Oil Production Vital Statistics August 2016

World total liquids bounced by a further 790,000 bpd in July partly on the back of continued recovery in Canada. Total liquids now stand at 97.01 Mbpd, down a meagre 70,000 bpd since July 2015.

The oil price staged a modest cyclical rally in August to close at $48.5 (Brent) on August 19th. Robust production from OPEC and Russia combined with large inventories hanging over the market makes me inclined to agree with Art Berman who speculates that prices will remain range bound between £38 and $52 in the near term.

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Blowout Week 139

This week we return to the shaky state of UK energy security, with Barclays projecting that an investment of £215bn by 2030, which presently is nowhere to be seen, will be needed to decarbonize the electricity sector while keeping the lights on.

 

Utility Week: UK needs to invest £215bn in energy by 2030

The UK will need to invest an “eye-watering” £215 billion in its energy system by 2030 in order to replace aging assets and decarbonise, analysis by Barclays Research has found. “With electricity security of supply already on a knife edge, the UK faces the obsolescence of approximately 40 per cent of its current combined cycle gas turbine fleet by around 2020 and approximately 70 per cent of all reliable generation capacity by 2030,” the report said.

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US Shale Oil Production Laid Bare

Enno Peters maintains a web site called Visualizing US Shale Oil Production. This is a wonderful resource for all those interested to understand the history and dynamic of US shale oil. This post is in two parts. It begins with a series of screen captures of Enno’s charts displaying production from the whole USA, the Permian, Eagle Ford, N Dakota (Bakken), Montana and Marcellus plays. Enno’s charts are interactive and readers are encouraged to visit his site to play.

Enno kindly sent me the data that underlies the charts and the second part of this post are a series of my own charts that interogates production, well numbers and decline rates. The legacy production, i.e. the underlying production without new additions, is declining at a rate of 38% per annum.
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An update on the Energiewende

Germany is still pursuing its goal of shutting down its nuclear plants but refuses to shut down its lignite plants. It is slashing renewable energy subsidies and replacing them with an auction/quota system. Public opposition is delaying the construction of the power lines that are needed to distribute Germany’s renewables generation efficiently. Renewables investment has fallen to levels insufficient to build enough new capacity to meet Germany’s 2020 emissions reduction target. There is  no evidence that renewables are having a detectable impact on Germany’s emissions, which have not decreased since 2009 despite a doubling of renewables penetration in the electricity sector. It now seems certain that Germany will miss its 2020 emissions reduction target, quite possibly by a wide margin. In short, the Energiewende is starting to unravel.

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Blowout Week 138

This week’s Blowout features the arrival within the next few weeks of the first of many shiploads of US fracked shale gas scheduled to be delivered to Scotland, which fracking supporters hope will “undermine arguments against fracking for shale gas in Scotland’s central belt”. The SHALE GAS FOR PROGRESS painted on the ships’ sides alone (inset) will be like a red rag to a bull to the anti-frackers, so prepare for protests:

GWPF:  Arrival Of US Shale Gas Raises Pressure On Scottish Nationalists

Industry insiders have confirmed that the first of a fleet of “Dragon-class” ships, each capable of transporting huge quantities of the shale gas ethane, will dock within the next seven weeks.

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The Holy Grail of Battery Storage

A recent Telegraph article claims that storage battery technology is now advancing so fast that “we may never again need to build 20th Century power plants in this country, let alone a nuclear white elephant such as Hinkley Point” and that the “Holy Grail of energy policy” that will make this solution economically feasible – a storage battery cost of $100/kWh – will be reached in “relatively short order”. This brief post shines the cold light of reality on these claims by calculating battery storage costs based on the storage requirements for specific cases estimated in previous Energy Matters posts. It is found that installing enough battery storage to convert intermittent wind/solar generation into long-term baseload generation increases total capital costs generally by factors of three or more for wind and by factors of ten or more for solar, even at $100/kWh. Clearly the Holy Grail of energy policy is still a long way off.

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How smart is a smart grid?

A smart grid is a computerized management system designed to distribute the power available to the grid in an efficient manner relative to demand while maintaining grid stability. It does not generate any power except in so far as it saves some energy that would be wasted with a less efficient system. Because of limited storage capacity a smart grid is also capable of maximizing energy use over only short periods; it will not solve the intermittency problem over longer ones. Consequently there will be extended periods over which the smart grid will have little or no renewable energy to deliver. Installation is also likely to be costly, and there are questions as to whether current designs based on computer simulations will work in practice.

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Blowout Week 137

This week we return to Hinkley Point, where yet another potentially deal-breaking complication has arisen as a result of the US filing suit against the China General Nuclear Power Company – a 33.5% stakeholder in Hinkley – for nuclear espionage. China has warned that retaliatory measures may be taken if the UK now dumps Hinkley. So what happens next?

The Diplomat:   UK-China Ties Put to the Test Over Hinkley Point Espionage Allegation

When Theresa May succeeded David Cameron as prime minister of the United Kingdom, China didn’t think that business as usual between the two countries would change overnight.

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What is the Real Cost of Oil?

Asking what it costs to produce a barrel of oil is rather like asking how long is a piece of string? The answer can be anything you want between $1 and $500. But of course the cost of producing oil in an ideal world should be well below the price of oil, leaving room for taxes and profits. The global oil market sets the price and producers need to adjust and adapt their strategies to maintain costs below prevailing prices from time to time. That is the theory at least.

With Brent trading at about $45 a cost analysis presented by Art Berman suggests that all Middle East OPEC and US shale producers are continuing to trade at a loss (see chart below the fold). Why then are there signs that the frackers are going back to work?

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El Hierro July 2016 performance update

During July the hybrid wind-hydro Gorona del Viento (GdV) plant set a new record of 65.9% renewable energy delivered to the El Hierro grid, handily exceeding the previous record of 53.9% achieved in June. This was dominantly a result of a continuation of the sustained northerly winds that began in mid-June. Total renewables generation since full operations began at GdV in June 2015 is now 37.8%, up from 34.6% at the beginning of the month. (Data on GdV plant layout, operation and capacities are given in the September update. Previous posts on GdV are accessible through the El Hierro Portal.)

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Blowout Week 136

This week we feature the Greenland ice sheet, buried in which is the abandoned Camp Century U.S. Army base, a relic of the Cold War. Camp Century still houses, among other things, a nuclear reactor. What happens when climate change removes the overlying ice and exposes the “serious pollutants” –presumably nuclear waste – that Camp Century reportedly contains?

 

AGU:  Melting ice sheet could release frozen Cold War-era waste

Climate change could remobilize abandoned hazardous waste thought to be buried forever beneath the Greenland Ice Sheet, new research finds.

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Nuclear Options

With Hinkley Point C and nuclear new-build in the UK very much in the public eye, I have found the range of nuclear options being discussed rather confusing. This post provides an overview of the 6 main reactor designs that are vying for the global market today focussing on the large, >1 GW Generation III reactors. While the post focusses on the UK, the part on generic designs should be of interest to all readers. [image from the “The Heroes of Telemark” a British – Norwegian raid during WWII aimed to prevent the Nazis gaining heavy water reactor technology. Or was it? Keep reading to CANDU to learn more.]

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Oil Production Vital Statistics July 2016

Global total liquids bounced by +600,000 bpd in June as Canada partially recovered from the Fort McMurray wild fire and Saudi Arabia flexed its muscles raising production by 200,000 bpd compared with May.

Not surprisingly the oil price has wilted to the vicinity of $43 / bbl. But Bull and Bear forces are beginning to equilibrate. On the Bull side for the oil price, US, European and Asian production is in decline and OPEC spare capacity is approaching wafer thin. On the Bear side, US LTO drillers are showing signs of going back to work and Saudi Arabia seems intent on flexing its production muscles to the end.

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Blowout Week 135

The big news this week is Hinkley Point, but since this has already been discussed at length in Euan’s recent post it doesn’t qualify as news any more. Accordingly, this week’s abbreviated Blowout features a little-known ~3.4 GWh pumped hydro plant in the Czech republic (inset) which has many similarities to the plant at Gorona del Viento in the Canaries and which, like GdV, suggests that the ultimate highest and best use of these plants may be as tourist destinations:

Spectator:  Czech hydro plant atop hill becomes top tourist attraction

Climb a peak at the heart of the Jeseniky mountain range in northeastern Czech Republic and there’s an unexpected reward…..
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The Hinkley Point C Pantomime

The board of EDF, the French State controlled owner of UK and French power stations and vendor of the new Gen 3 EPR (European Pressurised Water Reactor) voted narrowly to approve the Hinkley C reactor project on Thursday (by 10 votes to 7). Contracts were supposed to be signed today (Friday). But then in an unexpected move the UK Government has called the project in for re-evaluation. Clearly, they did not expect the French to proceed. What on Earth is going on? [image credit The Guardian.]

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How long does it take to build a nuclear power plant?

Cost and time overruns of the Areva EPR reactors at Olkiluoto in Finland and Flamanville in France are seldom out of the energy news. Olkiluoto began construction in 2005 with planned grid connection in 2010. The original build cost of €3billion has risen to €8.5 billion. And the grid connection has been pushed out to 2018 – 8 years late (13 years construction time) and €5.5 billion over budget.

So how long should it take to build a nuclear reactor? 5, 10 or 15 years? The answers are below the fold.

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The Eigg renewables project revisited

Among the claimants for the title of “world leader” in renewables development in remote areas the island of Eigg (population 90) off the west coast of Scotland, which since 2008 has been obtaining over 80% of its electricity from a custom-designed hybrid system, probably has the best claim. This post reviews operating data that have become available since I posted Eigg, a model for a sustainable energy future in September 2014. It concludes a) that while the project has delivered good results it is inefficient (overall capacity factor 11%), b) that Eigg will probably never be able to do away entirely with diesel backup and c) that the project owes its existence to the fact that 94% of the capital cost was financed by grants. It is economically unviable on a stand-alone basis.

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Blowout Week 134

This week we feature the forthcoming US elections, in particular the Republican and Democratic Platforms on energy and climate change. It’s difficult to conceive of such diametrically opposed positions. If Clinton wins the US will continue with Obama’s pro-renewable policies, but a Trump victory could well put paid to the world’s vision of a renewable energy future. Or could it?

Democratic Convention:   Democratic Platform on Climate Change

Climate change is an urgent threat and a defining challenge of our time.
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Global Nuclear Power Snapshot

The World Nuclear Association (WNA) has an informative website with a mine of data that I’ve wanted to extract for some time. This is a first pass to try and capture some of the headlines which are: deployment of nuclear power has in the past depended upon a combination of three factors 1) the size and level of technology development of any country (the leading producers in 2015 were the USA, France, Russia and China) 2) the desire to acquire nuclear weapons that may be linked to large advanced countries wanting to defend themselves and 3) a shortage of fossil fuels (France, Ukraine, Slovakia, Hungary, Slovenia etc. have the greatest penetration of nuclear in power generation). Let’s begin by looking at the 30 countries that have domestic nuclear power capacity (Figure 1).

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Climate science and the UK Climate Change Act

The Climate Change Act of 2008 is, supposedly, underpinned by the findings of climate science, and riding herd on these findings is the Climate Change Committee (CCC), which reviews the state of climate science whenever a new carbon budget is published to see whether any significant changes have occurred. Here we briefly review the CCC’s latest assessment, which accompanies the fifth carbon budget. We find that few if any of the CCC’s conclusions are backed up by hard evidence and that some of them are the opposite of the truth. Yet they still underpin the Climate Change Act, which continues to govern the UK’s long-term energy policy.

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