Analysis from research center IHS found advances in hydraulic fracturing used in the US could unlock shale oil in mature fields outside North America. By applying the new technology to low-productivity shale basins, IHS found there may be hundreds of billions of barrels of potential new shale oil globally.

A new study by Enform finds that 1/4 of all oil and gas jobs could be lost in Canada this year due to the fall in world crude oil prices. Shrinking corporate budgets in the industry could lead to as many as 185,000 direct and indirect job losses.

US shale oil rigs continue to drop —  down again last week to 660 which about 58% lower than where it was last October.  Lower world crude oil prices is putting pressure on the profitability of US shale oil operations. The US Energy Information Administration is now forecasting an 86,000 barrel per day drop in US shale oil production next month. While this may sound like a lot, in comparison to total US crude oil production of around 11 million b/d this is not very much.

The US Information Energy Information reported this week that there is still a 2 million b/d global surplus  of crude oil; the major economies – US, China, and the European Union – are showing little if any economic growth and Saudi Arabia is holding its oil production at about 10.3 million b/d in an effort to hang on to its global market share.  In addition there is another million b/d of Iranian crude oil waiting to come onto the market if it can reach an agreement with the US over its nuclear program.

Goldman Sachs Group Inc. says crude oil is poised to slump to $45 a barrel by October as a surplus of crude and producers’ easy access to cash weigh on the global market. The backlog of drilled but uncompleted wells in the US represents more than 100 million barrels of crude oil held in underground storage. The investment bank says uncompleted wells can be brought into production quickly and add at least 250,000 barrels a day.

Major hedge fund managers, investment banks, and global oil industry executives are starting to say that we should expect a drop in crude oil prices before the end of this year. Most of these prognosticators expect Brent crude oil to drop by $10 to $20 a barrel leaving it in the $50-60 range.  Brent oil is currently about $67 a barrel.

India is overwhelmingly dependent on fossil fuels—coal, crude oil and natural gas—which meet more than three fourths of the country’s energy needs. Coal meets 54.5% of India’s energy needs, and 61.5% of the installed electric power generation capacity.

Europe’s estimated shale gas reserves amount to about 80% of those in the US. The problem is that most European countries either have an outright ban on hydraulic fracturing or have imposed a moratorium until its effects on the environment become better known.

The International Monetary Fund said that energy subsidies were costing the world $5.3 trillion dollars a year as they fail to cover the true cost of environmental pollution, health costs and other costs.  The countries most responsible for these subsidies are China, the US, Europe, India and Japan. The %$5.3 trillion amounts to 6.5% of global GDP.

India is the third largest producer of electricity in the world with 258 GW of installed generating capacity. However, the country has been in power deficit for decades. A major reason is insufficient transmission capacity, compared to generation capacities and load requirements.  The government estimates that 24% of generated electricity is lost each year during transmission and distribution.

The US state of Hawaii became the first state to legislate its desire to become dependent on 100% renewable energy by 2045.  The state joins cities around the world that are aspiring to a similar objective.  The Canadian city of Vancouver recently voted to become 100% renewable by 2050. Other jurisdictions that have 100% renewables as their goal include the country of Denmark (2050) and the cities of Malmo, Sweden (2025) and Frankfurt, Germany (2050).

In an attempt to spur demand for energy-efficient vehicles, China is increasing tax exemptions on purchases of “new-energy” vehicles. The government hopes that making a push for new-energy technology, (electric, plug-in and fuel-cell technology) will help alleviate the country’s rampant pollution problem. Today the country announced tax cuts of 50% for the purchase of domestic new energy vehicles. Also, vehicles used for commercial use will be completely exempted from normal vehicle and vessel taxes.

 

with h/t Tom Whipple

 

 

 

 

 

 

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