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Peak Coal

Comments about coal are usually not complimentary. Despite our dependence on it as a source of heat for electric power generation, environmentalists wish it would go away. On the other hand, advocates like to claim we have more than 110 years of coal left – “at present rates of consumption”. Both sides are overlooking crucial points. Let’s see if we can clarify the future use of coal as a fossil fuel resource. To begin with, it is important to understand not all coal is of equal quality. When I was in grade school, we lived in a house that had a coal furnace. For those who could get it, the coal of choice of home heating applications was anthracite coal because it was the cleanest burning form of coal and provided – ton for ton – the most heat. Unfortunately, we humans have used up most of the readily […]

Posted On : Published By : Tom Whipple
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Russia Is Quick to Bend Truth About Ukraine

The Facebook post on Tuesday morning by Prime Minister Dmitri A. Medvedev of Russia was bleak and full of dread. “Blood has been spilled in Ukraine again,” wrote Mr. Medvedev, once favored in the West for playing good cop to the hard-boiled president, Vladimir V. Putin. “The threat of civil war looms.” He pleaded with Ukrainians to decide their own future “without usurpers, nationalists and bandits, without tanks or armored vehicles — and without secret visits by the C.I.A. director.” And so began another day of bluster and hyperbole, of the misinformation, exaggerations, conspiracy theories, overheated rhetoric and, occasionally, outright lies about the political crisis in Ukraine that have emanated from the highest echelons of the Kremlin and reverberated on state-controlled Russian television, hour after hour, day after […]

Posted On : Published By : Tom Whipple
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Seeking Consensus on the Internalized Costs of Coal

What is meant by “internalized costs”? Internalized costs are the costs which can be accurately accounted for in our current systems. In energy production, these costs typically consist of capital costs, financing costs, operation and maintenance costs, and exploration costs. Some energy options incur these costs in various stages such as extraction, transportation and refinement. Profits and taxes are excluded wherever possible in order to isolate the pure cost of production. Internalized costs related to coal can become very low. That is one of the main reasons why coal has thus far proven itself to be the standout energy source of the 21 st century ( figure below ) despite rising prices, decades of talk about climate change and huge hype about alternatives. We will seek to better quantify these low internalized costs in this article. Internalized costs of coal The International Energy Agency has complied the cost curve […]

Posted On : Published By : Tom Whipple
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Oil falls below $104 ahead of Ukraine meeting

The price of oil fell Tuesday ahead of talks in Switzerland that might help defuse tension between the West and Russia over Ukraine. Benchmark U.S. crude for May delivery was down 68 cents to $103.39 at 0650 GMT in electronic trading on the New York Mercantile Exchange. The contract rose 31 cents to close Monday at $104.05. Officials from the U.S., Russia, Ukraine and the European Union are set to meet in Geneva on Thursday for negotiations aimed at persuading Russia to back off in Ukraine following its annexation of Crimea. Failing that, European Union leaders could meet as early as next week to decide on tighter sanctions on Russia, a major producer of oil and gas, which has been accused of fomenting unrest in eastern Ukraine. The Ukraine government said on Sunday it was sending in troops to try to quash a pro-Russian insurgency in the region. Brent […]

Posted On : Published By : Tom Whipple
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Crude-oil futures slipped in Asian trading Tuesday

On the New York Mercantile Exchange light sweet crude futures for delivery in May traded at $103.37 a barrel at 0515 GMT–down $0.68 in the Globex electronic session. May Brent crude on London’s ICE Futures exchange fell $0.42 to $108.62 a barrel. Ukraine’s acting president said Monday he isn’t opposed to a referendum on greater autonomy for regions. Pro-Russian separatists stood firm against threats of military action. Crude-oil prices have risen since the start of the month as the Ukraine crisis escalated but analysts say the rally is mostly based on technical indicators. "While there is some risk that Russian involvement could provoke western sanctions that might include an embargo on Russian oil exports it’s far from clear that there’s any consensus in support of such a measure," Citigroup said in a report. Also uncertainty about Libyan oil exports are helping limit the fall in prices, analysts said. Libya […]

Posted On : Published By : Tom Whipple
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Natural-Gas Futures Slide as Producers Rebuild Inventories

Natural-gas futures fell 1.3% Monday, giving back some of last week’s gains as data suggested producers have begun restoring stockpiles that fell to an 11-year low last winter. Natural gas for May delivery fell 6 cents to $4.56 a million British thermal units on the New York Mercantile Exchange. It was the second session of losses after prices surged to a one-month high on Thursday, when the amount of gas added to stockpiles was less than expected, raising concerns that inventories wouldn’t be replenished in time to heat homes next winter. About half of U.S. homes use natural gas for heating. In a research note Monday, consultancy Gelber & Associates said pipeline flows show producers have begun extracting and shipping increased volumes of natural gas, setting up the potential for a large increase in stockpiles when definitive U.S. supply data is released Thursday. "Temperatures will have been very […]

Posted On : Published By : Tom Whipple
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Natural gas output from US' Marcellus edges closer to 15 Bcf/d: EIA

Natural gas production from the Marcellus Shale in May is expected to rise 253,000 Mcf/d above April levels and move closer to the 15 Bcf/d mark, the US Energy Information Administration said Monday in its monthly report on drilling productivity. The report said gas output from the Marcellus will rise to 14.77 Bcf/d in May from 14.52 Bcf/d in April, thanks in part to a projected increase in new well production/rig to 6,501 Mcf/d in May from 6,455 Mcf/d this month. Louisiana’s Haynesville Shale has begun to show new life after drillers left the play three years ago. The agency is projecting gas production will rise to 6.615 Bcf/d in May, 11,000 Mcf/d, above April’s 6.604 Bcf/d. Production in the play peaked at about 10 Bcf/d in 2012. Article continues below… Request a free trial of: Gas Daily Gas Daily offers the most detailed […]

Posted On : Published By : Tom Whipple
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Natural gas output from US’ Marcellus edges closer to 15 Bcf/d: EIA

Natural gas production from the Marcellus Shale in May is expected to rise 253,000 Mcf/d above April levels and move closer to the 15 Bcf/d mark, the US Energy Information Administration said Monday in its monthly report on drilling productivity. The report said gas output from the Marcellus will rise to 14.77 Bcf/d in May from 14.52 Bcf/d in April, thanks in part to a projected increase in new well production/rig to 6,501 Mcf/d in May from 6,455 Mcf/d this month. Louisiana’s Haynesville Shale has begun to show new life after drillers left the play three years ago. The agency is projecting gas production will rise to 6.615 Bcf/d in May, 11,000 Mcf/d, above April’s 6.604 Bcf/d. Production in the play peaked at about 10 Bcf/d in 2012. Article continues below… Request a free trial of: Gas Daily Gas Daily offers the most detailed […]

Posted On : Published By : Tom Whipple
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Iran to Maintain Daily Oil Sales at 1 Million Barrels Into July

Iran anticipates maintaining crude exports at about 1 million barrels a day until at least July when a deal with global powers over its nuclear program will be renewed or expire, the nation’s deputy oil minister said. Iran is producing about 2.7 million barrels of crude a day, Ali Majedi said today in Dubai. Output may rise to as much as 3.7 million barrels daily within six months of sanctions being lifted, he said, adding the move would also open the nation’s energy industry to investment. The nation plans to outline a new oil development contract at a conference in London by November, offering overseas partners incentives. “We will introduce the new contract, plus some of the oil and gas fields for development,” Majedi said at the Middle East Petroleum and Gas Conference. Iran, the fourth-largest oil producer in the Organization of Petroleum Exporting Countries, is discussing limits to […]

Posted On : Published By : Tom Whipple
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More Libyan oil expected on global market

Libya’s state-owned oil company said operations resumed at the western Zawiya oil terminal after protesters ended a blockade. More Libyan crude oil is expected to arrive on the international market after the central government brokered a deal with eastern rebel leaders to open export terminals there last week. Libya has struggled to return to its pre-civil war production level of 1.6 million barrels per day. Market tensions over energy security in Eastern Europe were countered by prospects even more Libyan oil would come from the Zawiya oil port in the west of the country. The International Monetary Fund said the Libyan energy sector represents about $63 billion to the government, a majority in terms of percentage of gross domestic product. In March, a progress report on Libya from the European Commission said a blockade on oil exports by eastern federalists has "severely" affected Libya’s fiscal situation. [ BBC ] […]

Posted On : Published By : Tom Whipple