of the contracts it has with foreign oil companies operating local fields in a bid to better match its interests to those of the operators. Currently, international oil companies in Iraq are working under the so-called technical service contracts, which a few years ago, forced them to reduce production from some of the country’s biggest fields because Baghdad had no money to pay them for operating the fields.

…click on the above link to read the rest of the article…

Are Mexico’s Oil Reserves Almost Depleted?

Are Mexico’s Oil Reserves Almost Depleted?

Offshore

Mexico’s oil and gas regulator said last week that the country’s proved hydrocarbon reserves will drop by 10.6 percent in 2017. This forecast, coupled with the lower oil production that state company Petroleos Mexicanos (Pemex) reported for yet another year in 2016, is painting a rather bleak picture of Mexico’s reserves.

Without resumption in investments and more drilling, and if no significant finds occur, Mexico will be running out of reserves within 9 years, according to an official from the National Hydrocarbons Commission.

However, the energy reform that ended Pemex’s monopoly and allowed foreign companies to invest in Mexico’s oil exploration and production is expected to start yielding results by the end of this decade. The deepwater bidding round last December attracted major international oil companies, and Mexico awarded blocks to consortia including Chevron, Exxon, Statoil, BP, Total, and China Offshore Oil Corporation.

In addition, the analysts are now largely calling the end of the downturn and expect deepwater investment to pick up in coming years.

Mexico’s National Hydrocarbons Commission said last week that as of January 1, 2017, the country’s proved oil and gas reserves are estimated at 9.16 billion barrels of oil equivalent, down by 10.6 percent from the 10.243 billion boe as of the beginning of 2016. Proved oil reserves were down 7.9 percent to 7.037 billion barrels from 7.641 billion barrels estimated as of 2016.

In its 2016 results release, Pemex reported crude oil production of 2.154 million bpd last year, down by 5 percent over 2015, mostly due to natural declines of a number of producing fields.

According to the EIA, Mexico’s crude oil production has been steadily dropping since 2005 as a result of natural production declines from Cantarell and other large offshore fields.

…click on the above link to read the rest of the article…

Howard’s energy superpower stuck in domestic gas shortages

Howard’s energy superpower stuck in domestic gas shortages

On hot days the truth comes out. Critical power plants for peak demand run on gas and that was short in supply, not only in South Australia, but also in NSW, as was shown in this previous post.

Multiple_power_systems_failure_NSW_10Feb2017Fig 1: Gas shortage contributed to multiple systems failure

The above information is taken from AEMO’s website POWER SYSTEM OPERATING INCIDENT REPORTS

with this incident report for the 10th of February.
NSW_generation_by_type_10Feb2017

Fig 2: Electricity generation by fuel in a heat wave

In Fig 2 we can see the dependency of the power supply on gas.

In AEMO’s Gas Statement of Opportunities March 2017 we find a graph with declining gas production from proved and probable reserves, together with this statement:

“AEMO’s analysis highlights that these domestic gas markets will rely on production from currently uneconomic and undeveloped gas resources (contingent resources) from 2021, and even more uncertain resources (prospective resources) from 2025, to meet forecast demand over the 20-year outlook period.”

AEMO_GSOO_2017_Fig1_domestic
Fig 3: Domestic gas production profile from conventional sources,
compiled i.a. on the basis of advice from producers

“For the purposes of GSOO modelling, AEMO has assumed that all LNG demand will be met and that GPG [Gas Powered Generation] will be a lower priority for gas supply. In its modelling, AEMO has assumed that, if gas was unavailable for electricity generation, another fuel type (such as coal-fired or hydroelectric generation) could be substituted – an assumption likely to be increasingly challenged as the electricity supply demand balance tightens.”

“Industry data shows that the rate of exploration and development of oil and gas wells recently drilled in Australia has nearly halved. Gas extraction is becoming increasingly challenging for all producers, due to a variety of factors:

…click on the above link to read the rest of the article…

Musktopia Here We Come!

It ought to be sign of just how delusional the nation is these days that Elon Musk of Tesla and Space X is taken seriously. Musk continues to dangle his fantasy of travel to Mars before a country that can barely get its shit together on Planet Earth, and the Tesla car represents one of the main reasons for it — namely, that we’ll do anything to preserve, maintain, and defend our addiction to incessant and pointless motoring (and nothing to devise a saner living arrangement).

Even people with Ivy League educations believe that the electric car is a “solution” to our basic economic quandary, which is to keep all the accessories and furnishings of suburbia running at all costs in the face of problems with fossil fuels, especially climate change. First, understand how the Tesla car and electric motoring are bound up in our culture of virtue signaling, the main motivational feature of political correctness. Virtue signaling is a status acquisition racket. In this case, you get social brownie points for indicating that you’re on-board with “clean energy,” you’re “green,” “an environmentalist,” “Earth –friendly.” Ordinary schmoes can drive a Prius for their brownie points. But the Tesla driver gets all that and much more: the envy of the Prius drivers!

This is all horse shit, of course, because there’s nothing green or Earth-friendly about Tesla cars, or electric cars in general. Evidently, many Americans think these cars run on batteries. No they don’t. Not really. The battery is just a storage unit for electricity that comes from power plants that burn something, or from hydroelectric installations like Hoover Dam, with its problems of declining reservoir levels and aging re-bar concrete construction. A lot of what gets burned for electric power is coal. Connect the dots. Also consider the embedded energy that it takes to just manufacture the cars. That had to come from somewhere, too.

…click on the above link to read the rest of the article…

Olduvai II: Exodus
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Olduvai
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Olduvai II: Exodus
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Olduvai III: Cataclysm
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