For months, pundits have focused on rising production, mostly from US shales, sluggish demand, primarily from European stagnation and disappointing Chinese activity, aided by conspiratorial Saudi/OPEC intentions. And there is no doubt that some of this is true…last year, today, and probably over the near term. The underlying oil (physical) picture stands, roughly, at 91 …
Still Trial and Error! Unconventional resource leaders believe that traditional petroleum geophysics, developed over 150 years, needs a makeover to most effectively exploit shale/tight reservoirs. The behavior of hydrocarbons in extremely low porosity rock may require an understanding of hydrocarbon, water, and rock surface behavior at a near atomic level – much like the difference …
One of the better presentations at the MIT Water Summit last month focussed on the upper bound of water costs – energy-intensive desalination which, at up to $0.65/cubic meter (a quarter of a cent per gallon), define the high end of the value of water resource at a level which was surprisingly low relative to, …
It Gets Worse!! Everybody knows about the regional energy/geopolitical enigmas – subsidized energy, power, and water driving wasteful consumption. Add the forced addition of subsidized oil-fired power as cheaply valued associated gas production tops out. Mix in the usual conflicting politics where each country has its own reason not to ‘play well with others,” and …
My Journey – A Progress Report Now that I have just a little more time (but less than you think!), I’ve been trying to understand both sides of the Climate Change/Global Warming “debate” (although many view the debate as over), including the how to think about the economic costs/risks. My goal is to find …
Subsidy Reversals Continue – What’s Next?? When you want more of something (solar in 2000-2005), you subsidize it. When you want less of something (Spain, 2009+, Germany?), you eliminate this incentives and, eventually, the subsidies “go negative.” After a decade of outsized subsidies (and despite substantial efforts to reduce in line with improved relative economics), …
….and Where Natural Gas Goes, Coal Can follow (but when??)! If you believe in higher gas prices, it might be worth the effort to revisit future coal fundamentals. After a horrible few years (stocks down 70-90%), it’s extremely difficult to find a coal bull. However: 1) Natural gas, at $4.50, is, for most power generators, …
As Dan Yergin’s “The Prize” might better summarize: In the Beginning (post WWI), there were those mindless borders, drawn at the Treaty of Paris. Then (1930s) came the wildcatters – Standard Oil, British Petroleum, 5% Gulbenkian, leading (largely colonialist) outsiders into Kuwait and Saudi Arabia and Persia and Iraq. I love the tale where SoCal …
The Long Road from Fukushima We might be early, but look what’ s setting up for a return to favor! Uranium, selling at half its all time (and 5 year) high, seems to be perking up. While some unfavorable fundamentals are still in place, a number of more positive trends are underway. Briefly: Bearish …
Investors and operators are flocking to the region in search of cheap feedstock for refining, chemicals, and energy intensive industrial opportunities. While it is difficult to imagine shortages and delays in such an infrastructure-rich region (Keystone XL excepted!), front end projects are already falling victim to sticker shock (permitting another matter!). It’s been 25 …