Ras Tanura oil terminal, Saudi Arabia. Photo courtesy of DollarPhotoClub.com
I have a backlog of energy articles to discuss. Will start posting some of them, starting with the precarious position of Saudi Arabia.
3/29 – Financial Times (I think) at RT.com – Saudi Arabia loses oil market share in key countries– Russia and Iran are pricing and marketing aggressively around the world. So much so that Saudi Arabia has dropped back from the largest exporter in nine out of the 15 largest markets. That loss has taken place over the last three years.
Will we see bunches of those soon? Yes, no, maybe so.
Will production of shale oil recover as oil prices rise? I’ve seen several articles discussing whether that can or will happen. Three articles saying yes, no, and maybe so.
Continental Resources says will start drilling if US crude increases to mid $40 range. Whiting Petroleum will start completing DUC wells if oil is in the low 40s. A year ago comments were that companies would start increasing the drilling if oil hit $70.
Article says Hess reduced the cost of a new well by 28% over the last year.
EOG says they have these rights for 3,200 wells which would produce a rate of return of 30% when oil is at $40.
Implication of these comments is shale production would likely ramp up when prices move into the 40s, perhaps more likely the high 40s. That would create substantial pressure on worldwide oil prices, keeping them from rising too far.
No.
3/15 – Wall Street Journal – Many Shale Companies Are Unable to Ramp Up Oil Output – Article raises a great point that just as output from shale oil has fallen slower than anyone expected, there are different reasons that shale producers may be challenged to ramp up production when prices increase.
The citizens of Venezuela continue to suffer at the hands of their elected officials.
Question for you to ponder: Is there a particular economic system that is causing all the suffering?
2/29 – AP at Fox News – Inflation-hit Venezuela to print bigger bills – Central Bank president says Venezuela will start printing 500 and 1,000 bolivar notes sometime. No date mentioned.
Largest bill in circulation is currently the 100 note. At exchange rates in effect a month ago or so, that would be worth about US$0.10. Largest bill in circulation is equal to about one American dime.
How can an economy function in such circumstances? Not very well.
3/4 – According to dolartoday.com, the exchange rate is 1,105 bolivars to the dollar. That means 100 bolivars is 9.05 cents.
3/18 – Exchange rate is 1,211, or 100 bolivars is 8.25 cents.
4/7 – Wall Street Journal – SpaceX Lands Portion of Spent Rocket on Floating Platform – SpaceX nailed the landing of its booster on a floating platform. They have had four failures to recover at sea and one successful recovery back on land (which required a lot of extra fuel). Was just a matter of time until they nailed it.
I do hope it will now become the norm to recover the lift stage.
Behind the Black provided the best link to video I’ve seen yet:
[youtube=https://youtu.be/sYmQQn_ZSys]
Oh, this launch also successfully delivered a load of cargo to the ISS. Delivery of cargo to space by private companies is old news. Still extremely cool.
Ponder the implications for how you look at the world:
When you have developed a perspective or opinion or conclusion on some issue after having thought through all the relevant factors, there is a serious danger that reaching such a conclusion leaves you thinking that anyone with a different perspective is incorrect.
If your carefully drawn, considered opinion is reasonable, then the inference is that other opinions aren’t reasonable.
Here is a recap of the North Dakota rig count, all from Million Dollar Way. Also, an article quantifying the impact on employment from the drop in rig count.
A few fun things I’ve seen lately. Amazon opens its 7th fulfillment center in California. Animated short that is close to photo quality. GIF showing how applications have displace everything on a circa 1990 work station.
3/15 – Behind the Black– Check out this animated video. Consider the question raised by Behind the Black – with this quality of animation, how soon until human actors aren’t needed because an apparently live action movie can be 100% animated?
Recently read several articles pondering what is going on in the collapse of newspaper revenue and the collapse in circulation. One is a lamentation over the loss of life-long career opportunities. Another describes doubling down as strategy to survive. Finally, a different idea on what might be driving the collapse in circulation.
The shrinkage will likely continue – A J-school prof at USC thinks if trends continue for the next three years like the last three, there could be somewhere between one-third and one-half of the 50 largest papers disappear.
We need to figure out how to ‘surf’ the massive waves of changes surrounding us.
This discussion, cross-posted from my other blog Attestation Update, helps all of us get a picture of the massive amounts of change surrounding us and the huge waves of change that are getting closer.
We need to understand what those two comments mean and how to cope with the implications. Tom Hood’s article points toward those waves that are soon to crash down on our heads.
Fascinating to watch news in February about OPEC’s strategy. First, IEA sees a drop of US shale oil in 2016 and 2017 with strong growth in output over the following four years.
I have quite a backlog of lot of articles on energy to discuss. Will try to get caught up. Here goes…
Article at the end of January indicated OPEC is publicly claiming things are going swimmingly well. Then Saudi Arabia and Russia agreed to freeze their production at the January level, which is near record level of output for both countries. Then the end of February OPEC’s secretary-general acknowledged that the intentional goal was to wage a price war against US shale. Also acknowledged the price war hasn’t worked like they planned.
I don’t think that crippling the Russian, Saudi Arabian, and Venezuelan national budgets by dropping prices about 60% with no near-term expectation of recovery is quite what they had in mind.
Lousy photo by James Ulvog of a man camp near Ray, North Dakota.
The fight over whether to shut down all man camps in Williston isn’t over.
3/19 – Bismarck Tribune – Man camp operators will fight back – The Williston city officials will have a second read of an ordinance to force all man camp operators within their reach to shut down. Target Logistics has dropped into the discussion a threat to sue if the city doesn’t give them more time to close down in an orderly manner.
The core argument is made yet again through an interview with a rotational crew worker. He works two weeks straight and then has two weeks off. Working twelve hours a day, plus time to get ready in the morning and turn in at night leaves little time to prepare food or do laundry.
A few articles catching my eye on consumer level solar, particularly the battle over non-solar retail customers involuntarily subsidizing rooftop installations of their neighbors, also known as net-metering. Of note is that in general solar power projects are only feasible with massive federal subsidies and residential solar power also requires heavy subsidies from other customers in the form of net-metering as well as all levels of government.
Currently, the electricity generated by solar panels that isn’t used by the homeowner is credited at the retail rate instead of the wholesale rate. That clever angle being played is that the retail rate also includes distribution costs, while wholesale rate reflects generation only.
Developments in the drone world are amazing. A few articles recently that caught my eye.
2/9 – Behind the Black – Oregon as seen by a drone – Watch the eye-popping video produced by a drone. No helicopter could produce those views. This is a foretaste of what drones will do:
