While the global market is currently oversupplied with crude, Rystad Energy research shows that investment decisions for only 8 billion barrels were made in 2015, even though the oil industry needs to replace 34 billion barrels of crude every year. This amount is less than 25 percent of what the market requires long-term.
“We see that for most new developments oil prices are below life cycle costs. As oil companies need to pay dividends and have incompressible taxes and royalties, the majority of upstream players are destroying value as we speak and do whatever they can to cut costs.
As a result, billions of barrels of crude are not being matured while global consumption growth is still very robust. Thus, a new shortage of crude is likely to come a few years down the road.
When this happens, the oil service capacity will not be there to support the growth at the pace needed. There is then a risk that we will face a new era of steep cost inflation which again will drive up oil prices too much and negatively impact the global economy.
“I am concerned that current job cuts could lead to a severe shortage of oil service capacity in a few years. It is very easy to get rid of people, but it will take a lot of effort and cash to bring people back to the industry. A responsible action from petroleum nations would be to stimulate the oil price in the short term in order to incentivize drilling and field development globally and stop downscaling of oil service capacity.”DYI Comments: Geopolitics are dropping the price of oil/gas(as explained in earlier posts) and it appears that a world wide recession is in the offering. This could very easily drop oil to the 10 to 20 Dollar range knocking out capital expenditures for exploration and development. A few years from now oil will experience a ramp up of prices, along with possible price spikes. Vanguard's Energy is DYI's favorite and is a great time to dollar cost average lowering your cost basis for shares. Position yourself by dollar cost averaging for the rebound in prices a few years from now.
Indonesia Exploring Liquid Fuel Nuclear Power Plants to Cut Reliance on Coal
Martingale and three Indonesian companies signed the MOU in Washington DC on the occasion of Indonesia President Joko Widodo’s visit to the US President Barak Obama. PT Industry Nuklir Indonesia (INUKI) is the state-owned nuclear fuel processing company. PT PLN is the state-owned power generation company. PT Pertamina is the state oil and gas giant which is now looking at nuclear and other forms of energy. Together these companies have formed the Indonesia Thorium Consortium whose purpose is the development and implementation of thorium molten salt reactors based on the ThorCon design.
The ThorCon thorium molten salt reactor design promises clean energy competitive with the cost of coal. The low-pressure liquid-fuel technology provides intrinsic passive safety. ThorCon expertise in shipbuilding design enables low-cost, high-precision, scalable manufacturing by ship yards. Mass production of nuclear power plants is possible with ThorCon technology. The ThorCon liquid-fuel nuclear reactor design is detailed at thorconpower.com.
Safe
ThorCon is a simple molten salt reactor. Unlike all current reactors, the fuel is in liquid form. If the reactor overheats for whatever reason, ThorCon will automatically shut itself down, drain the fuel from the primary loop, and passively handle the decay heat. There is no need for any operator intervention. In fact there is nothing the operators can do to prevent the drain and cooling. ThorCon is walkaway safe.
The ThorCon reactor is 30 m underground. ThorCon has four gas tight barriers between the fuelsalt and the atmosphere. Three of these barriers are more than 25 m underground. Unlike nearly all current reactors, ThorCon operates at near-ambient pressure. In the event of a primary loop rupture, there is no dispersal energy and no phase change. The spilled fuel merely flows to a drain tank where it is cooled. The most troublesome fission products, including strontium-90 and cesium-137, are chemically bound to the salt. They will end up in the drain tank as well.
No New Technology
ThorCon is all about NOW. ThorCon requires no new technology. ThorCon is a straightforward scale-up of the successful Molten Salt Reactor Experiment (MSRE). The MSRE is ThorCon’s pilot plant. There is no technical reason why a full-scale 250 MWe prototype cannot be operating within four years. The intention is to subject this prototype to all the failures and problems that the designers claim the plant can handle. This is the commercial aircraft model, not the Nuclear Regulatory Commission model. As soon as the prototype passes these tests, full-scale production can begin.
Rapidly Deployable
The entire ThorCon plant including the building is manufactured in blocks on a shipyard-like assembly line. These 150 to 500 ton, fully outfitted, pre-tested blocks are barged to the site. A 1 GWe ThorCon will require less than 200 blocks. Site work is limited to excavation and erecting the blocks. This produces order of magnitude improvements in productivity, quality control, and build time. ThorCon is much more than a power plant; it is a system for building power plants. A single large reactor yard can turn out one hundred 1 GWe ThorCons per year.
Fixable
No complex repairs are attempted on site. Everything in the nuclear island except the building itself is replaceable with little or no interruption in power output. Rather than attempt to build components that last 40 or more years in an extremely harsh environment with nil maintenance, ThorCon is designed to have all key parts regularly replaced. Every four years the entire primary loop is changed out, returned to a centralized recycling facility, decontaminated, disassembled, inspected, and refurbished. Incipient problems are caught before they can turn into casualties. Major upgrades can be introduced without significantly disrupting power generation. Such renewable plants can operate indefinitely; but, if a ThorCon is decommissioned, the process is little more than pulling out but not replacing all the replaceable parts.
Cheaper than Coal
ThorCon requires less resources than a coal plant. Assuming efficient, evidence based regulation, ThorCon can produce reliable, carbon free, electricity at between 3 and 5 cents per kWh depending on scale.
DYI Comments: If this proves to be workable look for Indonesia to use excess electricity to crack coal into liquid fuels using another old technology called Fischer-Tropsch process ending their need to import transportation fuels. Over the months ahead I'll keep my eye out for updates on Indonesia's progress and hopefully successful outcome. It goes without saying the U.S. needs to develop a pilot plant for feasibility. There are other options besides so called green technologies Mr. President.
DYI
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