Tag "Energy Information Administration"
The Permian Basin Continues To Drive Record U.S. Energy Growth
Despite recent low crude prices and a significant drop in the DrillingInfo rig count during January, the giant Permian Basin of West Texas and Southeast New Mexico continues to expand its role as the main driver of energy growth in North America.
In just the past week, we have seen the following significant events that are attributable all or in part to what has become the world’s second most-productive oil and gas resource: A driver of upstream and midstream profits – Both ExxonMobil and Chevron beat analyst expectations with their 4th quarter earnings announcements, driven mostly by their upstream and midstream developments in the Permian.
Driven by its Permian drilling, Chevron’s oil and natural gas production rose to an all-time high as the company produced a record 3 million barrels of oil per day (bopd) during the 4th quarter.
A driver of downstream expansion and acquisitions – Early last week, Exxon also broke ground on a major expansion of its Beaumont refinery, a project that will add the capability of processing an additional 250,000 bopd and make it the largest refinery in the country.
This purchase gives Chevron an additional 110,000 bopd of capacity to refine its own light sweet crude.
A driver of record domestic production – In its new Annual Energy Outlook released on January 24, the U.S. Energy Information Administration (EIA) now projects in its reference case that domestic crude oil production will rise to more than 15 million bopd by 2022, years before previous projections, and will remain above 14 million bopd through the year 2040.
This basin includes many prolific tight oil plays with multiple layers, including the Bone Spring, Spraberry, and Wolfcamp, making it one of the lower-cost areas to develop.”
Meanwhile, the EIA’s “High Resource and Technology” case projects U.S. domestic production to grow to an even more impressive 20 million bopd by the year 2040.
This month, the EIA projects that the Permian Basin alone will put that much crude onto the market.
Amazing.
WTI Drops Below $60
The January Brent lost 47 cents Friday to settle at $70.18 a barrel.
Week-on-week, the Brent is down 3.6 percent.
“WTI hit a nine-month low and fell for the 10th straight session, while Brent pricing was the lowest since April.” Seng added that both the WTI and Brent officially entered “bearish” territory on Thursday, having lost 20 percent of their respective values since peaking in October.
“Fundamentals weighed heavily on the market this week,” continued Seng.
“Despite a U.S. stock market that rebounded earlier, stocks were down today and global stocks continued lower on growth concerns.
RBOB is down two cents day-on-day and 5.3 percent for the week.
“Natural gas traded flat for most of the week until today, when prices jumped on a forecast for a blast of cold Canadian air that is expected to lower temps for a large part of the country in the coming days,” said Seng.
The latter figure is the “‘official’ season-ending volume,” he explained.
“Production last week decreased to 87.5 Bcfd while consumption fell to 83 Bcfd,” added Seng.
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EIA: US Crude Stockpiles Surge To Highest Level This Year
Crude inventories jumped by 6.2 million barrels to about 436 million barrels in the week to April 27, compared with expectations for an increase of 739,000 barrels.
Gasoline stocks rose 1.2 million barrels, compared with analysts’ expectations in a Reuters poll for a 587,000-barrel drop.
U.S. gasoline futures fell 0.7 percent to $2.0724 a gallon.
Price Futures’ Flynn said he anticipates strong demand going forth that will keep refinery output high, which remains bullish for oil prices.
Refinery crude runs fell by 60,000 barrels per day and refinery utilization rates rose by 0.3 percentage points to 91.1 percent of total capacity, EIA data showed.
Distillate stockpiles slumped by 3.9 million barrels, versus expectations for a 1.4 million-barrel drop, the EIA said.
Net U.S. crude imports rose last week by 263,000 bpd.
(Reporting By David Gaffen Editing by Marguerita Choy) Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone.
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Saudi Arabia to House World’s Largest Solar Project
According to the most recent data available from the U.S. Energy Information Administration (EIA), Saudi Arabia is the second largest oil producer in the world.
It produces 13 percent of the world’s oil and gets 60 percent of its own electric energy from petroleum.
On Tuesday, it announced that it would partner with Japanese tech conglomerate SoftBank to build the world’s largest solar power project, Bloomberg reported.
According to Bloomberg, the project, which will be built in the Saudi desert, is projected to generate 100,000 jobs and produce 200 gigawatts of power by 2030, 100 times the next biggest planned project, the Solar Choice Bulli Creek PV Plant in Australia, which only aims to produce two.
Solar power is a logical choice for Saudi Arabia.
According to Climate Action Tracker, if global temperatures rise to three or four degrees Celsius, 75 percent of the country would be excessively arid by the end of the century.
To provide more context for the scope of that vision, Fortune pointed out that the total capacity of all existing solar installations is around 400 gigawatts, which is only double what the Saudi/SoftBank project plans to produce on its own.
The project is projected to cost $200 billion overall.
Saudi Arabia will have to import panels at first, and it will also need to build up the battery capacity to store the solar energy.
The Saudi government’s bold investment in solar power humbles the U.S., which, according to EIA data, is the country currently leading it as no.
The Guy Who Came Up With Fracking Probably Deserves A Nobel Peace Prize
If you are driving the average 1,3476 miles that Americans drive every year, in a 2016 model car getting the average 24.7 miles/gallon, then congratulations: you saved about $700 last year compared to 2011.
The U.S. oil and gas industry has once again become a factor to reckon with, and our country and the world is a better place for it.
And we have one man in particular to thank for it: George P. Mitchell, the “father of fracking.” The last decade the U.S. has made astonishing progress in oil and natural gas production, thanks to advances in exploration and extraction technology.
As a result, U.S. oil and gas production has skyrocketed, and the U.S. is now the world’s largest natural gas producer, and on the path to again becoming the world’s largest oil producer: The fracking revolution went comparably unnoticed by the general public, environmentalists, politicians and regulators for the first decade after Mitchell and others revived the technology in the 1990s.
For example, in an attempt to prop up oil prices, Saudi Arabia has cut oil production in recent years.
In foreign policy terms this is a prime example of “leading by example at home.” When a country abstains from regulating an industry, adapting a policy of respecting the rights of individuals and corporations (by design or by accident as in the case of the fracking revolution), invention takes off and the country’s strength in the industry in question increases relative to other countries.
If an entire country turns its focus to expanding freedom and protecting individual rights by lowering taxes, cutting government spending, and repealing regulation across industries a couple of things happen: (1) As innovation is unleashed the country’s overall strength increases relative to other countries who are not following the same path, and (2) the countries left in the dust sooner or later start to take notice.
Perhaps reluctantly to begin with, but the example set by the leader will not go unnoticed among the citizens of the countries left behind.
A country that adopts as its overarching foreign policy strategy to lead by example at home will also find its defensive military needs easier to support.
If the Nobel Peace Prize were awarded posthumously, Mitchell would be a deserving candidate; future historians may look back at the first half of the 21st century and conclude that the “Father of the Fracking Revolution” deserved a place on the same pedestal as Dr. Borlaug, sharing the distinction of having done more to promote world peace than all politician and peace activist Nobel Laureates combined.
2017 Clean Energy By the Numbers: A State-by-State Look
Over the last few years, the U.S. has seen remarkable growth in clean, renewable energy like wind and solar power.
In 2017, renewables—such as hydropower, wind, solar and geothermal energy—made up 16 percent of the electricity powering the nation’s homes and businesses.
While this is positive progress, much more still needs to be done: a recent NRDC report concluded that the U.S. should generate at least 80 percent of its electricity from renewable resources by 2050 in order to meet the Paris accord’s target of holding global warming to no more than a 2-degree increase.
The State of Wind: The Great Plains Leads At the end of 2016, wind became the largest source of renewable power capacity in the nation, overtaking hydropower.
Iowa’s largest electric utility, MidAmerican, expects to be generating 85 percent of its electricity from wind by 2019.
The U.S. currently only has one offshore wind farm operating, but as costs fall for these offshore wind projects across the world, there is a growing interest by many states to support new offshore wind projects.
Minnesota, which has seen a massive increase in “community” solar projects, saw almost a 50 percent increase in solar jobs in 2017.
And businesses across the U.S. are still making new investments in solar energy to power their operations.
That is also a 25-fold increase in the state’s solar capacity, in just one year.
In 2017, emissions have fallen by another 4 percent, down to 28 percent below 2005 levels.
Why the New EIA Forecast Is Unrealistic
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.”
Since 2013, Hughes and PCI have produced annual studies questioning EIA forecasts, based on an analysis of comprehensive play-level well production data. “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.
If, as the EIA suggests, improved technology will continue to increase well production, then perhaps per-well productivity can continue to grow for some time.
So far, overall, the industry has lost money on tight oil production, and shale gas has done little better.
The industry and its investors assume that if productivity continues to increase, and oil prices rise, profitability will eventually materialize.
But what levels of oil and gas prices would be required to profitably extract fuels in the large non-core areas that the EIA assumes will eventually be tapped after “sweet spots” are drilled and exhausted?
Taxpayers who fund AEO reports deserve realistic estimates of future production, costs of production and prices needed for profitable production.
New NASA Study Solves Climate Mystery, Confirms Methane Spike Tied to Oil and Gas
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.
A drop in the acreage burned in fires worldwide between 2006 and 2014 meant that methane from those fires went down far more than scientists had realized. “The three numbers combine to 25 teragrams a year—the same as the observed increase.” “Leaking and venting of unburned gas—which is mostly methane—makes natural gas even worse for the climate than coal.”
A study in March last year found that natural gas power plants put out between 20 and 120 times more methane pollution than previously believed, due in part to accidental leaks and in part to deliberate “venting” by companies.
And as far back as 2011, researchers from Cornell University warned that switching over from coal to gas could be a grave mistake where climate change is concerned.
The NASA study may help settle the science on the oil and gas industry’s role in rising methane emissions.
Methane molecules rising from wetlands and farms have a relatively small concentration of heavy carbon isotopes, oil and gas-linked methane higher amounts, and methane from fires the most heavy carbon.
Historically, “burning during the past century has been lower than at any time in the past 2000 years,” one 2016 study points out, due in large part to the spread of fire suppression techniques.
In the meantime, even while fires declined worldwide, methane emissions overall have continued to rise sharply—and, according to NASA’s latest research, it turns out pollution linked to the oil and gas industry is responsible for the biggest chunk of that growing problem.
The Hazards of EIA Energy Forecasts
Accepting the conclusions of the latest energy outlook, released last week by the U.S. Energy Information Administration (EIA) means also accepting certain climate catastrophe.
Assuming this scenario will become reality also means accepting the consequences: total failure to stop dangerous climate change.
You can’t accept one without the other.
So what assumptions were used to create the EIA’s latest base-case scenario?
What is the intended value of creating energy outlooks using dangerous assumptions like these?
Instead, the EIA appears to cherry-pick assumptions that would protect the fossil fuel industry from difficult questions about its viability in a low-carbon world, while failing to include a scenario which considers what reaching climate success would look like.
Of course, the EIA isn’t alone in creating questionable energy outlooks seemingly designed to protect the fossil fuel industry from the difficult realities of the required energy transition.
This works for the fossil fuel companies, but what about the rest of us?
118 U.S. Mayors Endorse 100% Renewable Energy Goals
The Sierra Club released a new analysis Friday that found that transitioning all 1,400+ U.S. Conference of Mayors member-cities to 100 percent clean and renewable electricity will significantly reduce electric sector carbon pollution nationwide and help the U.S. towards meeting the goals of the Paris climate agreement.
In addition, the Sierra Club’s Ready for 100 campaign and the co-chairs of Mayors for 100% Clean Energy announced Friday that 118 mayors across the country have endorsed a goal of powering their communities with 100 percent clean, renewable energy such as wind and solar.
Mayors Take Bold Step Toward 100% Clean Energy https://t.co/hlOGOZhyOi @BusinessGreen @GreenCollarGuy — EcoWatch (@EcoWatch) 1493248204.0 The Mayors for 100% Clean Energy initiative is co-chaired by Mayor Philip Levine of Miami Beach, Mayor Jackie Biskupski of Salt Lake City, Mayor Kevin Faulconer of San Diego and Mayor Stephen K. Benjamin of Columbia, South Carolina.
Mayoral endorsements of 100 percent renewable energy have led to ambitious action in municipalities across the U.S.
The mayors of St. Petersburg, Florida and Abita Springs, Louisiana issued proclamations endorsing a goal of transitioning to 100 percent clean and renewable energy, followed by the formal adoption of a community-wide goal establishing 100 percent clean, renewable energy as the target for city energy planning.
Thirty-six cities across the U.S. have now committed to transition to 100 percent clean and renewable energy.
This growing list of cities most recently includes Columbia, South Carolina, which this week unanimously voted to transition entirely to clean, renewable energy by 2036. “Cities must adapt to cope with the threats of climate change, and that’s also why we must take action to mitigate them.
Salt Lake City has set the ambitious but achievable goals of generating 100 percent of the community’s electricity supply from renewable energy by 2032, followed by an 80 percent reduction in community greenhouse gas emissions by 2040.
We are taking action to achieve these goals and I am honored to join mayors from across our nation to lead the transition to clean, renewable energy.”
