SET Energy

A bullish report by the EIA showing declines in inventories of crude oil, gasoline, and distillates was not enough to buck the downward trend in oil prices due to a strengthening dollar and continued weak demand picture. The dollar rose to its highest this year at ~$1.435 per euro, 10.5% stronger than the July high of $1.6038 per euro. Next week’s report will show the impact of Hurricane Gustav. Since most refineries and crude production facilities are still offline, I guestimate that the numbers will come out very bullish with losses that bring crude, gasoline, distillates and propane near record lows for this time of year. The fact that oil rigs are not as damaged as post-Katrina and Rita is very fortunate, but Read the rest of this entry »

Climate change is shifting our planet every day. Scientists today reported dramatic ice shelf losses in northern Canada, ten times the size predicted for this summer. For the first time in human history, both the Northwest and Northeast Passages are navigable due to rapid Arctic sea ice melting. Losing all Arctic sea ice (a cooling northern parasol for the Earth) as most analysts predict will occur by 2020 would accelerate the quick Greenland melting with its potential to Read the rest of this entry »

Hurricane Gustav weakened to a Category 2 storm as it hit the Louisiana Gulf Coast, a smaller and weaker hurricane than Katrina or Rita. On Saturday when Gustav whirled to almost Category 5 strength, many analysts worried that Gustav may damage rigs and pipelines enough to reduce production by 50 million barrels over the next few months (similar to the level of Katrina and Rita in 2005). But from the first reports of minor flooding and damages, Gustav appears to be more similar to Hurricane Isidore of October 2002 which reduced production by Read the rest of this entry »

Gustav remains a Tropical Storm for now, but forecasters predict it will regain hurricane strength by the end of today and pass over western Cuba into the Gulf Sunday morning. Current projections have it hitting Gulf oil and gas production sites on Monday as a major hurricane. Virtually all oil and gas production was shut-in during Hurricane Katrina, with some fields being closed for a number of months. The impact of Gustav will depend on how its intensity and size develops over the next three days.

On the issue of energy and climate change, Read the rest of this entry »

Some more good news for natural gas consumers: the weekly EIA report shows inventories grew much faster than usual for this time of year. A gain of 102 billion cubic feet (bcf) brought total storage levels to 2,757 bcf. It is still 6.8% below last year’s level but now a substantial 2.6% above the 5-year average. This development temporarily took the wind out of Tropical Storm Gustav’s ability to Read the rest of this entry »

After soaking southwestern Haiti, Gustav is reentering the Caribbean Sea to gain its strength back south of Cuba as it makes its way toward the Gulf of Mexico. Current projections are for the tropical storm to regain hurricane wind speeds over the next 36 hours before growing to a substantial storm that may hit offshore oil and gas rigs and then the Gulf coast around Louisiana near the end of this weekend. As we saw with Fay, these storms are unpredictable (ASIDE: thanks Fay for giving my home state of North Carolina some much-needed rain!). But the potential production disruption has oil and natural gas prices up over Read the rest of this entry »

The first major hurricane of the 2008 season is churning its way toward oil and gas rigs in the Gulf of Mexico — sending prices up even though the dollar is strong today. Gustav turned from a new Tropical Depression yesterday to a Category 1 Hurricane today as it passes over southern Haiti. NOAA forecasters predict it will remain over water south of Cuba and then hit the Gulf as a Category 3 or 4 storm gathering strength from the warm water. This would threaten to shut down Gulf of Mexico fields that equal Read the rest of this entry »

I’m proud to report that solar photovoltaic (PV) power is about to come to my home state of NC in a major way. By the end of the year, PV capacity will more than quadruple. And by 2021, it will be more than 500 times its current capacity.

As we’ve mentioned before, solar is a small contributor today throughout the country and most of the world. In NC, capacity stands at less than a megawatt (MW) from scores of small systems at households around the state. But the recently passed Renewable Energy Portfolio Standard mandates Read the rest of this entry »

Even though many natural gas markets are recording strong production increases (especially the US), there have been significant delays in production and delivery systems for liquified natural gas (LNG). This unfolding reality leads an analyst at Wood Mackenzie to believe LNG may begin trading at price parity or with a premium compared to oil in the years ahead. That means that new demand for natural gas for electricity generation or heating will Read the rest of this entry »

In a sign that climate change concern may move serious policy in the US, a utility plans to shut two small coal plants and replace them with cleaner natural gas electricity generation. The plan by Xcel Energy was approved by the Colorado utilities commission this week, and be completed by 2012. Xcel filed its plan last year in response to state policy to reduce emissions 20% by 2020. The plants capacity is 229 MW and they plan to replace the electricity with Read the rest of this entry »