Home » Posts tagged 'eia' (Page 5)

Tag Archives: eia

The U.S. stock market is not the only thing that’s gotten overheated in the last few years. Exuberance over U.S. energy output has hit a record high as natural gas production has reached its all-time peak, and oil production nears highs not seen in 47 years. Thanks to the so-called “shale revolution” (tapping previously inaccessible fossil fuels in shale rock deposits through the use of hydraulic fracturing and horizontal drilling technologies), the U.S. government has green-lighted liquefied natural gas export terminals and pipelines and lifted the ban on oil exports. The statistical arm of the U.S. Department of Energy—the Energy Information Administration (EIA)—predicts that the United States will become a net energy exporter in the next five years, a status we haven’t enjoyed since Eisenhower was president.

Although shale development represents a remarkable technological achievement (made possible by cheap loans and questionable finances), the EIA seems to be betting heavily on the long-term prospects of tight (shale) oil and shale gas production, apparently in the erroneous belief that what goes up must keep doing so. This despite ample warning signs that the “shale revolution” will be a short-lived phenomenon. In fact, the higher production goes, the faster and sooner it will decline.

Since 2011 my colleague at Post Carbon Institute, David Hughes (an expert on fossil fuel production who worked for the Geological Survey of Canada for 32 years), has been sounding the warning bell about the danger of betting our energy future on shale. Through intensive analysis of oil and gas production data, he has identified a clear pattern of quite rapid boom and bust cycles in shale plays.

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

EIA estimates for USA in 2050: The Future is Fossil Fuels and Cheap Electricity

February 12, 2018

EIA estimates for USA in 2050: The Future is Fossil Fuels and Cheap Electricity

What energy transformation?

The EIA Annual Energy Outlook 2018 is out. The hard heads at the US Dept of Energy crunched the numbers, assumed technology will improve, and modeled the outcomes. According to their best estimates (and even their “worst” estimates) thirty years from now, the main energy source for the US is natural gas and fossil fuels. Renewables grows from 5% to 14%, but coal, nukes, hydro stays about the same. When the Australian Greens say “we don’t want to be left behind”, the answer is “Exactly! So explore for gas! Use Nukes!”

The World’s largest economy will still be nearly 80% fossil fueled in 2050.

On the road, most people are still using gasoline cars, and here’s the kicker — electricity prices are still at about 11 cents per kilowatt hour. Weep all ye Australians, Brits, Germans and other who would be grateful if electricity only rose 10% a year, not 10% over 30 years.

How much does an interconnector cost from Townsville to Texas?

h/t Paul Homewood who has quoted Mark Perry from AEI:

Despite all of the hype, hope, cheerleading, fuel standards, portfolio standards, and taxpayer subsidies for renewable energies like wind and solar, America’s energy future will still rely primarily on fossil fuels to power our vehicles, heat and light our homes, and fuel the US economy.

EIA, 2018, Graph, Total energy use projections.

Electricity prices are dirt cheap and will stay that way:

EIA, 2018, Graph, Electricity Prices, projections.

Of the renewables, only solar PV is forecast to increase. Wind stays the same; Hydro stays the same; Geothermal is still tiny.

Big-solar does not even rate a mention.

EIA, 2018, Graph, Renewables use projections.

Which renewables are growing?

The Big Picture

Renewables, a small non-essential part that isn’t going to change much.

EIA, 2018, Graph, Industrial energy use projections.

Industrial energy use will be … about the same mix.

Electric Vehicles? Spot the green sliver:

Not the car transition some are expecting.

EIA, 2018, Graph, transportation, projections.

EIA, 2018, Graph, Total energy use projections.

U.S. Shale Companies Are Ready To Expand

February 11, 2018

U.S. Shale Companies Are Ready To Expand

The latest oil rally, which sees crude trading at close to its highest point in three years, is sufficient to garner considerable attention from market pundits, industry insiders and investors alike. It has raised the ugly specter of a sharp uptick in U.S. oil production driven by the much-anticipated shale oil boom.

Yet, there are signs that the potential for U.S. shale oil companies to rapidly expand production and return to the boom years witnessed before the prolonged oil slump appears overblown.

There are a range of constraints poised to prevent the rapid production growth many mainstream analysts had been predicting.

It was only in early December last year that an MIT study was released concluding that the U.S. vastly overstates oil production forecasts and that the EIA has been exaggerating the effect of fracking technology on well productivity.

According to MIT research, the EIA assumes that regular improvements in drilling technology and well design are boosting output at new wells by around 10 percent, yet their own research shows that it is closer to 6.5 percent. That, along with the EIA’s own monthly production data, which shows that U.S. oil output between January and November 2017 grew at a far more modest monthly average of 1.3 percent, indicates that the EIA’s weekly forecasts could very well be overstating U.S. oil production.

In the past, the optimistic figures provided by the EIA have suppressed the price of West Texas Intermediate or WTI, and this in part has been one of the contributing factors to the significant premium that has existed between WTI and Brent.

Nevertheless, that premium is closing, having fallen from over $6 per barrel at the start of 2018 to less than $4 for the last week of January 2018 amid falling U.S. inventories.

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

Why the New EIA Forecast Is Unrealistic

February 7, 2018

Why the New EIA Forecast Is Unrealistic

The Energy Information Administration (EIA) of the U.S. Department of Energy has just released its Annual Energy Outlook (AEO) 2018, with forecasts for American oil, gas and other forms of energy production through mid-century. As usual, energy journalists and policy makers will probably take the document as gospel.

That’s despite the fact that past AEO reports have regularly delivered forecasts that were seriously flawed, as the EIA itself has acknowledged. Further, there are analysts inside and outside the oil and gas industry who crunch the same data the EIA does, but arrive at very different conclusions.

The last few EIA reports have displayed stunning optimism regarding future U.S. shale gas and tight oil production, helping stoke the notion of U.S. “energy dominance.” No one doubts that fracking has unleashed a gusher of North American oil and gas on world markets in the past decade. But where we go from here is both crucial and controversial.

The most comprehensive critiques of past AEO forecasts have come from earth scientist David Hughes, a Fellow of Post Carbon Institute (note: I, too, am a Post Carbon Institute Fellow). Since 2013, Hughes and PCI have produced annual studies questioning EIA forecasts, based on an analysis of comprehensive play-level well production data. Their latest report, a critical look at AEO2017, is just out.

“Shale Reality Check: Drilling Into the U.S. Government’s Rosy Projections for Shale Gas & Tight Oil Production Through 2050” explores four big questions crucial to the realization of the EIA’s forecasts:

1. How much of the industry’s recent per-well drilling productivity improvement is a result of better technology, and how much is due to high-grading the best-quality parts of individual plays? Over the past few years, industry has shown the ability to extract increased amounts of oil and/or gas from each well.

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

US Crude plus Condensate and Tight Oil, Jan 2018 Update

January 26, 2018

US Crude plus Condensate and Tight Oil, Jan 2018 Update

chart

From Dec 2016 to Dec 2017 US Tight oil output has increased by 975 kb/d based on US tight oil output data from the EIA.

For the entire US we only have EIA monthly output estimates through Oct 2017. Over the Dec 2016 to Oct 2017 period US output has increased by 866 kb/d and the OLS trend has a slope of 821 kb/d.

chart/

Note that the 866 kb/d increase in US output over 10 months would be a 1040 kb/d increase over a 12 month period.

Most of the increase in US output has been from increased LTO output. The forecasts by several agencies (EIA, IEA, and OPEC) of more than a 1000 kb/d increase in US output in 2018 may assume that the recently increased oil price level will lead to increased investment in the oil sector.

Much of the increase in LTO output has been in the Permian basin and several factors may slow down the recent rapid growth. Among these are limited fracking crews, inadequate pipeline capacity for natural gas, which will limit output as flaring limits are reached, and potential water shortages.

Longer term the various LTO plays will run out of space to drill more wells in the tier one areas (the so-called sweet-spots) and this will limit the rate of increase within 2 or 3 years. It is likely that the Eagle Ford is close to this point, the Bakken might reach that point by 2019, and the Permian basin perhaps by 2021.

For US C+C output, I expect about a 600+/-100 kb/d increase in 2018.

Why Oil Prices Could Dive

January 25, 2018

Why Oil Prices Could Dive

WTI briefly touched $65 per barrel after the EIA reported a surprise drawdown in inventories — the highest price since late 2014. Although the rally hit some stumbling blocks in recent days, prices remain at multi-year highs. However, absent further bullish news, the downside risk looms large.

One of the most acute threats to prices is the exorbitant positioning by hedge funds and other money managers, who have staked out record net longs in the oil futures market. With everyone piling into one side of the bet, there’s little room left on the upside. This kind of lopsided positioning has consistently ended with a rush for the exits, setting off a sudden — and often sharp — price correction.

Mad Money’s Jim Cramer spoke about the problem on Tuesday on CNBC. “As of last week, large speculators were holding the single largest bullish position in the history of crude oil,” he said. “Being bullish is NOT a good sign … when everyone’s bullish, well, then, you don’t have anyone to convert to be able to start buying … You need to convert bears but there’s no bears.”

Cramer, citing data from Carley Garner, co-founder of DeCarley Trading, said the current makeup in the futures market points to a near-term price correction. “As Garner points out, when one of these massive speculative bets in oil unwinds, you do not want to get caught anywhere near the blast radius,” Cramer said.

Another force working against the current rally is the recent decline of the dollar, which has been weakening for the last several weeks. Since oil is denominated in U.S. dollars, a weaker dollar can put upward pressure on crude prices as crude becomes relatively less expensive to much of the world.

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

What Could Push Oil To $100?

January 25, 2018

What Could Push Oil To $100?

If anyone thought the latest oil market outlooks of the EIA and the IEA are upbeat, here’s an even more upbeat one from Energy Aspects: The consultancy expects crude demand this year to grow by 1.7 million bpd, and says Brent could touch above $100 a barrel in 2019.

According to Energy Aspects, the reason for the further jump in prices will be a drop in new production outside the U.S. shale patch. It’s a little hard to buy that, however, if one remembers that there is 1.8 million bpd in production capacity ready to be tapped again once OEPC and Russia taper their production cuts. That alone should take care of the demand growth that the consultancy predicts for this year. That is, unless it booms by 2 million bpd, which is the top of the range forecast by Energy Aspects. But even then, the U.S. and Russia alone could take care of it: The Russian state majors are itching to expand production in eastern Siberia.

Of course, the likelihood of OPEC and Russia bringing all that production online is highly debatable, as the partners in the cut deal seem still determined to continue with the original plan. Nevertheless, the barrels are there, so there’s no urgent need for actual new production yet. However, if global demand grows so much so quickly, does anyone have any doubts that the new, expanded oil cartel will be flexible enough to make the best of the situation? Hardly.

So how likely is this demand growth? According to Energy Aspects, there is currently “no real drag on demand growth.” The global economy is in growth mode, which lends strong support to the price momentum, and the short-term forecasts for the top consumers of crude oil are all bullish. Yet, there’s one potential drag: prices.

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

What’s The Limit For Permian Oil Production?

January 18, 2018

What’s The Limit For Permian Oil Production?

The ‘hottest shale play’ has been the media’s favorite cliché for the Permian Basin over the past year. And while cliché, the basin straddling West Texas and New Mexico has lived up to this description—its oil production, unlike that in other basins, did not fall off a cliff during the downturn, it recently beat its own record from the 1970s, and is expected to continue to increase production more than any other U.S. shale play and account for most of the American oil production growth.

The Permian has been pumping oil since the 1920s. Conventional oil production started to decline in the late 1970s, but the fracking boom revitalized the oil-producing region in the early 2010s, and as oil prices rose last year, the Permian beat its previous record for annual oil production dating back to 1973.

The Permian surge in oil production is also revitalizing other industries in small Texas towns, from frac sand trucking and oilfield services to overbooked hotels and full restaurants, as Robert Rapier wrote in Forbes about his recent visit to the Permian.

This shale basin will continue to drive the U.S. oil production growth in the short to medium term, forecasts suggest. But analysts have started to question just how long the Permian can keep pumping at this relentless pace before hitting geological or financial constraints.

The Permian is now nearing 2.8 million bpd of oil production, EIA data shows. To compare, in October 2013, before the oil price crash, Permian production was 1.29 million bpd. In January and February 2016, when oil prices dipped to below $30 a barrel, the Permian production was still ticking up and exceeded 2 million bpd, compared to drops in all other main producing shale regions, including the Eagle Ford and the Bakken.

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

New NASA Study Solves Climate Mystery, Confirms Methane Spike Tied to Oil and Gas

January 17, 2018

New NASA Study Solves Climate Mystery, Confirms Methane Spike Tied to Oil and Gas

Global map of percent changes in acres burning

Over the past few years, natural gas has become the primary fuel that America uses to generate electricity, displacing the long-time king of fossil fuels, coal. In 2019, more than a third of America’s electrical supply will come from natural gas, with coal falling to a second-ranked 28 percent, the Energy Information Administration predicted this month, marking the growing ascendency of gas in the American power market.

But new peer-reviewed research adds to the growing evidence that the shift from coal to gas isn’t necessarily good news for the climate.

A team led by scientists at NASA‘s Jet Propulsion Laboratory confirmed that the oil and gas industry is responsible for the largest share of the world’s rising methane emissions, which are a major factor in climate change — and in the process the researchers resolved one of the mysteries that has plagued climate scientists over the past several years.

Missing Methane

That mystery? Since 2006, methane emissions have been rising by about 25 teragrams (a unit of weight so large that NASAnotes you’d need over 200,000 elephants to equal one teragram) every year. But when different researchers sought to pinpoint the sources of that methane, they ran into a problem.

If you added the growing amounts of methane pollution from oil and gas to the rising amount of methane measured from other sources, like microbes in wetlands and marshes, the totals came out too high — exceeding the levels actually measured in the atmosphere. The numbers didn’t add up.

It turns out, there was a third factor at play, one whose role was underestimated, NASA‘s new paper concludes, after reviewing satellite data, ground-level measurements, and chemical analyses of the emissions from different sources.

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

Is An Oil Price Spike Inevitable?

January 16, 2018

Is An Oil Price Spike Inevitable?

The oil glut is over, at least when it comes to U.S. commercial inventories: over the past two months they have been within the average range for the season, thanks to hefty draws. These draws, one analyst argues, are a signal of higher-than-expected demand that is not only an American trend but a global one.

Judging by recent price movements, Flynn is hardly an exception: Brent touched $70 last week, a level only the most bullish of the bulls hoped to see at this time of the year as doubts about OPEC and Russia’s ability to offset growing American production persisted. Now, with new discoveries continuing to sit at record lows, there is a chance that $70 a barrel is only the beginning—as long as demand delivers on expectations, that is.

For now, global crude oil demand forecasts seem to be overwhelmingly positive. The EIA, in its latest Short-Term Energy Outlook, forecast global oil consumption growth of 1.7 million bpd this year and a bit less in 2019.

The International Energy Agency is a bit more guarded, forecasting in its latest Oil Market Report an average demand growth rate of 1.3 million bpd for this year. This would be a slowdown from last year’s 1.5 million barrels daily, but still a robust growth rate, in spite of the wider adoption of EVs and the increase in renewable power generation capacity.

If these forecasts turn out to be accurate—the oil market is notoriously difficult to predict—then we could see a real price spike before too long. In fact, we could see a deficit at some point in the future, according to Flynn, who estimates that the one-trillion-dollars in exploration investments that fell victim to the 2014 price collapse could cause a global production drop of between 8 and 11 million barrels per day.

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

Momentous Change in US Natural Gas, with Global Impact

January 2, 2018

Momentous Change in US Natural Gas, with Global Impact

Even China is buying U.S. LNG.

In 2017, the US became a net exporter of natural gas for the first time. It started small in February, when the US exported 1 billion cubic feet more than it imported. By October, the last month for which data from the Energy Department’s EIA is available, net exports surged to 45 billion cubic feet. For the first 10 months of 2017, the US exported 86 billion cubic feet more than it imported. And this is just the beginning.

Exports to Mexico via pipeline have been rising for years as more pipelines have entered service and as Mexican power generators are switching from burning oil that could be sold in the global markets to burning cheap US natural gas. The US imports no natural gas from Mexico.

Imports from and exports to Canada have both declined since 2007, with the US continuing to import more natural gas from Canada than it exports to Canada.

What is new is the surging export of liquefied natural gas (LNG) by sea to other parts of the world.

This chart shows net imports (imports minus exports) of US natural gas. Negative “net imports” (red) mean that the US exports more than it imports:

The first major LNG export terminal in the Lower 48 – Cheniere Energy’s Sabine Pass terminal in Cameron Parish, Louisiana – began commercial deliveries in early 2016 when the liquefaction unit “Train 1” entered service. Trains 2 and 3 followed. The three trains have a capacity of just over 2 billion cubic feet per day (Bcf/d). In October 2017, the company announced that Train 4, with a capacity of 0.7 Bcf/d, was substantially completed and is likely to begin commercial deliveries in March 2018. Train 5 is under construction and is expected to be completed in August 2019. The company is now lining up contracts and financing for Train 6. All six trains combined will have a capacity of 4.2 Bcf/d.

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

OPEC November Oil Production

December 16, 2017

OPEC November Oil Production

The OPEC data below was taken from the December OPEC Monthly Oil Maret Report. All data is through November 2017 unless otherwise noted.

OPEC crude oil production declined by 133,500 barrels per day in November.

Algeria was up slightly in November after that huge decline in October.

Angola was the biggest loser in November, down 108,700 barrels per day.

Ecuador, though holding its own for the last year, appears to be in slow decline.

I have managed to cobble together an estimate of Equatorial Guinea’s historical C+C production. I had the EIA’s production numbers through June 2013. I subtracted 10% for “other liquids”, then merged that with the OPEC MOMR data that started in 2016. However, Equatorial Guinea’s production is not enough to make much difference.

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

Is Oil About To Collapse?

December 11, 2017

Is Oil About To Collapse?

When writing about markets, here and elsewhere, I usually try to avoid the temptation to write sensational things. Words like “collapse” and “crash”, or “surge” and “explode” attract clicks, which in turn often translates to cash for a writer, but major events like that are rare. That is all fine and logical, but…WTI really does look like it is about to collapse.

Let’s be clear, I am not necessarily talking about a return to the sub-$30 of the beginning of 2016 here, but a return to the more recent lows around $42 before too long is distinctly possible, and if that happens, who knows where we go from there? There are, as I have noted in the past, reasons to believe that the long-term path of oil is still upward, but more immediately there is one dominant factor that keeps adding downward pressure, large and still growing supply from North American shale producers.

Some say, as in this FT piece, that there are signs that U.S. shale production has peaked, but then that was also supposed to be the case in 2015 and 2016. I am sure that if I could bother to go back further I would find that the same thing was said in previous years too. The fact is though, that as the EIA chart below shows, after dropping off as price declined at earlier this year, U.S. crude production is growing again and will be higher this year than last and is expected to be higher again in 2018.

(Click to enlarge)

The second chart, directly above, indicates why American producers are pumping at a growing rate. WTI has been recovering ever since the low of $26.05, and is now at levels not seen since June of 2015.

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

Is The EIA Overestimating The U.S. Shale Boom?

December 6, 2017

Is The EIA Overestimating The U.S. Shale Boom?

The American shale boom may be overstated by the U.S. Energy Department, according to a new MIT study that suggests the agency may be over-attributing a rise in shale drilling to technological advances.

“The EIA is assuming that productivity of individual wells will continue to rise as a result of improvements in technology,” MIT researcher Justin B. Montgomery told World Oil. “This compounds year after year, like interest, so the further out in the future the wells are drilled, the more that they are being overestimated.”

Instead, lukewarm oil prices have forced oil majors to drill only in easy-to-access areas, located mostly in the Eagle Ford and Permian basins in Texas, and the Bakken formation in North Dakota. This has led to an exaggerated increase in the number of active wells, and a hyperbolized narrative of growth in the shale industry, the study says.

“The same forecasting methods are used in other plays in the U.S., and the same dynamic is likely to be present,” Montgomery added.

Margaret Coleman, the Energy Information Administration’s chief of oil, gas and biofuels exploration and production analysis, said the “study raised valid points” and offered insights for more accurate analysis of domestic fossil fuel forecasting. Part of the blame can be attributed to an information gap in data available to the EIA team, she added.

Many shale wells lack key pieces of data tracked down by the MIT team, meaning EIA projections over-emphasized geological and capital assumptions as well as technological developments to estimate the shale industry’s growth. Of course, there have been some advances in drill head technology, mapping software, and hydraulic fracking, but that is just one part of the puzzle.

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

US Demand for Electricity Falls Further: What Does it Mean?

December 3, 2017

US Demand for Electricity Falls Further: What Does it Mean?

Layoffs at GE Power, for example.

The weekend started Friday night with layoff news from GE’s power division, in two locations.

First, there was Greenville County, South Carolina, where GE Power is one of the largest employers with 3,400 workers.

“Based on the current challenges in the power industry and a significant decline in orders, GE Power continues to transform our new, combined business to better meet the needs of our customers,” GE’s statement said in flawless corporate speak: “As we have said, we are working to reduce costs and simplify our structure to better align our product solutions, and these steps will include layoffs.”

GE Power has not disclosed the number of workers that are part of this layoff. The facilities make large gas turbines and turbine generator sets used by power plants. The plant also makes wind turbines.

Then there was GE Power’s facility in Schenectady, New York, which announced the layoff of an undisclosed number of employees, blaming “a significant decline in orders.”

GE Power has a problem: Electricity consumption in the US peaked in 2007 and has declined since, despite population growth of about 24 million people over the 10 years and despite economic growth.

The chart below, based on data from the Department of Energy’s EIA, shows annual electricity generation from 2001 through 2016. Note the growth in generation through 2007, the plunge during the Financial Crisis, the recovery, and the uneven decline since:

This trend continues in 2017. On Friday, the EIA released its Electric Power Monthly, with power generation data through September 2017. Over these nine months, electricity generation has fallen by 2.6% compared to the same period a year ago. Part of the year-over-year drop in August and September was due to the damaged electric grid in the areas affected by Hurricanes Harvey and Irma.

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

Tag Archives: eia

Content

Post categories

Economic Links

Energy/Resource Links

Environmental Links

Geopolitical Links

Liberty Links

News Links

Other Links

Survival Skills

Post Archives by Category

Post navigation

Latest Posts