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EIA: US shale oil output to drop 93,000 b/d in September

Crude oil production in September from seven major US shale plays is expected to decline 93,000 b/d to 5.27 million b/d, according to the US Energy Information Administration’s latest Drilling Productivity Report (DPR) . EIA previously projected a 91,000-b/d decline for both July and August ( OGJ Online, June 9, 2015 ; July 13, 2015 ). The DPR focuses on the Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, Permian, and Utica, which altogether accounted for 95% of US oil production increases and all US natural gas production increases during 2011-13. The Eagle Ford continues to represent a bulk of the overall oil output declines, projected to fall 56,000 b/d in September to 1.48 million b/d. The Bakken is expected to fall 27,000 b/d to 1.16 million b/d, and the Niobrara is expected to fall 18,000 b/d to 399,000 b/d. In the Permian, meanwhile, EIA projects a larger increase for September […]

Posted On : Published By : Tom Whipple
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The Trick That’s Going to Keep America’s Coal Alive

A miner operates the shearer in a longwall coal mine in Johnson City, Illinois. Photographer: Andrew Harrer/Bloomberg A 30-year-old mining technique is becoming all that’s keeping a group of U.S. coal producers from joining their competitors in bankruptcy. Coal, already locked in a battle with cheap natural gas, now faces federal environmental rules that threaten to reduce its share of power generation to the lowest in 66 years. Companies from Illinois to Northern Appalachia are responding by leaning more heavily than ever on longwall-mining, a technology that’ll be used to produce a quarter of America’s coal this year, up from 19 percent in 2013. Investors are backing the miners who rely on the efficient approach. Think of a giant deli slicer with multiple revolving blades that cuts coal from a seam into slices. Eighty percent of analysts covering Foresight Energy LP and CNX Coal Resources LP, both known for […]

Posted On : Published By : Tom Whipple
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Shale Oil Output Wanes as U.S. Producers Retreat in Bear Market

The shale fields that propelled the U.S. energy boom are expected to take another step back next month as producers reduce costs in the midst of a bear market. Output from the prolific tight-rock formations, such as the Eagle Ford in southern Texas, will decline by about 92,000 barrels a day next month to 5.27 million, the Energy Information Administration said Monday. It’s the fifth straight month a slide is expected, after output more than tripled from 2007. Shale producers like EOG Resources Inc. have cut spending and reduced output after oil prices fell more than 20 percent from their 2015 peak in June, and remain down by more than half from a year ago. The number of rigs drilling for oil last week was 670, down from 1,609 in October, according to oil-field service company Baker Hughes Inc. “We’re certainly in the period where we should see the […]

Posted On : Published By : Tom Whipple
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Chevron Takes Harder Punch From Low Oil

Today Chevron has slipped hard, as the drop in oil prices combined with its own ambitious expansion have weighed heavily on its earnings. The company’s stock price has underperformed Exxon and Shell over the past year—during which oil prices fell sharply—after besting its two bigger competitors during the previous five years. Chevron’s stock price, which rose 2.5% on Monday to $85.89, is down 32% for the past year, compared with a 20% drop at Exxon. Chevron’s $571 million profit in the second quarter was just 10% of its haul a year earlier. Had Chevron not booked a gain for selling a stake in an Australian refiner, the company would have posted a quarterly loss for the first time in almost 20 years. Excluding asset sales and noncash impairments, Chevron earned $1.8 billion, or 97 cents a share. Exxon and other oil powerhouses have struggled to tame costs and deliver […]

Posted On : Published By : Tom Whipple
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Undamming Rivers: A Chance For New Clean Energy Source

Many hydroelectric dams produce modest amounts of power yet do enormous damage to rivers and fish populations. Why not take down these aging structures, build solar farms in the drained reservoirs, and restore the natural ecology of the rivers? Hydroelectric power is often touted as clean energy, but this claim is true only in the narrow sense of not causing air pollution. In many places, such as the U.S. East Coast, hydroelectric dams have damaged the ecological integrity of nearly every major river and have decimated runs of migratory fish. Conowingo Dam Photo credit: American Rivers. If Maryland’s Conowingo Dam were removed, large-scale solar projects could be built on the site of its drained 9,000-acre reservoir. This need not continue. Our rivers can be liberated from their concrete shackles, while also continuing to produce electricity at the site of former hydropower dams. How might that occur? A confluence of […]

Posted On : Published By : Tom Whipple
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The Link Between Oil Reserves and Oil Prices

Last December the Energy Information Administration (EIA) released its latest estimate of U.S. Crude Oil and Natural Gas Proved Reserves . Although natural gas reserves rose, the real story was crude oil reserves. The EIA reported that U.S. proved reserves of crude oil and lease condensate had increased for the fifth year in a row, and had exceeded 36 billion barrels for the first time since 1975: There are two reasons for this increase in proved reserves. The first is that despite >150 years of oil production in the U.S., new fields are still being discovered. In March 2015 the EIA released its update to the Top 100 U.S. Oil and Gas Fields as a supplement to the December report. This was the EIA’s first update on the Top 100 fields since 2009. The most significant addition to the list was the Eagleville field (in the Eagle Ford Shale), […]

Posted On : Published By : Tom Whipple
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U.S. sanctions put Gazprom-Shell alliance plans in jeopardy

Shell branding is seen at a petrol station in west London, January 29, 2015. Royal Dutch Shell’s plans to build a strategic alliance with Russia’s Gazprom could be in jeopardy after the United States added one of Gazprom’s biggest gas fields to its list of Russian sanctions on Friday. Shell and Gazprom signed an agreement in June to develop a strategic alliance in the gas sector, ranging from upstream – exploration and production – to sales, including possible asset swaps. Development of the Yuzhno-Kirinskoye field on the island of Sakhalin in the Pacific, a project known as Sakhalin-3, has been seen as central to that alliance as it would allow the two companies to expand their sole existing LNG venture, Sakhalin-2, located nearby. State-owned Gazprom was believed to be considering selling a stake in Sakhalin-3 to Shell, which confirmed only last week that it was interested in buying a […]

Posted On : Published By : Tom Whipple
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Russian GDP Plunges 4.6%

Russia’s economy shrank the most since 2009 after a currency crisis jolted consumer demand, while a selloff in oil threatens to drag the country into a deeper recession. Gross domestic product contracted 4.6 percent in the second quarter from a year earlier after a 2.2 percent decline in the previous three months, the Federal Statistics Service in Moscow said on Monday, citing preliminary data. That was worse than the median forecast for a 4.5 percent slump in a Bloomberg survey of 18 analysts. The Economy Ministry had projected that output shrank 4.4 percent in the period, calling it “the lowest point ” for Russia. The rout on commodities markets has overshadowed the first signs of stabilization in Russia by hammering the ruble and shaking a country that relies on oil and gas for about half of its budget revenue. The nation is enduring its first recession in six years […]

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Russian Recession Finds No Bottom as Economic Skid Picks Up Pace

How low can it go? Russia, which Moody’s Analytics estimates entered a recession in the first quarter, may be in for a rough ride. Gross domestic product shrank 4.6 percent from a year earlier in the second quarter, the most since 2009, after a 2.2 percent slump in the previous three months, the Federal Statistics Service said on Monday, citing preliminary data. Capital Economics Ltd. sees a downturn that will trough with a 6.3 percent plunge in the third quarter, while HSBC Holdings Plc predicts this year’s worst performance from October to December. A steeper drop would run counter to assertions by government officials that last quarter marked “the lowest point ” for Russia, with growth set to resume late this year or at the start of 2016. What’s setting the economy back is a renewed slide in commodity prices that saw crude drop to a six-month low last […]

Posted On : Published By : Tom Whipple