America’s Energy Triple Play @ Work

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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 »

Have the Saudi’s Underestimated the US Oil Industry?

EIA fig_9a  Crude YOY 2012 2013

SOURCE: US EIA The decision by OPEC to hold production targets level caused oil prices to fall another ten dollars per barrel in the aftermath. There has been the expected wailing and gnashing of teeth with talk in the media and elsewhere about how the Saudi’s were taking aim at the US shale revolution. There may even be some measure of truth to it. We understand the Saudi’s and the rest of OPEC mat be irritated at the US for finding a way to escape the bondage of high imported oil …Continue Reading »

Power to the People!

When the short history of smart grid is written someday, I predict it will include four chapters: Government industrial policy and political correctness Market rationalization of the policy mistakes Customer aggregation, choice and revenge The return to rational energy economic equilibrium In Chapter 1 we will hear all about the first phase of smart grid where the focus was on deployment of smart meters by investor owned utilities. The reasons were simple. The Federal Government was …Continue Reading »

Temperatures are not Rising over Climate Change except at the IPCC Conference in Paris

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SOURCE: http://www.bbc.com/news/science-environment-28870988 Prepare yourself for wailing and gnashing of teeth as the UN International Panel on Climate Change advocates meet in Paris. The Telegraph newspaper article in the UK summed up the Panel’s view: “The world is on course to experience “severe and pervasive” negative impacts from climate change unless it takes rapid action to slash its greenhouse gas emissions, a major UN report is expected to warn on Sunday. Flooding, dangerous …Continue Reading »

A Fly on the Wall at OPEC’s November 27th Meeting

The next meeting of OPEC ministers is scheduled to take place November 27, 2014 in Vienna. It is not going to be business as usual. The stated purpose of the meeting is to set production policies for 2015. But we all know what the members will be discussing over tea or something stronger. “How do we get this problem under control?” A cartel is a group of companies or, in this case, countries who engage in collusion to limit or control the market price of a product. In many countries this …Continue Reading »

Making Sense of Falling Oil Prices

EIA net energy imports lowest in 29 years

SOURCE: US EIA World oil prices have fallen by 30% since their June 2014 high of about $115 per barrel. As I write this on October 15th Brent crude, the global benchmark, is at about $84.88 per barrel. WTI, the US benchmark is at $81.58 per barrel. This rapid fall in oil prices has spooked the market and set off actions and reactions that only contribute to the volatility. The predominant fear in the market is that prices will continue to fall and wreak havoc around the world. So what is …Continue Reading »

What to Make of Lower Oil Prices? Merry Christmas!

Lower Demand and Higher Libyan Supply

SOURCE: US EIA As I write this on October 13, 2014, the Brent crude oil price is $88per barrel or about 23% lower than its $115 year-to-date peak on June 19. For 13 straight months until July 2014 monthly Brent spot prices traded from $107 to $112 per barrel according to the US Energy information Administration (EIA). As oil prices declined  below $100 per barrel the herd mentality has been of display big time as the price of oil dropped and the herd started running faster---the question …Continue Reading »

We’ll Never Forget!

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Will the Next Power Shift be Off the Grid?

TCLabz DER Future

SOURCE: TCLABZ The integrated North American power grid is the largest machine in the world.  This machine is amazing because supply of electrons to meet expected demand for electrons must balance every second of every hour of every day---or the light go out for someone or all of us. There are 3,200 utilities that supply the U.S. electrical grid with power they  sell for about $400 billion each year. The electric power industry has been in a state of constant change for nearly fifty …Continue Reading »

The Mismatch of Power Supply and Demand

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SOURCE:  US EIA The Mismatch of Supply and Demand. Many North American power markets (both ISO and non-ISO) have what might be described as too much of too many good things in plentiful power supply and low natural gas fuel prices.  What’s missing is demand growth to put all that generation potential to productive use. This mismatch of supply and demand presents itself as excess generation capacity from the lingering effect of slow economic growth and flat utility demand growth as customers …Continue Reading »