Today's ENERGY News - March 25, 2016

 

Today's ENERGY News

March 25, 2016  

 

Despite oil’s decline, energy companies win with equity offerings

Persistent low oil prices have lead to slower business in much of North Dakota’s Bakken oil fields. The collapse of U.S. oil and gas investment could have… More than a dozen companies in the hard-hit exploration and production energy industry have announced new share offerings this year – and have generally been rewarded in the stock market for the strategy. Although it might seem that companies would upset their investor base by diluting earnings per share when they added more stock, most of the 15 companies that have done so have actually outperformed their peers. Their share prices have beaten an oil and gas producers index, on average, by about 3 percentage points since their respective offerings, and the outperformance is even stronger when compared with that...  

 www.reuters.com

The big bust in the oil fields

He’d borrowed from banks and investors and retirement funds, all in a frenzied mission to drill for oil and gas, and by the time Terry Swift realized he’d gone too far, this was his debt: $1.349 billion. His company, founded by his father almost 40 years earlier, had plunged into bankruptcy and laid off 25 percent of its staff. Its shares had been pulled from the New York Stock Exchange. And now Swift was in a company Chevrolet Tahoe, driving back to the flat and dusty place where his bets had gone bust. Swift was coming to this energy-rich strip of South Texas trying to grapple with how much blame he shouldered for the failure of his company. A low-key and historically cautious oil chief executive who eschews private...  

 www.washingtonpost.com

Solar-Panel Installers Face Clouded Future

Many U.S. states are considering dialing back solar-power incentives amid growing pressure from local electric utilities, potentially dealing a blow to the companies that install home solar systems around the country. More than 900,000 homes across the U.S. are equipped with solar panels, with most of those homeowners able to sell any excess electricity their houses generate back to the utility, helping reduce the cost of home solar panels by up to 30%. But the price solar customers get paid for that extra renewable power through so-called net metering is starting to fall, as several states, including Nevada and Hawaii, have slashed their solar subsidies. Utilities in Arizona, Colorado, Louisiana, Utah and many other states are currently proposing measures that include changing their net metering programs or raising the monthly fees charged to home solar users for […]

 www.wsj.com

Virginia gets head start with offshore wind

Approval of a wind-energy research plan in the federal waters off Virginia’s coast is a pathway to commercial sector development, the state’s governor said. The federal Bureau of Ocean Energy Management announced consent for the first-ever wind energy research facility offshore Virginia. The research plan envisions the installation of two 6-megawatt turbines, which could generate enough power to meet the annual demands of 3,000 homes. Virginia Gov. Terry McAuliffe said federal approval supports state plans to become the first in the nation to advance an offshore wind energy program. “This research project is the gateway to commercial development of offshore wind which will help diversify our Commonwealth’s energy... 

 www.upi.com

Chinese researchers develop novel aluminum–graphite dual-ion battery

A team from the Shenzhen Institutes of Advanced Technology (SIAT) of the Chinese Academy of Sciences has developed a novel, environmentally friendly low-cost battery. The new aluminum-graphite dual-ion battery (AGDIB) offers significantly reduced weight, volume, and fabrication cost, as well as higher energy density, in comparison with conventional LIBs. The battery shows a reversible capacity of ≈100 mAh g −1 and a capacity retention of 88% after 200 charge–discharge cycles. A packaged aluminum–graphite battery is estimated to deliver an energy density of ≈150 Wh kg −1 at a power density of ≈1200 W kg −1 —≈50% higher than most commercial lithium-ion batteries. A paper on the work is published in the journal Advanced […]

  www.greencarcongress.com

How Much Demand Deconstruction From EVs?

Lower Forever: Electric Cars and the Inevitable Reality of the Oil Market

Proponents of the Electric Car are already convinced that the advent of cars with plugs will ultimately spell doom for the Big Oil companies and countries that rely on oil exports.  Meanwhile the oil industry, led by OPEC, is expecting steady growth through at least 2040.  But what will it take for the rest of the market to “see the light” and accept the fact that demand for oil will soon peak and slowly erode?

In this report I will examine the fundamentals of oil demand destruction from a markets perspective.  Using a combination of conservative estimates, educated guesses, and market insights I will quantify the amount of PEV sales needed to cause enough oil demand destruction necessary to change the long term outlook of the oil market.  Furthermore, assuming an “S” shaped growth curve I will provide insights as to how long it might take for this shift in market psychology to occur.

n late 2014 through 2015 a worldwide oversupply of crude oil existed mostly in the order of 1 to 2 million barrels per day according to the EIA.  WTI Crude Oil sold off from well over $100 in mid-2014 to under $27 a barrel in February of 2016.  As a result of the prolonged oversupply and pricing pressure, oil companies drastically slashed capital expenditures, reduced workforces and reluctantly accepted the “lower for longer”mantra.

But what would it take for the market to accept what electric car advocates already believe – that prices and demand for oil will remain Lower Forever?  To begin with, the market needs to observe enough oil demand destruction to conclude that electric cars are having a significant impact on market fundamentals.  If this can be observed in the context of an “S” shaped growth curve, market participants will quickly realize that oil will soon reach Peak Demand and then begin falling.  A huge psychological threshold will be crossed when electric cars beginning displacing about 50% of annual oil demand growth.  At that point it will be pretty obvious that oil consumption will inevitably begin a steady decline.

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Today's Energy News - March 24, 2016

Rockefeller Family Fund hits Exxon, divests from fossil fuels

The Rockefeller Family Fund said on Wednesday it would divest from fossil fuels as quickly as possible and “eliminate holdings” of Exxon Mobil Corp, saying the oil company associated with the family fortune has misled the public about climate change risks. Though only a sliver of the endowment’s modest $130 million in assets is invested in fossil fuels, the move is notable because a century ago John D. Rockefeller Sr. made a fortune running Standard Oil, a precursor to Exxon Mobil. The charity said it would also divest from coal and Canadian oil sands. Given the threat posed to the survival of human and natural ecosystems, “there is no sane rationale for companies to continue to explore for new sources of hydrocarbons,” the Rockefeller Family Fund said...  

 www.reuters.com

Oil and gas: Debt fears flare up

About 600 people packed on to the Machinery Auctioneers lot on the outskirts of San Antonio, Texas, last week to pick up some of the pieces shaken loose by the oil crash.  Trucks, trailers, earth movers and other machines used in the nearby Eagle Ford shale formation were sold at rock-bottom prices. One lucky bargain hunter was able to pick up a flatbed truck for moving drilling rigs — worth about $400,000 new — for just $65,000.  Since the decline in oil prices began in mid-2014, activity in the Eagle Ford, one of the heartlands of the shale revolution, has slowed sharply. The number of rigs drilling for oil has dropped from a peak of 214 to 37, and businesses, from small “mom and pop” service providers to venture capital companies, are trying to offload unused equipment...

  www.ft.com

IMF Says Cheap Oil Slow to Deliver Boost to Global Growth

International Monetary Fund researchers said the benefits from cheap oil may not materialize until demand in the global economy picks up and central banks in advanced nations move away from near-zero interest rates. Despite a significant drop in oil prices since June 2014, economists are still looking for the positive effects of cheaper oil. While the main reason why prices have fallen has been an increase in global supplies, a new IMF report shows that domestic demand has been weaker than forecast in oil-exporting countries last year, while falling short of expectations in oil importers such as the U.S. and Europe. Researchers argued that in an environment where oil prices are low and central banks cannot reduce policy interest rates further, “the decline in inflation owing to lower production costs raises the real rate of interest,” making it more expensive to borrow and stifling demand, the paper said. Conversely,...

 www.bloomberg.com

Oil’s Decline Takes Toll on Saudi Conglomerate

A construction conglomerate at the center of Saudi Arabia’s petrodollar-fueled economic boom is teetering under billions of dollars of debt, bankers and financial advisers familiar with the matter said, showing the strain of cheap oil on the kingdom and its companies. The Saudi Binladin Group was once among the biggest beneficiaries of Saudi Arabia’s massive spending at home, paid for by the kingdom’s growing oil wealth. But in the…

  www.wsj.com

U.S. oil falls after big jump in stockpiles

Oil prices fell in Asian trading on Thursday, adding to a slump in the previous session, after U.S. stockpiles rose for the sixth week to another record, sapping the strength of a two-month rally in prices. U.S. crude futures CLc1 were down 55 cents at $39.24 a barrel at 0757 GMT, trading further below the important $40 level. It closed down $1.66, or 4 percent, at $39.79 a barrel on Wednesday. That marked the sharpest one-day drop for the front-month contract in U.S. crude since Feb. 11. Brent crude futures LCOc1 were down 36 cents at $40.11 a barrel. They finished the last session down $1.32, or 3.2 percent, at $40.47 a barrel. Earlier this week, both benchmarks had risen by more than 50 percent from multi-year lows that ...

  www.reuters.com

EYE on the World - Earth, Spiders, Rockefellers, Bunnies and Fools

 

Earth, Spiders, Rockefellers, Bunnies and Fools...

Economic Globalization Accelerates Destruction of Earth 

FAIR TRADE OR NOT? 

International trade damages tropical nature: NUS study

The findings of this first-ever study showed that the majority of tropical countries incur huge net economic losses amounting to US$1.7 trillion each year. Topping the list are countries such as Brazil, Thailand, India, Vietnam and Indonesia, where large areas of land are used for producing timber, crops and livestock for export. 

NATIONAL UNIVERSITY OF SINGAPORE

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Rockefellers Dump Exxon Over Climate Deceptions

TELL GOP, "EVEN BIG OIL CONFIRMS CLIMATE CHANGE"

Exxon said it now believes the threat of climate change is clear and warrants action.

In response to the divestment movement, many oil industry leaders have said millions of people in the developing world would be condemned to darkness and poverty if society were to halt the burning of fossil fuels before there is ample supply of cleaner energy sources.

REUTERS

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Funeral for Bears & Bulls - Enter the Bunny!

 

 

Market swings: not a bear or a bull, but a bunny

Some believe US share prices have still not emerged from the dotcom crash 

 “The stock market is about fair value now. In reality we’re not very overvalued because rates and inflation are so low. What we could talk about is a bear in hibernation. We would keep valuations high, but in a decade from now we are about where we are now and our returns have been a lot below average.”

Financial TImes

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Clearly Market Values Now Seeking Greater Fools 

S&P Portrays HUGE 40-55% Downside

"To summarize, on the basis of valuation measures we find most strongly correlated with actual subsequent market returns across history, we presently estimate zero nominal total returns for the S&P 500 over the coming 10-12 year period, with negative real returns on both horizons. We expect that the completion of the current market cycle is likely to take the S&P 500 down by about 40-55%, which would not be a worst-case scenario but a historically run-of-the-mill outcome given present  valuations.                  

                                                                                                                                                      Seeking Alpha  

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Mercury Rapidly Spreads to Land Foods 

Dartmouth-led study illuminates pollutant's movement from aquatic to land food webs

DARTMOUTH COLLEGE

 

You taste like mercury, said the spider to the fly

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Today's Energy News - March 23, 2016

Ride to the Bottom: U.S. energy workers hit hard by company stock bets

An electronic display identifies the post that trades SandRidge Energy stock on the floor of the New York Stock Exchange January 11, 2013. Nearly 15 years since Enron’s collapse decimated the retirement accounts of its employees, hundreds of thousands of U.S. energy workers remain precariously exposed to big, concentrated bets on company stock in their 401(k) retirement plans. The slide in oil prices to their lowest levels in over a decade wiped out several billion dollars of retirement wealth in the energy sector in the past year. The losses may prove temporary for companies that successfully navigate the crisis, but tens of thousands of employees of struggling firms may see much of their nest eggs gone for good. In Oklahoma and Texas, workers are delaying retirement plans, surrendering trucks, cars and land in personal bankruptcy cases, or just praying oil prices will recover. “I just didn’t see it coming,” […]

 www.reuters.com

Schlumberger calls for industry rethinking

The head of Schlumberger, one of the largest oil and gas services companies in the world, said from New Orleans the industry is in need of a strategic makeover. Lower crude oil prices have left companies servicing the energy sector with less capital as spending declines for exploration and production. Industry rivals Halliburton and Baker Hughes aim to join forces to endure the downturn. British energy company BG Group combined with Royal Dutch Shell in a similar effort. Schlumberger, one of the largest companies in the upstream sector, reported revenue for the fourth quarter came in at $7.7 billion, a 9 percent decline from one year ago. CEO Paal Kibsgaard told industry leaders at an energy conference in […]

  www.upi.com

Suncor completes acquisition of Canadian Oil Sands

Canadian companies Suncor and Canadian Oil Sands Ltd. announced their merger was completed under the terms of a hostile offer launched last year. Both companies announced the end of the acquisition process that saw Suncor take in all of the shares in its rival. Suncor President and CEO Steve Williams said the final grab of 15.8 percent of the outstanding shares marked the final step of the deal. “We’re looking forward to working cooperatively with Syncrude to steadily improve asset performance, reduce costs and explore synergy opportunities,” he said in a statement. Canadian Oil Sands was among the largest owners in the Syncrude operation in northern Alberta. Production there stands at around 350,000 barrels of oil per day, enough to meet the […]

  www.upi.com

The Future of Batteries and Electric Vehicles

Electric cars have been on the horizon for years now, but what will it actually take for a majority of the world’s vehicles to be powered by batteries instead of combustion engines?In this week’s Industry Focus: Energy , Tyler Crowe interviews Steve Levine, author of The Powerhouse: Inside the Invention of a Battery to Save the World , about the fascinating geopolitical situation surrounding batteries and EVs. Tune in to hear where the technology is today, which two breakthroughs to really watch out for, some unexpected ways the takeoff of EVs could affect the world, and more. hael Lewis’ stories, or Greg Zuckerman’s The Frackers , which is a book that we’ve talked about with him on the show before — is you took it and kind of personalized it around the people who were actually making it happen, most particularly two companies and the people who were involved […]

  peakoil.com

Outlook for The US Offshore Industry Is Darkening

More government regulations are impacting the offshore sector’s outlook, possibly hampering the recovery. G. Allen Brooks’ examines several of the recent Obama administration actions. This opinion piece presents the opinions of the author. It does not necessarily reflect the views of Rigzone. After enunciating an energy policy in March 2012 that was based on the concept of an “all of the above” resource strategy, President Barack Obama has abandoned it in his recent energy policy actions. First, he rejected the construction application for the Keystone XL pipeline, and now he is ditching the Atlantic Lease 260 sale from the proposed five-year offshore oil and gas lease sale program for 2017-2022. Even more recently, President Obama has directed that the government tighten air pollution standards for offshore drilling. The removal of Atlantic Lease 260 is a reversal of President Obama’s previous policy calling for opening up the East Coast offshore […]

  www.rigzone.com