IHS Markit Research Articles

Crash rates of convertible cars

Objective Convertible cars have existed since among the first automobiles, and the lack of substantial roof structure creates some safety concerns. Though crash tests have demonstrated that convertibles can resist excessive intrusion in front and side crashes and that strong A-pillars and roll bars can help maintain survival space in rollovers, little work has been done examining the real-world crash experience of these vehicles. The objective of this study was to compare the crash experience of recent convertibles with nonconvertible versions of the same cars using the most recent crash data. Methods Crash and exposure data were obtained from the U.S. Department of Transportation and IHS Markit, respectively. Rates of driver deaths and police-reported crash involvements were compared for 1- to 5-year-old convertible cars and their nonconvertible versions during 2014–2018. Exposure measures included registered vehicle years (RVY) and vehicle miles traveled (VMT). These rates were compared using the standardized mortality ratio to account for possible differences in exposure distribution. Crash circumstances (e.g., point of impact, rollover, ejection) and behavioral outcomes (e.g., speeding, alcohol impairment, seat belt use) were compared for drivers killed in crashes. Results Convertibles had lower driver death rates and police-reported crash involvement rates on the basis of both RVY and VMT. However, the differences in driver death rates were not statistically significant. Driver deaths per 10 billion VMT were 11% lower for convertibles, and driver involvement in police-reported crashes per 10 million VMT was 6% lower. On average, convertibles were driven 1,595 fewer miles per year than the nonconvertible versions of these cars. Among fatally injured drivers, convertibles had slightly higher rates of ejection, and behavioral differences were minimal. The number of rollovers was small and their rate did not substantially differ between convertibles and their nonconvertible versions. Conclusions Safety concerns associated with convertibles’ retractable roof structures were not supported by the results of this study.

Intelligent Energy - Cognitive AI to Augment the Human Knowledge

<div class="section abstract"><div class="htmlview paragraph">Andrew Grove (founder CEO Intel) defines strategic inflectionpoints as what happens to a business when a major event alters itsfundamentals. The Covid-19 pandemic is one such historic event thatis changing fundamental business assumptions in the Oil industry.Companies with a hunter-gatherer mindset will ride this wave withthe help of technologies that make their operations lean andefficient. Current developments in AI, specifically aroundCognitive Sciences is one such area that will empower the earlyadopters to a many-fold improvement in engineering and researchproductivity. This paper explores 'how to augment the humanintelligence with insights from engineering literature, leveragingCognitive AI techniques?'. The key challenge of acquiringknowledge from engineering literature (patents, books, journals,articles, papers etc.) is the sheer volume at which it growsannually (100s of millions existing and new papers growing at 40%year-on-year as per IDC). 6 million+ patents are filed every year,of which a mere 20-40% are relevant to any technology domain. It ishumanely impossible to scour, review and take the right decisionsby reading them all. This paper describes key cognitive techniqueslike concept extraction, cause-effect formulation, sentimentanalysis, document summarization, topic modeling, automaticmetadata extraction etc., that conforms to the analyticalmethodology used by E&P researchers worldwide. Such techniquescan also be applied to legacy internal data of energy companies,empowering digitalization and knowledge management initiatives. Cognitive techniques have been around for a while now (firstgeneric patents from IBM in early 1990s) but have never beenapplied to the engineering world, until the 2010s when IHS Markit(under entity Invention Machine Corp.) patented and productizedthis as an engineering research, problem solving and innovationplatform. This paper also explores the efficiency gains and valuesaccrued by the researcher community, while using IHS Markit'sCognitive AI platform.</div></div>

Securities Finance: Data applications for beneficial owners

We use the IHS Markit Securities Finance dataset and beneficial owner consulting team to map the evolution of industry practices. Securities lending plays a critical role in global capital markets: the practice is broad, encompassing borrowing securities to cover a failed trade, borrowing to sell short, liquidity and financing. With the number of investors participating in securities lending continuing to increase, there is a need to have guiding principles in place with regard to lending programme controls and the evaluation of performance and risk. Part of the challenge from a beneficial owner’s perspective is being able to access quantitative and qualitative data to properly compare themselves to similar entities in order to make changes to existing parameters and perform a thorough review of their programmes. Having more transparency and a better understanding of the data allows beneficial owners to identify opportunities that may increase the profitability of their programmes, while allowing for changes to programme parameters within their risk/reward appetite. The increased focus on ESG (environment, social and governance) for many beneficial owners has resulted in new evaluations of securities lending programmes as they relate to ESG policies for respective investments. As internal priorities evolve for beneficial owners, regulation has also become an important factor of consideration for securities lending participants. It has affected the complete chain from execution of initial trades to monitoring and reporting. We provide evidence of these changes from academic research, industry working groups as well as the IHS Markit Securities Finance dataset and consulting business.

Domino effect in marine accidents: Evidence from temporal association rules

Marine accidents cause not only significant economic losses, but also severe environmental pollution and inestimable human casualties, which have become a worldwide concern. To better cope with this concern, this paper adopts temporal association rules (TARs) to mine and discover the domino effect in marine accidents. Using the dataset of 5754 marine domino accidents (MDAs) collected from the International Maritime Organization and IHS Markit Company, the main findings of this paper are as follows. First, ‘hull damage’ was found to be the most frequent accident in MDAs, and ‘collision’ was more likely to cause the damage in the whole hull. Second, ‘oil spill’ was most often observed as a final marine accident. Meanwhile, ‘foundered’ was more likely to cause ‘oil spill’ in both oil tanker and general cargo ship MDAs. Third, it is pointed out that most probable scenarios involved ‘hull damage’ as the basic accident which ended with ‘foundered’ and ‘oil spill’ as top accidents. These findings not only advance our knowledge of marine accidents from the perspective of the domino effect, but also provide insights into improving marine safety.

Exploring the Challenges and Promises of Automotive HUDs

INFORMATION DISPLAY LAST INCLUDED A special automotive display theme in its July/August 2020 issue. At the time, I and others from SID's Metro Detroit Chapter were organizing our 27th Annual Vehicle Displays and Interfaces Symposium (vehicledisplay.org), which, under the circumstances, of the coronavirus pandemic was reimagined as an online event. In this issue and the March/April 2021 issue, we revisit the symposium with an exploration of some of its most compelling points by Kyle Davis, a senior data analyst at IHS Markit, and two exciting articles on head-up displays (HUDs) that were selected as best papers by the symposium session chairs. The first, “Investigating Human Perception Studies for Head-Up Display Ghosting,” by Steve Pankratz, William Diepholz, and John Vanderlofske of 3M, covers a topic that is growing in importance because of the increase in vehicles with large multi-color (or full color) HUDs. SAE International most recently addressed ghosting in its automotive HUD standard SAE J1757-2, published in November 2018.1 The second article will appear in the March/April 2021 issue. “Holographic Optical Elements and Projector Design Considerations for Automotive Windshield Displays” by Sam Martin and Jason Thompson of Texas Instruments and Ian Redmond of Ceres Holographics offers a market overview of HOE automotive applications and performance and projector design considerations when illuminating holographic films. The specially designed films are inserted or attached to the windshield or combiner to allow information to be displayed. As long as vehicles are not fully automated (Level 5 of the six levels of driving automation SAE outlines in its J3016 standard), critical information needs to be legible and easy to comprehend so that the driver's attention remains fixed on the road. The windshield HUD (wHUD) or combiner HUD (cHUD), paired with advanced driver-assistance systems (ADAS), is a darling of the automotive safety world because it allows for quicker reaction times to visual information (see “Turning Automotive Windows into the Ultimate HMIs” in the July/August 2020 issue). However, that advantage comes with significant engineering disadvantages, including ghost images in the windshield, high ambient lighting and temperatures because of sun exposure, and the high cost of an HUD option. Nonetheless, because of the increase in the HUD's displayed image and, therefore, the increase in the field of view (FOV) from the evaluation points and multiple viewpoints as described in SAE J 1757-2 (see Fig. 1), ghosting and its challenges are the most important problems to solve. An overview of a computer-aided design with traditional eye boxes. Courtesy of the author The evaluation point for display performance cannot solely be the traditional centroid of the cyclopean eye ellipse. For wHUDs and some cHUDs, ghosting depends on view location and must be eliminated or rendered non-visible by the driver. (This can be even more complicated for taller or shorter drivers if the FOV variations set by automotive original equipment manufacturers [AOEMs] is not optimized for their viewing). Despite huge investments and technological improvements, Level 4 (in which an automated driving system [ADS] can do all the driving in certain circumstances) and Level 5 vehicles are still a long way off from production. Level 3 automation—conditional automation in which the driver must be ready to take over from autonomous mode at some points—is entering production,2 although many experts have safety concerns about it: Because it allows drivers to disengage, they may be slow to react if they need to resume control. For driver-in-control vehicles (SAE Levels 1 and 2 and sometimes Level 3), not only ghosting but also high ambient illumination is a significant engineering issue for any display operating outdoors. Military labs have developed standards and specifications for evaluation using costly integrated spheres and devices that are not affordable for consumers. The articles outlined here should lend some clarity to these important topics. Silviu Pala has been chairman of SID's Metro Detroit Chapter since 1998 and of the SAE Vehicle Flat Panel Display (VFPD) group since 1999. He is the co-general program chair of SID's Annual Symposium on Vehicle Displays and Interfaces. A former director of technology planning at DENSO International America, Pala holds 30 patents. He can be reached at.

Solar PV Market Research and Industry Competition Report

Solar Industrial scale continues to expand. The world installed photovoltaic capacity gradually increased from 135GW in 2013 to 480GW by the end of 2018, achieved 3.5 times growth during five years. There will be still have space for price reduction. With the development of solar cell structure design, micro-nano laser precision machining and other technologies, the per-kilowatt cost of photovoltaic power generation has entered decline channel, and it is expected to realize the affordable online in the future. According to IHS, the price difference between PERC single crystal components and polycrystal components is $0.055 per watt. Industrial technology has made obvious progress, and single crystal PERC has become the mainstream. The efficiency of the cell is breaking new records. The conversion efficiency of ordinary single-crystal and polycrystalline cells has reached 20.2% and 18.6% respectively, and the efficiency of high-efficiency batteries has reached 21.3% and 19.2% respectively. According to data released by Solarbe, the single crystal PERC technology performs best in cell conversion efficiency and output power compared with other technologies. In the next four years, China's market growth will remain stable at 40-50GW. IHS Markit forecasts that the global market size is expected to remain stable at 100-120GW from 2018, while the growth of the Chinese market will remain stable at 40-50GW in the next four years.

Normalized Cumulative Production Curves Estimate Ultimate Recovery

This article, written by JPT Technology Editor Chris Carpenter, contains highlights of paper SPE 199981, “Use of Normalized Cumulative Production Curves To Estimate Ultimate Recovery of Unconventional Plays in North America,” by Ivan Olea, Hamed Tabatabaie, SPE, and Louis Mattar, SPE, IHS Markit, et al., prepared for the 2020 SPE Canada Unconventional Resources Conference, Calgary, 15-16 September. The paper has not been peer reviewed. Operators and investors are interested in finding better metrics to evaluate the production performance of unconventional multifractured horizontal wells (MFHWs). The complete paper discusses the use of cumulative production ratio curves normalized to a given reference volume in time for different unconventional plays in North America to investigate the median trend for each play and the median ultimate recovery per play. The paper discusses the choice of 12-month cumulative production for a reference volume as a normalization parameter. Introduction Many methods exist for forecasting the production rate from unconventional reservoirs, but all have limitations. Recently, several publications have appeared relating the expected ultimate recovery (EUR) to the initial rate or the cumulative production after 3, 6, or 24 months. In the complete paper, these publications are reviewed, and their learnings extended, to several unconventional reservoirs. Work in 2018 studied 147 MFHWs covering many formations in the Permian Basin and a wide range of input variables and determined EUR using rate transient analysis, numerical simulation, and decline-curve analysis. The authors of that work compared the EUR with various cumulative production intervals (3, 6, 12, and 24 months) and concluded that the correlation with 3 months was poor; 24 months’ cumulative production was an accurate predictor of EUR but was not considered to be an early-enough predictor. That work’s authors chose 12 months as a preferred early-time predictor of EUR and justified its use by stating that operating conditions have usually stabilized by that time. A universal type curve of cumulative production was created as a percent of EUR vs. years of production (e.g., after 1 year of production, 33% of the EUR has been produced). This type curve accounted for different well lengths and completions and both strong and weak wells. The universality of the type curve is consistent with the understanding that the factors that make a well a high- or low-rate producer affect the 12-month cumulative and the EUR proportionally. A different work from 2018 studied approximately 3,000 wells in the Delaware Basin to determine an early indicator of long-term performance. These authors used not only the EUR but also the actual cumulative production from 252 wells with 6 years of production history. Results showed that the correlation coefficient between the 6-year production and various early-time indicators (cumulative production at 30, 60, 90, and 180 days and 1, 2, 3, and 5 years) improves from 0.23 (for 30 days) to 0.73 (for 1 year) and only minimally thereafter. A 2012 work studied public production data from more than 6,000 wells from the Barnett, Fayetteville, and Woodford shales. These authors binned the data into quartiles and used a key performance indicator (KPI) that combines a confusion matrix and a cost matrix (penalty function). Results indicated that the prediction ability of various metrics ranged from 48% (3-month cumulative production) to 85% (2-year cumulative production) and that, in some cases, the peak month production KPI was only marginally lower than the 6- or 12-month cumulative.

Production Networks and Epidemic Spreading: How to Restart the UK Economy?

We analyse the economics and epidemiology of different scenarios for a phased restart of the UK economy. Our economic model is designed to address the unique features of the COVID-19 pandemic.Social distancing measures affect both supply and demand, and input-output constraints play a key role in restricting economic output. Standard models for production functions are not adequate to model the short-term effects of lockdown. A survey of industry analysts conducted by IHS Markit allows us to evaluate which inputs for each industry are absolutely necessary for production over a two month period.Our model also includes inventory dynamics and feedback between unemployment and consumption. We demonstrate that economic outcomes are very sensitive to the choice of production function, show how supply constraints cause strong network effects, and find some counter-intuitive effects, such as that reopening only a few industries can actually lower aggregate output. Occupation-specific data and contact surveys allow us to estimate how different industries affect the transmission rate of the disease. We investigate six different re-opening scenarios, presenting our best estimates for the increase in R0 and the increase in GDP. Our results suggest that there is a reasonable compromise that yields a relatively small increase in R0 and delivers a substantial boost in economic output. This corresponds to a situation in which all non-consumer facing industries reopen, schools are open only for workers who need childcare, and everyone who can work from home continues to work from home.

OPEC+ Moves To End Price War With 9.7 Million B/D Cut

A month-long price war that began in March and caused global oil prices to crash at a record pace is winding down, thanks to an unusual and historic deal between the world’s major oil producers. The big moment came after 4 days of negotiations in mid-April led by the Organization of Petroleum Exporting Countries (OPEC) and its chief outside partner Russia inked an agreement to cut crude output by 9.7 million B/D. The cuts are the biggest OPEC and its allies have ever made—and the first to involve the US. The price cuts will take effect this month and extend through June. After June, output curtailments are to be gently rolled back to 7.8 million B/D starting in July and lasting to the end of 2020. The coalition of producing nations will then loosen the reductions to 5.8 million B/D from January 2021 to April 2022. This third phase will be subject to review next year. Each country’s reduction will be determined from their October baselines—except for Russia and Saudi Arabia. The two largest producers in the agreement are each reducing output from a baseline of 11 million B/D to 8.5 million B/D. In urging immediate action, OPEC Secretary General Mohammed Barkindo reminded oil and energy ministers from more than 20 nations that at current levels of production, the world’s crude storage capacity would be topped out by May. “There is a grizzly shadow hanging over all of us,” he said. “We do not want this shadow to envelope us. It will have a crushing and long-term impact on the entire industry.” Considered an essential step toward stabilizing crude markets, the agreement did not come without some dramatics. Mexico, a key partner in the so-called OPEC+ group, refused to commit to its proposed cut of 400,000 B/D, instead saying it was working with the US to share a combined cut of 350,000 B/D. The US, meanwhile, had never previously participated in a coordinated cut led by OPEC. US President Donald Trump said he agreed to “help Mexico along” by assuming the lion’s share of reductions requested by OPEC. The decision by the US to intervene came as a surprise to many observers. “I was going to pick up the slack, and they would make it up to us at a later date,” he added, indicating that Mexico could repay the favor in “a different form.” In the end, the informal arrangement proved to be just what the coalition of producers needed to hear to grant Mexico its wish to cut back just 100,000 B/D. On 12 April, the deal was approved by OPEC+ which moved its official reduction target from 10 million B/D to 9.7 million B/D to reflect the arrangement. “It would not have seemed in the cards three weeks ago that something like this could possibly happen,” Daniel Yergin, the vice chairman at IHS Markit, said. “Among other things, it reflected a pivot on the part of President Trump from focusing on low gasoline prices to focusing on the national security implications of devastating the US oil industry. Low gasoline prices are not a big thing at a time when most everybody is at home and can’t drive anyway.”

Technology Focus: Natural Gas Processing and Handling (April 2020)

Technology Focus In 2019, the US experienced the lowest natural gas prices since 2016. This was despite natural gas consumption increasing in the residential and commercial sector by 2% (between October and December) according to the US Energy Information Administration (EIA). In July and August, the electric generation sector also experienced an increase in natural gas consumption because of above-average humidity levels in the Midwest and Northeast. Natural gas inventories at the end of March recorded the lowest levels since 2014 during withdrawal season, whereas the injection season recorded the second-highest levels from sustained growth in natural gas production. This trend of low gas prices was because of natural gas production growth, as prices continued to decline through the rest of 2019. The EIA forecasts an increase in natural gas consumption by 1.4 Bcf/D (1.7%) in 2020. The average US natural gas price is projected to fall by 9% to $2.33/million British thermal units (MMBtu) in 2020. The EIA said it expects continued growth in natural gas production in 2020 in response to improved drilling, increased associated gas production, and increased Appalachian and Permian pipeline take-away capacity. As of 3 February, Henry Hub spot price closed at $1.82/MMBtu, $0.87 lower than the same time last year. Weather temperatures were warmer than expected, except in the Northeast and Midwest where it was colder than expected, hence affecting winter demand. Globally, the Paris-based International Energy Agency’s 5-year forecast shows natural gas demand driven by Asia-Pacific growth, with the region accounting for approximately 60% of the total gas consumption forecasted increase through 2024. China is expected to be at the forefront of this demand growth because it is expected to constitute approximately 40% of the total gas demand increase through 2024. The global liquefied petroleum gas (LPG) market has continued to grow reasonably in the past decade, and the US, as a result of its strong domestic LPG production, has ascended in recent years as the largest LPG producer and exporter in the world. The Asia-Pacific region, because of its growing population, constitutes the highest market share of the global LPG consumption. The global LPG market trend is predominantly supply-driven by natural gas and crude oil but not so much from refining. According to IHS Markit, LPG demand in Asia-Pacific grew approximately 3.5% in 2018 and has continued to maintain its steady growth in 2019. Global supplies of LPG are expected to rise approximately 5% to 325 million tonnes in 2020. By region, approximately 28% of the global supplies will be from the US and approximately 20% from the Middle East. Asia-Pacific will continue to be the main driver for LPG demand growth, accounting for approximately 45% (4.6 million B/D) of the global demand. The prominent increase in US LPG exports has resulted in significant changes in the LPG global trade flow patterns in recent years, demonstrating a shift from a dependency on exports from the Middle East. More can be learned by attending the SPE Annual Technical Conference and Exhibition in Denver on 5–7 October and the SPE Asia Pacific Oil and Gas Conference and Exhibition in Perth, Australia, on 8–11 September. Recommended additional reading at OnePetro: www.onepetro.org. SPE 195759 Solutions for Seal Gas Leakage Recovery in Methane Compression: Integration Into Processing Lines or Gas Valorization Systems by Filippo Conforti, Baker Hughes, et al. SPE 197582 Running Sour Hydrocarbon Assets: Eni’s Story of Experience by Luciano Scataglini, Eni, et al. SPE 195555 Experimental Investigation of Integrity Issues of Underground Gas Storage Containing Hydrogen by Erik Clemens Boersheim, Clausthal University of Technology, et al.

E&P Notes (April 2020)

E&P Notes Historic Oil Glut May Linger for Years Stephen Rassenfoss, JPT Emerging Technology Editor Editor’s Note: The global repercussions of COVID-19 and the oil price drop in mid-March continue to have far-reaching effects on the market, operators, and services companies. This month, JPT editors deliver in-depth E&P market and activity updates. To stay updated, visit the JPT website (www.spe.org/jpt), and sign up to receive JPT’s weekly newsletter (http://go.spe.org/jpt_newsletter) and JPT’s monthly Unconventional Insights newsletter ("http://go.spe.org/JPT_Unconventionals_Newsletter)"http://go.spe.org/JPT_Unconventionals_Newsletter). Price crashes caused by supply gluts have been happening since oil production began, but the latest one is growing to epic proportions. “There has been a dizzying drop in world oil demand and a dramatic pivot in Saudi oil production policy. If this situation persists amidst a recession, it points to the possible buildup of the most extreme global oil supply surplus ever recorded,” said Jim Burkhard, vice president and head of oil markets for IHS Markit. The firm’s estimates of overproduction could range from 4 million B/D to 10 million B/D from February to May 2020, which is in line with a trend of growing oversupply estimates from oil industry observers, who say low prices will be long-lasting. E&P Spending Cuts Spur Requests for Reduced OFS Fees Judy Feder, Technology Editor Fallout for the oil and gas industry from COVID-19 and the production volume war that began when Russia walked away from the suggested OPEC+ deal and Saudi Arabia started flooding the market with oil has been rapid and severe. And, it looks as if US shale will be the hardest hit. The total capital and operational expenditure of exploration and production (E&P) companies is now likely to be cut by $100 billion in 2020 and another $150 billion in 2021 if oil prices remain at a $30 level, according to a recent Rystad Energy impact analysis. The shale industry would carry the biggest burden of this supply shock by taking as much as $65 billion of the $100-billion 2020 spending reduction expected globally. And, it may get worse. According to Rystad, if no agreement is reached during the next scheduled OPEC+ meeting in June, E&P companies are likely to slash capital and operational budgets to make up for significantly lower cash flows that are expected this year and next.

Coronavirus cancels chemical events

The threat of the new coronavirus is disrupting the spring meeting season across the chemical enterprise. IHS Markit has canceled its World Petrochemical Conference, scheduled for March 24–27 in New Orleans, and its CERAWeek oil and gas conference, set for March 9–13 in Houston. The drug services trade show CPhI Japan has been postponed, and the American Physical Society called off its March meeting. IHS says it decided on the cancellations after consulting with health officials and taking into account the company travel restrictions and border health checks that attendees would have to contend with. “We wanted to provide as much notice as possible,” IHS says in a statement about the petrochemical conference. That conference drew 1,500 attendees in San Antonio last year, and organizers were expecting 1,800 for the New Orleans gathering. CERAWeek drew 5,500 last year. IHS also canceled a transportation event in Long Beach, California, last week.

Life After 5: How Tight-Oil Wells Grow Old

Tight-oil production in the US set new records in 2019, but the banner year ended with an important caveat: more than two-thirds of crude production from shale plays flowed from wells drilled in the past 2 years. The figure reflects the fast-paced life of horizontal wells while also highlighting that older assets are not contributing as originally expected. Wells brought online since the start of 2019 represented 45% of total US onshore production—3.5 million B/D out of an all-time high 7.74 million B/D. As more late-year production data flows in, the 2019 wells might represent closer to 50% of the total, according to information from Shale Profile, an analytics firm that aggregates public data from US oil and gas regulators. Another 25%, or about 1.9 million B/D, came from wells that started producing in 2018. The remainder of US onshore supply came mostly from the 93,000 wells that were completed between 2010–2017. The importance of this older stock of horizontal wellbores is coming into focus as the early-time-decline rate of new wells accelerates, prompting upstream analysts at IHS Markit to forecast that US tight-oil production will peak in 2021. Unconventional wells in the most prolific shale plays tend to see decline rates of more than 50% in their first year, and another 30% in their second. One of the key assumptions that justified the economics of such production profiles held that, after about 5 years, those steep declines would transition to the modest 5–10% annual drops seen in conventional wells, and remain there for many years. The most recent production data reveal that tight oil wells are not living up to this standard. At 5 years of age, horizontal wells in the Permian Basin and Williston Basin’s Bakken Shale share average terminal decline rates of around 17%. The figure for wells of the same age in the Eagle Ford Shale is 23.5%. On average, it takes 8–10 years for these wells to fall below an annual decline threshold of 10%. These terminal decline rates represent a clear challenge for current reserves and ultimate recovery estimates from wells that were expected to produce economically for 30 or more years. As a result, shale producers are now advised to not use conventional wells as a guide, or else run the risk of overstating and overvaluing unconventional assets (URTeC 432). The sector’s awareness of long-term production shortfalls is also considered to be the driving force behind a new wave of mergers and acquisitions that has left constrained operators seeking to combine with peers holding proportionally large positions of undrilled acreage.

Tracking and Predicting the German Economy: Ifo vs. Pmi

This analysis investigates the predictive power of the most important leading indicators for the German economy, which are provided by the ifo Institute and IHS Markit. We conduct an out-of-sample, real-time forecast experiment for growth of gross domestic product and growth of gross value added in both the manufacturing and the service sector. We find that both survey providers produce valuable leading indicators to predict the current quarter of German GDP growth. Regarding forecasts for the next quarter, the ifo indicators are slightly better than the IHS Markit headline index. For the manufacturing sector, series provided by ifo are clearly superior to those of IHS Markit. For the service sector, the ifo indicators produce better nowcasts, whereas the indicators by IHS are more valuable for one-quarter-ahead predictions.

Comments: Shale Enters a New Phase

Editor's column US crude oil production will reach a record level of 12.29 million B/D in 2019, increasing faster than expected both this year and in 2020, according to the latest US Energy Information Administration (EIA) forecast. Output will rise to 13.29 million B/D next year. Similarly, the International Energy Agency predicted last month that US shale oil production will continue to reshape world energy markets, with the US accounting for 85% of the increase in global oil production to 2030. US output will rise to 19 million B/D over the next decade, wresting additional market share from OPEC producers and Russia, according to the agency’s annual World Energy Outlook. But while shale will continue to affect global markets, some believe this predicted rate of growth may be optimistic. There are already signs that producers are curtailing spending and production in the major shale basins as they are under increasing pressure to focus more on capital discipline and returns rather than production growth. In contrast to the EIA and IEA, consultancy IHS Markit sees much slower growth in US shale next year, just a 440,000 B/D increase, with output flat in 2021. “Going from nearly 2 million B/D annual growth in 2018, an all-time global record, to essentially no growth by 2021 makes it pretty clear that this is a new era of moderation for shale producers,” said Raoul LeBlanc, IHS Markit vice president for North American unconventionals. “This is a dramatic shift after several years where annual growth of more than 1 million B/D was the norm.” IHS Markit predicts prices for West Texas Intermediate (WTI) crude to hover in the $50/bbl range and that capital spending will drop by 10% this year, 12% in 2021, and 8% in 2022, from $102 billion in 2019 to $83 billion in 2022. Prices need to be about $65/bbl for producers to be able to both increase production significantly while also satisfying shareholder expectations, it said. In the meantime, producers are focusing more on completing wells than drilling new ones, which is a more economical way of boosting output. There were 7,740 drilled but uncompleted wells in the seven major US shale regions at the end of September, according to the EIA, compared with 8,800 in January. After years of producing all out, pushing US oil and natural gas production to record levels, shale producers are pulling back. Although output has skyrocketed, particularly in places such as the Permian Basin, financial results have not. Mergers and bankruptcy filings are common, and investors have become reluctant to lend capital. Natural gas companies in particular are hurting, and they are promising more capital discipline and lower production going forward. During third-quarter earnings calls, Chesapeake Energy, EQT, Callon Petroleum, Cimarex, and Diamondback Energy all signaled flat to lower spending and production. Chesapeake’s CEO had to re assure investors of the company’s financial health a week after the company said in a third-quarter earnings filing that it had “substantial doubt” of its ability to continue as a going concern. “I don’t think OPEC has to worry that much more about US•shale growth long term,” Pioneer Natural Resources Scott Sheffield told investors last month.

DL‐IDS: a deep learning–based intrusion detection framework for securing IoT

AbstractThe Internet of Things (IoT) is comprised of numerous devices connected through wired or wireless networks, including sensors and actuators. Recently, the number of IoT applications has increased dramatically, including smart homes, vehicular ad hoc network (VANETs), health care, smart cities, and wearables. As reported in IHS Markit (see https://technology.ihs.com), the number of connected devices is projected to jump from approximately 27 billion in 2017 to 125 billion in 2030, an average annual increment of 12%. Security is a critical issue in today's IoT field because of the nature of the architecture, the types of devices, different methods of communication (mainly wireless), and the volume of data being transmitted over the network. Security becomes even more important as the number of devices connected to the IoT increases. To overcome the challenges of securing IoT devices, we propose a new deep learning–based intrusion detection system (DL‐IDS) to detect security threats in IoT environments. There are many IDSs in the literature, but they lack optimal features learning and data set management, which are significant issues that affect the accuracy of attack detection. Our proposed module combines the spider monkey optimization (SMO) algorithm and the stacked‐deep polynomial network (SDPN) to achieve optimal detection recognition; SMO selects the optimal features in the data sets and SDPN classifies the data as normal or anomalies. The types of anomalies detected by DL‐IDS include denial of service (DoS), user‐to‐root (U2R) attack, probe attack, and remote‐to‐local (R2L) attack. Extensive analysis indicates that the proposed DL‐IDS achieves better performance in terms of accuracy, precision, recall, and F‐score.

Truly Innovative Lighting Design

Truly Innovative Lighting Design

UHD: TVs Advance While Content Lags

AbstractAlthough consumer electronics companies are racing to unveil new TV resolutions, broadcasters, pay TV, and subscription video on demand streaming services often have a different set of priorities. Paul Gray, a research and analysis director for IHS Markit. explores the diverging outlooks and what we can learn from UHD market trends.

E&P Notes (May 2019)

PTTEP to Buy Murphy Oil’s Malaysian Business for $2.1 Billion Matt Zborowski, Technology Editor Thailand’s PTT Exploration and Production (PTTEP) is doubling down on Malaysian oil and gas in an effort to broaden its reach in its native South-east Asia. PTTEP has agreed to acquire Murphy Oil’s Malaysian business for $2.1 billion in an all-cash deal. PTTEP also announced that it was awarded two Malaysian exploration blocks in the Malaysia 2018 bid round. The assets to be purchased produced 48,000 BOE/D net to Murphy last year, of which 62% were liquids, and consisted of proved reserves of 468 Bcf of natural gas and 51 million bbl of liquids. The deal includes five petroleum exploration and production projects—Sabah K, SK309 and SK311, Sabah H, SK314A, and SK405B—in the shallow and deep waters off the Malaysian states of Sarawak and Sabah. Global Oilfield Services Market Won’t Recover Until 2025 Trent Jacobs, JPT Digital Editor It has been a tough few years for the world’s oilfield service sector and, according to a new report, the best of times are on hold for a few more. This is according to Rystad Energy, which says the sector is on pace to capture $920 billion in revenue by 2025. The Norwegian market research firm has highlighted the figure as the high-water mark reached in 2014, a year that ended with crude prices falling by more than 40%. “This will be the longest slump faced by the oilfield service industry since the 1980s, with about $2.3 trillion in revenues lost along the way,” said Audun Martinsen, Rystad Energy’s head of oilfield service research. Martinsen continued by noting: “On the bright side, in only 3 years’ time, activity levels will be higher than they were in 2014, although the cost cuts achieved in the sector means spending levels will only be 80% of what was seen in that peak year.” ExxonMobil, Chevron Target Nearly 2 Million BOE/D in Permian Production Matt Zborowski, Technology Editor ExxonMobil and Chevron revealed plans that would result in combined production from the US majors of nearly 2 million BOE/D from the Permian Basin of West Texas and southeastern New Mexico by the mid-2020s. ExxonMobil revised upward its Permian production outlook by almost 80% to reach 1 million BOE/D by as early as 2024. The operator said its resource base in the basin totals 10 billion BOE. Chevron expects its output from the basin to rise to 600,000 BOE/D by year-end 2020 before hitting 900,000 BOE/D by yearend 2023. The company said it has added some 7 billion BOE in Permian resources over the last 2 years. Shale Pioneer: Hard Ceiling On Production Growth Coming Trent Jacobs, JPT Digital Editor The central debate today in the US shale business is how long productivity growth will continue. According to one of the most influential voices in the sector, the answer is not much longer. “I am not particularly optimistic that, over the next 5 years, the industry is going to be able to show the year-over-year improvements in well recoveries that we’ve seen over the past 10 years,” said Mark Papa, chief executive officer of private-equity-backed shale producer Centennial Development Resources. Papa said the two biggest factors at play are frac hits, or parent-child well interference, and a shrinking inventory of high-quality drilling locations. Shale CEO on Parent-Child Challenge, Well Declines: We Know Matt Zborowski, Technology Editor Much has been made recently about the disparities in production between parent and child wells in US shale basins. The increased attention on the issue is part of broader concern among investors about the ability of operators to maintain high levels of output over the next few years. However, Doug Suttles, Encana president and chief executive officer, assures that shale executives are acutely aware of the parent-child challenge. His company has been “very public about this for 5 years now,” he said before an audience largely consisting of the investor community at CERAWeek by IHS Markit this week in Houston. He ultimately doesn’t think it’s “a big threat” to the shale sector. ExxonMobil Makes Huge Gas Discovery Offshore Cyprus ExxonMobil has made what it says is the world’s third-largest natural gas discovery in 2 years off the coast of Cyprus in the eastern Mediterranean Sea. Based on preliminary interpretation of the well data, the discovery could represent an in-place natural gas resource of up to 8 Tcf. The Glaucus-1 well, located in Eastern Mediterranean Block 10, encountered a gas-bearing reservoir of approximately 436 ft. The well was safely drilled to a depth of 13,780 ft in 6,769 ft of water. Industry consultants Wood Mackenzie told Reuters news agency that it estimated recoverable resources of Exxon’s field to be 4.55 Tcf. That compares with its 6.4 Tcf estimate for Calypso, found by Italy’s ENI and France’s Total last year.

Caution ahead in petrochemicals

The petrochemical industry is spooked. Shale gas in the US and a long economic expansion brought a decade of unprecedented prosperity for the industry. But speakers at the World Petrochemical Conference, put on in San Antonio last month by the consulting group IHS Markit, warned of threats to the new order. Economic growth is slowing, and a recession is possible. The plastic waste issue has blossomed into a full-fledged crisis for the industry that could hamper long-term growth. At the same time, petrochemical makers are bringing heaps of long-planned new production on line, which could mean slack markets in the near future. In his talk opening the conference, IHS Markit chief economist Nariman Behravesh predicted that US economic growth will slow from 2.9% last year to 2.4–2.5% this year. It should ease further to 2.0% in 2020. Behravesh told the audience of about 1,500 attendees that he thinks a recession