Platts Survey of Top Energy Stories of 2009

As I compile my year end list of the biggest energy stories of the year, I have just gotten an e-mail from Platts that is very helpful. As they have done in previous years, they have a survey up so readers can rank the top stories:

Platts wants to know: the biggest oil stories of ’09

They will publish the results shortly after Christmas. Scanning the list and comparing to my rough draft of the Top 10, I see one story that isn’t currently on my list that I missed: The Valero Foray into Ethanol. Other than that, all of the stories that I have tentatively in my Top 10 are on their list except for two (and I bet people who take the survey will suggest both of them).

I will post my list prior to Christmas, and hope that we don’t see another big year end story like the XOM acquisition of XTO. That is a Top 10 story that came in right at the end of the year. Here is how I ranked the stories Platts had listed, but this was off the top of my head and very subjective. I may decide later on that #3 should really be #8, or that something that didn’t make the list should really be on there. My Top 10 will be a bit different because I have combined some topics that they treated separately.

1. Prices (basis WTI) comes roaring back to the $80 level after almost hitting $30
2. Full-year decline in demand heads toward biggest drop since 1981
3. Natural gas-crude spread in US blows out to unprecedented levels
4. Refinery woes: Valero shuts Delaware City , Sunoco shuts Eagle Point, Repsol shuts Cartegena, Japan cutbacks underway (RR: related to Reliance news)
5. Valero makes big foray into ethanol with multiple ethanol plant purchases; Sunoco follows on smaller scale
6. EU slaps duties on US sales of biodiesel into Europe
7. OPEC holds to its 24.845 million b/d ceiling all year
8. US EPA rules greenhouses gases are a threat to public health, plans on using authority to regulate them
9. ExxonMobil gets into bidding war with Chinese, others over Ghana stake (RR: more for what it signals for the future).
10. Exxon buys XTO for $41 billion

20 thoughts on “Platts Survey of Top Energy Stories of 2009”

  1. I just cut, and pasted Westexas's comment from your post at The Oil Drum, because I think he says it all.

    The relative net import numbers for the US, the largest OECD net oil importer, and China, the largest non-OECD net oil importer, are probably a good indication of where we are headed. In the 2006-2008 time frame inclusive, the large cumulative decline in US net oil imports was more than matched by the large cumulative increase in Chinese net oil imports–China bought every barrel of oil that we did not import, plus some. I expect to see this pattern continuing, i.e., non-OECD countries taking a larger share of declining net oil imports versus OECD countries taking a smaller share of declining net oil imports.

    Meanwhile, the slight decline in the annual volume of global net oil exports in the post-2005 time frame is highly misleading. I estimate that by the end of 2009 oil importers will have burned through 20% to 25% of the total volume of post-2005 global cumulative net oil exports.

  2. I like the natural gas stories; they may dominate energy stories for years to come. I would add fracking improvements to the list.

    Toyota saying they will have a PHEV Prius out soon is also huge, and in a round-a-bout way, is a top energy story.

    We could be on the cusp of much wider PHEV-ing of new cars. Like any hybrid. If so, look for oil consumption to drop for decades at a stretch. With the PHEV, we see cars that go 150 mpg per liquid gallon.

    Between PHEVs, CNG and biofuels, will fossil oil consumption be higher or lower in 20 years? I think lower. Could be a lot lower.

    OPEC has a choice: Keep oil cheap and plentiful, or become a backwater industry.

  3. I just cut, and pasted Westexas's comment from your post at The Oil Drum, because I think he says it all.

    That is the same point I made several times in my recent presentations. Demand has fallen in the U.S., but increased demand in China and India was even greater than our decrease.


  4. Jeff Rubin made the point in an article, today, that the OPEC Countries, plus Mexico, and Russia, use over 14 Million barrels of oil/day. Add those countries to China, and you're over 22 Million bpd.

    They are, also, growing their consumption, rapidly (especially Saudi Arabia, and the rest of OPEC.)

    Add to that, we are at 10.2% Unemployment. To get to any reasonably accepted level of employment we're going to have to grow our consumption of oil, at least, A Million bpd.

    We're not "out of the woods," yet, I think.

  5. Here's a big story that did not make it onto Platt's list. The cherry picking of data may not have been restricted to the University of East Anglia.

    From the Russian business paper Kommersant:

    "… Climategate has already affected Russia. On Tuesday, the Moscow-based Institute of Economic Analysis (IEA) issued a report claiming that the Hadley Center for Climate Change based at the headquarters of the British Meteorological Office in Exeter (Devon, England) had probably tampered with Russian-climate data.

    "The IEA believes that Russian meteorological-station data did not substantiate the anthropogenic global-warming theory.

    "Analysts say Russian meteorological stations cover most of the country's territory, and that the Hadley Center had used data submitted by only 25% of such stations in its reports.

    "… The IEA said it was necessary to recalculate all global-temperature data in order to assess the scale of such exaggeration. …"

  6. Rufus wrote: "I just cut, and pasted Westexas's comment from your post at The Oil Drum …"

    Rufus — didn't you say that the Powers That Be at the Oil Drum had banned you?

  7. They'd have to be fairly omnipotent powers-that-be to be able to ban cut-and-paste from the site. 🙂

  8. It's starting to look like a massive fraud scheme Kinuach. Some of these people need to be in jail. I'm trying to imagine a motive for falsifying temperature data. While it could cost the world trillions,how would they personally benefit?

  9. Rufus banned from TOD?
    Is there anyone who has not been banned?

    I wonder who finances TOD. Or puts money into the pockets of its editors. Lots of ways to launder money.

  10. Strangely enough, I don't think it was so much my pro-ethanol views (for which I caught a Lot of heat,) so much as my "DENIER" stance.

    THAT was, absolutely, a "Bridge Too Far."

  11. My vote for the #1 story is Exxon's purchase of XTO, combined with the related but smaller transaction in which Devon is selling high cost oil to focus (mostly) on domestic gas. These are very high-cred votes for the future role of natural gas in the US. What had been seen as a pretty sick commodity for over a year, with producers suffering from the fruits of their own success, now gets two thumbs up from the major player in the US energy industry, and one of the most successful independents.

    Another story that may turn out to be bigger than we think is the miguided ruckus being raised over fraccing. If the feds slap blanket penalties on (or prohibit) fraccing, it's going to have a serious impact on domestic production.

    That noted downhole completions expert, Ed Markey, is wanting to conduct hearings on the practice. I'm confident that he'll get to the root of the problem. Or not.

  12. Here's another big story:

    The IEA plunks for Peak Oil. They predict it will occur in 2020 under a business-as-usual scenario.

  13. Pete wrote: "They'd have to be fairly omnipotent powers-that-be to be able to ban cut-and-paste from the site. :-)"

    Pete, you're Irish. Remember your heritage!

    If the cool kids ban you from the club house, you don't sneak back to peek in the windows and see what fun they are having.

    You damn them and their progeny. And pass the grudge on to your children & grandchildren.

    Ah! The old days!

  14. Larry Nichols, chairman and CEO of gas-producer Devon Energy Corp., said that in the past, companies were forced to search for new gas each year, making long-term contracts impractical. But the recent shale discoveries are different—they are huge and extremely reliable, meaning they can reliably strike multi-year commitments to provide gas. Devon, for example, has drilled 4,000 wells in the Barnett Shale without a single dry hole, and still has thousands of places left in the field to drill.

  15. 4000 shale gas wells without a dry hole?
    Man, I like those odds.
    And China has shale? And CNG is a proven technology?
    And Europe has shale?

    This has got to be the biggest energy story of the year, and many years.

    Boomtimes in the gas patch, go to it.

  16. Maury,

    In these kinds of plays you may never, or rarely, see a dry hole. But you can have wells that are subcommercial. The range of outcomes in terms of rate and reserves per well can be pretty high. There's a distinction between a technical dry hole (no gas) and a commercial dry hole (lost money on the well). I suspect there are a lot of commercial dry holes.

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