Industry

Jeffrey Brown responds to “U.S. energy independence is no longer just a pipe dream”

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“It’s no pipe dream. The U.S. is already the world’s fastest-growing oil and natural gas producer. Counting the output from Canada and Mexico, North America is “the new Middle East,” Citigroup analysts declare in a recent report.”

Jeffrey Brown responds: The Texas Railroad Commission (RRC) sums the reported production from Texas producers, and it has been doing so far decades, while the EIA apparently uses a sampling approach to estimate Texas production. For annual production in 2011, the RRC shows Texas crude oil production at 1.12 mbpd (million barrels per day), while the EIA shows it at 1.46 mbpd, a gap of 340,000 bpd. The gap between the RRC and the EIA for monthly production is even more pronounced, on the order of about 500,000 to 600,000 bpd.

If the EIA is this far off for Texas, what about the other producing states, and what does it say about the EIA’s global data?

U.S. coal generation drops 19 percent in one year, leaving coal with 36 percent share of electricity

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Power generation from coal is falling quickly. According to new figures from the U.S. Energy Information Administration, coal made up 36 percent of U.S. electricity in the first quarter of 2012 — down from 44.6 percent in the first quarter of 2011. That stunning drop, which represented almost a 20 percent decline in coal generation over the last year, was primarily due to low natural gas prices. As EIA explains, natural gas generation will climb steadily this year, while coal will see a double-digit drop by the end of 2012…

Updating world deepwater oil & gas discovery

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Deepwater oil production will help reduce the decline in world oil production from aging fields. The IEA claims that four Saudi Arabias need to be discovered up to 2030 to replace the present decline in production (about 5 %/a). The deepwater ultimate is likely to represent less than half of Saudi Arabia’s oil ultimate. It is not enough!

Chesapeake and JPMorgan: Risk (mis)management with other people’s money

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If you were personally faced with betting on complicated nonsense with your own money, you’d never do it. But JPMorgan was betting with other people’s money, with deposits, with INSURED deposits no less. Now, JPMorgan traders thought they understood the risks. Obviously, they didn’t. And, probably they couldn’t. They pretended to be able to understand the world through models that simply cannot account for unquantifiable risks, risks in the real world.

ODAC Newsletter – May 11

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Fears of a new phase in the European debt crisis, a decline in oil imports to China in April, and the prospect of a new round of international talks on Iran’s nuclear programme have seen oil prices drop back from recent highs in the past two weeks. Despite all this however, and reports from OPEC that it bolstered supply by 320,000 barrels in April, Brent oil still stands around $112/barrel.

Energy and peak oil – May 7

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– IMF working paper – “The Future of Oil: Geology versus Technology”
– World Oil: Aleklett’s new analysis of peak oil is refreshingly comprehensive
– Now Playing at a Computer Near You: The ASPO-USA Webinar Series
– T. Boone Pickens: Biggest Deterrent To U.S. Energy Plan Is Koch Industries
– Cheap Oil Built ‘The American Way’ but All the Cheap Oil is Gone