Recent Articles
LNG tanker loading in Louisiana

LNG: The India Question

The global LNG industry has an economics problem. The main use for LNG (liquefied natural gas) is to burn it to generate electricity. However, there are lots of ways to make electricity these days and importing LNG to then burn it to power gas turbines is currently one of the most expensive. And while we know the industry doesn’t care about it, LNG is also one of the dirtiest fuels from an emissions standpoint. It is a climate killer.

So, on the surface LNG doesn’t have a lot going for it if you aren’t an oil and gas executive. Which is why efforts to tout the initial public offering of a leading LNG exporter in the U.S. flopped badly this year as reality creeped in. It’s also why we haven’t heard about any new LNG facilities being funded and moving forward in the U.S. despite the Trump admin handing out LNG export permits like candy. As I’ve been saying for a while, there is a real LNG pause and it is based on economics.

Screenshot 2025-01-12 at 3.56.29 AM

The Cleanup Bill for the Fracking Boom is Already Here

In 2020 a paper in the Journal of Petroleum Technology acknowledged this fact stating: “… shale producers are now advised to not use conventional wells as a guide, or else run the risk of overstating and overvaluing unconventional assets.”

“Overstating and overvaluing unconventional assets” is another way to say reserves fraud.

Shale wells decline so fast that no one is going to want to own them at year 30 as then they would be stuck with very low oil production and high clean up costs which the profits from the oil production won’t come close to covering. The industry’s failure to acknowledge this is the basis of much of the fraud I have written about.

So when the oil companies run out of new acreage to drill to “keep running,” they have no where else to run to keep the shale boom alive.

So instead they will stop and walk away when the profits are gone. We are now getting proof that the industry is starting to walk away from their cleanup liabilities for shale wells that are not even 20 years old.

Screenshot 2024-10-23 at 6.46.10 AM

Learning from California As It Becomes An Orphan Petrostate

In California, the oil majors are walking away from their asset retirement obligations (aka cleanup obligations). This is a long-employed strategy by the fossil fuel extraction industry that allows them to take all of the profits and then leave the public with the liabilities. What this means is that the public already effectively owns the liabilities of the oil industry in America. The public chipped in $4.7 billion for abandoned well cleanup in 2022. It’s just the beginning. The industry knows this but is planning on the public not realizing it for another couple of decades. At which point, the profits will be gone and the industry will be free to move on.

Screenshot 2024-07-15 at 8.15.48 AM

New Satellites Alone Won’t Stop the Methane Climate Crisis

In March, a SpaceX rocket launched MethaneSat, a joint U.S.-New Zealand endeavor, which joined a satellite network already detecting methane emissions from oil and gas production on Earth. The new satellite circles the Earth 15 times a day, detecting releases of the greenhouse gas from drilling sites and pipelines worldwide.

However, on the ground in the oilfields of Texas, we see that the promise of this technology will fall short of the rapid reductions of methane emissions needed to slow climate change.

Screenshot 2024-04-16 at 6.04.09 AM

Oil Industry Methane Pollution Is Business as Usual, Not Accidental

The oil industry is once again winning the messaging war to mislead the public about the true nature of its business. Methane is getting significant media attention these days due to the launch of a new methane-detecting satellite and new U.S. methane regulations that may require some companies to pay fines for large methane emissions. However, almost all of the media coverage is making the mistake of talking about methane “leaks” or “fugitive emissions” being the main problem, when that is far from the truth.

Mentions in the Media

The Oil Industry’s Big Bluff

The oil companies know that much of their future profits will need to go toward cleaning up their drilling sites, so they’re trying to cash out now, basically by borrowing against those future profits and distributing the money as dividends. The idea is that they’ll all just eventually declare bankruptcy, leaving the government — ie taxpayers — to pay for all the cleanup. [Powering the Planet]

From The Crucial Years: “The head of the Saudi state oil company is insisting that the renewable energy transition is failing. But they’re also investing heavily in…renewable energy. As Justin Mikulka points out, something has to keep the cash flowing so that Saudi princes can buy soccer teams and golf leagues.”

“Despite this, U.S. oil majors have not written down or retired Permian assets or otherwise disclosed assumptions about project breakevens in their SEC filings. Instead, as analyst Justin Mikulka has shown, they have effectively used the media to disseminate an unsupported claim that their Permian assets will be among the world’s low-cost producers.”

Seb Kennedy is a must read on LNG markets. If you want to sign up for my newsletter he recommends, you can do that for free right here. https://powering-the-planet.ghost.io/#/portal/signup

And, Justin Mikulka in “Great News for Clean Power and Storage” at The Daily Kos can probably relate as much as anybody and perhaps understands more than most. He writes: “There is a lot of great news in the clean energy space. We have the tools and technologies we need to transition to clean energy and eliminate carbon dioxide and methane emissions. That said, it isn’t enough yet. Emissions are still rising, including the potent greenhouse gas methane, and climate impacts are getting impossible to ignore. We need to get our politicians to do a lot more, a lot faster.”

I second that.

“Justin Mikulka writes how great it is that the Biden administration is considering scrapping its plans to encourage natural gas plants to burn hydrogen.”

“Justin Mikulka is a great reporter who’s been on the energy beat for more than a decade and this piece draws attention to the incredibly important point that in addition to using the atmosphere as its dumping ground, the fossil fuel industry uses the literal earth as its dumping ground too, leaving taxpayers to clean up the mess of abandoned and idle wells that dot the country.” Amy Westervelt, Drilled

“While the trains are still burning, they’re rebuilding the rails,” Mikulka told Grist. “It’s again an excellent example of how they put profit over public safety.”

“Getting the world to use blue hydrogen made from natural gas gives the oil and gas industry a way to lock in decades of natural gas demand via blue hydrogen,” Mikulka said.

I was on Democracy Now to discuss my Intercept op-ed on the need for the U.S. to build a green steel industry and stop relying on imports from Russia and Ukraine.

The Intercept writes about how the rail lobbying group (Association of American Railroads) targeted me and my work and submitted it to security agencies. The truth is apparently a real threat to them.

My articles and op-eds have also appeared in Scientific American, In These Times, The Intercept, DeSmog, Drilled News, EcoWatch, Real Clear Markets, Truthout, Energy Post (Europe) and Nation of Change.

Contact: mikulka@gmail.com