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Reuters on the global automakers’ plans for the future of EVs

“Global automakers are planning an unprecedented level of spending to develop and procure batteries and electric vehicles over the next five to 10 years, with a significant portion of their budgets targeted at China… Automakers’ plans to spend at least $300 billion on EVs are driven largely by environmental concerns and government policy, and supported by rapid technological advances that have improved battery cost, range and charging time.”

Paul Lienert and Christine Chan, Reuters

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The Wall Street Journal on US shale industry’s financial woes

“Shale companies have attracted huge amounts of capital from Wall Street over the past decade. So far, investors have largely lost money. Since 2008, an index of US oil and gas companies has fallen 43%, while the S&P 500 index has more than doubled in that time, including dividends. The 29 companies in the Journal’s analysis have spent $112 billion more in cash than they generated from operations in the last 10 years, according to data from FactSet, a financial-information firm.”

Bradley Olson, Rebecca Elliott and Christopher M. Matthews, The Wall Street Journal (1/2/19)

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S&P Global Platts on the potential of ANWR’s prospective resources

“Some geologists harbor doubts about ANWR’s prospective resources. ‘I don’t see (in the refuge’s geology) what I hear in the political talk,’ about the refuge’s potential, said Richard Garrard, an Alaskan-based exploration geologist. said. Geologically, the region is an extension of the Brooks Range, which is to the south. ‘How many oil fields have been discovered in the Brooks Range? None.’”

From S&P Global Platts

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Deputy director, State Energy and Environmental Impact Center, NYU School of Law on proposed seismic testing off the east US coast

[about proposed seismic testing off the east US coast] “Almost every single one of those states is pretty adamant about not wanting that activity off their shore. The administration is pushing through the industry agenda on expanded oil and gas leasing despite all evidence that other stakeholders have other viewpoints about the appropriateness and the scope of that activity.”

Elizabeth Klein, deputy director, State Energy and Environmental Impact Center, NYU School of Law

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White House economic advisor on the cancellation of subsidies for EVs

“As a matter of our policy, we want to end all of those subsidies [for electric vehicles]. And by the way, other subsidies that were imposed during the Obama administration, we are ending, whether it’s for renewables and so forth…It’s just all going to end in the near future. I don’t know whether it will end in 2020 or 2021.”

Larry Kudlow, White House economic advisor

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US EIA on US oil reserves

“Total US oil reserves in 2017 exceeded a … 47-year-old record, highlighting the importance of crude oil development in shales and low permeability plays, mainly in the Southwest.”

US EIA

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Differential between Canada and the US oil prices

“In my 36 years in this [petroleum] business, I have never seen such a wide differential in sentiment between Canada and the US. I’ve never seen more frustration among our customers and our competitors and in our peer-group companies than right now.”

Kevin Neveu, chief executive officer of the oilfield-service company Precision Drilling Corp.

“The assumption that current and future climate conditions will resemble the recent past is no longer valid…With continued growth in [greenhouse gas] emissions at historic rates, annual losses in some economic sectors are projected to reach hundreds of billions of dollars by the end of the century – more than the current gross domestic product (GDP) of many US states,”

The Fourth National Climate Assessment Volume II, compiled through combined efforts of 13 US government agencies

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Excerpt from “Thoughts on the Future of World Oil Production”

“It is likely that in the coming years world oil production will decline (at around 5 percent per year) and that LTO [light tight oil] will decline more sharply. This will come as a shock because it is contrary to the official forecasts, which see oil production rising up to 2040.”

Jean Laherrère, retired geologist-geophysicist involved in oil and gas exploration worldwide; from “Thoughts on the Future of World Oil Production,” 11/18

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US oil production data & Global warming trends

“US crude oil production reached 11.3 million barrels per day (b/d) in August 2018, up from 10.9 million b/d in July. This is the firded the Russian Ministry of Energy’s estimated August production of 11.2 million b/d, making the United States the leading crude oil producer in the world.”
US EIA monthly report

“We thought that we got away with not a lot of warming in both the ocean and the atmosphere for the amount of CO2 that we emitted. But we were wrong. The planet warmed more than we thought. It was hidden from us just because we didn’t sample it right. But it was there. It was in the ocean already.”
Laure Resplandy, Princeton University research team leader

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The mirage of the US oil & gas industry

“To outward appearances, the US oil and gas industry is in the midst of a decade-long boom. [However] America’s fracking boom has been a world-class [financial] bust …. Even after two and a half years of rising oil prices and growing expectations for improved financial results, a review of 33 publicly traded oil and gas fracking companies shows the companies posting $3.9 billion in negative free cash flows through June.”

Report from Institute for Energy Economics and Financial Analysis, and the Sightline Institute

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The state of US oil producers in particular in the Permian Basin

“The well-established market consensus that the Permian [basin] can continue to provide 1.5 million barrels per day of annual production growth for the foreseeable future is starting to be called into question.”
Paal Kibsgaard, CEO of Schlumberger

“Two-thirds of US oil producers failed to live within their means in the second quarter, even as oil prices have risen almost 40% over the past year to more than $70 per barrel. Fifty major US oil companies reported they collectively spent $2 billion more than they took in.”
FactSet’s analysis of free cash flow

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The Trump administration and its climate change policy

“The amazing thing [the Trump administration] is saying is human activities are going to lead to a rise in [atmospheric carbon] that is disastrous for the environment and society [a 7-degree Fahrenheit increase from pre-industrial levels]. And then they are saying they are not going to do anything about it.”

Michael MacCracken, senior scientist at US Global Change Research Program (1993 – 2002)

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LNG industry’s renewed interest in investment

“The sanctioning of LNG Canada would mark a potential turning point in the LNG market, signaling the industry’s appetite to invest has returned. Even new large-scale greenfield projects are back on the agenda, after a dearth of project financial investment decisions over the last few years.”

Saul Kavonic, Credit Suisse Group AG’s director of Asia energy research

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The state of global oil production

”Assuming that the balancing act between declining and growing [oil producing] countries continues (from Mexico through to Canada) the whole system will peak when the US shale oil peaks (in the Permian) as a result of geology or other factors and/or lack of finance in the next credit crunch, and when Iraq peaks due to social unrest or other military confrontation in the oil-producing Basra region. There are added risks from continuing disruptions in Nigeria and Libya, steeper declines in Venezuela and the impact of sanctions on Iran.”

Matt Mushalik, Australian engineer and oil industry analyst

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Trump administration’s position on the reduced need for conserving energy

[The Trump administration stated there is a “reduced the urgency of the US to conserve energy.”] I strongly disagree with this argument. It isn’t certain that the US will become a net exporter of petroleum and petroleum products, but in any case, that’s not a reason to forego conservation. There are economic reasons, national security reasons, and environmental reasons for conserving oil.”

Robert Rapier, energy industry commentator

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The significance of the price of oil

“[T]he fortunes of energy companies are highly dependent on a single, highly-salient, well-understood, widely-available, plausibly exogenous factor – the price of oil….This is a market where firm value hinges to a large degree on observable luck, so the fact that we observe little filtering of luck from [the size of] executive pay is particularly striking.”

Lucas W. Davis and Catherine Hausman, the Energy Institute in Haas

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The role of renewable energy resources in California’s electricity generation

“The [California] legislature finds and declares that the Public Utilities Commission, State Energy Resources Conservation and Development Commission, and State Air Resources Board should plan for 100 percent of total retail sales of electricity in California to come from eligible renewable energy resources and zero-carbon resources by December 31, 2045.”

Senate Bill 100 reads

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Mexico’s oil production

[In Mexico] “Production peaked in 2004/2005 at just over 3.5 million b/d, so the overall decline is approaching 50%…Only three years since 1999 have had reserve replacement ratios greater than 100%. Many years’ numbers have actually been negative, some of them significantly so, and the estimated ultimate recovery has been revised slightly downwards overall.”

George Kaplan, oil industry analyst

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Potential ban on drilling in many parts of Colorado

“A ballot measure requiring greater setbacks could have a dramatic effect on drilling in Colorado. In Weld County, Colorado, where much of the drilling in Colorado’s DJ Basin takes place, the greater setback distances would put roughly 78 percent of the surface land off limits to drilling. ‘That is effectively a ban on the industry,” Dan Haley, president of the Colorado Oil & Gas Association, told Bloomberg in a July interview. “You’d basically have no new wells drilled in Colorado.’”

Nick Cunningham, Oilprice.com

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Head of commodities research at Standard Chartered on US oil production

“Weekly data had shown a strong 324,000 b/d output rise [in US oil production] from March to May. The revised data shows that this rise was a mirage: output actually fell 19,000 b/d over the period. It is time to deal with the statistical gorilla on the oil trading floor. We think US crude oil production has not reached the 11 million b/d shown in recent weeks in the Energy Information Administration weekly data, and that it is significantly below 11mb/d, with growth slowing.”

Paul Horsnell, head of commodities research at Standard Chartered

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Oil industry analyst’s perspective on the lack of capacity of low-sulfur fuel production

“The economic collapse I predict will occur because the world’s petroleum industry lacks the capacity needed to supply additional low-sulfur fuel to the shipping industry [in 2020] while meeting the requirements of existing customers such as farmers, truckers, railroads, and heavy equipment operators.”

Phillip Verleger, oil industry economist, and analyst

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US District Judge in dismissing a lawsuit by New York City against major oil companies

“Climate change is a fact of life, as is not contested by Defendants. But the serious problems caused thereby are not for the judiciary to ameliorate. Global warming and solutions thereto must be addressed by the two other branches of government.”

US District Judge John Keenan in Manhattan, in dismissing a lawsuit by New York City against major oil companies

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