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In order to recover the abundance of these fuels that the EIA claims will be there for the taking, between now and 2050 the industry will need to drill something on the order of 700,000 new wells at a total cost of over $5 trillion.

As global leaders struggle to tackle the climate crisis, and as ordinary people worldwide are increasingly whiplashed by high fuel costs, the US government is promising policymakers, industrialists, and investors that there will be decades of growing supplies of fracked oil and natural gas. However, an independent earth scientist with 32 years of experience with the Geological Service of Canada is using the industry’s and government’s own data to show why that’s a dangerous fallacy.

Hughes has just issued his latest, Shale Reality Check 2021, and it provides an invaluable, comprehensive, yet detailed view of the past, present, and future of tight oil and shale gas.

During the past decade, Post Carbon Institute has published a series of reports by earth scientist J. David Hughes on the status of US shale gas and tight oil resources and production (i.e. natural gas and oil that are extracted using hydraulic fracturing, also known as fracking). These reports are remarkable for their technical depth and thoroughness, and are frequently referenced by climate activists, energy investors, and industry insiders. Hughes has provided a necessary counter to the US Energy Information Administration’s (EIA) typically over-optimistic projections, which often echo hyperbolic claims by the industry. Indeed, Hughes’s reports, which address forecasts contained in the widely-cited EIA Annual Energy Outlook, may justify calling him “the people’s shadow EIA.” Hughes has just issued his latest, Shale Reality Check 2021, and it provides an invaluable, comprehensive, yet detailed view of the past, present, and future of tight oil and shale gas.

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

The International Energy Agency has Joined the Conspiracy Against the World

June 19, 2020

The International Energy Agency has Joined the Conspiracy Against the World

The International Energy Agency has joined the conspiracy outlining a $3 trillion plan to restart the global economy while cutting greenhouse gas emissions, saying that governments have a “once-in-a-lifetime opportunity” to create jobs while decarbonizing infrastructure. Their highly questionable economist Fatih Birol has suddenly come out and proclaimed that the world has six months to avert a climate crisis. He has warned of the need to prevent post-lockdown surge in emissions. This is complete nonsense for this elitist consortium has already shut down the world economy to the point that in Britain, they have not produced and electricity by coal in two months. He spouts out statements with NO SUPPORTING scientific evidence and is pretending the world will end in 6 months if we allow people to use energy again.

You can Google Faith Birol and he is an economist with no background in climate. For decades his forecasts have been all about the rise and fall of energy – not climate change. It is made up of 30 member countries, 8 association countries, and 2 accession countries all of which must be a member of OECD. You will find that the IEA accepts also private donations and Birol is also now linked to Gates.

The IEA is an autonomous intergovernmental organization within the OECD framework, headed by its Executive Director. The strange part is that its Governing Board is the main decision-making body and it is composed of energy ministers or their senior representatives from each member country. For the IEA’s chief economist to come out of the blue with climate change forecasts are against the self-interests of member states that produce energy.

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

Geopolitical Risk Is On The Rise In Oil Markets

February 27, 2018

Geopolitical Risk Is On The Rise In Oil Markets

In the long-term, many oil analysts expect the world to become increasingly dependent on oil production from the Middle East, as U.S. shale fades in importance. However, geopolitical turmoil is already causing disruptions in major oil-producing countries in the Middle East, raising questions about the region’s ability to supply the global market in the long run.

The IEA has repeatedly warned that while U.S. shale has led to oversupply in the short run, shale output cannot meet future demand by itself. By the mid-2020s, especially because there are questions about the longevity of U.S. shale, there could be a much greater reliance on the Middle East, just as there was in the past.

However, according to the Oxford Institute for Energy Studies (OIES), the deteriorating geopolitical landscape in the Middle East could leave longstanding scars on the region’s energy sector.

Geopolitical threats are cropping up in various ways in the Middle East and North Africa. Formal institutions have been weakened, and in places like Libya, Yemen and Syria there is an absolute lack of legitimacy in government. Non-state actors have stepped into the void, such as Hezbollah, the Houthis, Libya Dawn, and others, according to OIES. These rivaling power centers make it tricky for oil companies and oilfield services to make investments.

As far as the oil market goes, these geopolitical problems are not obvious just yet. The glut of U.S. shale has inoculated the oil market from instability and unrest for the time being. Also, while there are plenty of sources of conflict and no shortage of potential threats, actual oil production outages have remained minimal. In fact, Iran ramped up production after the removal of international sanctions, while Libya, and Nigeria restored quite a bit of output after serious outages.

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

IEA Pours Cold Water On OPEC Optimism, Warns Global Oil Demand Shrinking

November 14, 2017

IEA Pours Cold Water On OPEC Optimism, Warns Global Oil Demand Shrinking

Pouring cold water on yesterday’s optimistic demand forecast projected by OPEC, which projected global crude demand growth to rise by 1.5mm b/d in 2018, this morning the International Energy Agency warned that the crude oil price rally could be short-lived because, contrary to OPEC’s expectations, global oil demand will be weaker than expected this year and next. In its closely watched monthly oil report, the IEA cut its crude demand growth outlook by 100,000 barrels a day for 2017 and 2018, as the WSJ reported. The agency now expects demand to grow by 1.5 million barrels a day this year and 1.3 million barrels a day next year.

The IEA predicted that balances will likely show the crude market is oversupplied in Q4 2017 and the first half of 2018, with oil demand in 2017 at 97.7mmb/d, rising to 98.9 million in 2018. Meanwhile, non-OPEC Oil Supply is expected To rise by 700,000b/d In 2017 To 58.1mmb/d, and another 1.4 mmb/d in 2018 to 59.5mm b/d, led by shale output.

The IEA also noted that global oil inventories fell 63mm barrels In Q3, only second quarterly draw since 2014, with the call on OPEC crude seen at 32.6mmb/d in Q4, declining to 32.0mmb/d in Q1 2018.

However, “the highlight of the report was that they lowered their demand forecast,” said Jens Pedersen, senior analyst at Danske Bank. The report also cautioned that “if the geopolitical concerns calm down, then prices could fall down again, so on the margin it’s a tad bearish.”

The IEA noted that oil prices have risen roughly 20% since early September with Brent crude sustaining gains above $60 a barrel in recent weeks, on the back of supply disruptions and geopolitical tensions in the Middle East. But if those problems prove temporary, a “fresh look at the fundamentals” would likely show the “market balance in 2018 does not look as tight as some would like and there is not in fact a ‘new normal.’”

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

America’s “Soaring” Gasoline And Oil Demand Was Just An Illusion: How The EIA Fooled The Algos

July 3, 2016

America’s “Soaring” Gasoline And Oil Demand Was Just An Illusion: How The EIA Fooled The Algos

When it comes to “real-time” measurements of crude demand and supply, the data is notoriously bad (and perhaps, according to some, intentionally manipulated). We pointed this out most recently in early March when we that according to IEA data, crude oil production exceeded consumption by an average of 0.9 million barrels per day in 2014 and 2.0 million bpd in 2015. Of this 1 billion barrels which the IEA said was produced but not consumer, some 420 million are said to be stored on land in OECD member countries and another 75 million can be found stored at sea or in transit by tanker somewhere from the oil fields to the refineries. This means that as of this moment, about 550 million “missing barrels” are unaccounted for “apparently produced but not consumed and not visible in the inventory statistics.”

However, it is not only data at the annual level that is flawed: monthly, and especially weekly data is just as, if not even more distorted. In fact, as Bloomberg’s oil energy analyst Julian Lee asks, “could it be that the U.S. demand that’s helped drive a near doubling of oil prices since mid-February was illusory?”

Lee is referring to a major discrepancy in DoE reporting which through the Energy Information Administration, produces two sets of U.S. demand data that drive sentiment and influence trading. The first shows monthly figures. They’re two months out of date, but they give the most accurate assessment of what’s going on in the world’s largest oil-consuming country.

The second set of numbers come out each Wednesday, giving preliminary estimates for the previous week. For crude markets these weekly figures – though less reliable – are arguably more important, largely because they’re bang up to date.

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

Bakken Production Down plus IEA Predictions

October 14, 2015

Bakken Production Down plus IEA Predictions

The Bakken and North Dakota production data is in.

Bakken production was down 19,502 bpd in August while all North Dakota was down 20,552 bpd.

Here is an amplified chart of Bakken and all North Dakota production.

Bakken barrels per well per day is now 112 while all North Dakota gets 94 barrels per well per day.

This chart shows the monthly change in North Dakota production. It is likely that by next month the 12 month average change in production will be negative.

Bakken wells producing increased by 69 and ND wells producing increased by 65.

From the Director’s Cut

July Permitting: 233 drilling and 0 seismic
Aug Permitting: 153 drilling and 1 seismic
Sep Permitting: 154 drilling and 1 seismic

July Sweet Crude Price1 = $39.41/barrel
Aug Sweet Crude Price = $29.52/barrel
Sep Sweet Crude Price = $31.17/barrel
Today’s Sweet Crude Price = $35.00/barrel
(low-point since Bakken play began was $22.00 in Dec 2008)
(all-time high was $136.29 7/3/2008)

July rig count 73
Aug rig count 74
Sep rig count 71
Today’s rig count is 67
(in November 2009 it was 63)(all-time high was 218 on 5/29/2012)

Comments: The drilling rig count increased 1 from July to August, decreased 3 from August to September, and dropped 4 more this month. Operators are now committed to running fewer rigs than their planned 2015 minimum as drill times and efficiencies continue to improve and oil prices continue to fall. This has resulted in a current active drilling rig count of 10 to 15 rigs below what operators indicated would be their 2015 average if oil price remained below $65/barrel. The number of well completions fell from 119(final) in July to 115(preliminary) in August. Oil price weakness now anticipated to last well into next year is the main reason for the continued slow-down. There was one significant precipitation event in the Minot area, 6 days with wind speeds in excess of 35 mph (too high for completion work), and no days with temperatures below -10F.

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

What Does Exxon Know That We Don’t?

May 24, 2015

What Does Exxon Know That We Don’t?

Forecasts from the IEA and Goldman Sachs this week are trying to say that crude barrels are still overpriced – but the market isn’t listening. I’ve been convinced that crude prices above $60 are counterproductive as Goldman said in their recent note – but other factors are continuing to help push prices higher.

Let’s take a closer look and see what’s going on – and what might go on in the near future.

Some short-term fundamentals continue to push traders into long positions in oil. I’ve been among the first to point out the large outflows of capital from just about every other asset class, save for energy stocks and commodities. This isn’t particularly smart analysis, but clearly money managers and institutional investors are looking for ‘value’ in a very hot market – and oil stocks and commodities look just too low to them. For these ‘value searchers’, it’s damn the fundamentals – full speed ahead, and oil catches a bid with every, even small bullish indication.

As appears to be the case with Chinese demand, which has incrementally picked up in recent months. But it’s not like Chinese imports aren’t being met for the most part – they are finding more oil now than ever before in their history. And imported oil is not being used. Several reports have Chinese oil stockpiles growing for the last 7 weeks – an obvious way for China to hoard oil that they think is going to get more expensive later.

US stockpiles have come slightly down in the last few EIA reports – a surprise for many who believed that storage would increase throughout the summer. Many are extrapolating that this drop in stockpiles is a harbinger of slower production from slashed numbers of rig counts, but this may be very premature.

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

Dramatic UK Emission Drop Just a ‘Taste of What Could Be Achieved

March 27, 2015

Dramatic UK Emission Drop Just a ‘Taste of What Could Be Achieved

UK greenhouse gas emissions fell by 8.4 percent between 2013 and 2014, according to official figures released today by the Department for Energy and Climate Change (DECC). Carbon emissions fell by 9.7 percent.

A 23 percent reduction in coal use and record warm temperatures were the main contributors to the decline in emissions. Continued falls in energy use were also a factor.

This dramatic drop in emissions is the largest on record for a growing UK economy. In fact, the economy grew faster in 2014 than it has in any year since 2007.

Economic Growth

It is extremely rare that emission reductions of more than 5 percent per year occur without an economic recession.

“This is further evidence, if it was needed, that efforts to cut carbon pollution and boost our economy can go hand in hand,” said Doug Parr, chief scientist at Greenpeace UK.

DECC’s figures follow recent estimates by the International Energy Agency that global CO2 emissions stalled in 2014 during a period of global economic growth. If confirmed, it would be the first time in 40 years when a growing global economy was not accompanied by rising emissions.

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

The Easy Oil Is Gone So Where Do We Look Now?

February 24, 2015

The Easy Oil Is Gone So Where Do We Look Now?

In 2008, Canadian economist Jeff Rubin stunned the oil market with a bold prediction: With the world economy growing at 5 percent a year, oil demand would grow with it, outpacing supply, thus lifting the oil price from $147 to over $200 a barrel.

The former chief economist at CIBC World Markets was so convinced of his thesis, he wrote a book about it. “Why the World is About to Get a Whole Lot Smaller” forecast a sea change in the global economy, all driven by unsustainably high oil prices, where domestic manufacturing is reinvigorated at the expense of seaborne trade and people’s choices become driven by the ever-increasing prices of fossil fuels.

In the book, Rubin dedicates an entire chapter to the changing oil supply picture, with his main argument being that oil companies “have their hands between the cushions” looking for new oil, since all the easily recoverable oil is either gone or continues to be depleted – at the rate of around 6.7% a year (IEA figures). “Even if the depletion rate stops rising, we must find nearly 20 million barrels a day of new production over the next five years simply to keep global production at its current level,” Rubin wrote, adding that the new oil will match the same level of consumption in 2015, as five years earlier in 2010. In other words, new oil supplies can’t keep up with demand.

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

Is There Any Hope Left For Nuclear Energy?

February 20, 2015

Is There Any Hope Left For Nuclear Energy?

Can nuclear help avoid the worst effects of climate change?

The International Energy Agency recently provided a roadmap for nuclear power, detailing how the technology could help keep global temperature increases within a 2-degree scenario. According to the IEA report, between 2015 and 2050 total installed nuclear power capacity around the world would need to more than double from 396 gigawatts (GW) to 930 GW.

To get there, the IEA says that the world will need to see an additional 20 GW of new nuclear capacity each year, a scenario that from today’s vantage point seems highly unlikely. The IEA admits as much, and says several key things must happen in order for the industry to ramp up in such a rapid fashion.

The need to train a skilled workforce, greater standardization, more public acceptance, and a resolution to long-term nuclear waste storage feature among the key objectives. There are good reasons to believe that these problems could theoretically be addressed, albeit with great political difficulty.

Critically, however, the IEA notes that the nuclear industry is going to need to demonstrate that it can build new power plants on time and within budget. On this objective, the industry is failing miserably. Nuclear power plants have often suffered from cost overruns and delays, one factor (among many) that put the industry into a decades-long lull beginning in the early 1980’s. The so-called “nuclear renaissance” was thought to put an end to these problems with a new generation of designs and modular construction. So far, it hasn’t played out that way.

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

Oil Price Crash – What Next?

February 17, 2015

Oil Price Crash – What Next?

In the fast moving oil market much of the fundamental data only becomes available for general consumption at least one month in arrears. But EIA oil price data and Baker Hughes rig counts are available weekly and with much action going on it is worthwhile updating.

The price plunge seems to have reversed, at least for the time being (more on that below). But the most stunning data is the free fall in US oil drilling rigs shown in Figure 1, down 553 (34%) from the October top. The IEA also published their Oil Market Report early this month, on 10th February, reporting oil supplies were down 235,000 bpd in January, mainly in OPEC countries Iraq and Libya.

Figure 1 The US oil rig count is down to 1056 rigs from a peak of 1609 in October last year. The gas rig count continues to inch downwards slowly. The collapse in US shale oil drilling, that looks set to continue, must lead to US oil production decline in the months ahead.

Figure 2 The bounce in the oil price is as sharp as the crash and is difficult to see at this scale. Hence, move on to Figure 3.

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

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