Shale productivity: snakes and ladders?

Unprecedented high-grading is now occurring in the US shale industry, amidst challenging industry conditions. This means 2020-21 production surprising to the upside, and we raise our forecasts +0.7 and +0.9Mbpd respectively. Conversely, when shale activity recovers, productivity could disappoint, and we lower our 2022+ forecasts by 0.2-0.9 Mbpd. This 7-page note explores the causes and consequences of this whipsaw effect.

Biomass to biofuel, or biomass for burial?

Greater decarbonization at a lower cost is achievable by burying biomass (such as corn or sugarcane) rather than converting it into bio-ethanol.

This model captures the economics. Detailed costs are estimated for biomass burial and to compare the relative CO2 footprints of the two options.

Three individual tabs illustrate margins, NPVs and IRRs for sugar-cane to bio-ethanol economics, buried sugarcane, and buried napier grass.

CO2 from US bio-ethanol plants?

This data-file tabulates the CO2 emissions from US bioethanol plants, which produce around 1Mbpd of liquid fuels, with an average CO2 intensity of 85kg/boe. In addition, we estimate 160kg/boe of CO2 are emitted in producing US corn, so bio-ethanol has a total CO2 intensity of 245kg/boe (c40% less than conventional oil products).

Our data are based on granular disclosures from 170 separate facilities, which have reported to the EPA and EIA disclosures. Hence we can screen more and less CO2-intensive States and Companies.

Covered companies, ranked by ethanol capacity, include Poet, Valero, Great Plains, Koch, Marathon and White Energy.

Oil demand for chemicals, by product, by region

This data-file breaks down the world’s use of oil to make chemicals (i.e., plastics). It’s split across 13 different products, and the ‘Top 10’ countries/regions. The estimate year is 2016.

Copyright: Thunder Said Energy, 2022.