Broken Energy Markets and the Downside of Hubbert’s Peak

A few commenters have mentioned peak oil recently. I am cautious about making forecasts and predictions and prefer instead to observe and document the data as the peak oil story unfolds. I have in fact published a couple of charts recently illustrating aspects of peak oil, one showing a possible peak in the rest of the world that excludes N America and OPEC (Figure 1). The other showing the undulating plateau in conventional crude + condensate that has persisted since 2005 (Figure 2). In my last post on oil price scenarios two of those showed global oil production capacity 1 to 2 Mbpd lower in 2016 than 2014. If that comes to fruition, will we have passed peak oil but does it matter?

Figure 1 Global oil production has been split into three geo-political categories: 1) USA and Canada, 2) OPEC and 3) the Rest of the World (RoW). RoW production bears the hallmarks of having peaked in the period 2005 to 2010 and this has consequences for oil prices, demand and prosperity in parts of the world, especially the OECD. Most of the growth in oil supply has been in the USA and Canada where the market has been flooded with expensive oil. Data are crude oil + condensate + natural gas liquids (C+C+NGL) and exclude biofuels and refinery gains that are included by the IEA in their total liquids number.

The current “low oil price crisis” is providing a clear and new perspective on the nature of the peak oil problem. If low price does indeed destroy high cost production capacity then this will raise the question if the high cost sources can ever be brought back? IF low price kills the shale industry can it come back from the dead?

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Blowout week 51

We lead off this Blowout week with the ongoing oil price collapse (graph credit NASDAQ)

Which is having predictable impacts on some producers:

BBC:  North Sea oil industry ‘close to collapse’

The UK’s oil industry is in “crisis” as prices drop, a senior industry leader has told the BBC. Robin Allan, chairman of the independent explorers’ association Brindex, told the BBC that the industry was “close to collapse”. Almost no new projects in the North Sea are profitable with oil below $60 a barrel, he claims. “It’s close to collapse. In terms of new investments – there will be none, everyone is retreating, people are being laid off at most companies this week and in the coming weeks. Budgets for 2015 are being cut by everyone.” His remarks echo comments made by the veteran oil man and government adviser Sir Ian Wood, who last week predicted a wave of job losses in the North Sea over the next 18 months.

But not on others:

Bloomberg:  US producers planning to pump more oil in 2015

U.S. energy producers plan to pump more crude in 2015 as declining equipment costs and enhanced drilling techniques more than offset the collapse in oil markets, said Troy Eckard, whose Eckard Global LLC owns stakes in more than 260 North Dakota shale wells. Oil companies, while trimming 2015 budgets to cope with the lowest crude prices in five years, are also shifting their focus to their most-prolific, lowest-cost fields, which means extracting more oil with fewer drilling rigs, said Goldman Sachs. Exxon Mobil Corp will increase oil production next year by the biggest margin since 2010. So far, the Organization of Petroleum Exporting Countries’ month-old bet that American drillers would be crushed by cratering prices has been a bust. “Companies that are already producing oil will continue to operate those wells because the cost of drilling them is already sunk into the ground,” said Timothy Rudderow, who manages $1.5 billion as chief investment officer at Mount Lucas Management Corp.

More related stories below the fold, plus the UK “capacity auction”, US tariffs on Chinese PV panels, India’s advanced heavy water reactor, New York bans fracking, the world’s largest ship, CO2 emissions from the Southern Hemisphere, the Lima climate talks and how hot weekdays are going to cost Americans $20 each.

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The Nature of the “Scientific Consensus” on Climate Change

My previous post discussed a little-known UN poll that has so far attracted seven million voters from all over the world and which despite being totally unscientific nevertheless provides some interesting insights about public attitudes towards climate change. Here I discuss another little-known climate change poll that also provides some interesting insights but which is otherwise about as different to the UN poll as it’s possible to get. Why? Because there were only 286 respondents, not seven million, and they aren’t just anybody. They’re all climate scientists.

I refer to the Bray & von Storch poll entitled A survey of the perceptions of climate scientists 2013 . It’s quite a poll. It doesn’t ask just a few questions. It asks no fewer than one hundred and thirty-one, some of them highly technical (“The current state of scientific knowledge is developed well enough to allow for a reasonable estimate of the effects on climate of surface albedo?”). Yet 286 of the 4,491 people to whom the poll was sent responded, and most of them to all 131 questions – a respectable level of response to an internet poll considering the time it would have taken to fill it out.

The poll is weighted towards the “consensus” viewpoint. The invitees included “authors of climate related papers in peer reviewed climate related journals …. authors who contributed to Oreskes’ (2004) published conclusions concerning consensus in the climate change issue …. the IPCC list of contributors” and those on “readily available email lists from institute web sites (i.e. NCAR (US National Center for Atmospheric Research), MPI (Max Planck Institute), AMS (American Meteorological Society)) etc”. Almost all the respondents were affiliated with universities or government-funded research organizations and almost half of them had been involved as authors or reviewers of IPCC reports.

But the poll contains a graphic that is arguably the best illustration yet published of what the climate change “scientific consensus” really looks like. We find it on page 59:

268 of 272 climate scientists think that humans have caused at least some of the warming since 1850, representing a 98.5% consensus. But if we use the IPCC’s claim that “most” (i.e more than 50%) of the warming  was human-caused as the criterion the number drops to 81.2%, and if we insist on all of the warming being human-caused, which is essentially what the IPCC’s climate models show, it drops to only 6.3%. Clearly the “scientific consensus” on climate change can be quantified only if we put a hard number on what percentage of observed warming has to be caused by humans before climate change becomes “significant”. (A 12.5% human-caused warming threshold gives a 97.5% consensus among the respondents, incidentally. The oft-quoted 97.5% number seems to have originated in the 2009 Doran poll.)

(What’s your estimate of the percentage of human-caused warming since 1850? Feel free to provide a number. My estimate is either zero or 50% depending on which of my two pet theories sounds more plausible to me at the time, so I give it 25%.)

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Oil Price Scenarios for 2015 and 2016

A couple of weeks ago I had a post titled The 2014 Oil Price Crash Explained that was cross posted to over 20 other blogs including The Automatic Earth and Zero Hedge. In this post I use the empirical supply and demand dynamic described in that earlier post (Figure 1) to try and constrain the oil price a year from now and in 2016. The outcome is heavily dependent upon assumptions made about supply and demand and the behaviour of OPEC and the banking sector. Three different scenarios are presented with December 2015 prices ranging from $45 to $100 / bbl. Those hoping for a silver bullet forecast will be disappointed. Individuals must judge the scenarios on merit and decide for themselves which outcome, if any, is most likely.

Figure 1 The blue supply line is constrained by monthly production – price data from 1994 to 2008 and shows how supply became inelastic to demand post-2004. As demand continued to rise, prices rose exponentially to $148 / bbl in July 2008 before crashing all the way down again. The blue supply line is fitted to Brent Spot data at a time when there was no significant spread between Brent and WTI. The blue supply line in this chart is shown as a faint blue dashed line in all other charts to provide a frame of reference.

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Poor countries don’t care about climate change

The Lima climate talks have just ended. Predictably, no substantive agreement was reached. The nations of the world agreed for the umpteenth time that climate change needs to be fixed but remained completely unable to agree as to who should pay for fixing it. For the umpteenth time the rich developed nations said it’s a global problem and everyone should pitch in. For the umpteenth time the poor developing nations said no, you rich guys caused it and should therefore pay to fix it, and besides there’s a clause in the original 1992 UNFCCC agreement that lets us off the hook (which there is).

One could easily come away with the impression that this is simply a sordid squabble over money. There are, however, reasons to believe that the position of the developing nations is conditioned by more than just money, and an ongoing poll that has received very little publicity sheds light on what it is. Flying under the radar, it’s the United Nations internet poll on how, together, we are going to shape a better world:

Why does your vote matter?

You’re part of a global vote at the United Nations, allowing people for the first time to have a direct say in shaping a better world.

The votes matter. The UN is working with governments everywhere to define the next global agenda to address extreme poverty and preserve the planet. The data from MY World continues to inform these processes and be used by decision makers around the world.

“I want this to be the most inclusive global development process the world has ever known” – UN Secretary General Ban Ki-moon

The poll allows voters from any country to select the six options out of the following list of sixteen that they think will do most to eradicate poverty and preserve the planet. One of them is “Action taken on climate change”:

• Phone and internet access
• Equality between men and women
• Reliable energy at home
• Political freedoms
• Better healthcare
• Action taken on climate change
• Protecting forests, rivers and oceans
• Better transport and roads
• Better job opportunities
• An honest and responsive government
• A good education
• Affordable and nutritious food
• Protection against crime and violence
• Access to clean water and sanitation
• Support for people who can’t work
• Freedom from discrimination and persecution

The poll is unscientific, wide open to abuse (you promise faithfully to vote only once) and globally non-representative (over 80% of the seven million votes so far cast have come from India, Mexico, Nigeria, Pakistan, Sri Lanka and Yemen, and almost half of them from just four organizations – the Youth Organization of Mexico City, the Millennium Development Goal groups of Nigeria, the Pakistan Youth Revolution Clan and Action for Pune Development). As we shall see, however, the results still yield some interesting insights.
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Blowout week 50

This week we give OPEC and oil prices a break and lead off with the portentous pronouncements of UK Energy and Climate Change Secretary Ed Davey on the future, if any, of fossil fuels (photo credit: Telegraph).

Greenwise Business:  Fossil fuels “no longer a safe financial bet”, says Davey

Britain’s Energy and Climate Change Secretary, Ed Davey, has said companies should be required to disclose their investments in fossil fuels, bringing firmly into the mainstream the idea that climate risk will affect the value of such holdings. Davey said it was time to recognise that as economies moved away from fossil fuels as part of that deal, coal, oil and gas were no longer presumed to be a safe financial bet. “We are seeing a move from carbon capitalism to climate capitalism,” he said. “We know with climate change we have got to move out to a low carbon agenda and we are already seeing the signs that the market is going to be helping to drive this,” he said. “I think we need to look again at rules of disclosure for big companies who have large investments in fossil fuels,” Davey said. “I think there is a case for making that mandatory is what I am saying.”

Telegraph:  Big oil’s problem isn’t falling prices, it’s Ed Davey

If sentiment wasn’t already bad enough across the industry after a 35pc slump in Brent since June, then remarks made by the energy secretary Ed Davey suggesting that pension funds should dump the sector have only added to the sense of foreboding. In an interview with the Telegraph over the weekend, Mr Davey argued that the age of fossil fuels was coming to an end and that within the space of just 30 years oil, gas and coal, might no longer play a meaningful role in the economies of major industrialised nations. His opinions, I am sure, are well meaning enough, in that they are aimed partly at addressing legitimate concerns over the impact that climate change will have on the entire resources industry. But they are also misleading and potentially dangerous for both the economy and investors who may be persuaded to now suddenly exit the sector in a hurry.

The usual mix below the fold, including same-old-same-old at the Lima climate talks, Russia’s energy deals with India, fuel poverty in UK, bullish predictions from Exxon, more problems with Germany’s Energiewende, a Greenpeace publicity stunt backfires big-time and the coywolf – a vicious new hybrid species created by climate change.
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The Vostok Ice Core: Temperature, CO2 and CH4

In their seminal paper on the Vostok Ice Core, Petit et al (1999) [1] note that CO2 lags temperature during the onset of glaciations by several thousand years but offer no explanation. They also observe that CH4 and CO2 are not perfectly aligned with each other but offer no explanation. The significance of these observations are therefore ignored. At the onset of glaciations temperature drops to glacial values before CO2 begins to fall suggesting that CO2 has little influence on temperature modulation at these times.

As discussed at the end of this post, consideration of the geochemical cycles of CO2 and CH4 in ice, permafrost, terrestrial and oceanic biospheres and in deep ocean water during freeze – thaw glacial cycles suggests that it is inevitable that CO2 and CH4 are going to correlate with temperature in a general way. This correlation shows that CO2 and CH4 are controlled by temperature and so provides no evidence for CO2 or CH4 amplifying temperature signals that are linked to orbital cycles.


Figure 1 The location of Antarctica, Vostok and other ice core locations.

The Russian Vostok Antarctic base lies 1300 km from the S pole, close to the centre of the Antarctica continent at an elevation of 3488 m.  It currently receives 2.6 mm precipitation per year. Average temperature is -55˚C and the record low is -89.2˚C which is below the freezing point of CO2. Vostok is one of the most hostile places on Earth.

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Oil price wars – who blinks first?

In the green corner we have the US shale producers. In the red corner we have the oil exporting countries of OPEC. Assuming the fight is fought to a conclusion, who wins?

OPEC wins. The US shale producers will shut down first. The reasons are:

The US shale producers are motivated by economics, and all other things being equal will have an incentive to cut production at or around the point where production cost exceeds sales price.

• The OPEC countries are motivated by social imperatives. They have historically used their oil wealth to finance social programs, build infrastructure and subsidize basic foodstuffs and other items such as gasoline (which costs one cent/liter in Venezuela). Cutting back on social spending courts civil unrest and cutting back on oil production cuts spending, so they have a disincentive to cut oil production. (As long as the oil price exceeds cash production costs, which it does in all OPEC countries by a substantial margin, they in fact have an incentive to increase production.)

But not all OPEC countries are created equal. Some can stand the pain longer than others, and here we will look into the question of who might go to the wall first if low oil prices persist.

But first the US shale producers. The recent graphic from Business Insider reproduced in Figure 1 is not backed up by much in the way of explanation but my understanding is that it shows current production and breakeven production costs at US shale oil plays based on  Citigroup estimates. If we take these results at face value we find that almost all US shale oil production is economic at crude prices of $70/bbl, but 40% of it becomes uneconomic at prices below $60/bbl and almost 90% of it at prices below $50/bbl:

Figure 1: Breakeven production cost estimates, US shale oil plays

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The OPEC Conundrum

When OPEC met on 27th November they decided to leave production unchanged and to not meet again until June 2015. This at a time of volatility in oil markets and plunging price that leaves many OPEC member states facing budget deficits, some large and unmanageable.

In this post I take a look at the oil production and consumption history of OPEC and find that historically OPEC has been as much controlled by markets as to be in control of them.

Figure 1 Oil production data for OPEC member states. Indonesia and Gabon have both left OPEC. The situation in 1998 was very similar to that in 1973 (see text for details). The $1000 question is whether 2014 is reminiscent of 1979?

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Blowout week 49

This week we feature the impacts of the collapse in crude oil prices, which are already being felt around the world:

Why is Saudi Arabia using oil as a weapon?

Daily Caller:  OPEC needs higher oil prices to finance government spending

Falling oil prices are making it harder for OPEC member states to fund their governments. Oil prices hovering around $70 per barrel is too low for most OPEC countries to cover their budgets, according to Reuters data. While OPEC countries generally have lower costs of actually getting oil out of the ground than the western countries, they use that oil revenue to fund their government budgets and provide benefits to their citizens. These costs add up, meaning that OPEC members need high oil prices — usually above $90 per barrel — to keep their budgets in the black. “The weighted average of oil prices collected by members of the Organization of the Petroleum Exporting Countries was $106 a barrel last year — just enough to cover the average budget requirements,” according to Reuters analysts.

Algemeiner:  Oil Prices Punish Iranian Economy

Iranians awoke on Monday morning to a 30 percent increase in the price of bread – the most tangible consequence of an economy suspended between the twin pressures of falling oil prices and continuing international sanctions stemming from the Tehran regime’s failure to properly account for its nuclear program. A growing chorus inside Iran is blaming rival Saudi Arabia and its allies for the price fall. In October, government spokesman Mohammad Baqer Nobakht accused “some so-called Islamic countries in the region” of “serving the interests of America and (other) arrogant powers in trying to squeeze the Islamic Republic. They (the West) have forced our oil production from 4 million bpd to 1 million bpd, and this recent fall of oil prices is their latest gimmick.”

More related stories below the fold, plus Russia scraps South Stream, Germany to cut coal use, the risk of a “carbon bubble”, EU regulations threaten cross-channel ferries, a nuclear plant catches fire and nobody notices, how to save the planet by not eating meat and the BBC brings unbiased news coverage to Australia.
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Perception trumps reality – the IPCC report on the impacts of climate change

Working Group 2 of the Intergovernmental Panel on Climate Change recently released the final version of its contribution to the IPCC Fifth Assessment Report: Climate Change 2014: Impacts, Adaptation, and Vulnerability. The WG2 report contains 1,731 pages of text, figures, boxes, footnotes and references, the first 832 of which list every negative impact climate change is having or could conceivably have on the Earth, its physical state, its ecosystems and the people who populate it. I doubt that anyone has ever read it from beginning to end. I certainly haven’t.

But the report’s mind-numbing length hasn’t stopped people from interpreting it the way they think it should be interpreted. And because no one bothered to read the fine print everyone thinks the IPCC is saying that the adverse impacts of human-caused climate change are already being felt:

Rising sea levels threaten every coastline. More powerful storms and floods threaten every continent. More frequent drought and crop failures breed hunger and conflict in places where hunger and conflict already thrive. On shrinking islands, families are already being forced to flee their homes as climate refugees. (Barack Obama)

Climate change is already having sweeping effects on every continent and throughout the world’s oceans … ice caps are melting, sea ice in the Arctic is collapsing, water supplies are coming under stress, heat waves and heavy rains are intensifying, coral reefs are dying, and fish and many other creatures are migrating toward the poles or in some cases going extinct. (New York Times)

The record rainfall and storm surges that have brought flooding across the UK are a clear sign that we are already experiencing the impacts of climate change. (Guardian)

But that isn’t what the IPCC is saying. A single sentence on page 4 of the Summary for Policymakers puts the IPCC’s conclusions in a different perspective:

Attribution of observed impacts in the WGII AR5 generally links responses of natural and human systems to observed climate change, regardless of its cause.

That’s right. Regardless of its cause. Working Group 2 isn’t claiming that these observed impacts are necessarily a result of human activities. They could equally well be the result of natural climate change – the IPCC makes no distinction. And if they are then President Obama, the New York Times, the Guardian and all the others who believe that the adverse impacts of human-caused climate change are already being felt have got it wrong.

The key question here is clearly what fraction of the observed impacts of climate change that the IPCC identifies is human-caused and how much natural. Let’s see if we can put some probabilities on this.

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History doesn’t repeat itself, but it does rhyme

  • Baker Hughes rig count statistics show how drilling reacted to earlier falls in the oil price. There is always a time lag of months between an oil price event and a change in drilling. There are faint signs of US drilling starting to turn down and quite clear signs that Middle East OPEC drilling has turned down.
  • Drilling in Iraq is down significantly from 94 oil rigs in July to 56 rigs in October, but there are likely other reasons for that.
  • The oil industry in the USA and the Middle East has changed markedly in the last decade and I believe the production response to reduced drilling will be much more pronounced in both areas than before. History doesn’t repeat itself, but it does rhyme (Joseph Anthony Wittreich).

Figure 1 Baker Hughes rig count for the USA and oil price described in the text. Note how peaks and troughs in drilling lag the oil price. Also some uncertainty in drilling strategy the last three years as oil price fluctuated within narrow bounds. But the oil price has now broken down and I believe it is inevitable that drilling follows. Never before has US oil production been so heavily linked to drilling activity.
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Peak Oil in the Rest of the World

What caused the recent crash in the oil price from $110 (Brent) in July to $70 today and what is going to happen next? With the world producing 94 Mbpd (IEA total liquids) $1.4 trillion has just been wiped off annualised global GDP and the incomes of producing and exporting nations. Energy will get cheaper again, for a while at least. The immediate impact is a reduction in global GDP and deflationary pressure. There is a lot of information to review and summarise and so this week and next we will present the story in stages culminating we hope with an oil market forecast scenario.

Figure 1 Global oil production has been split into three geo-political categories: 1) USA and Canada, 2) OPEC and 3) the Rest of the World (RoW). RoW production bears the hallmarks of having peaked in the period 2005 to 2010 and this has consequences for oil prices, demand and prosperity in parts of the world, especially the OECD (Figure 3). Most of the growth in oil supply has been in the USA and Canada where the market has been flooded with expensive oil. Data are crude oil + condensate + natural gas liquids (C+C+NGL) and exclude biofuels and refinery gains that are included by the IEA in their total liquids number.

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Blowout week 48 – OPEC special

The big news this week is OPEC’s decision not to support oil prices by cutting production, so that’s what we lead off with (photo credit Guardian):

CNN Money: OPEC: No cut in oil production and prices keep falling

OPEC countries failed Thursday to agree to a cut in oil production that was desperately sought by some member states worried about the recent drop in prices. Officials met for six hours of negotiations in Vienna. It would have been the first cut in production since 2008. But Saudi Arabia, the largest among OPEC members, was against the cut in output — in a bid to retain market share and hold off competition from U.S. shale production. Brent crude, the European benchmark, was down by about 7% at $72.60 after it was announced that production will remain around 30 million barrels a day. The price of light crude, the U.S. benchmark, plunged about 7% to below $69 per barrel. Analysts say a cut of around 1.5 million barrels a day would be needed to support oil prices.

More on OPEC below the fold, plus stories on dwindling energy supplies in Ukraine, low oil prices and sanctions biting in Russia, a gloomy future for the North Sea, Peterhead fails a stress test, a new EU renewables project, an invisible force field surrounding the Earth and how climate change will prevent your flight from taking off while drying out your turkey.
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The Cost of Energy Storage

I taught my students that intermittent renewable electricity (wind and solar) was third class compared with dispatchable fossil fuels (first class) and baseload nuclear power (second class). But that renewables may be turned into a first class electricity source with the development of affordable grid-scale storage. There are two important qualifiers to this statement and those are 1) affordable and 2) grid-scale. By grid scale I mean electricity storage that could power a medium sized town for a day or longer, or every night when the sun is down.

In this short post I want to begin chronicling new storage projects as they are announced for future reference and begin with three very different approaches.

Three Reasons Oncor’s Energy Storage Proposal Is a Game Changer

The first case is Oncor Energy’s plan to install vast amounts of battery storage distributed through the Texas grid.

Early last week, Texas transmission and distribution company Oncor announced a proposal to install 5,000 megawatts of battery energy storage on the Texas grid. The words “game-changing” get thrown around a lot about energy storage projects—usually prematurely. But in this case I think there are some clear reasons why Oncor’s proposed deal could be a game-changing development for grid battery energy storage:


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Google rejects renewables

Here at Energy Matters we pride ourselves on writing original posts that aren’t just rehashes of what someone else has written, but once in a while along comes an article  of sufficient interest to justify putting it up for discussion. This article is one.

It’s a post-mortem on a project initiated by Google – a master of innovation if ever there was one and a company with impeccable green credentials (see photo below) – the goal of which was to scope out an innovative renewable energy system that could compete economically with coal and other fossil fuels and which could be deployed quickly enough to stave off the worst impacts of climate change.

Google headquarters, complete with 1.6MW of PV panels

Work on the project, which Google named RE<C (Renewable Energy cheaper than Coal) continued from 2007 to 2011, a period over which Google invested large sums of money in renewable energy projects. (How much Google spent on the RE<C project isn’t known, but according to Forbes the company’s total investment in renewables by April 2011 had reached “a cool quarter of a billion dollars”.)

But RE<C failed to produce the hoped-for results, and in November 2011 the project was shut down and project staff were instructed to write a post-mortem detailing what went wrong. They summed up their findings in this stark conclusion:

Today’s renewable energy technologies won’t save us.
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The 2014 Oil Price Crash Explained

  • In February 2009 Phil Hart published on The Oil Drum a simple supply demand model that explained then the action in the oil price. In this post I update Phil’s model to July 2014 using monthly oil supply (crude+condensate) and price data from the Energy Information Agency (EIA).
  • This model explains how a drop in demand for oil of only 1 million barrels per day can account for the fall in price from $110 to below $80 per barrel.
  • The future price will be determined by demand, production capacity and OPEC production constraint. A further fall in demand of the order 1 Mbpd may see the price fall below $60. Conversely, at current demand, an OPEC production cut of the order 1 Mbpd may send the oil price back up towards $100. It seems that volatility has returned to the oil market.

Figure 1 An adaptation of Phil Hart’s oil supply demand model. The blue supply line is constrained by data (see Figure 4). The red demand lines are conceptual. Prior to 2004, oil supply was fairly elastic to changes in price, i.e. a small rise in price led to a large rise in production. This is explained by OPEC opening and closing the taps. Post 2004, oil supply became inelastic to price, i.e. a large change in price led to marginal increase in supply. This is explained by the world pumping flat out. Demand tends to be fairly inelastic and inversely correlated with price in that high price suppresses demand a little. Supply and price at any point in time is defined by the intersection of the supply and demand curves. 72 Mbpd and $40 / bbl in 2004 became 76 Mbpd and $120 / bbl in 2008 as demand for oil soared against inelastic supply.

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Blowout week 47

We lead off this week with a real blowout. It happened a couple of days ago about fifty miles south of where I live. Even Red Adair would have had trouble with this one:

Colima volcano, Mexico, November 21, 2014 (credit Oronegro)

This video catches the initial explosion.

In other news, the approach of winter –

ABC News: Ice forms on Lake Superior weeks ahead of schedule:

The first sightings of ice on Lake Superior and the Great Lakes overall usually occur during the beginning to middle of December. However, a perfect combination of last season’s record ice coverage, cooler summer temperatures, and an early blast of arctic air this fall has allowed for areas of ice to form earlier than normal for the second year in a row.

– once more focuses attention on the energy situation in Europe. More stories on this below the fold, along with problems at Scottish nuclear plants, setbacks at Hinkley Point, the EC sues Poland, shale gas in the US, an Iraq/Kurdistan oil deal, Australian coal to Ukraine, the world’s longest continuously-producing oil well and how climate change is killing chocolate.
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The two degrees C “dangerous interference” threshold – a meaningless metric

For some time now the world’s emissions-reduction strategies have been guided by the belief that global temperatures must not be allowed to exceed two degrees C above the pre-industrial mean (or slightly more than 1˚C above current temperatures) if we are to avoid “dangerous interference with the Earth’s climate system”.

Politicians are in general agreement that limiting warming to less than 2˚C is necessary to avoid redlining the Earth’s climate:

“The world (must) keep the global temperature increase from climate change below two degrees.” Ed Davey.

“Our joint goal (is) limiting global warming to under two degrees celsius.” German Environment Minister Barbara Hendricks.

“The U.S. continues to support the 2˚C goal.” Todd Stern, America’s top climate diplomat

And also that bad things are likely to happen if the climate does redline:

“experiencing global warming of as much as three or four degrees (could) lead to catastrophe, if not war.” François Hollande.

“A rise of 4˚C would be enough to wipe out hundreds of species, bring extreme food and water shortages in vulnerable countries and cause catastrophic floods that would displace hundreds of millions of people.” Ban Ki-moon

Clearly a lot depends on whether the world can keep global mean temperatures below the 2˚C “danger threshold”, assuming that 2˚C really is the danger threshold. Which raises the question, how good is the 2˚C estimate? Given the trillions of dollars that have already been spent trying to stay below it one imagines that it must be very good – a product of exhaustive research and the application of hard scientific principles.

But is it?

Unfortunately, it isn’t.

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European and UK Gas Security

In a recent post, A Beginners Guide to Blackouts, I drew attention to the fact that keeping the lights on in Britain was to a large extent dependent upon our ability to source sufficient gas to power the country’s large fleet of combined cycle gas turbines. The official view from the UK Government, National Grid and OFGEM (the regulator) is that the:

  • Gas market is well supplied and able to cover any cold spells.
  • Gas supplies, storage and network capacity well in excess of maximum expected demand.
  • Supply interruptions from Russia pose a low risk to UK energy security.

This seems rather optimistic for a number of reasons that include:

  • Global Liquefied Natural Gas (LNG) supplies have fallen for the last two years despite rampant demand and high prices
  • Competition for LNG supplies from Japan is fierce since that country closed down all of its nuclear power stations
  • Indigenous European gas supplies have been falling since 2004
  • Europe and the USA have decided to pick a fight with Russia, Europe’s closest, largest and most reliable supplier of natural gas

So, will the UK and the rest of Europe be able to source sufficient gas to keep the lights on this winter? This is quite a complex question to answer.

Figure 1 West European countries have diversified gas supplies while the East European countries tend to be totally dependent upon Russian gas. In the grander scheme, N Africa is not a significant supplier of gas to Europe, although a component of LNG also comes from N Africa.

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