Prepare for the Competitive Distributed Energy Future

New England generators retiremenets and adds

SOURCE: EIA The big shift in energy means the Internet of Everything is creating competitive energy markets. It means new knowledge available from a tsunami of data available about our energy use. It means new choices not just in energy sources like fuels for power generation, but also new vendors, new bundles of services. It also means new connections made possible by collaboration and mutual interest both designed to help us get a better deal, optimize the performance of our business, and …Continue Reading »

America’s Shale Revolution Payback Hits OPEC where it Hurts

Break Evens

The shale revolution is levelizing the energy marketplace, undermining the pricing power of OPEC, reducing US oil imports, turning natural gas exports as LNG into a big factor in global markets and redefining future market rules. This is a big deal. And OPEC knows it cannot stop it. US oil production from the shale revolution is way up as oil production rose to 9.077 million barrels a day, the highest level in weekly according to data from the Energy Information Administration going back to …Continue Reading »

America’s Energy Triple Play @ Work

Accenture-New-Energy-Consumer-Four-Business-Models-infographic

SOURCE: US EIA Rig counts are falling but production is still up driving worry of an oversupplied market. Traders with contango in their eyes are leasing storage and hoarding excess oil in anticipation of higher future prices. Natural gas inventories are above five year averages---the first surplus since November 2013 although continued cold weather spreading across the country may pull it back below that five year average. The US Energy Information Administration’s Short Term Energy …Continue Reading »

Where will Falling Crude Oil Prices Settle?

WTI and Brent Oil Prices

SOURCE:  US EIA That is the question everyone in the oil and gas industry is asking themselves. After reaching monthly peaks of $112 per barrel (bbl) and $105/bbl in June 2014, crude oil benchmarks Brent and West Texas Intermediate (WTI) fell to $62/bbl and $59/bbl in December 2014. Today, January 9, 2015 Brent crude is priced at $49/bbl and WTI at $47/bbl. There are two common reactions to this fall in oil prices. “OMG---Yes!” is the consumer reaction every time they fill up the gas …Continue Reading »

Volatility Happens but Collateral Damage Kills You

EIA OPEC net oil exports to fall in 2014 and 2015

  The US Energy Information Administration’s latest Short-Term Energy Outlook, forecasts that Organization of the Petroleum Exporting Countries (OPEC) member countries not counting Iran will experience oil export revenue 14% lower at year-end 2014 compared to a year ago. That is $700 billion left in the pockets of oil consumers over the last year. If you are a filling your gas tank you are cheering. But this is the worst OPEC performance since 2010 not just because oil prices declined but …Continue Reading »

How We ‘Fracked’ the Energy Industry—-for the Good!

EIA US Dry Gas Production

SOURCE: US EIA The energy industry is being turned on its head by changes in technology, regulation and global markets. In oil and gas the shale revolution onshore was unleashed by technology changes in 3D seismic imaging making E&P more accurate and productive, horizontal drilling enabling access to the ribbon-like shale and tight oil formations, and hydraulic fracturing which uses liquids and pressure to crack open or ‘frack’ the shale layers to release its precious commodity. Fracking …Continue Reading »

Time to End the Renewable Fuel Standard

On August 10, 2012 The US Department of Agriculture released a specialized crop forecast sure to send corn prices higher than their already record setting $8 per bushel.  The USDA report said corn production would be “sharply lower” down 22.6 bushels per acre to 123.4 bushels per acre making the current harvest the lowest forecast since the 1995-96 growing season.  The number of acres of corn expected to be harvested for was also reduced by 1.5 million acres reflecting USDA’s estimate of failed …Continue Reading »

WoodMac Attack

Bloomberg reported rumors that McGraw-Hill had out bid it and others at 1.1 billion pounds ($1.7 billion) for energy consultant and advisory service provider Wood Mackenzie.  Wood Mac is being flipped by Charterhouse Capital Partners which acquired it in 2009 for 520 million pounds in a fire sale.   Other suitors in the auction according to the Bloomberg story include IHS, Thomson Reuters and Bloomberg itself but perhaps not all love it THAT much to outbid McGraw-Hill. All of this is …Continue Reading »

Will National Energy Policy ‘Evolve’ to a Clean Energy Standard?

Bingaman CES figure4-lg

Clean energy is something everyone is ‘for’.  Few people are in favor of dirty energy.  But the problem is the definition of what is clean depends upon who you ask.  We will say we are in favor of clean renewable energy, when polled, until a wind producer tries to site a wind turbine near us, or spreads out a sea of photovoltaic panels across the desert—or worse says a high voltage transmission line is needed to bring that clean, renewable energy from its remote location to serve demand in the …Continue Reading »

Put America’s 'Spare' Oil Productive Capacity to Work

Global oil prices are driven by a ‘rule of thumb’ that suggests prices will go up when the spare capacity of oil available on any given day is less than 5% of expected global demand.  In today’s high priced oil market that swing in spare capacity is about 2%. This a big deal because traders worry about risk such as events in the Middle East, or with Iran or any other places that supplies oil.  Spare capacity or swing productive capacity is the volume of oil than can be delivered as a percentage …Continue Reading »