Energy Tomorrow Blog
Posted December 31, 2014
Business Day: For years, Organisation of Petroleum Exporting Countries (OPEC) pulled the strings set the price of oil and controlled the supply. After dictating the course of oil prices for more than 50 years, OPEC is finding its influence diminished.
Right now, OPEC represents about 40 percent of global daily production. The organization still has a say in what the energy market looks like. But for OPEC, oil can no longer be used as either a weapon or as a lever. There is simply too much production arising beyond the control of OPEC.
For 2015, US will emerge as dominant player. OPEC member countries are gradually losing the largest energy market in the world and the irony is that they will soon be competing for the markets that used to be theirs for the taking. Projections from recent happenings reveal that in 2015 the US will start dictating to the market. With the advent in 2015 of large US exports of liquefied natural gas (LNG), the effect is even larger, and with it comes the hastening of OPEC’s decline.
Posted December 4, 2014
National Journal: World oil producers have put oil prices into a free fall, refusing to pare back global supplies in the hopes that low prices will derail the fracking-backed production boom in the U.S. and preserve OPEC's power over world energy markets.
But global analysts are skeptical that the move will work.
The basic reason: Prices remain high enough to keep pumping. "Looking out there, it seems like there's a huge amount of oil that can be produced at $60, $70 per barrel," said Michael Lynch, president of consulting firm Strategic Energy and Economic Research, referring to the prices for Brent crude oil, a global reference point.
Posted December 3, 2014
New Orleans Times-Picayune: After more than a decade of work and a $7.5 billion investment, Chevron has started oil and gas production at its Jack and St. Malo fields in the deepwater Gulf of Mexico. The fields are among the largest in the region, expected to produce more than 500 million barrels of oil equivalent over the next three decades.
The Jack and St. Malo fields, discovered in 2003 and 2004 respectively, are located 25 miles apart in the Walker Ridge region of the Gulf about 280 miles south of New Orleans.
Oil and gas from the fields will flow back to a single, floating production platform located between the two fields. The platform has the capacity to produce up to 170,000 barrels of oil and 42 million cubic feet of natural gas per day.
Posted October 31, 2014
Fox News:Why is the White House Delaying the Keystone XL Decision?
Read more: http://bit.ly/1pbMGbR
Posted October 30, 2014
A new study details the essential tie between America’s ongoing energy revolution and advanced technologies of hydraulic fracturing and horizontal drilling. Specifically, virtually every barrel of domestic oil production growth over the past five years can be attributed to fracking and horizontal drilling – which has positively impacted global crude markets and saved consumers billions of dollars.
Kyle Isakower, API vice president for regulatory and economic policy, discussed the ICF International study during a conference call. The study calculates the impact of safe fracking and horizontal drilling on crude markets and prices at the pump. Isakower:
“Economists are still debating where the markets might go from here. But for the average consumer, there’s no question that America’s energy revolution has provided a welcome source of savings. … By comparing historical price and production data against a scenario without advanced drilling, it paints a clear picture of where we would be without the technology-driven energy revolution.”
Posted October 16, 2014
Early in a panel discussion of energy policy and politics hosted by Real Clear Politics, the question was asked whether U.S. voters pay much attention to energy issues in an election year. RCP tweeted panelist/Wall Street Journal energy reporter Amy Harder’s response - that voters only notice energy when the prices are high.
Certainly, that’s generally been an accurate analysis. Less than a decade ago energy issues were challenging for U.S. policymakers staring at flat or declining domestic oil and natural gas production
But the U.S. energy picture has been dramatically altered by surging production here at home – an energy revolution made possible by advanced hydraulic fracturing and horizontal drilling and vast resources in shale and other tight-rock formations. Result: Good news in the absence of challenging energy developments – for U.S. consumers (if not for hosts of events on the intersection of energy and politics).
Posted September 25, 2014
Supply matters. According to U.S. Energy Information Administration (EIA) chief Adam Sieminski, crude oil could cost at least $150 a barrel today because of supply disruptions in the Middle East and North Africa – if not for rising U.S. crude production.
Sieminski told the North Dakota Petroleum Council’s annual meeting that crude from the Bakken, Permian and Eagle Ford shale plays and others around the country has spiked in the past decade to more than 4 million barrels per day – enough to make up for outages in crude production elsewhere. Sieminski:
“If we did not have the growth in North Dakota, in the Eagle Ford and the Permian, oil could be $150 (per barrel). There is a long list of countries with petroleum outages that add up to about 3 million barrels per day.”
So, let’s rephrase things a bit: Clearly, U.S. production, adding to global supply, matters. A lot.
Posted September 19, 2014
A couple of recent polls indicate many Americans are concerned that lifting the 1970s ban on crude oil exports could increase prices at the pump. A couple of thoughts.
First, it’s likely these opinions stem from an idea that restricting domestic crude oil output to the boundaries of the United States will favorably impact domestic pump prices. Yet, because crude oil is traded globally, the world market sets the cost of crude, which then is the chief factor in prices at the pump.
Second, the strong weight of new scholarship and analysis say that allowing exports of domestic crude will lower pump prices in this country – while also boosting economic growth, employment and wages and improving our balance of trade.
Posted September 10, 2014
A new report from Brookings’ Energy Security Initiative adds more scholarly weight to the analytical case for lifting America’s decades-old ban on crude oil exports. Echoing earlier studies by IHS and ICF International, the Brookings research finds that allowing the export of domestic crude would stimulate more oil production here at home, provide broad economic benefits and strengthen U.S. energy security. Brookings:
… we believe that the U.S. should allow the market to determine where crude oil will go and move immediately to lift the ban on all crude oil exports. … After 40 years of perceived oil scarcity, the United States is in a position to help maximize its own energy and economic security by applying the same principles to free trade in energy that it applies to other goods. By lifting the ban on crude oil exports, the United States also will help mitigate oil price volatility while alleviating the negative impacts of future global oil supply disruptions.
Posted September 4, 2014
New Jersey Gov. Chris Christie is making headlines this week with a speech from Mexico calling for stronger economic ties between the two countries and actions to sustain what he called the “North American energy renaissance” – including lifting the decades-old ban on exporting U.S. crude oil. Christie:
“For all of North America, the energy revolution has improved our strategic and competitive position. But the revolution remains in its infancy. And whether North America realizes the full potential of its energy opportunity will be the result of more than just luck and natural bounty, it will also be driven by the policy choices and investments we must make. … The 1970s-era ban on crude exports creates a price anomaly which holds U.S. crude oil at a discounted price, which ultimately hurts upstream production and limits the energy boom.”
Christie’s remarks parallel what others are saying about ending the domestic crude oil export ban.