WSJ: Goes After Shale Again

Back in March, the Wall Street Journal wrote a take down article on shale production. The newspaper is at it again with a very similar article. The prior article mentioned that shale producers argued that they could drill wells closer together and still produce the same amount of oil per well. This resulted in corporations raising close to $57 billion in equity and debt in 2016. The article discussed how one such corporation, Laredo, promised that they could drill 32 wells on a unit, which has since been reduced to 16 to 24 wells.

For their most recent article, the WSJ goes after Encana.

To reduce costs and avoid production problems that can occur when single shale wells are spaced too closely together, the company introduced the cube, an experiment in which it would complete as many as 60 oil and natural-gas wells from one location . . . In the company's biggest cube development to date, 33 wells drilled from one location in West Texas are each on track to pump about 300,000 barrels of oil over 30 years. That is about half the amount of oil Encana said a typical well would pump in late 2017, according to the Journal's analysis of production data from Rystad Energy, Shale Profile and Friezo Loughrey Oil Well Partners LLC. 

Shale Growth Slowing in the Permian?

Rigzone via Bloomberg has an article up about the Permian:

Now, cracks are opening in that survival tale, with companies ranging from EOG Resources Inc. to tiny Laredo Petroleum Inc. dropping their 2019 growth rates by 3 percentage points to more than 40 below last year’s gains. “You’re having to spend more and more every year to grow at a faster rate,” said Noah Barrett, an energy analyst at Janus Henderson, in a telephone interview. “Companies routinely spent 120 to 130% of their cash flow never generating positive cash flow or earnings.” . . . The Permian has been the world’s fastest-growing major oil region over the past two years, growing 72 percent to 4.2 million barrels a day. But the pace of that growth is under threat as producers bow to investor demands to stop spending money.

Algeria: why the military might not want to give up power

Algeria recently had their 21st Friday of protests. Reuters has this summary:

The military has tried to appease protests by helping the judiciary to meet demands for the prosecution of people suspected of corruption. Several former senior officials, including ex-prime ministers Ahmed Ouyahia and Abdelmalek Sellal have been placed in custody over charges including “dissipation of public funds”. . . . Anti-government protests now seek the resignation of interim president Abdelkader Bensalah, a former head of the upper house of parliament, and Prime Minister Noureddine Bedoui.

Let's key in on the corruption topic.

Pensions: Update on CalPERS Returns and Approaches Taken By Cities

Pensions & Investments writes that CalPERS had a 6.7% net return for their fiscal year ending June 30th. This was below the target of 7.1%. Though this return is below expectations, it is an improvement above what Pension & Investments reported back in January when it said that CalPERS earned -3.9% for 2018. That return was driven by the market drop in December 2018.

This is what they write for the fiscal year ending June 30th:

The $372.8 billion California Public Employees Retirement System, Sacramento, earned an annualized net return of 5.8% over five years, a 9.1% return for the 10-year period and 5.8% for the 20 years ended June 30. Over the past 30 years, the CalPERS fund has returned an average of 8.1% annually.

Sweden: Crime in Malmo

Around a year ago, I wrote some blog posts looking into crime and the city of Malmo. Though crime rates in Sweden hardly compare to that of the United States, I thought it would be interesting to look considering that the Swedish Democrats were making political gains and Malmo was often named as a city filled with growing crime. At the time, it did appear that murder rates were on the uptick. Interestingly, earlier this year, crime rates were reported for the city and crime had fallen to a 17 year low.

Per The Local in Sweden (January 18, 2019):

With recent high-profile shootings, you'd think Malmö was in the middle of a crime wave . . . According to Sweden's crime statistics agency Brå, the number of crimes reported in Malmö dropped more than 10 percent in 2018 to 53,192, a level last seen in 2001, when there were 75,000 fewer people living in the city . . . According to Brå's annual statistics, the number of attempted murders reported in Malmö dropped by nearly half, from 100 in 2017 to 55 in 2018, the lowest number since 2013.

A more recent article from The Local in Sweden appears to largely back this up:

People living in the city were slightly more likely than those living elsewhere in Sweden to report being victims of a crime.

Sweden and Energy

I haven't done any posts on Sweden for awhile so figured I'd do a google search and see what comes up. Bloomberg had an article up on electric vehicles and how Sweden wants to eliminate sales of fossil-fueled cars by 2030.

Demand for electricity in Stockholm and other cities is outgrowing capacity in local grids, forcing new charging networks to compete with other projects from housing to subway lines to get hooked up . . . For the rise in electric vehicles to be manageable despite the lack of power capacity, Power Circle suggests that owners should receive incentives not to charge and even send power back to the grid during morning and afternoon peak hours. 

Libya: Haftar's Military Loss and Loss of International Support?

Haftar's Libya National Army (LNA) was dealt a major defeat on Wednesday, June 26th. Via Reuters:

Forces allied to Libya’s internationally recognized government on Wednesday seized the town of Gharyan south of Tripoli, home to the main supply base of eastern forces attacking the capital, witnesses and Tripoli officials said . . . Gharyan was until Wednesday the main forward base for the LNA where troops, weapons and ammunition arrived from the East. The LNA began its Tripoli campaign here.

Haftar has been fighting to the south of Tripoli since April 4th without any real progress (from what I've read). Now he's suffered a major defeat. It isn't mentioned, but I wonder how many weapons and ammunition was taken by the Government of National Accord (GNA) forces.

California Teacher Pensions

As I recently blogged, Measure EE that would have helped fund LASUD got voted down by a significant margin. That doesn't mean that the funding problem doesn't go away.

LA School Report had an article up on California's pension system:

CalSTRS has gone from more than 100 percent funded to 63 percent funded in just 17 years . . . CalSTRS members who retired in 2018 received an average annual pension of $54,144  . . . California teachers do not pay into Social Security, and so do not receive those benefits when they retire. However, CalSTRS pays them more than double what a Social Security beneficiary would receive with the same final working salary and retiring at the same age. 

Too Much Oil in 2020: So Says IEA

Via Bloomberg we learn that oil supply growth is likely to increase faster than demand:

Even though growth in world oil demand will accelerate to 1.4 million barrels a day in 2020, it will be eclipsed by a 2.3 million barrel-a-day surge in output, as the ongoing boom in U.S. shale is augmented by new fields in Brazil, Norway and Canada.

The assumption in demand growth is based on the US and China coming to a resolution on trade. Also, half of the supply growth would come from US shale.