Prediction: Coal has fallen. Nuclear is next then Oil.

[SageBrush]

“Just as the government is supporting through the people’s taxes windmills and solar panels, they need to support the clean coal technology. … We need a level playing field,” he said.

Excellent reasoning skills like his lead to BK

 

[mspohr]

Fracking banned in UK as government makes major U-turn

Fracking banned in UK as government makes major U-turn

The government has banned fracking with immediate effect in a watershed moment for environmentalists and community activists.

Ministers also warned shale gas companies it would not support future fracking projects, in a crushing blow to companies that had been hoping to capitalise on one of the new frontiers of growth in the fossil fuel industry.

The decision draws a line under years of bitter opposition to the controversial extraction process in a major victory for green groups and local communities.

 

[SageBrush]

Fracking banned in UK as government makes major U-turn

That is a vote of confidence in off-shore wind. The Politicians are jumping on the bandwagon

 

[mspohr]

That is a vote of confidence in off-shore wind. The Politicians are jumping on the bandwagon

It definitely is a political move. With an election coming up, some think this was done purely for political reasons and not because of some enlightened understanding of the climate crisis. Politicians need to be dragged kicking and screaming to do the right thing.

 

[miimura]

That is an amazing turn of events. Now if the UK government wakes up to the boondoggle that is Hinkley Point, I will truly have a coronary.

 

[TheTalkingMule]

I've been pushing for our governor in PA to force an extraction tax by calling a temporary moratorium on all fracking. Environmental impact, increased childhood cancer, whatever you wanna get behind.

He refused to move on it. This second term has been a major letdown. I don't consider myself a "progressive", but that's the kind of governor we need in PA to counter our ratsnest legislature full of fracking puppets.

 

[Merrill]

I've been pushing for our governor in PA to force an extraction tax by calling a temporary moratorium on all fracking. Environmental impact, increased childhood cancer, whatever you wanna get behind.

He refused to move on it. This second term has been a major letdown. I don't consider myself a "progressive", but that's the kind of governor we need in PA to counter our ratsnest legislature full of fracking puppets.

It all gets down to money, unfortunately the fossil fuel industry pays off the politicians.

 

[ReddyLeaf]

The Shale Oil Revolution Actually Reflects a Nation in Decline | Peak Prosperity

As poor as the economics are for the shale drillers, which have collectively spent some $260 billion more than they have taken in from their operations, things are even worse than commonly understood. As the public is on the hook for billions of dollars worth of road and bridge damage caused by fracking trucks.

If the future is going to be mostly electrified, then there are huge energy expenditures to be made in alternative electricity production and storage, build-out of electric vehicles and mass transit systems, and a complete overhaul of the agricultural system.

If the analyses I trust are more accurate, then there’s closer to only 50% of what we thought was there. This is a big problem for a nation without any sort of a plan, especially one that has used the shale output to convince itself that oil abundance is always going to be a part of the landscape.

I lived right in the middle of a fracked area, probably ten wells within a five mile radius. It completely destroyed the roads, potholes so large that even pickups had to zigzag around them. The 24/7 noise was excruciating for months as they moved one drilled to the next hole. What’s worse is that well half-life in the area was about 6 months. That means essentially zero production after 5 years. Oh, BTW, I’m sure they still get to write off everything at the initial production level due to the “oil depletion allowance.” Meanwhile, if they had put up a wind turbine at every location, we’d still have electricity production decades and centuries later.

 

[TheTalkingMule]

It all gets down to money, unfortunately the fossil fuel industry pays off the politicians.

This guy doesn't take much fracking money, he doesn't even accept his salary. It feels like he's still running for something even though he's in his 2nd term. Trying to reach across the aisle is great, but at some point you need to play all your chips.

 

[iPlug]

Aramco is both the oil sector’s Goliath and a firm vexed by problems

 

[iPlug]

A surge of oil production is coming, whether the world needs it or not.

The flood of crude will arrive even as concerns about climate change are growing and worldwide oil demand is slowing. And it is not coming from the usual producers, but from Brazil, Canada, Norway and Guyana — countries that are either not known for oil or whose production has been lackluster in recent years.

This looming new supply may be a key reason Saudi Arabia’s giant oil producer, Aramco, pushed ahead on Sunday with plans for what could be the world’s largest initial stock offering ever.

Together, the four countries stand to add nearly a million barrels a day to the market in 2020 and nearly a million more in 2021, on top of the current world crude output of 80 million barrels a day. That boost in production, along with global efforts to lower emissions, will almost certainly push oil prices down...​

Flood of Oil Is Coming, Complicating Efforts to Fight Global Warming

 

[mspohr]

This is funny

Bloomberg - Are you a robot?

Global oil demand may peak within the next 20 years, according to an assessment included in the prospectus for Saudi Aramco’s initial public offering, suggesting views are slowly changing in the kingdom where officials long dismissed the notion as overblown.

 

[TheTalkingMule]

This is funny

Bloomberg - Are you a robot?

Global oil demand may peak within the next 20 years, according to an assessment included in the prospectus for Saudi Aramco’s initial public offering, suggesting views are slowly changing in the kingdom where officials long dismissed the notion as overblown.

They're selling MC Hammer cassette futures. Brent is going to $25 in a few weeks/months on this debacle, 2015 all over again.

 

[iPlug]

"forecasts oil demand to peak around 2035...demand growth for crude and other oil liquids will be “leveling off” at that time" seems one of the more realistic forecasts.

Yet that is not bad news for the Saudis, as the article points out "Aramco can take some solace in the fact that as one of the lowest-cost producers, its market share may rise as demand slips. Even in a bearish case for oil, with demand peaking in the late 2020s, Saudi Arabia’s market share could rise from around 15% to 20% by 2050..."

 

[TheTalkingMule]

"forecasts oil demand to peak around 2035...demand growth for crude and other oil liquids will be “leveling off” at that time" seems one of the more realistic forecasts.

Yet that is not bad news for the Saudis, as the article points out "Aramco can take some solace in the fact that as one of the lowest-cost producers, its market share may rise as demand slips. Even in a bearish case for oil, with demand peaking in the late 2020s, Saudi Arabia’s market share could rise from around 15% to 20% by 2050..."

Yes, Saudi Arabia's timeshare will almost certainly rise from here in most scenarios. Problem is, pricing will be half what it is today as the markets work their way back to balance. US fracking continues to grow and won't slow down or stop on a dime just because Brent pricing hits $40.

The danger of this IPO isn't in the math or the physics, it's in politics and power. The reason this IPO is happen is the Kingdom going broke. They barely have enough money to keep an uprising quelled, and all the factors are rapidly trending in the wrong direction. You invest $10B in the Aramco IPO, Brent goes to $40 and the royal family loses power. You just lost your entire investment and MBS sails off on his yacht to Mar A Lago.

 

[iPlug]

I share your enthusiasm and likely most environmental goals. But such forecasts are too rosy.

For example, the aforementioned U.S. fracking scenario at $40 is quite doubtful as the opposite has already occurred in recent years at that price - U.S. production pulled back markedly and rather quickly then when the Saudis flooded the market with oil.

Expect more fits and starts as has been the history.

 

[TheTalkingMule]

The supply and demand picture has changed dramatically since 2015, along with the situation in Saudi Arabia. Logic dictates we'll have a run up in prices if/when fracking pulls back, but I'm starting to think that might not even happen.

The oil majors are playing in the Permian now. They can and will pump with WTI @ $40, especially now that even the Saudis admit the end is in sight. The era of "pump it or lose it" is upon us and the rules are very different than last time around.

The Saudis are at the end of the line for raising money. This IPO buys them another year of bridging the budget gap for public subsidies, but after that there's nowhere else to turn.

The US producers absolutely MUST pump to show revenue or the banks walk away. Saudi Arabia MUST bring in $100B every year or they lose power over a country teetering on the edge. Once demand peak is in sight, those two things cannot co-exist. I think we're in for a loooong(12+ month) downturn followed by one last spike then an accelerating decline in demand followed by absolute global chaos.

 

[iPlug]

...The oil majors are playing in the Permian now...The US producers absolutely MUST pump to show revenue or the banks walk away.

I don't see how these two statements can be reconciled. The oil majors are playing in a much bigger way than they were a few years ago. But it is because of that circumstance that the majors are not beholden to the banks as the small players were. They can go idle for months or years at a time if needed and not go bust. This would make U.S. shale oil production even more elastic than it was in the recent past.

The bigger issue with shale production is how quickly each play fizzles out. So simply pausing new drilling will alone cause much supply to fall off in a weeks to months.

Because of their lowest cost to produce a barrel of oil, Saudi Arabia would be one of the last players to go offline due to an international drop in demand. It's unclear how long their current political dynasty will last, but as long as there is any money to be made, some political force there will continue to pump it out of the ground.

Further, there will long be a continued demand for plastics, so it's hard to imagine Saudi Arabia folding at any time in the next many decades.

 

[mspohr]

I don't see how these two statements can be reconciled. The oil majors are playing in a much bigger way than they were a few years ago. But it is because of that circumstance that the majors are not beholden to the banks as the small players were. They can go idle for months or years at a time if needed and not go bust. This would make U.S. shale oil production even more elastic than it was in the recent past.

The bigger issue with shale production is how quickly each play fizzles out. So simply pausing new drilling will alone cause much supply to fall off in a weeks to months.

Because of their lowest cost to produce a barrel of oil, Saudi Arabia would be one of the last players to go offline due to an international drop in demand. It's unclear how long their current political dynasty will last, but as long as there is any money to be made, some political force there will continue to pump it out of the ground.

Further, there will long be a continued demand for plastics, so it's hard to imagine Saudi Arabia folding at any time in the next many decades.

I think SA's problem is that it needs to generate billions in income annually to keep the money flowing and keep everyone happy. Even a small drop in income will cause great economic pain leading to social unrest and instability. There will undoubtedly be continued oil sales for many years. The question is will there be enough income to keep the gravy train going.

 

[TheTalkingMule]

I don't see how these two statements can be reconciled. The oil majors are playing in a much bigger way than they were a few years ago. But it is because of that circumstance that the majors are not beholden to the banks as the small players were. They can go idle for months or years at a time if needed and not go bust. This would make U.S. shale oil production even more elastic than it was in the recent past.

Pardon the mis-type, my thought was that having the majors encroaching in the Permian and investors already souring means any smaller player who used to be the only game in town now needs to go full sprint until death or acquisition.

Also I think the majors will figure out they're better off just pumping at anything north of $40 WTI. The end is in sight, so it's no longer this infinite timeline where moving the price point is the only concern. Any rational oil company is now looking at a finite volume of oil that will be sold before all assets are either stranded or permanently unprofitable. In that reality the answer is nearly always to pump.