Shale Gas Supply Growth Shakes Up Everything

EIA World Shale Resources

SOURCE:  US EIA Data and Reuters graphic The shale revolution is a full reversal of energy fortunes in the United States.  It might have similar potential in other parts of the world if as projected global LNG prices decline over the decade ahead and indexing gas prices to oil erodes from competitive pressures on existing oil-indexed LNG suppliers. Large volumes of global gas supplies are expected come to market at prices below oil price parity (assuming oil prices at or above $90/bbl). …Continue Reading »

The Big Shift in Energy is Not What You Think

Energy Business Cycle 2

The energy business cycle has always been dominated by boom and bust cycles.  Through changes in technology, economic conditions and regulation nothing has altered that cyclical pattern.  We have, however, seen driving forces of change affect the energy business cycle both for the good and not so good. The Big Shift in energy today is not what you think.  It is not going to be driven or dominated by political correctness or government industrial policy. The big shift in energy is not pro-coal.  …Continue Reading »

The Revenge of Competitive Markets and the Big Shift in Energy Economics

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The economy, jobs and the debate over the direction of the country dominate 2012 political campaigns.  Nowhere is the political rhetoric fiercer than on energy issues. Today there is wave after wave of new Federal regulation designed to favor clean energy strategies at the expense of fossil fuels that still provide most of our energy resources.  There is broad public support for environmental quality but we see Federal energy industrial policy as hugely expensive, highly disruptive with spotty …Continue Reading »

Natural Gas is Cleaner, Cheaper, Easier and Riskier

There is much to like in the growth of natural gas as the marginal fuel of choice for power generation.  Clean, cheap, easier to site, quicker to build, fewer regulatory or environmental hassles----and it cuts emissions 40% compared to coal. A new study by Professor Lawrence M. Cathles, Cornell University, recently published in the journal Geochemistry, Geophysics and Geosystems calls natural gas a transition step to a low-carbon energy future of wind, solar and nuclear energy.  He says …Continue Reading »

Risk is Still a Four Letter Word

EIA STEO May 2012 Non OPEC Oil Production

The convergence of forces creating profound changes in domestic energy production is being driven by technology, globalization, demographic changes and by economies turning things upside down. But only recently and only in selected places across the energy value chain has it hit critical mass.  One of them is reflected in the graphic above from the US EIA showing the growth in US domestic oil production. Opportunity is born today out of the risk-induced realization that insight can be extracted …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 »

America’s Energy Export Growth Trend

SOURCE: EIA

The beaten and bruised US coal industry  got up off the floor from the body blows of US EPA’s regulations and got back in the race as an export champion serving energy hungry Asian markets. Fourth quarter 2011 US coal exports increased 6.6 percent from the Q3: 2011 and 32.6 percent from Q4: 2010 to 27.7 metric short tonnes (mst) with exports going mostly to Europe and Asia continuing to climb. Meanwhile, total U.S. coal consumption decreased by of 18.8 percent from third quarter 2011 and 9.4 …Continue Reading »

The Sum of Global Utility Executives Fears: Affordability, Reliability, Sustainability

SOURCE: PWC 12th Global Powewr & Utilities Survey

I’m not talking about the Occupy movement marching on utilities around the world.  It is worse than that if we are to believe the results of PwC’s 12th Global Power & Utilities report – The shape of power to come.  The survey tells us what we already know--- we will live in interesting times in the global power business with the uncertainty of transformational change the only constant. If you are an energy strategy consultant this is very good news.  Volatility is a wonderful thing for …Continue Reading »

Proving Up Marcellus Shale is a Good News Story

While politicians debate North American energy policy the markets have chosen natural gas as the fuel of the future. The tremendous growth of unconventional shale gas is insuring that future will take place. This is not new news, the EIA Annual Energy Outlook 2011 estimated that the US has 2,543 trillion cubic feet (Tcf) of potential natural gas resources.  That is about 100 years of gas supply at our average annual rate of consumption. As more drilling and unconventional natural gas E&P …Continue Reading »

Is California's Resource Adequacy at Risk?

California is experiencing growing concerns over resource adequacy.  The CAISO took the unusual step of objecting to the proposed shut down of the Calpine Sutter natural gas power plant at FERC saying the plant would be needed as soon as 2017 to assure resource adequacy and thus is made no sense to shut it down now. Why is Sutter being shut down? Because California electric demand is weak along with its economy, but all that renewable energy being added to the grid is classified as “must take” …Continue Reading »