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On Impact of Falling Oil Prices on LNG

Ed,

You just copied an article and posted it.

If you check this website, you will see Japanese LNG prices were much higher than in the article.

https://ycharts.com/indicators/japan_liquefied_natural_gas_import_price

Dec 2013: $16.38/million Btu

Dec 2014: $13.68/million Btu

That is a 16.5% drop over one year. That is about the total drop that will occur, because oil prices have stabilized at about $60/barrel.

January 26, 2015    View Comment    

On Ten Reasons Why a Severe Drop in Oil Prices is a Problem

Sean,

"The money gets locked up in investments and doesn't propel the economy so then we have to stimulate the economy again."

Billionaires are very smart people. They acquire poorly-run companies to better serve growing markets, and get rich in the process.

It is not so much about making money, as it is about the thrill of the deal and seeing it come to fruition. 

January 26, 2015    View Comment    

On Ten Reasons Why a Severe Drop in Oil Prices is a Problem

Gail,

Low oil prices are a problem for producers, especially highly leveraged, high-cost producers. Producers with cushions, i.e., national wealth funds, such as Russia and Norway, will do just fine, if the low oil prices do not last more than 2 - 3 years.

Whereas Norway may no longer be capable of belt tightening, the Russians certainly are, especially if it is framed as a patriotic duty to fight Western Encroachments by NATO, EU and US.

The US has a strategic oil reserve which may be maliciously discharging some oil to add more chaos to pricing.

Low oil prices are be a boon for consumers, airlines, etc. Gasoline, instead of $3.75/gallon, is now $2.20/gallon.

On another note:

Russia is building a gas pipeline from east Siberian gas fields to west Siberian gas fields and from there to East Asia (China, Japan, etc.). It will be completed in about 4 years.

In 2013, about 80 bcm was sent via Ukraine to Europe, about 50% of all Russian gas to Europe. 

Russia will complete a pipeline via the Black Sea to a gas hub on the Turkey-Greece border by 2017 to provide 63 bcm to Europe, but Europe will have to build about $10 - $20 billion of pipelines to come and get it.

Turkey is in NATO, but not in the EU. With anti-Muslim feelings in Europe increasing, Turkey will not be in the EU for decades.

The growing Turkish economy will get Russian gas at a discount and will use more of it.

Starting about 2017, Russian gasflow via Ukraine will be greatly reduced and will become minimal, i.e., a few bcm, by 2020, when Russia will have established major gas flows to East Asia. Ukraine's $2.4 billion/yr in transit fees, paid by Gazprom, will become near zero.

Over the past 24 years, Europe, especially Germany, has established many businesses in Russia to produce goods and services, and has exported goods and services to Russia. That business has been very profitable.

Europe will lose most of the very big, profitable Russian market to other countries, largely due to the EU overexpanding its influence into east Europe, thereby dismissing and encroaching on the traditional spheres of Russian influence.

Europe is more or less trying to acquire dysfunctional, bankrupt, corrupt, oligarch-run Ukraine, to do the same as in Russia after 1990, except on a much smaller scale.

Europe may also need to import more LNG from politically unstable countries, which is much more expensive than gas from Russia.

Those headwinds will adversely affect Europe's already weak economy for decades.

http://theenergycollective.com/willem-post/368081/russian-gas-exports-and-western-encroachments-russia

January 26, 2015    View Comment    

On A Snapshot of Germany's Electricity Mix: Solar Capacity Reigns, but Coal Generation Sustains

Nah, he likely read some RE propaganda

January 7, 2015    View Comment    

On A Snapshot of Germany's Electricity Mix: Solar Capacity Reigns, but Coal Generation Sustains

Sean,

Your flip side will be ignored by German power system engineers.

Energy storage is and will be very expensive. Economically viable energy storage has not yet been invented.

It is better to finally start the HVDC lines, as Germany's engineers have decided (THEY are not stupid), and have been asking for for many years, but could not get politicians to join them, because of NIMBY.

January 7, 2015    View Comment    

On A Snapshot of Germany's Electricity Mix: Solar Capacity Reigns, but Coal Generation Sustains

Math,

Wind and solar energy are wholesale price depressers, causing all sorts of stranded-cost problems for the traditional power industry, and they are household price increasers, causing all sorts of problems for millions households trying to keep up their standard of living without too much skimping.

January 2, 2015    View Comment    

On A Snapshot of Germany's Electricity Mix: Solar Capacity Reigns, but Coal Generation Sustains

Nathan,

Excellent comment with which I completely agree. It is like replacing an old Trabant with a new Audi.

Germany exports, because it has to use neighbors' grids to balance its own, when excess wind and solar energy are produced. The more such production, the more such exports.

Nothing for RE folks to crow about, as the exports often are at near-zero wholesale prices, after having a subsidized LEGACY cost of about 34 eurocent/kWh, in case of solar, which is very sloooowly declining, because of the little addition of more MW of solar/month.

Had Germany STARTED building north-south HVDC transmission about 10 years ago, when folks like me and others said it would be needed, the "excess problem" would have been mitigated, i.e., a larger domestic grid to spread excess energy.

Those transmission lines were held up by NIMBY, and are STILL being held up by NIMBY, because people finally are starting to see the adverse visual impact of it all.

If major parts of the lines have to be buried, costs/mile will go up by about a factor of 2 - 3, depending on the soil conditions.

RE apologizers need to keep a stiff upper lip, and obfuscate, and dissemble.

January 2, 2015    View Comment    

On How to Read a 2015 Article About Electric Power

Hi Bob,

You have on your teaching hat. Great.

I wish you and your family a healthy, happy New Year

Willem

January 1, 2015    View Comment    

On A Snapshot of Germany's Electricity Mix: Solar Capacity Reigns, but Coal Generation Sustains

Bas,

The points you make are in my article, which I think you should read.

It shows I am in FAVOR of solar, just as you. The TEC article is relatively new, but has had thousands of views.

http://theenergycollective.com/willem-post/2162036/comparison-grid-connected-and-grid-houses

However, you leave out an important point.

Buildings would have to be designed for very high energy efficiency, i.e., Passivhaus level, to make off-grid buildings viable.

What Germany did with the ENERGIEWENDE is to help reduce PV solar panels in a very expensive manner (China also helped out), as is clear from this article:

http://theenergycollective.com/willem-post/338781/high-renewable-energy-costs-damage-germanys-economy

The ENERGIEWENDE should have been concurrent with a nationwide, Passivhaus level residential building program to make a more rational impact.

December 29, 2014    View Comment    

On A Snapshot of Germany's Electricity Mix: Solar Capacity Reigns, but Coal Generation Sustains

Bas,

You are a Delft engineer. Act logically, please.

The LEGACY solar costs/kWh will be declining very slowly, as relatively few new solar systems, compensated at lower costs/kWh, are added.

Just 1,682.997 MW were added in the first 10 months of 2014.

The total solar in Germany is 38,018.877 MW, as of end Oct 2014.

A grocery clerk can see it would take a long time, many years, if ever, for the legacy cost curve to reach grid wholesale price parity.

Here is a reality check on some of your illogical statements:

http://instituteforenergyresearch.org/analysis/germanys-electricity-market-balance-must-pay-flexible-back-power/

http://euanmearns.com/large-scale-grid-integration-of-solar-power-many-problems-few-solutions/

December 28, 2014    View Comment    

On A Snapshot of Germany's Electricity Mix: Solar Capacity Reigns, but Coal Generation Sustains

Schalk,

The legacy cost of solar subsidy is about 33 eurocent/kWh. That energy is sold at wholesale to the French at about 5 eurocent/kWh, or less, sometimes near zero! 

France is looking forward to more of such energy.

December 27, 2014    View Comment