The Petroleum Truth Report

My goal is to offer clear and direct explanations of energy reality. These posts are data-driven interpretations of oil and gas topics that often challenge conventional thinking.

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Producers and oil-field service companies are on life support. One-third of U.S. oil companies are in default. Yet some analysts who have no experience working in the oil industry proclaim break-even prices below $40 per barrel and breathlessly predict that the business will come roaring back when prices exceed $50. Producers don’t help with outrageous claims of profitability at or below current oil prices that exclude costs and are not generally applicable to their portfolios.

As a result, the public and many policy makers believe that tight oil is a triumph of American ingenuity and that energy will be cheap and abundant going forward. The EIA forecasts that U.S. crude oil production will exceed the 1970 annual peak of 9.6 mmbpd by 2027 and that tight oil will account for almost 6 million barrels per day. Although I have great respect for EIA, these forecasts reflect a magical optimism based on what is technically possible rather than what is economically feasible.

Renewable energy will be increasingly part of the landscape but its enthusiasts are also magical thinkers.

In 2015, renewables accounted for only 3% of U.S. primary energy consumption. No matter the costs nor determination to convert from fossil to renewable energy, a transition of this magnitude is unlikely in less than decades.

Solar PV and wind provide much lower net energy than fossil fuels and have limited application for transport–the primary use of energy– without lengthy and costly equipment replacement. The daunting investment cost becomes critically problematic in a deteriorating economy. Although proponents of renewable energy point to falling costs, more than half of all solar panels used in the U.S. are from China where cheap manufacturing is financed by unsustainable debt.

It is telling that energy and its cost can hardly be found among the endless discussions about the economy and its failure to grow. Technology optimists have disparaged the existence of an energy problem since at least the 1950s. Neither unconventional oil nor renewable energy offer satisfactory, reasonably priced, timely solutions to the dilemma.

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Uniper hat über das Wochenende weitere Entlassungen angekündigt. Das betrifft alle klassisichen deutschen Kraftwerksarten, Wasser, Kohle und Gas.

Letzte Woche habe ich mir die 4 deutschen Netzbetreiber etwas angesehen. 2015 war in der Regel schlecht bis durchwachsen, die Aussichten durch EEV werden dort pessimistisch gesehen. Polen hat nun seine 4 Phasenverschieber fertig gestellt, darüber hatten wir im DGF schon mal gesprochen.

Die Eigenkapitalpositionen der großen Energieunternehmen sind nicht rosig.
Da kommt noch mehr..

Grüße,
CenTao