Dirty Mike and the Boys said:

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I work in midstream natural gas, so I'm familiar with gas injection, but how does injecting into the power grid work? How is power stored? A quick google search only yielded 'energy storage facilities'.

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I used to work for a natural gas pipeline company that supplied gas to power plants. We would primarily store gas as line pack in our line or some pipeline upstream of us. A power plant would burn at a 50,000 mmbtu/d rate for 16 hours and then at 0 for 8 hours so we would curtail gas coming into our system (from an interstate line) or just let pressures build or we could off load gas onto an interstate gas line like TGP or Tetco.

Dirty Mike and the Boys said:

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I work in midstream natural gas, so I'm familiar with gas injection, but how does injecting into the power grid work? How is power stored? A quick google search only yielded 'energy storage facilities'.

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Injection in the context of my post is simply electrons going through the breaker onto the high-voltage grid at the generation site.

The only viable energy storage right now is hydraulic -- pump water into an uphill reservoir during off-peak hours, release it downhill through a generator during on-peak. Expensive to build, hard to cycle.

There's some interesting ideas out there right now. For instance, build a couple of miles of electrified railroad up a hill in the middle of nowhere and set up the motive power such that it can generate power into traction or traction into power; send a trainload of gravel up the hill when power is cheap and let it coast down on-peak. Same concept as pumped storage but more flexible. Still not cost-effective, though.

The silver bullet right now is some sort of durable, cost-effective utility-scale battery to allow renewable energy to be stored for times when the sun is down and the wind's not blowing. I'm a cynic, so I expect such a solution to require strip mining of minerals in China with significant pollution just so proto-socialist Druids in San Francisco can rustle their gender-fluid jimmies.

Utility scale solar is gaining traction as a hedge for natural gas. When paired with a flexible peaker plant it can work (although it still costs more for consumers than building a CCGT, or a CT for a peaker...but I guess it "feels" good). However, you really need a regulated environment to do it at the moment because the ERCOT non-reg power market is so cheap no one is going to make a substantial investment and the economics don't work in the free market.

I would propose some sort of global alliance and infrastructure with developed countries. It's always peak and non-peak somewhere, right?

Ensco buys Atwood

http://www.marketwatch.com/story/ensco-to-buy-atwood-oceanics-in-all-stock-deal-combined-company-valued-at-69-bln-2017-05-30

SpreadsheetAg said:

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Ensco buys Atwood

http://www.marketwatch.com/story/ensco-to-buy-atwood-oceanics-in-all-stock-deal-combined-company-valued-at-69-bln-2017-05-30

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Market shrinking. Can be a good thing and a bad thing....

I have a good friend that works for them. He's not worried until the contracts end....then it is nut crunching time.

LostInLA07 said:

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Utility scale solar is gaining traction as a hedge for natural gas. When paired with a flexible peaker plant it can work (although it still costs more for consumers than building a CCGT, or a CT for a peaker...but I guess it "feels" good). However, you really need a regulated environment to do it at the moment because the ERCOT non-reg power market is so cheap no one is going to make a substantial investment and the economics don't work in the free market.

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I remember reading about a CA solar project that was 900 MW. All solar, but backed up by on-demand gas turbines. I think they were all simple cycle, aero types (GE).

So essentially 1.8 GW installed, but 900 MW production. Only advantage is that while (mostly) sunny and clear, the power was clean. But you could ramp up in 15 minutes to full power on NG.

This was a few years ago.

~egon

Exactly...

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so for ~4X the cost (including government handouts), you can have a "clean" 900 MW plant.

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meanwhile, in China...

Your point, if there is one?

From my blog tracker.

http://www.realclearenergy.org/articles/2017/05/29/millennial_behavior_is_about_to_make_fools_of_peak_energy_demand_theorists_110227.html

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Start with the peak-driving proposition that's been so eagerly advanced over the past half-dozen years. Here, wishful thinking aside, recent trends are unequivocal. America's affection for cars is far from over.

Over the past couple of years, the data show travel on America's roads has been growing at a record pace. By year-end 2016 road travel had hit an all-time high, north of 3.2 trillion vehicle-miles. Gasoline demand has followed apace, also hitting new highs. So much for peak driving.

What about the housing market? This sector lags automotive by a couple of years. Houses cost more and take longer to build than cars, but Millennials are starting to buy, rather than continue to share or couch-surf. They already make up over 40% of home buyers. This shouldn't be surprising. As LendingTree CEO Doug Lebda has noted about Millennials: "I mean, you can't obviously buy a house without a good job." And the data show that "starter" homes for Millennials are nearly as big as the average sized home already owned by boomers. What does this imply about average home size as, in due course, Millennials move up market? Do we need to note that bigger homes consume more energy?

Here's a prediction, given that homes are responsible for nearly 40% of the nation's electricity consumption: As Millennials have kids and buy houses, the past eight years of flat electric demand will soon follow the same upward curve seen in road-miles. And imagine what happens to household electric meters if automakers finally make affordable and useful electric cars. But without regard to Tesla and its wannabes, peak electric demand is very unlikely.

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I can't seem traditional energy going away or being seriously threatened by alternatives, but as battery storage becomes more efficient, car engines get more efficient and alternatives become more market accessible without government incentives, It wouldn't be surprising to see a ceiling on growth. An expanding population would offset that, but I vaguely recall household size is declining in the US and developed nations.

...or in a few years when you figure out how to handle the peaks of power demand, you have a 1.8 GW facility running flat out and you get production from both sides


I think the electrical market is in flux from still trying to figure out the transition from coal boilers to gas turbines. Adding in solar/wind just makes everyone get pissy.


~egon

Every day is a new 52 week low for us, approaching a 10 year low

The news for service companies just gets worse and worse.

An article from EP mag by Rystad about GOM and North sea:

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The low oil price environment has affected oilfield service companies dramatically over the last two years. In terms of revenue, companies exposed to the service market in the North Sea and GoM have experienced a decline of 42% from the peak in 2014.

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After such a deep cut in this market it will take some time before the industry experiences a full recovery. Even with oil prices of $90/bbl to $100/bbl for the next decade, the market will not be back to 2014 levels before 2024.

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New Projects Will Contribute To Growth

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Royal Dutch Shell Plc in February approved its Kaikias deep-water project in the U.S. Gulf of Mexico, saying it would break even with prices below $40 a barrel. That followed BP Plc's decision in December to move forward with its Mad Dog Phase 2 project in the Gulf. Costs for that project were originally pegged at close to $20 billion and now are all the way down to $9 billion due to increased deepwater efficiency.

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It's not all doom and gloom...

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originally pegged at close to $20 billion and now are all the way down to $9 billion due to increased deepwater efficiency.

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uh - I'm not sure efficiency is the right word... more likely because so many people are having to sell at opex cost. Not sustainable for offshore contractors... you have to be able to recover fixed costs which no one can do right now.

Vernada said:

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The news for service companies just gets worse and worse.

An article from EP mag by Rystad about GOM and North sea:

Quote:

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The low oil price environment has affected oilfield service companies dramatically over the last two years. In terms of revenue, companies exposed to the service market in the North Sea and GoM have experienced a decline of 42% from the peak in 2014.

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Quote:

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After such a deep cut in this market it will take some time before the industry experiences a full recovery. Even with oil prices of $90/bbl to $100/bbl for the next decade, the market will not be back to 2014 levels before 2024.

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New Projects Will Contribute To Growth

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Ouch.

BP does a lot more stuff in house as opposed to letting vendors/services companies do things. This has made their costs come down quite a bit over the last 2 years. Yes, the rig companies are taking it on the chin, but they have brought their costs down as well. It will still be a few years before the offshore market bounces back, but there are some signs of life...

nu awlins ag said:

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BP does a lot more stuff in house as opposed to letting vendors/services companies do things. This has made their costs come down quite a bit over the last 2 years. Yes, the rig companies are taking it on the chin, but they have brought their costs down as well. It will still be a few years before the offshore market bounces back, but there are some signs of life...

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Unless there were drastic design changes, the vast bulk of that $11B in savings is almost certainly coming from the service companies... and not just rig companies.

Edit: and they are cuts that are not sustainable. They will only exist until proper consolidation occurs - both through buyouts / mergers and bankruptcies.

In some cases, yes big changes have taken place.

Vernada said:

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nu awlins ag said:

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BP does a lot more stuff in house as opposed to letting vendors/services companies do things. This has made their costs come down quite a bit over the last 2 years. Yes, the rig companies are taking it on the chin, but they have brought their costs down as well. It will still be a few years before the offshore market bounces back, but there are some signs of life...

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Unless there were drastic design changes, the vast bulk of that $11B in savings is almost certainly coming from the service companies... and not just rig companies.

Edit: and they are cuts that are not sustainable. They will only exist until proper consolidation occurs - both through buyouts / mergers and bankruptcies.

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Isn't this desirable for the industry's health, though? The correction to oil's historically normal price range was always going to drive weak-sister producers and service companies under and force the survivors to become more innovative and efficient in order to compete. Once the "proper consolidation" you mention occurs, won't the winners form the basis for a stronger industry, just like the initial round of bankruptcies and buy-outs did when prices first fell?

Once the consolidation occurs it will lead to less competition and more profit which is what will be needed for the industry to stabilize... there are simply too many specialized assets competing for too few work days right now.

Actually, today's price is about where we were in 2005. Before that, prices were in the $20-$30 range. When I started, it was $15 or so. There were plenty of offshore projects then, though not the deep water like today. When the price jumped, so did everything else, because you could get it. You'll see the same thing in years time as both operators and service companies adjust to the pricing structure.

but I think it's a little silly for a producer to claim that they were able sanction a project due to $11B of 'efficiences'... probably more accurate to say they were able to sanction it on the backs of companies struggling to be the last man standing.

Vernada said:

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Once the consolidation occurs it will lead to less competition and more profit which is what will be needed for the industry to stabilize... there are simply too many specialized assets competing for too few work days right now.

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That is already happening, especially in pressure pumping. The offshore guys are just now seeing it, few big companies getting bought, and will see it down the road.

nu awlins ag said:

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Actually, today's price is about where we were in 2005. Before that, prices were in the $20-$30 range. When I started, it was $15 or so. There were plenty of offshore projects then, though not the deep water like today. When the price jumped, so did everything else, because you could get it. You'll see the same thing in years time as both operators and service companies adjust to the pricing structure.

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That is not completely accurate - sure there was profit in certain jobs, but one of the big reasons for the price jump was the astronomical cost of specialized assets that were built to perform the deepwater work.

The underlying fixed costs of those assets remains today... which is why the bankruptcies and consolidation will occur.

Fitch said:

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I can't seem traditional energy going away or being seriously threatened by alternatives, but as battery storage becomes more efficient, car engines get more efficient and alternatives become more market accessible without government incentives, It wouldn't be surprising to see a ceiling on growth. An expanding population would offset that, but I vaguely recall household size is declining in the US and developed nations.

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I dunno. Battery technology hasn't advanced a whole lot, not in leaps and bounds like some other technologies. I'm skeptical huge improvements are on the horizon. I see more improvements in efficiency using batteries likely before huge leaps in battery capacity.

We're headed towards a multifaceted material shortage, folks. Secure your supply chain.