Shale Oil Fiasco

[Gerry Maddoux + 3,627]

12 hours ago, Coffeeguyzz said:

This overall situation is apt to only enhance US LNG producers in the future as these FSRUs are going in all over the planet and will need near term (at least) supply of LNG.

Great explanation. Thanks. I had no idea these FSRU's were proliferating like this. In my view, LNG is so free of polluting impurities that it is the ideal hydrocarbon to compete with renewables. Not only that but every major oil find these days--due to the stratigraphic targets left to exploit--is accompanied by even more natural gas (77% by report on high impact wells). 

Right now, overpopulation and obesity (massive methane gas production), along with a concomitant hunger for protein (95 million cows in the US alone by 2018 USDA report) by far outweigh the burning of hydrocarbons. OAC had this wrong: it's not cow farts but methane regurgitation from multiple stomachs--gallons each day per cow. I'm not a vegetarian but this is a simple fact. This becomes more intriguing when one considers the new finding that dinosaurs very likely had multiple stomachs too. Can you imagine the amount of methane those big suckers must have been emitting there at the last? 

Converting all the automobiles in the world to electric is equivalent, they say, to changing over the largest 15 freighters from 3.5% bunker fuel to 0.5% sulfur fuel. Take the other 59,985 freighters into consideration and the MARPOL mandate makes electric cars a tiny flyspeck. In fact, it makes renewables barely larger than a flyspeck. Climate science is suffering from a profound lack of unbiased observation. I cannot imagine why the super-majors don't aggressively address this. I realize that I've slipped off the reservation here, but the economically-driven onslaught against even our best hydrocarbons--read LNG and CNG--is reckless and disconnected from a thorough scientific experiment.  

[ANVESH physicist 0]

Can any body tell me Brent oil price showing in other sites showing 60.69 but in this it is 59.89 why the difference and which is correct

[Old-Ruffneck + 1,177]

46 minutes ago, errolla anvesh said:

Can any body tell me Brent oil price showing in other sites showing 60.69 but in this it is 59.89 why the difference and which is correct

Most likely what you are seeing is after hours electronic trading. Some shut down at the closing bell on Friday and some continue all weekend long in the after hours. 

[D Coyne + 305]

On 1/23/2020 at 9:01 AM, Boat said:

Just a guess but renewables and nat gas are very labor and infrastructure intensive. Just like that chart above steady growth will be enjoyed for decades. Will nuclear and coal lose out to price? I think so. Electric cars, semis and trains switch to renewables or nat gas electricity with CHP. Yea For these reasons the shelf life of nat gas and renewables grow in tandem much longer than  20 years. Maybe closer to 75. 

Boat,

I doubt natural gas output will continue to grow for 75 years, even a highly optimistic case with a natural gas URR of 27000 TCF and growth of 4% per year in Natural gas output from 2019 to 2050 would peak in roughly 2050, if the peak is reached at approximately 50% cumulative output of URR.  A more realistic scenario with 20000 TCF for Natural Gas URR peaks in 2041.

A more realistic estimate is 10 to 30 years for peak in World natural gas output, my best guess is 20 years around 2040.

See  http://peakoilbarrel.com/world-natural-gas-shock-model/

[D Coyne + 305]

On 1/23/2020 at 11:35 AM, Gerry Maddoux said:

Dennis, you may be missing my point. Or maybe I'm just so naive I can't see the big picture.  

I'm not sure it's of any concern to Mr. Putin that the Marcellus and Utica producers are running into trouble at these prices. Russia has all this new gas from the Yamal Peninsula--and they're drilling like there's no tomorrow. They have to move the gas forthwith, if they're to get at the oil. Further, they now have a shortcut to the big Asian markets. Everyone has gas--pun intended. Everyone wants that four-billion-population Asian market. The pricing pressure is immense because there's so much gas. And it's coming from all over the world! The Utica/Marcellus is becoming a smaller and smaller piece of the global pie.

 Are we really going to run out of natural gas? When you tour the Haynesville Shale, to use a domestic example, you have to be stunned at the available targets for future exploitation. That basin is very close to the big Sabine Pass LNG facility--so when Jerry Jones put his half-billion to work, it was there, not the Utica/Marcellus. That thing will still be going in twenty years . . . if we need it.

But thinking more globally, I personally feel that the crust of this planet is so richly endowed with natural gas that we'll have it as long as it's a viable commodity. Since this LNG revolution is making natural gas a worldwide-consumer commodity--instead of just a worldwide-trading commodity--it is important to look at the whole world when you model exactly when we'll run out of gas. I tell you, it is being found and exploited all over this old world. Argentina has it; Brazil has it; they're just too inept at the moment to exploit it. But Russia will be all too happy to help them figure that out. My solid conjecture: we are not going to run out of gas. Not globally. And for the moment, wherever NG is discovered in huge quantities, LNG trains will go in.

It's very easy to talk about renewables when times are good. I'm not pushing for one, but some day we'll have a recession. People will want whatever it takes to keep them warm. If the Europeans can keep themselves warm using windmills and solar panels, God bless them. But my deep, unalterable hunch is that they're going to get themselves in such an economic bind that they will take whatever is cheapest. Just as hydrocarbons brought us out of the cave, they will prevent our entry back into the cave. I shudder to think of a planet covered in solar panels and windmill farms. Further, I think there will be such profound unintended and unexpected consequences that the next generation after this current group of crybabies is going to blame their fathers and mothers for mucking up the globe with them.

 

Gerry,

There are always unintended consequences, natural gas will be a problem, there was a time when it was believes the oil resource was unlimited, just because someone claims something is so, does not make it so.  Not all of the natural gas discovered will be profitable to produce if natural gas prices remain low, if the price of natural gas rises (and it will,) wind and solar will be the cheaper energy source.

[LANDMAN X + 181]

Have been reading this thread since 12/15.  Great stuff.  Remember, only about 4% is out there in the solar and wind.  Look at this article on some of the picture.  

 

https://www.manhattan-institute.org/green-energy-revolution-near-impossible

 

 

[Boat + 1,315]

One more point that leads to steady gain in renewables and nat gas but not explosive growth. Where there is good sun and wind, solar and windmills will take the majority of new growth market share as they have for a few years. The the majority of the electricity market has existing infrastructure for nuclear and coal but new facilities are to expensive and finally society sees the dangers they pose. But neither gas or renewables can compete with the cost of that energy that are already in place where the wind or sun isn’t so good. 
Renewables will never be stopped but decades will pass before nuclear and coal plants slowly need to be replaced. 
The billion dollar question is how much cheap nat gas is out there and how volatile the market stays. As time goes by spikes in nat gas will have to compete with 30-35 year steady priced renewables. To me this is what big consumers trend towards. 
 How high wind turbines get to capture enough breeze in less windy areas. I think that question has yet to be answered. The taller they get the more financial viable they become and the bigger area they proliferate. 

[footeab@yahoo.com + 2,131]

38 minutes ago, Boat said:

One more point that leads to steady gain in renewables and nat gas but not explosive growth. Where there is good sun and wind, solar and windmills will take the majority of new growth market share as they have for a few years. The the majority of the electricity market has existing infrastructure for nuclear and coal but new facilities are to expensive and finally society sees the dangers they pose. But neither gas or renewables can compete with the cost of that energy that are already in place where the wind or sun isn’t so good. 
Renewables will never be stopped but decades will pass before nuclear and coal plants slowly need to be replaced. 
The billion dollar question is how much cheap nat gas is out there and how volatile the market stays. As time goes by spikes in nat gas will have to compete with 30-35 year steady priced renewables. To me this is what big consumers trend towards. 
 How high wind turbines get to capture enough breeze in less windy areas. I think that question has yet to be answered. The taller they get the more financial viable they become and the bigger area they proliferate. 

Yea, they take the new "growth" and everyone's electricity bills keep increasing.... WHY?  Oh right, all that doubled infrastructure sitting around doing nothing but with full staff waiting for the sun to disappear behind a cloud or the wind to die.  This at a time when the price of Coal and Natural gas is at an all time LOW.  Electricity prices should be going down, not up.  Ah, but when you have to have 2X as much installed capacity than required... LCOE means dip shit nothing. 

[0R0 + 6,251]

20 hours ago, D Coyne said:

Gerry,

There are always unintended consequences, natural gas will be a problem, there was a time when it was believes the oil resource was unlimited, just because someone claims something is so, does not make it so.  Not all of the natural gas discovered will be profitable to produce if natural gas prices remain low, if the price of natural gas rises (and it will,) wind and solar will be the cheaper energy source.

There is a problem in the idea of renewables entirely displacing fossil fuels. First is that the carbon footprint of renewables outside the solar belt and wind corridors which are only available OUTSIDE the major economies - China, N. Europe East of the Danish coast and the English Channel, US Northeast and upper midwest. It means that the installation of those renewables in those areas will consume more fossil fuel than the energy they provide during their useful lifetimes.

Funnily enough, the US S. West is the greatest  land mass that can become all solar and is within transmission distance of major populations.

In the EU, only Spain and Italy reach that distinction. Possibly Greece. China, despite all the technology and much hype, is not really a viable solar energy economy and will never recover the coal and oil used to setup its renewables from them. The program is energy negative. . .

[ceo_energemsier + 1,818]

Not so much a fiasco? maybe its turning out to be a feast?

Increased New Well Productivity Helped US Shale Growth In 2019

 

https://oilprice.com/Latest-Energy-News/World-News/Increased-New-Well-Productivity-Helped-US-Shale-Growth-In-2019.html

 

[Boat + 1,315]

On 1/26/2020 at 1:44 AM, footeab@yahoo.com said:

Yea, they take the new "growth" and everyone's electricity bills keep increasing.... WHY?  Oh right, all that doubled infrastructure sitting around doing nothing but with full staff waiting for the sun to disappear behind a cloud or the wind to die.  This at a time when the price of Coal and Natural gas is at an all time LOW.  Electricity prices should be going down, not up.  Ah, but when you have to have 2X as much installed capacity than required... LCOE means dip shit nothing. 

I have heard that argument but Texas is close to 20% wind with little added expense. All while adding nat gas and killing coal among fast market growth. Maybe you need a Texan as a consultant.

[Gerry Maddoux + 3,627]

9 minutes ago, Boat said:

I have heard that argument but Texas is close to 20% wind with little added expense

I'm curious, is that Texas is close to 20% wind energy for themselves, or does most of that go to Florida?

[ceo_energemsier + 1,818]

Technology in action!!!!

 

 

Engineered nanoparticles mitigate frac hits: Reaching more in-place hydrocarbons increases production

An innovative treatment method uses pressure and surface-modified nanoparticles to mitigate frac hits and create a favorable fluid-flow environment.

 

 

Frac hits are costing operators billions of dollars in lost production. To help alleviate this costly issue, Nissan Chemical America Corporation (NCA) has introduced a new treatment method to mitigate the effects of frac hits and increase production in initial wells, in addition to infill projects.

The patent-pending treatment method uses fluid in combination with highly surface-modified nanoparticles. The combination provides a temporary high-stress fracture environment in the initial well, to prevent neighboring fracture interactions using the fluid. The highly surface-modified nanoparticles act to reduce interfacial tension, modify wettability, and disjoin and fragment hydrocarbons to create a favorable fluid-flow environment, which enables increased and sustained production.

THE CHALLENGE

As development of unconventional reservoirs continues with tighter and tighter well spacing, some of the current production and subsequent reserves of the initial well are often compromised. In many cases, the initial well consists of large, permeable fracture networks connecting to much tighter matrix reservoir rock. By the time the infill well is drilled, the initial well in the spacing unit may have already produced several hundred thousand barrels of fluid. This depletion often creates a lower-stress environment around the induced fractures of the parent well—in other words, a pressure sink may form predominantly in the fracture network.

As an infill well is drilled and completed, the initial well will become more vulnerable to an intersection from a nearby propagating fracture, leading to severe production losses. In addition, fracture fluid and proppant communication may occur between the neighboring wells, also leading to an ineffective stimulation of the infill well. As the name—frac hit—suggests, a powerful force is unleashed that can also result in severe damage to production tubing, casing, and wellheads.

Infill wells often demonstrate production performance of 60% or less when compared to the existing initial well. Initial well interference can include undesirable increases in water production, as well as oil output decreases that frequently do not return to their previous levels. Numerous causes have been cited, including stress reversal, tendency of infill well fractures to grow toward initial well fracture networks, and improper well spacing.

It has been reported that the longer the initial well has been on production, the higher the likelihood of an induced stress change, resulting in a higher probability of infill well interference. Negative influences can be seen in the form of fines migration, proppant migration, or fluid pressure communication between the infill well frac zone to the initial well frac zone, and vice-versa.

CURRENT STRATEGIES

With intense pressure from c-suites and investors to cut costs and increase production, hydraulic fracture interference, or frac hits, is an increasing problem in today’s more mature unconventional fields. Operators must develop strategies to combat production losses caused by frac hits. Refracturing has been explored as a potential solution, however, there are limitations when it comes to the cost-effectiveness of this process.

 

 

 

 

THE SOLUTION

To help mitigate frac-hits, NCA and distributor, ELS, developed a method of driving, by fluid, a patent-pending well-additive treatment and method (nanoActiv), which is mechanically powered by highly surface-modified silicon dioxide particles. Nissan Chemical has been perfecting nanoparticle technology since 1951, and is one of the first companies to produce highly surface-modified colloidal particles for industrial applications.

The company’s nanoActiv technologies are highly surface-modified colloidal silica nanoparticles, designed to penetrate deep into the reservoir and persist with long efficacy. They are used for a variety of applications, including new well completions, remediations, re-stimulations and production services.

Through Brownian motion, nanoActiv HRT (hydrocarbon recovery technology) deploys what is known as “disjoining pressure,” a phenomenon that suggests nanoparticles lift hydrocarbons from the rock surface at the three-phase contact angle. The technology surrounds hydrocarbon drops, fragmenting them into smaller droplets, enabling efficient flowback to the wellbore. Once treated, particles exhibit substantial persistence and remain within the matrix and natural fracture network after contact flow-through, facilitating ongoing improved hydrocarbon mobility.

Another component of the treatment method uses nanoActiv  EFT (enhanced flowback technology), which is a nanoparticle micellar dispersion, stabilized using a synergistic combination of distinctive highly surface-modified silica nanoparticles, a soybean extract solvent, and a blend of surfactants. It exhibits an effective primary chemical action, enhanced with the added mechanical properties of the company’s nanotechnology. EFT delivers the unique advantages of diffusion, disjoining pressure and fragmentation. It also reduces interfacial tension for improved stimulation fluid interaction within the reservoir near the created and propped fracture facies, as well as throughout the entire propped fracture network—increasing initial oil and gas production.

LABORATORY RESEARCH

In 2019, Dr. Hassan Dehghanpour (University of Alberta) demonstrated the interfacial tension (IFT) reduction and wettability modification potential of the well-additive treatment. As wettability affects the relative permeability, the wetting state can significantly impact the productivity of a well. Scientific research concluded that the treatment method altered the wettability of Montney
formation core samples from oil-wet to water-wet conditions.

 

 

MITIGATING FRAC HITS

“ELS informed us that frac hits were devastating production and operator profits,” explains John Southwell, NCA’s technical director, North America. “So, we worked together to develop a method of combining our patent-pending nanoparticles with a unique pre-loading technique, to mitigate the effects of frac hits.”

Nissan’s frac hit mitigation process begins when nanoActiv is deployed into the initial well during the re-pressurization process. The well-additive treatment, in HRT or EFT, is injected as pills or intermixed with a total volume of injected fluid. While the added fluid provides the benefits of a temporary high-stress barrier near the initial well, the nanoparticles provide the benefit of significant IFT reduction, as well as wettability modification near the wellbore, to create a much more favorable fluid-flow environment. Consequently, fracture interactions are mitigated, and more hydrocarbons are produced.

Shear fractures in infill wells are problematic in the Permian basin. Initial wells are getting crushed by offset fracs, and the infill wells, themselves, aren’t producing up to expectations. The frac hit mitigation technology is a key change element in improving production results of these closely spaced horizontal shale wells. “nanoActiv represents a step-change in technology that improves profitability” states Stephen Gornick, NCA chief reservoir engineer.

On a recent job in the Permian basin, Shear Frac Group LLC measured the type and amount of fractures created per second on the infill pad with their proprietary technology, Frac BRAIN. The infill well closest to the nanoActiv preloads showed a significant increase in the cumulative fracture count, compared to the other adjacent infill wells on the pad. Shear Frac’s engineer explained that normally infill wells have lower fracture counts, due to offset depletion; however, this was not observed in this well.

Shear Frac’s real-time, cloud-based tool links to the frac data van to help operators guide hydraulic fracture inputs and improve fracture surface area creation during operations. This technology provides a new measurement of rock failure and fracture efficiency, using surface pumping data to determine the amount of shear (complex) or tensile (planar) fractures created.

Engineers from the operator believe the reason that the initial preload was so effective with NCA’s EFT technology is because the small size (12-15 nm) of the surface-modified nanoparticles in the fluid caused the preload fluid to access parts of the tight rock that normal fluid wouldn’t enter—saturating the rock near the infill well. Combine that with a pressure barrier and lowering of the surface tension of the preload fluid by the components of EFT, and you get optimal infill fracturing. Add to this the fact that EFT was preloaded into initial wells, returned to oil production less than 10 days after coming online (one recent well is exceeding previous production amounts within the first week), and the operator is proceeding to target future pads as nanoActiv preload candidates.

FIELD RESULTS

nanoActiv has consistently caused oil to flow back sooner than the operator expected—with the well actually exceeding pre-treatment production levels. The product has been pumped in various initial well pre-load jobs across the Eagle Ford shale, and Anadarko and Permian basins.

 

 

 

 

[footeab@yahoo.com + 2,131]

4 hours ago, Boat said:

I have heard that argument but Texas is close to 20% wind with little added expense. All while adding nat gas and killing coal among fast market growth. Maybe you need a Texan as a consultant.

Texas NG producers are PAYING to get rid of their NG.  NG isn't low, it isn't FREE, it is PROFIT currently. 

And this is happening exactly NOWHERE else in the world. 

[0R0 + 6,251]

2 hours ago, ceo_energemsier said:

Technology in action!!!!

 

 

Engineered nanoparticles mitigate frac hits: Reaching more in-place hydrocarbons increases production

I was wondering why that wasn't put in place already.

Pressurizing initial wells before fracking child wells seems to be a rather obvious method to avoid producing pressure sink effects and inefficient fracs.. But the nanoparticle + micellar encased solvent method  is really a big step beyond current tech. Loadings are fairly low so it is probably financially viable. We just need to see what they do for new child wells' production over their lifetimes. I would guess the effect would only be in the initial 4-6 months of production, as production eventually sucks out the surface active materials out of the fractures. I don't see the operators willing to wait more than the minimal 3 weeks to get the nanoparticles distributed completely into the surfaces of the fractures. Anyway, if I understand it correctly, none of the data presented is about child well performance. 

[footeab@yahoo.com + 2,131]

5 minutes ago, 0R0 said:

I was wondering why that wasn't put in place already.

Pressurizing initial wells before fracking child wells seems to be a rather obvious method to avoid producing pressure sink effects and inefficient fracs.. But the nanoparticle + micellar encased solvent method  is really a big step beyond current tech. Loadings are fairly low so it is probably financially viable. We just need to see what they do for new child wells' production over their lifetimes. I would guess the effect would only be in the initial 4-6 months of production, as production eventually sucks out the surface active materials out of the fractures. I don't see the operators willing to wait more than the minimal 3 weeks to get the nanoparticles distributed completely into the surfaces of the fractures. Anyway, if I understand it correctly, none of the data presented is about child well performance. 

Would be very interesting the frac/refrac time intervals this could open up.  Keeping the pressure higher. 

[D Coyne + 305]

21 hours ago, 0R0 said:

There is a problem in the idea of renewables entirely displacing fossil fuels. First is that the carbon footprint of renewables outside the solar belt and wind corridors which are only available OUTSIDE the major economies - China, N. Europe East of the Danish coast and the English Channel, US Northeast and upper midwest. It means that the installation of those renewables in those areas will consume more fossil fuel than the energy they provide during their useful lifetimes.

Funnily enough, the US S. West is the greatest  land mass that can become all solar and is within transmission distance of major populations.

In the EU, only Spain and Italy reach that distinction. Possibly Greece. China, despite all the technology and much hype, is not really a viable solar energy economy and will never recover the coal and oil used to setup its renewables from them. The program is energy negative. . .

0R0,

Not likely, typically energy payback is about 4 years of a 30 year life for PV on average in the US.  Seems you may have been reading fossil fuel producer funded propaganda.  NREL expects the energy payback to drop to 2 years by 2024 (this estimate was published in 2004.

 

See

https://www.nrel.gov/docs/fy04osti/35489.pdf

 

A more recent report from 2014 suggests 1 to 2.5 years for energy payback for PV solar.

 

https://www.ise.fraunhofer.de/content/dam/ise/de/documents/publications/studies/Photovoltaics-Report.pdf

 

For wind, energy payback is 5 to 8 months

https://www.sciencedaily.com/releases/2014/06/140616093317.htm

[Alfredo + 3]

The oil industry, fracking, corresponds to what is meant by capitalism in the United States or is what Charles Hugh says in his book.

Charles Hugh Smith takes a step back to offer his much sought out economic analysis on the future of capitalism in the global system.

The Future of What's Called "Capitalism" 

[0R0 + 6,251]

8 hours ago, D Coyne said:

0R0,

Not likely, typically energy payback is about 4 years of a 30 year life for PV on average in the US.  Seems you may have been reading fossil fuel producer funded propaganda.  NREL expects the energy payback to drop to 2 years by 2024 (this estimate was published in 2004.

 

See

https://www.nrel.gov/docs/fy04osti/35489.pdf

 

A more recent report from 2014 suggests 1 to 2.5 years for energy payback for PV solar.

 

https://www.ise.fraunhofer.de/content/dam/ise/de/documents/publications/studies/Photovoltaics-Report.pdf

 

For wind, energy payback is 5 to 8 months

https://www.sciencedaily.com/releases/2014/06/140616093317.htm

It is not in those geographies. But in overcast, low wind georgraphies. Obviously no problem in sunny arid climates to get solar to pay off. 

It is this map that has my skeptic eyes squinting at institutional projections.

 The main issue is overcast days and the short northern winter days.That means that solar is not standalone in the North and requires much more storage/standby fossil fuel capacity to overcome consecutive overcast days.  

Perhaps the map is biased in that in the 800-1200 KWH/m2 you should breakeven.with current best practices commercial product at 17% efficiency for silicon and 18% for thin film, and that would cover some large population centers. .  

Peter Zeihan, who calculated the following map, Is looking at lack of prolonged intermittency, removes cropland, and cuts off transmission over 1000 miles.Leaves the bulk of the population with cheaper fossil fuel than renewables, (this is not an energy breakeven/return)

I think he is overestimating storage costs and underestimating efficiency as those have improved by a factor of 5 and 2 respectively since he started working on this a decade ago. But these were calculated from commercial operating data IIRC. So have to be at least somewhat backward looking. 

[D Coyne + 305]

15 hours ago, 0R0 said:

It is not in those geographies. But in overcast, low wind georgraphies. Obviously no problem in sunny arid climates to get solar to pay off. 

It is this map that has my skeptic eyes squinting at institutional projections.

 The main issue is overcast days and the short northern winter days.That means that solar is not standalone in the North and requires much more storage/standby fossil fuel capacity to overcome consecutive overcast days.  

Perhaps the map is biased in that in the 800-1200 KWH/m2 you should breakeven.with current best practices commercial product at 17% efficiency for silicon and 18% for thin film, and that would cover some large population centers. .  

Peter Zeihan, who calculated the following map, Is looking at lack of prolonged intermittency, removes cropland, and cuts off transmission over 1000 miles.Leaves the bulk of the population with cheaper fossil fuel than renewables, (this is not an energy breakeven/return)

I think he is overestimating storage costs and underestimating efficiency as those have improved by a factor of 5 and 2 respectively since he started working on this a decade ago. But these were calculated from commercial operating data IIRC. So have to be at least somewhat backward looking. 

0R0,

Transmission costs are not that large, the energy can be moved north to south or south to north and east to west, the assumptions of the analysis are not good ones.  Why is cropland removed?  Works fine for wind.  Why 1000 miles, most nations have an interconnected grid and the grid can be upgraded.

There are plenty of alternative analyses which suggest wind and solar are likely to replace much of the fossil fuel currently used, the transition will take time, the high resource areas will go first, costs will go down for wind and solar while the cost for oil, natural gas, and coal will rise.  It will be cheaper to move the power with HVDC transmission lines from high resource areas, than it will be to produce locally with fossil fuel in 20 to 30 years.  In the mean time there will be a gradual transition from fossil fuel to wind and solar as fossil fuel resources deplete.

There is also the issue of climate change which most of the World, except for the tiny population of people reading this board, recognizes is a problem that needs to be addressed.

[ceo_energemsier + 1,818]

(Bloomberg) -- Exxon Mobil Corp. plans to start gauging buyer interest in its U.K. and German upstream operations in the coming weeks as the oil major continues to divest overseas assets, people with knowledge of the matter said.

The energy giant aims to start a sale process for its U.K. North Sea assets imminently, according to the people. It would then begin marketing its oil and natural gas assets in Germany to potential acquirers shortly afterward, the people said, asking not to be identified because the information is private. The two disposals could fetch more than $2 billion combined, they said.

Big U.S. oil companies have been selling assets as they seek to focus efforts on their home market. Exxon exited Norway last year when it sold its oil and natural gas fields in the country to Var Energi AS for $4.5 billion. It has also been considering a sale of its offshore oil fields in Malaysia, which could fetch as much as $3 billion, Bloomberg News reported in October.

Exxon has been working with investment bank Jefferies Financial Group Inc. to consider options for its U.K. North Sea assets. Its U.K. offshore operations are mainly managed through a 50-50 joint venture with Royal Dutch Shell Plc.

The U.S. major is responsible for about 5% of the U.K.’s oil and gas production, supplying an average of 80,000 barrels of oil and 441 million cubic feet of gas a day, its website shows. In 2018, Exxon’s German assets produced about 45,000 barrels of oil equivalent a day, according to a company operating review.

Deliberations are at an early stage, and no final decisions have been made, the people said. Exxon could still decide to keep some of the assets, the people said.

A representative for Exxon said the company continually reviews its assets for contributions toward its financial objectives as well as their potential value to others. The company declined to comment on specific transactions.

Exxon said in November that the company’s $15 billion divestment program was running ahead of schedule. The company feels “really good” about the progress, its vice president of investor relations, Neil Hansen, said on a conference call at the time.

[ceo_energemsier + 1,818]

1 hour ago, D Coyne said:

0R0,

Transmission costs are not that large, the energy can be moved north to south or south to north and east to west, the assumptions of the analysis are not good ones.  Why is cropland removed?  Works fine for wind.  Why 1000 miles, most nations have an interconnected grid and the grid can be upgraded.

There are plenty of alternative analyses which suggest wind and solar are likely to replace much of the fossil fuel currently used, the transition will take time, the high resource areas will go first, costs will go down for wind and solar while the cost for oil, natural gas, and coal will rise.  It will be cheaper to move the power with HVDC transmission lines from high resource areas, than it will be to produce locally with fossil fuel in 20 to 30 years.  In the mean time there will be a gradual transition from fossil fuel to wind and solar as fossil fuel resources deplete.

There is also the issue of climate change which most of the World, except for the tiny population of people reading this board, recognizes is a problem that needs to be addressed.

(Bloomberg) -- BP Plc’s outgoing Chief Executive Officer Bob Dudley warned Big Oil of moving too fast on investing in new technologies to counter climate change, because their failure could lead to financial ruin.

“If you go too fast and you don’t get it right you can drive yourself out of business,” Dudley said in a Columbia Energy Exchange podcastwith Professor Jason Bordoff.

Oil companies must retain a strong financial footing to be able to invest when game-changing technologies are developed, he said. In the early 2000s, before his tenure as CEO, BP invested heavily in solar technology only to write off much of the spending.

“If we understand where the technologies are going and we invest, the best thing we can do strategically is have a strong balance sheet. When it becomes really clear certain technologies are going to move very quickly and be profitable, then we’ll be able to make that shift.”

Here are other select quotes from the interview:

On Big Oil’s role in the energy transition:

BP, Exxon Mobil Corp., Royal Dutch Shell Plc, Chevron Corp and Total SA are “only responsible for producing about 8% of the world’s oil. If we were all driven out of business that oil would still be produced” by national oil companies and other countries.

“We want to be leaders in this and we do enormous amount as companies” such as in developing technology and reducing emissions from their own operations. But “we’re not the epicenter of these issues.”

On BP’s dividend:

“I meet with shareholders and they say ‘we would like you to move really quickly into renewables.’ I say, ‘we can do that, would you like us to cut the dividend?’ They go, ‘no, no, don’t do that.’ We’ve got to find the right balance and pace here.”

On meeting Paris goals:

“I cannot imagine how we’re going to get there without a price on carbon.”

“I don’t know how the world can get to the to goals of Paris without a very major role for natural gas.”

On renewables:

“We should not shut down what we’re doing or sell our assets to somebody else and go all into renewables and think that’s going to solve the problem.”

“We’ve been working renewables a long time and we’re supportive of it. It does have a lower return profile, there’s no question about it.”

On technology:

“Technology has not yet been cracked that will make the big movement on climate change. Renewables are fantastic. They’re one way to do it, but we’re going to come through with some solution. I hope we get the world back to some sort of nuclear capability that’s much safer for example.”

[Rob Kramer + 696]

With Canada USA and LNG prices all from 2$ USD - 4$ there is gonna be a huge push in NG ... the energy content for the price is unreal . I dont know how it got this far and theres still tons of flairing ! Cheap energy decade ? 

[Gerry Maddoux + 3,627]

9 minutes ago, Rob Kramer said:

Cheap energy decade ? 

I think so. We literally have NG coming out our ears. In Exxon's big Stabroek block find off Guyana, they're thinking Liza 1 and 2 will result in 120,000 and 220,000 bo/d, but their FPSO's are being built with gas plants to handle 170 mcf/d and 400 mcf/d--voluminous amounts of NG under anyone's criteria. And these are only two of the nineteen major finds in that block. 

Every single oil discovery these days is accompanied by massive volumes of natural gas. We are in the "Age of Gas." 

And it's going to be cheap, simply because to get at the oil you have to offload the gas as quickly as possible. In the Yamal Peninsula, the Permian, the Bakken, Guyana, the GOM, and wherever oil is discovered. That means worldwide LNG at lower and lower prices. From Guyana, for example, LNG goes anywhere. Soon the Europeans will realize that they absolutely cannot get to the Paris standards unless they utilize LNG for at least half of their energy needs. Don't forget: this is not pipeline gas; this has had all Hg and H2S removed, along with long-chain carbon molecules. The newer LNG trains don't expel much noxious gas in the production of clean LNG. 

If renewables make this a stranded asset, well, they deserve the accolades. I don't believe that will happen. Not unless there's a pandemic that destroys an awful lot of demand for energy.

[Anthony Okrongly + 114]

Here's a fun fact: 5% of Germany's electricity is provided by Solar power even though they have the same solar power potential as Alaska.

https://e360.yale.edu/digest/renewables-generated-a-record-65-percent-of-germanys-electricity-last-week

Even though their average renewables runs at about 40% of electricity generation.

Texas - with nearly twice the sunlight produced just 1% from Solar.

https://www.dallasobserver.com/news/what-does-it-mean-for-texas-to-have-produced-more-wind-than-coal-energy-11725090

The cheap natural gas (42% of electricity) certainly helps.  And Texas has gone more to wind than Solar (22% of electricity). 

Texas produced about 22% of it's electricity from renewable sources. 

The question is... as the shale plays out over the next (let's be generous and say) 7 years and the cheap natural gas goes the way of the shut down oil fracking rig will Texas go the same way as Germany? 40% renewable, mostly wind. 

What are the ramifications of the shale fiasco on National Electricity Production and costs?  In 2005 Coal was 50% of U.S. energy production.  Does anyone think we will go back to that case? It seems unlikely. Using Texas as a reference for both cheap natural gas and plentiful wind/solar, it seems like a pretty straight line replacement swap from 20% wind and 40% natural gas to 40% wind and 20% natural gas. 

We will always need natural gas, nuclear and coal to provide consistency of power. Renewables will fill the remaining role. 

Even though this discussion get into the weeds at times, I don't think anyone is saying fracking will be MORE or even nearly at the SAME level as today in 20 years... right?  Will the shale plays last 20 years in any significant way? No way.  OK, 10 years?  What's the case. Extremists are saying 2020 will see peak fracked energy.... consensus is 2-5 years to peak. Nobody is saying it isn't going to peak in this decade. So now we are just arranging the deck chairs on The Titanic. 

With declining fracking for oil we get declining natural gas (by-product) which takes us back to scarcity in the U.S. for both in THIS decade. Nobody arguing on this forum (I would guess) can't easily remember the turn of the millennium. Almost nobody arguing on this forum doesn't have children and grandchildren who could potentially see the turn of the next millennium. With that in mind this decade will be over quickly. If your job is in the fracking fields and you expect to have one in 10 years I think a large percentage of you are delusional. 

I would propose that this is one of the very few forums in the U.S. where energy issues are being discussed on BOTH sides on a daily basis. If you take the word "Fiasco" out of this discussion and turn it into "Bridge" it would probably be more appropriate, because I (again) say that no one thinks shale is a permanent solution. If 30 years ago someone told you that 40% of Germany's energy would be renewable you would have dismissed it out of hand. The middle of The NEXT 30 year transition is only 15 years from now.  

If we pretended (without much effort) that we are in the middle of the CURRENT 30 year transition... and that Shale Oi/Gas is the bridge... Then we can see the writing on the wall.  If you think Shale has another 5 years before it peaks then we are 10 years into the current 30 year transition. 

I don't think anyone is arguing that tight energy doesn't have dramatic decline rates per well, that there isn't a limit to the geology involved, that it hasn't proven to require astronomical financial inputs to acquire, that environmental policy (particularly for pollution at the well site - see Colorado) isn't increasing yearly and that there is no indication that the trend to replace fossil energy with renewable energy is going to change. 

That being said, the rest is just a matter of timing. When The Titanic hit the iceberg it didn't break apart, roll over and sink immediately. It took 2 hours and 40 minutes. For the first 2 hours it was obvious what was going to happen (that time has already played out in oil since 2000). During the next 30 minutes the criticality of it all became very real (our current state). The last 10 minutes were just a loud, dramatic postscript. You can go turn in an application for a job in The Permian, but only an idiot signs up for the retirement plan when they get it. 

 

Edited January 29, 2020 by Anthony Okrongly