Commentary: Could falling oil prices spark a financial crisis?

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The oil and gas boom in the United States was made possible by the extensive credit afforded to drillers. Not only has financing come from company shareholders and traditional banks, but hundreds of billions of dollars have also come from junk-bond investors looking for high returns. As is the nature of the junk-bond market, lots of money flowed to companies with much riskier drilling prospects than, say, the oil majors. Market Background Oil Opinion

2014 225

Oil Well Strippers Suffering From Low Oil Prices

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With OPEC breaking down and any kind of coordination among its members on price cuts looking increasingly unlikely, it now appears that oil prices could remain below $50 a barrel for a year or more. A stripper is a small operator of very old oil wells that frequently produce less than five barrels per day of oil. billion barrels of oil and 18.8 percent of the US oil output, so they are a non-trivial source of US production.

2015 183
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BNEF: Oil price plunge to have only moderate impact on low-carbon electricity development, but likely to slow EV growth

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The collapse in world oil prices in the second half of 2014 will have only a moderate impact on the fast-developing low-carbon transition in the world electricity system, according to research firm Bloomberg New Energy Finance. However, the slump in the Brent crude price per barrel from $112.36 For example, if lower oil prices last, they are likely to slow the growth of the electric vehicle market, to some extent.

2014 225

Opinion: Oil Price War May Benefit both US Shale and Saudi Arabia

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Even as financial commentators on CNBC are starting to come around to the idea of a bottom in oil prices, the key question for US oil producers remains one of timing. How long will the oil price slump last? After the oil price crash in 1985, it took almost twenty years for prices to revert to previous levels. If oil does not return to $100 a barrel until 2035, there will be a lot less shale companies around. Oil Opinion

IHS Markit: US oil production growth heading for a major slowdown, as capital discipline and weak prices play out

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US shale production—the chief source of rapid growth that made the United States the world’s largest oil producer—is slowing down fast, says a new report by IHS Markit. The new IHS Markit outlook for oil market fundamentals for 2019-2021 expects total US production growth to be 440,000 barrels per day (b/d) in 2020 before essentially flattening out in 2021. The combination of closed capital markets and weak prices are pulling cash out of the system.

2019 163

Wall Street Losing Millions From Bad Energy Loans

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Oil companies continue to get burned by low oil prices, but the pain is bleeding over into the financial industry. Major banks are suffering huge losses from both directly backing some struggling oil companies, but also from buying high-yield debt that is now going sour. Loans issued to oil and gas companies have looked increasingly unappetizing, making it difficult for the banks to sell them on the market. Market Background Oil

2015 259

The Saudi Dilemma: To Cut Or Not To Cut

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To cut and push up prices or not to cut and preserve market share, this is the question that Saudi Arabia is facing ahead of this year’s December OPEC meeting. million barrels daily, including from Russia, to reverse the free fall of oil prices. A recent report from Capital Economics said Saudi Arabia has its problems but it could withstand lower oil prices without feeling too much of a pinch. shale oil. Market Background Oil

2018 216

Day Of Reckoning For US Shale Will Have To Wait

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It may just delay the adjustment for oil markets. “It We think that banks are generally giving producers more time to improve financial health and that spring ‘16 redeterminations could be much tougher without significant commodity price improvement,” said Jonathan Wolff, an analyst with Jeffries, according to SNL. Maintaining access to finance can come at a price. Bond markets have essentially been ruled out as a new source of finance for high-yield producers.

2015 205

Opinion: Saudi Oil Strategy: Brilliant Or Suicide?

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In the last quarter of 2014, in the face of possible oversupply, Saudi Arabia abandoned its traditional role as the global oil market’s swing producer and therefore it role as unofficial guarantor of existing ($100+ per barrel) prices. In October, Saudi sources first prepared the market with statements that the country would be comfortable with oil prices as low as $80 per barrel for “a year or two.” Plunging oil prices have substantially reduced Saudi revenues.

2015 246

Oil Majors’ Costs Have Risen 66% Since 2011

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The oil majors reported poor earnings for the fourth quarter of last year, but many oil executives struck an optimistic tone about the road ahead. Oil prices have stabilized and the cost cutting measures implemented over the past three years should allow companies to turn a profit even though crude trades for about half of what it did back in 2014. That allowed them to successfully lower their breakeven price for oil projects. Market Background Oil

2017 163

Indianapolis plans to add 425 PHEVs and BEVs to municipal fleet by 2016

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This is a landmark step in revitalizing our aging fleet and replacing expensive internal combustion engine vehicles with cutting-edge EV technology, all while reducing our dependence on oil and saving Indianapolis taxpayers thousands in fuel costs each year. America’s dependence on oil ties our national and economic security to a highly-unpredictable, cartel-influenced global oil market.

Global investment in renewable power reached $270.2B in 2014, ~17% up from 2013; biofuel investment fell 8% to 10-year low

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billion in 2014, nearly 17% higher than the previous year, according to the latest edition of an annual report commissioned by the United Nations Environment Program’s (UNEP) Division of Technology, Industry and Economic (DTIE) in cooperation with Frankfurt School-UNEP Collaborating Centre for Climate & Sustainable Energy Finance and produced in collaboration with Bloomberg New Energy Finance. Oil and renewables do not directly compete for power investment dollars.

2015 217

Opinion: Oil Megaprojects Won’t Stay On The Shelf For Long

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One casualty of the oil price downturn could be the megaproject. For years, as conventional oil reserves depleted and became increasingly hard to find, oil companies ventured into far-flung locales to find new sources of production. Extracting oil from these frontier areas required more advanced technology and a lot more capital: Ultra deepwater, Arctic offshore, heavy oil sands, and increasingly, the Lower Tertiary. Oil Opinion

2015 184

Opinion: Political Climate Shifting Against The Oil And Gas Industry

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Oil and gas companies have had a tough time over the past year trying to weather the storm of falling oil prices. Drilling oil and gas wells requires a lot of money. For companies that have seen their revenues vanish because of collapsing oil prices, access to credit is obviously critically important. Put another way, about 12 percent of all loans to oil and gas companies are rated “substandard” or worse. Market Background Oil Opinion

2015 195

IRENA report finds renewable power costs at parity or below fossil fuels in many parts of world

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The report, “ Renewable Power Generation Costs in 2014 ”, concludes that biomass, hydropower, geothermal and onshore wind are all competitive with or cheaper than coal, oil and gas-fired power stations, even without financial support and despite falling oil prices. However, the report notes, renewable energy price improvements are not universal, and costs range widely according to resources and the availability of financing.

2015 303

Opinion: Expect A Wave Of Consolidation In The Oil Industry

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The point is, with volumes languishing (and probably poised to decline) tied to a flat oil futures price curve and with economics marginal at $60 per barrel, many E&P operators find themselves running through hedges in 2015 and still in need to finance their already reduced capital spending. This not only reflects solvency risk but also the natural course of bringing assets to a price more in line with their underlying sale value. Market Background Oil Opinion

2015 236

IHS Markit: global commercial vehicle production to drop 22% in 2020 in wake of COVID-19

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New financing has also been announced to eliminate high emissions vehicles in key regions which should give some support to boost to truck sales, all else being equal. More indirect steps for the industry also include bond-financed infrastructure investments; measures to stimulate domestic consumption; and policies to support small- and medium-sized companies, in particular, and companies in Hubei province to stabilize the employment rate.

2020 175

Pike Research forecasts global biofuels market to double by 2012 to $185.3B

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Meanwhile, aviation and marine fuel demand could add 200 BGPY or more to global transportation fuel demand by 2021.despite huge demand for biofuels from transportation end-markets, access to inexpensive feedstocks and financing hurdles remain challenging obstacles for biofuels production trying to keep pace with emerging mandates. Ultimately, widespread commercialization will depend on whether these ventures can reach price. access and dictating terms for accessing financing.

2012 217

Opinion: OPEC Divorce And Self-Destruction Thanks To Saudi Oil Strategy?

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If You’re a Free Range Oil Producer. Despite low oil prices, Saudi Arabia is maintaining its investment in its oil industry. oil analyst cited in this article, who has tracked oil companies’ budgets for many years, estimates that Aramco and its Kuwaiti and UAE counterparts will increase their investment in oil exploration and production in 2015 by 4.5 as the drop in oil prices over the last year has put a strain on the nation’s finances.".

2015 195

BNEF forecasts EVs to be 35% of global new car sales by 2040; cost of ownership below conventional-fuel vehicles by 2025

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A new study by Bloomberg New Energy Finance (BNEF) forecasts that sales of electric vehicles will hit 41 million by 2040, representing 35% of new light duty vehicle sales worldwide. The research estimates that the growth of EVs will mean they represent a quarter of the cars on the road by that date, displacing 13 million barrels per day of crude oil but using 1,900 TWh of electricity. At the core of this forecast is the work we have done on EV battery prices.

2016 200

Opinion: Is Russia Plotting To Bring Down OPEC?

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Putin has highlighted on various occasions the contribution Russia’s mineral wealth, in particular oil and natural gas, must make for Russia to be able to sustain economic growth, promote industrial development, catch up with the developed economies, and modernize Russia’s military and military industry. While oil and natural gas are crucial to Russia, Russia’s crude and natural gas are crucial to its neighbors on the Eurasian landmass. Market Background Oil Opinion Russia

Russia 195

IHS Automotive forecasts 88.6M unit global light vehicle market in 2015; 2.4% growth

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million units, aided with increased auto finance penetration, fast dealership expansion and government vehicle scrappage programs. The campaign is expected to have a long-lasting effect on premium parts/vehicle prices in China. Coupled with this, the momentum could lead to downward adjustment in premium pricing, which helps provide solid foundation for premium vehicle penetration to further increase in China in the next decade.

2015 199

Pike Research forecasts global biofuels market value to double to $185B by 2021

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between 2017 and 2021, as a combination of higher oil prices, emerging mandate. Multiple aims include the reduction of dependence on imported oil, mitigation of greenhouse gas (GHG) emissions, and driving economic development. Ultimately, widespread commercialization will depend on whether these ventures can reach price. The report identifies a number of key trends, including: Oil prices are expected to climb over the next decade, driving increased interest in.

2011 196

Opinion: Saudis Could Face An Open Revolt At Next OPEC Meeting

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OPEC next gathers December 4 in Vienna, just over a year since Saudi Oil Minister Ali Al-Naimi announced at the previous OPEC winter meeting the Saudi decision to let the oil market determine oil prices rather than to continue Saudi Arabia's role of guarantor of $100+/bbl oil. In fact, Saudis have downplayed the impact of lower prices on their country, asserting that the kingdom has the financial wherewithal to withstand lower oil prices.

2015 192

BNEF forecasts EVs to hit 54% of new car sales by 2040; decreasing importance of PHEVs

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Electric vehicles will make up the majority of new car sales worldwide by 2040, and account for 33% of all the light-duty vehicles on the road, according to a new forecast published by Bloomberg New Energy Finance (BNEF). The forecast, put together by the advanced transport team at BNEF, relies on likely future reductions in price for lithium-ion batteries and of prospects for the other cost components in EVs and internal combustion engine vehicles.

2017 163

ICCT suggests minor changes to Fed tax policy to cut higher investment risk of 2nd-gen biofuels and advance the industry

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Using publicly available financial data, they applied investment analysis tools (the capital assets pricing model, CAPM) that are generally not applied to this space in order to develop a more rigorous understanding of the investment risk in the industry. In addition, the industry faces barriers from the impending “blend wall” of 10% ethanol in gasoline and uncertainty regarding policies and oil prices.

2013 221

Report finds Coal-to-Liquids and Oil Shale pose significant financial and environmental risks to investors

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Ceres recently released a new report concluding that coal-to-liquid (CTL) and oil shale technologies face significant environmental and financial obstacles—from water constraints, to technological uncertainties to regulatory and market risks—that pose substantial financial risks for investors involved in such projects. The Obama Administration’s recent extension of the offshore oil-drilling moratorium through 2011 has also renewed investor interest in on-shore oil reserves.

2010 185

Can Electric Vehicles Speed Up As The Economy Slows Down?

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Moreover, with the massive drop in oil prices , gas-powered vehicles are more economical to operate, which makes it harder to argue that EVs will help drivers save money on fuel.

New UC Davis market-based sustainability forecasting approach concludes supplanting gasoline and diesel with renewable fuels could take 131 years

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In the paper, Nataliya Malyshkina and Deb Niemeier point out that the peak of oil production is estimated to occur approximately between 2010 and 2030, and note that all those dates are considerably earlier than their estimate of the time until renewable replacement technologies are viable in the market (around 2140). “ Obviously, our results suggest that there is a potential danger that crude oil will be depleted before it can be replaced by viable substitutes.”

2010 249

Study finds government and vehicle manufacturers need to introduce long-term incentives and prices cuts to create sustainable market for ultra-low emission vans

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Governments and vehicle manufacturers will need to introduce long-term incentives and price cuts to create a sustainable European market for ultra-low emission vans (ULEV), according to a newly published report by Element Energy, commissioned by the UK Department for Transport. Total costs of ownership were calculated for the full range of powertrains and van sizes in 2011, 2020 and 2030, taking account of depreciation and financing costs, fuel costs, servicing and insurance.

2012 200

GSI/UNEP conference report finds fossil-fuel subsidy reform complex and challenges sobering; ~1% of global GDP spent on fossil-fuel subsidies

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In 2008, a report by UNEP called for the elimination of fossil-fuel subsidies, concluding that such subsidies often lead to increased levels of consumption and waste; place a heavy burden on government finances; can undermine private and public investment in the energy sector; and do not always end up helping the people who need them most. Coal Natural Gas Oil Policy

2011 207

UC Berkeley Study Concludes Battery Switching Model Would Accelerate Mass-Market Adoption of Electric Cars; Baseline Scenario Projects EVs Reaching 64% of New LDV Sales in 2030

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In two other scenarios considered, a high oil price scenario (using EIA projections) and a battery swap operator-subsidzied scenario, EV new vehicle sales penetration reaches 85% and 86% respectively by 2030. candidate in economics with a specialization in international finance and environmental economics. The analysis in the paper relies on a network externality model focusing on relative prices, operating costs, and the network effects of battery switching stations.

2009 150

IEA World Energy Outlook view on the transport sector to 2035; passenger car fleet doubling to almost 1.7B units, driving oil demand up to 99 mb/d; reconfirming the end of cheap oil

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Change in primary oil demand by sector and region in the central New Policies Scenario, 2010-2035. Under the WEO 2011 central scenario, oil demand rises from 87 million barrels per day (mb/d) in 2010 to 99 mb/d in 2035, with all the net growth coming from the transport sector in emerging economies. Alternative technologies, such as hybrid and electric vehicles that use oil more efficiently or not at all, continue to advance but they take time to penetrate markets.

2011 213

KPMG study identifies 10 sustainability “megaforces” with accelerating impacts on business; imperative of sustainability changing the automotive business radically

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Fossil fuel-dependent transportation industries such as aviation, shipping and manufacturers that use petroleum as a process input, such as plastic or chemical producers, will need robust strategies and plans to address fuel price volatility and potential shortages, KMPW warns. Businesses may be vulnerable to water shortages, declines in water quality, water price volatility, and to reputational challenges. Global food prices are predicted to rise 70 to 90 percent by 2030.

2012 256

Study details viable pathway to develop sustainable aviation biofuels industry in Pacific Northwest; hydroprocessing of natural oils seen as the most immediate opportunity

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Established hydroprocessing technologies to produce aviation fuels from natural oils. supply chains for sustainable aviation fuels utilizing oils from oilseed crops such as camelina, as well as algae and biomass. million gallon/year hydroprocessing facility and supporting functions including feed oil purification and hydrogen production is approximately $250 million. Biomass resources of the US, with the Northwest circled. Source: SAFN report, via NREL. Click to enlarge.

2011 199

DNV GL paper suggests near-term success for LNG in shipping; alternative fuel mix to diversify over time

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DNV and GL merged in September 2013 to form DNV GL—the world’s largest ship and offshore classification society, the leading technical advisor to the global oil and gas industry, and a leading expert for the energy value chain including renewables and energy efficiency. That is, owners will not start using new fuels if infrastructure is not available, and energy providers will not finance expensive infrastructure without first securing customers.

2014 200

Hawaii opts for EVs and renewable energy

Revenge of the Electric Car

The rest of Hawaii’s electricity is generated by burning oil. Yes, tankers of dirty, expensive oil are brought in and boatloads of money are shipped back to the oil companies. Oil burning is one of the single biggest sources of pollution coming from the whole state. Clean base load energy is particularly important since that is usually generated by nukes, burning coal or, in the case of Hawaii, oil.

2008 100

VW Chief Executive Says Company Will Introduce EVs Based on the Up! New Small Family in 2013; Cautions Against Electro-Hype

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Within a decade, he added, Volkswagen wants to offer significant numbers of pure electric cars at affordable prices and with the range expected by customers. We have rock-solid finances. With electromobility, the automobile industry faces a fundamental technological upheaval.Our path leads away from oil, to emission-free mobility, and the electric car plays a key role.CO The perspective of rising oil prices is a turboboost for a change in customer behavior, he said.

2009 150

Honda May Develop Plug-In as Obama Alters U.S. Policy (Update2) - Bloomberg.com

Tony Karrer Delicious EVdriven

from its reliance on imported oil. customers $600 a month to lease.Honda hasn’t revealed its production price. Oil prices are going to go up.

2009 44

Andy Grove: The U.S. must create an electric car industry - Apr. 17, 2009

Tony Karrer Delicious EVdriven

News | Markets | Technology | Personal Finance | Small Business | CNN.com RSS Newsletters Video Home Fortune 500 Technology Investing Management Rankings Andy Grove on battery power To wean itself from imported oil, the U.S. But with oil prices toppling since, the push for new energy technologies is being shoved aside by the nations other economic woes. will be competing for the same finite supplies of oil and gas.

2009 35

Cleantech Blog: Smart Grids and Electric Vehicles

Tony Karrer Delicious EVdriven

People-Oriented Development Current Status of REDD Financing the Fifth Fuel Peak Phosphorus - Commence Urine Recyling on Space. Just as wireless service providers offer smartphones at discounted prices, Project Better Place will offer discounted electric vehicles with usage pricing plans. Millions of EVs and PHEVs would expand the sale of electricity as an alternative to oil. No more Big OIL - think of the extra money stimulating the economy!

2009 28