text:
NLPWESSEX, natural law publishing
nlpwessex.org
"I don't think in the last two or three hundred years we've faced such a concatenation
of problems all at the same time.... If we are to solve the issues that are ahead of us,
we are going to need to think in completely different ways."
Paddy Ashdown, High Representative for Bosnia and Herzegovina 2002 - 2006
PEAK OIL AND ENERGY CRISIS NEWS
News - News - News
** To Go Direct To Current Energy Crisis News Reports - Click Here **
Peak Oil and Energy Crisis News Reports
Former Shell Scientist M. King Hubbert Speaks On Peak Oil in 1976
What Happened To The $11 Oil?
"The chairman of Royal Dutch/Shell, Mark Moody-Stuart, three months ago unveiled a five-year plan that assumed a price of $14 a barrel. He has since publicly mused about oil at $11. Sir John Browne, chief executive of BP-Amoco, is now working on a similar assumption. Consumers everywhere will rejoice at the prospect of cheap, plentiful oil for the foreseeable future. Policymakers who remember the pain of responding to oil shocks in 1973 and in 1979-80 will also be pleased."
The next shock?
Economist, 4 March 1999
".... today's $11-a-barrel price [is].... [the] lowest inflation-adjusted oil prices of the past half-century ... Even if consumption rises dramatically over time, most analysts believe prices should remain in check because of advanced technology and because OPEC nations need to sell as much as they can to maintain their incomes..... Low oil prices are excellent news, of course, for big energy consumers. A sustained $10-per-barrel drop in the price of oil cuts about 0.7 points from the annual U.S. inflation rate over five years and adds about 0.3 points to the U.S. economy's growth.... [I]f you're still operating under the assumption that the earth's petroleum--or at least the cheap stuff--is about to run out, you're not going to thrive in the new oil era. Technology is making it possible to find, produce, and refine oil so efficiently that its supply, at least for practical purposes, is basically unlimited."
TREMORS FROM CHEAP OIL
Businessweek, 14 December 1999
"Oil and gas companies need to increase annual investment by 20 per cent or face a global supply crunch from 2025, a leading consultancy has warned. An analysis by Wood Mackenzie found that the current industry recovery has been more gradual than in previous cycles, with a dearth of funds being pumped into new production. This could lead to a supply gap from the middle of next decade, pushing prices upward. It could also put increased pressure on companies' growth targets, triggering increased merger and acquisition activity in the coming years. "The recovery in investment has been slower and shallower than other upturns," said Malcolm Dickson, head of European upstream research at Wood Mackenzie. "We need to see investment to meet demand for oil and gas, which we see being robust in the long term, and to meet company growth targets." The warning comes as the industry cautiously emerges from a downturn that saw the price of crude collapse by 75 per cent between mid-2014 and early 2016, to below $30 a barrel at its lowest point. While prices have now seen a resurgence, reaching more than $80 a barrel in recent weeks, producers remain wary of investing capital into new projects. Development spending rose 2 per cent in 2017 and is expected to rise 5 per cent this year. Wood Mackenzie predicts this will increase from a low of $460bn in 2016 to around $500bn in the early-2020s — well below the peak of $750bn in 2014. But it would need to hit annual levels of around $600bn to meet demand for oil and gas over the coming decade, according to the consultancy."
Wood Mackenzie warns of oil and gas supply crunch
Financial Times, 24 October 2018
"We're running out of new oil. Explorers in 2017 discovered the least amount of oil since at least the 1940s, according to Rystad Energy, an oil and gas consultancy. It estimated that less than seven billion barrels of oil equivalent were found this year through Thursday. Some energy companies will announce more discoveries next year in their 2017 annual reports, but Rystad expects this to increase the 2017 total by 10% at most. New discoveries have fallen every year since 2014, when oversupply triggered an oil crash that cut its price by more than half. The plunge forced many upstream oil producers to reduce their spending, and helps explain why discoveries are also down. But that's not the only reason: explorers are finding less oil resources per field, according to Rystad. An average offshore discovery held about 100 million barrels of oil equivalent (boe) in 2017, down from 150 million boe in 2012. The last time oil and gas companies added to their reserves by as much as they were producing was in 2006, when the so-called reserve replacement ratio reached 100%. It was down to 50% in 2012, and 11% in 2017. This doesn't mean we're about to run out of crude oil. Major producers including the US have emergency reserves. Moreover, the industry's headache for the past few years has been too much oil. The Organisation of Petroleum Exporting Countries, a cartel of big producers, has agreed to deal with the oversupply problem by cutting output until the end of 2018. Also, there are usually a few years in between when an oil firm makes a large discovery and when it's ready for production. That means we can count on recent discoveries to keep our engines running for some time. And there were some major discoveries this year, like the 1 billion barrels found off the coast of Mexico by Premier Oil, Talos Energy, and Sierra Oil & Gas. But if oil discoveries continue trending down, we could be talking seriously about oil shortages in about a decade from now, Rystad estimates. "While there have been some notable successes this year, we have to face the fact that the low discovered volumes on global level represent a serious threat to the supply levels some ten years down the road," said Sonia Mladá Passos, a senior analyst at Rystad, in a press release."
Oil discoveries are at an all-time low — and the clock is ticking
Business Insider, 23 December 2017
"The Permian Basin in West Texas may be the second biggest field in the world after Ghawar in Saudi Arabia," he said. Zhu Min, the deputy director of the International Monetary Fund, said US shale has entirely changed the balance of power in the global oil market and there is little Opec can do about it. "Shale has become the swing producer. Opec has clearly lost its monopoly power and can only set a bottom for prices. As soon as the price rises, shale will come back on and push it down again," he said. The question is whether even US shale can ever be big enough to compensate for the coming shortage of oil as global investment collapses. "There has been a $1.8 trillion reduction in spending planned for 2015 to 2020 compared to what was expected in 2014," said Mr Yergin. Yet oil demand is still growing briskly. The world economy will need 7m b/d more by 2020. Natural depletion on existing fields implies a loss of another 13m b/d by then. Adding to the witches' brew, global spare capacity is at wafer-thin levels - perhaps as low 1.5m b/d - as the Saudis, Russians, and others, produce at full tilt. 'If there is any shock the market will turn on a dime,' he said. The oil market will certainly feel entirely different before the end of this decade. The warnings were widely echoed in Davos by luminaries of the energy industry. Fatih Birol, head of the International Energy Agency, said the suspension of new projects is setting the stage for a powerful spike in prices. Investment fell 20pc last year worldwide, and is expected to fall a further 16pc this year. "This is unprecedented: we have never seen two years in a row of falling investment. Don't be misled, anybody who thinks low oil prices are the 'new normal' is going to be surprised," he said. Ibe Kachikwu, Nigeria oil minister and the outgoing chief of Opec, said the ground is being set for wild volatility. "The bottom line is that production no longer makes any sense for many, and at this point we're going to see a lot of barrels leave the market. Ultimately, prices will shoot back up in a topsy-turvey movement," he said...Saudi Arabia has made it clear that there can be no Opec deal to cut output and stabilize prices until the Russians are on board, and that is very difficult since Russian companies are listed and supposedly answerable to shareholders."
Saudis 'will not destroy the US shale industry'
Telegraph, 24 January 2016
"Ten years ago you couldn't avoid it if you tried. Books by James Howard Kunstler, Richard Heinberg, Kenneth Deffeyes, and others were warning that worldwide oil production would inevitably peak soon, based on analysis similar to that of celebrated geologist M. King Hubbert, who predicted, in 1956, that U.S. oil production would peak between 1965 and 1970. Darn if he wasn't right. With the presumed world peak in oil production, national economies hooked on injecting oil straight into their largest arteries then began to decline. Peak oil doesn't mean oil would disappear – half of it would still be left – just that less of it would be produced each year going forward, and shell-shocked economies would fall into a permanent state of recession as consumers battled, Mad Max-like, for every last barrel. Except "events never play out the way one expects," said James Murray, a speaker at a session entitled "Is Peak Oil Dead and What Does It Mean for Climate Change?" at the AGU Fall Meeting in the City by the Bay. Technology came to the rescue, in the forms of fracking and three-dimensional directional drilling. U.S. oil production soared upward 54 percent in just five years, from 3.3 billion barrels in 2009 to 5.1 billion barrels in 2014. Although world oil production increased by only 8.5 percent in that time, it was enough to keep it from peaking. So is peak oil now an outdated concept, or does it still lie in our future? The latter, most experts at the AGU meeting were saying, while admitting they hadn't foreseen the technological revolution that has allowed U.S. oil and gas production to soar over the past decade. Those resources are finite, and the cost of extracting them increases once the low-hanging fruit are picked. Oil has dropped to about $35 per barrel because oil producers, hungry for unconventional oil from tar sands and gas from shale, overproduced. Yet they're still not making money, said James Murray from the University of Washington. Shale oil – what the industry calls "tight shale" – "is profitable for drillers, hotels and restaurants, but not for investors," he said. Cash flow in this sector was $10 billion in the red in 2014, even as yet more money is plowed into it from, Murray thinks, investors desperate for yields as the Federal Reserve keeps inerest rates extremely low. Murray said the break-even price for conventional oil is $20 per barrel, but $75 per barrel for tight oil. So oil companies are drawing back: U.S. oil production seems to have peaked in July 2015, and even the Eagle Ford shale basin in Texas and the Bakken field in North Dakota are cutting back. "The world may be close to peak oil production," Murray concluded....David Hughes, president of Global Sustainability Research, Inc. in Calgary, pointed out that "the remaining reserves [of fossil fuels] are large, but of lower quality and require more energy to produce." He estimated that more than 90 percent of what are known in the field as 'unconventional sources' – shale gas and oil and tar sands oil – 'are not recoverable.'"
Whatever became of 'peak oil'? Still to come?
Yale Climate Connections, 18 December 2015
"It is now generally accepted by those actually studying the issue that production of 'conventional oil,' which is what the early 'peakists' were talking about 10 or 15 years ago, really did stop growing back in about 2005-2008. Since then official 'oil' production numbers have continued to climb slowly, but included in the 'official' numbers as put out by the US and international agencies is not all your grandfather's oil. Instead the compilers of our oil statistics have learned to lump all sorts of liquid hydrocarbons of varying utility together and tell us that oil in the form of 'all liquids' continues to grow. Now these hydrocarbons such as natural gas liquids, biofuels, tar sands, and shale oil have uses, but they either cost considerably more to produce than conventional oil, or do not have the same energy content as conventional oil. In at least one case, 'refinery gains' which are sort of like whipping up a pint of cream into gallons of whipped cream, have no additional energy in their expanded state at all. They simply fill more barrels and let us pretend we have more energy to use than we actually do. While the financial press continues to chatter endlessly about the technological breakthroughs that have brought us millions of barrels of new shale oil, sadly they have the basics of the story wrong. It is the high prices that 'oil' has been selling for in the last ten years, not the decades-old fracking technology that has allowed very expensive shale oil to be produced that is new. Even with the recent $40 per barrel price decline, oil is still selling for four times what it was going for 12 or 13 years ago. It is the surge in prices to circa $100 a barrel has allowed very expensive oil such as that from fracked shale wells, the Canadian tar sands, and deep offshore oil wells to be produced; now with oil selling for closer to $70 a barrel the question is how long oil that is no longer economic to produce will keep being extracted. The other question is just how much of our oil supply is in danger of being mothballed until prices climb again as they surely will. The reason for the current fall in prices is still in debate. The 'oil' supply has continued to creep up in recent years, but starting last June the demand for $100+ oil was no longer there. While demand in the 'rich' OECD countries has been down since the 2008 oil price spike, this year it seems to be the slowing Chinese economy and its reduced demand for raw materials that has been behind the sinking demand. Many of the developing economies have been growing and using more oil each year due to growing trade with the Chinese. Someday conventional wisdom will conclude that oil at circa $100+ a barrel was simply too much to sustain high rates of economic growth and so the growth fell taking oil demand along with it. "
The Peak Oil Crisis
Falls Church News-Press, 31 December 2014
"The critical measure here is EROEI (the Energy Return On Energy Invested). The days of 100:1 energy returns are long gone. The ratio for new oil projects has declined from 30:1 to barely 10:1 since the 1970s. For global energy overall, the EROEI has declined from about 37:1 in 1990 to less than 14:1 now. The flip-side of EROEI is the real cost of energy. The cost ratio at an EROEI of 37:1 in 1990 was 2.6 per cent, but this has risen to 6.8 per cent today. The global EROEI may fall to 10:1 by 2020, increasing the energy cost 'levy' on the economy to 9 per cent. In blithe ignorance of this increasing levy, we have continued to grow the claims value of the financial system on the assumption of perpetual growth. These 'excess claims' show up as unsustainable debt, undeliverable welfare commitments, and unrealisable expectations for returns on investment. My calculations suggest that the system now owes $90 trillion (£55 trillion) more than it can deliver. For individuals, this is being manifested in the escalating real costs of fuel, power, food, water and physical infrastructure. Globally, it is visible in 'energy sprawl', as the energy-delivering infrastructure expands (both in scale and in cost) in response to the weakening in efficiency resulting from a deteriorating EROEI. As well as crimping disposable incomes and destroying returns on investment, this process is curbing our ability to invest in other things. The essential point is that the economy is not a monetary system governed by the theoretical 'laws' of economics, but an energy dynamic determined by the all-too-real laws of thermodynamics. Once we understand this, the squeeze on household prosperity becomes far less of a mystery."
Tim Morgan - The global economy sinks under its debts as the real cost of energy rises
City.AM, 24 October 2013
"The most common misconception about peak oil is that it means the world is running out of oil. Many articles that seek to debunk the notion of peak oil start with that premise, and then they proceed to tear down that straw man. Peak oil is about flow rates, and the overall flow rate will begin to decline while there is still a lot of oil left in the ground. Another misconception is that peak oil beliefs are homogeneous. The beliefs among people who are concerned about the impacts of peak oil cover a wide span. There are those who believe that a peak is imminent, to be followed by a catastrophic decline....... A more mainstream peak oil position is that the real threat is much higher oil prices, leading to stagnant economies.... The points of contention are the timing, the steepness of the decline, the impact on the global economy and the ability of other energy sources to fill the supply gap. Some believe we will smoothly transition to alternatives, and some people believe peak oil will be catastrophic."
Peak Oil: Misconceptions and Realities
Investing Daily, 26 November 2012
"...we are entering an era of scarce resources. Apart from the atomic bomb, this is the most dangerous development in two centuries..... New powers such as China and India are rising, not yet risen, mixing emphasis on their 'developing' status with assertiveness."
David Miliband, British Foreign Secretary, 2007-10
'It was not bin Laden who defined this decade'
London Times, 7 September 2011, Print Edition, P28
"Bankers and the financial sector may have displaced energy from the front pages of the newspapers right now, but Energy Security remains at the top of the global political and economic agenda....The need to balance energy security, jobs and economic development while addressing the problem of climate change all contributed to the challenge politicians faced in Copenhagen. And that challenge means that energy security will dominate politics and policy for the next 12 months and considerably beyond.... Reliable and affordable supplies of hydrocarbon energy were taken for granted through much of the 20th century and laid the foundation for the world's extraordinary economic progress. When concerns arose, it tended to be at times of war or turbulence, notably in the Middle East, or, closer to home, with industrial action. What's different now is that energy security has become a defining issue for the 21st century, as one element in a complex energy challenge with strategic, economic and environmental dimensions.... Opening access to a range of potential operators encourages the most efficient solutions, and often involves partnerships that provide new combinations of skills. Iraq is a very good example. BP is teaming up there with CNPC of China and Iraq's South Oil Company to drive a major investment programme that will nearly triple production from the super-giant Rumaila field. With this and the other agreements concluded with national and international oil companies in the last six months, Iraq has the potential to contribute 10mmb/d to global supplies in the next 10-15 years. That's a big piece of the additional resource we need....The current debate about Copenhagen and sustainability add new urgency and importance to the broader discussion of energy security. The challenge of creating a low-carbon economy is far from easy, requiring the wholesale re-engineering of the global economy over time."
Tony Hayard, Chief Executive of BP
The Challenge of Energy Security
Speech at London School of Economics, 4 February 2010
"The most important contributors to the world's total oil production are the giant oil fields....The evolution of decline rates over past decades includes the impact of new technologies and production techniques and clearly shows that the average decline rate for individual giant fields is increasing with time. These factors have significant implications for the future, since the most important world oil production base – giantfields –will decline more rapidly in the future, according to our findings.... By 2030 the production from fields currently on stream could have decreased by over 50% in agreement with IEA (2008) . The struggle to maintain production and compensate for the decline in existing production will become harder and harder. Our conclusion is that the world will face an increasing oil supply challenge, as the decline in existing production is not only high but also increasing."
Giant oil field decline rates and their influence on world oil production
Energy Policy Volume 37, Issue 6, June 2009
"The global economy is tanking, U.S. forces remain tied up in Iraq, Afghanistan is on a downward spiral -- one might wonder why anyone would want to be U.S. president during these trying times. Recently, the nation's chief intelligence officer weighed in, painting an even more somber picture of a far more complicated world. National Intelligence Director Mike McConnell looked beyond the immediate future, focusing on what his analysts are telling him about the challenges the world community is likely to face by 2025. It isn't pretty. Speaking to an annual conference of intelligence officials and contractors, McConnell said demographics, competition for natural resources and climate change will increase the potential for conflict. President-elect Barack Obama may get a glimpse of some of those challenges on Thursday. McConnell is expected to lead Obama's first top-secret intelligence briefing, according to U.S. officials familiar with the process. According to McConnell's outlook, economic and population growth will strain resources. 'Demand is projected to outstrip the easily available supplies over the next decade,' he said at the annual conference. The intelligence community's forecast indicates oil and gas supplies will continue to dwindle and production will be concentrated in unstable areas, he said. And there appears to be no relief at hand. McConnell said studies have shown that new energy technologies -- such as biofuels, clean coal and hydrogen -- generally take 25 years to become commercially viable and widespread."
New president faces increased risk of conflict, intel chief says
CNN, 5 November 2008
"If you speak to people in the industry, they will conceed that whatever my company may say publicly, we understand that we are facing decline in our own production and worldwide, we are not going to be able to produce more fuel liquids or crude oil in the near future... I was recently at a conference in New Mexico, sitting next to one of the recent CEOs of a major oil company and he, in response to a question from the audience, said 'of course I am a peakist, it is just a question of when it is coming' and I think that that is illustrative of once one is retired as a CEO, one is freer than one was in position to say I am a peakist. And what you hear privately from almost all people is we are coming to it.... I think that many of these politicians will ultimately find that the public blames them for its failure to warn them. Of course in a sense the public is responsible because it is the present public attitude to which politicians play up, and tell them what they want to hear but when the view of the world changes, what the public wanted to hear some time ago is no longer what they want to hear in the future."
James Schlesinger, former US Energy Secretary
Interview with David Strahan, ASPO 6, September 2007
"The scarcity of energy supplies and the energy imbalance between nations is a threat to our prosperity and national security. As resources contract, oil-hungry economies will compete for dwindling supplies of hydrocarbons. Competition for fossil fuels will increase.... Energy resources have long been a major strategic concern: access to secure sources, control over supply lines: these are issues of national security.... The energy challenge is now more pressing than ever.... Global oil production is apparently nearing its peak.... current estimates seem to be converging on some point between 2010 and 2020.... [there] are five factors which are changing the energy landscape: rising demand; dwindling supply; greater concentration of resource in the hands of a few; limited spare capacity; and the environmental impacts of energy use.....This is not a problem that can wait ten years."
Sir David Manning, British Ambassador To The United States Of America
Speech at Stanford University, 13 March 2006
".... a series of crises in oil supply is likely over the coming decades. The first, related to the peak and decline of non-OPEC production, is practically upon us and underpins the currently high oil prices...... The imminent inability of non-OPEC production to meet incremental demand and its decline after 2010 precipitates the second crisis as OPEC's diminishing spare capacity (even with Iraq's production back to preinvasion levels) becomes less and less able to accommodate short-term fluctuations.....The third crisis, due to OPEC's incremental supply being unable to meet incremental demand, follows in the first half of the next decade. This assumes that OPEC's reserves are as published. .....These crises will have global economic and geopolitical significance: The oil price will be high and volatile, and demand growth will have to be curtailed..."
Oil Supply Challenges - 2: What Can OPEC Deliver?
Oil and Gas Journal, 7 March 2005
The Energy Challenge Of The Post 9/11 Period
"The U.S. needs energy — lots and lots of energy — and 37.1% of it is currently supplied by oil. As the population expands and the policy decisions and technological innovations needed to make the switch to green, renewable energy sources lag, thirst for the stuff is only going to grow. Critics have long lamented that when it comes to energy policy, 9/11 was an opportunity for the country to have an honest debate about the choices it needs to make if it's ever going to break its addiction to oil. 'We need to address the underlying issue,' says Lisa Margonelli, director of the New America Foundation's Energy Policy Initiative, 'and that's our dependence on oil.' Having a national conversation now — an adult one — is the only way forward."
The Far-Ranging Costs of the Mess in the Gulf
TIME, 6 May 2010
MORE ENERGY INFORMATION
'We Need A New Way Of Thinking' - Consciousness-Based Education
PEAK OIL AND ENERGY CRISIS NEWSBITES
2019 - 2018 - 2017 - 2016 - 2015 - 2014 - 2013 - 2012 - 2011 - 2010 - 2009 - 2008 - 2007
"China and Russia are poised to further deepen their energy cooperation as their top leaders both pledged on Friday to improve business environment for energy firms' cooperation.Attending a bilateral energy business forum together, Chinese President Xi Jinping and his Russian counterpart Vladimir Putin vowed to provide policy support for such cooperation. As comprehensive strategic partners of coordination, China and Russia enjoy deepening cooperation in all spheres, which has forcefully promoted the two nations' common development and revitalization, Xi said. Describing energy cooperation as the "most significant, most fruitful and most wide-ranging" area of bilateral cooperation, Xi said the two sides' close coordination has played a positive role in safeguarding the fair, just, reasonable and orderly international energy order. To consolidate and deepen their energy cooperation, Xi made four proposals. Firstly, business entities should lead the cooperation and stick to the principles of mutual benefits, win-win results and being commercially viable. Financial insurance and energy cooperation should be enhanced for mutual support and mutual promotion."
China, Russia vow to further energy cooperation
Xinhua, 9 June 2019
"Angela Merkel's government is facing growing calls from business leaders to postpone plans to phase out nuclear power in Germany in order to protect the environment. The chief executive of Volkswagen and the chairman Continental AG, a leading car parts manufacturer, are among those to speak out in recent weeks. They have seized on the climate movement of 2019 as an opportunity to argue in favour of nuclear energy, and warn shutting down Germany's last reactors could leave the country reliant on highly pollutant brown coal. Mrs Merkel pledged to shut down all of Germany's nuclear reactors by 2022 in the wake of a public outcry following the 2011 Fukushima disaster in Japan. But critics say it was too ambitious to switch to renewable energy and phase out nuclear power at the same time. With renewables unable to make up the shortfall, Germany has been forced to turn to coal."
Germany faces growing calls to delay phase-out of nuclear energy
Telegraph, 9 June 2019
"The executive director of the International Energy Agency said Europe saved $8bn on its natural gas bill last year because surging U.S. shale production and a shake-up in EU energy markets forced Russia to change its gas pricing mechanism. Fatih Birol, speaking as the IEA released its annual gas report Friday, said 2018 was a "golden year for natural gas, which accounted for 45% of total global energy growth, which in turn was the fastest in two decades," he said. Demand for natural gas grew 4.6% in 2018, led by the US and China. He said the shift in global gas markets stemmed from the US shale gas revolution, a rapid expansion of the liquefied natural gas industry and EU liberalisation of energy markets, had forced Russia to change its oil-indexed pricing of gas. The change began when rising US gas output led Qatar, the world's largest LNG exporter, to divert LNG supplies to Europe, shaking up pricing on the continent and widening the influence of the Dutch TTF benchmark price."
Europe saved $8bn on gas bill in 2018 because of US and Russia: IEA
Oil and Gas Middle East, 9 June 2019
"Texas drillers may have found a solution to the stubborn natural gas glut that's forced them to either burn it off into the air, or pay others to take it away. At least five producers, led by EOG Resources Inc., are experimenting with shooting highly-pressurized natural gas into past-their-prime wells that have seen their output slip. The wells are then capped to build up pressure inside with the aim of dislodging any oil still hiding in the rock.The methodology's been used in conventional wells elsewhere with both natural gas and carbon dioxide for years, but it's just now emerging in America's fracked shale fields. The win-win goal: The trapped gas is put to work, and there's a 30%-to-70% gain in oil output from older wells, according to EOG. As the shale boom ages, the potential could be extensive.... With pipeline capacity for gas limited, prices there have cratered, dropping as low as minus $9 per million British thermal units in early April.The result: In late 2018, Permian flaring -- the burning off of associated gas -- more than doubled from a year earlier to 500 million cubic feet a day, and that's likely to rise, said Stephanie Kainz, senior associate at RS Energy Group Inc. in Calgary. It's a problem from both an economic point of view, and environmentally.... Gas injection can potentially extend crude production volumes in older wells by 18 to 24 months, Krishnamoorti said. What's still to be determined is how well EOR works in different types of rock formations.Not all rock is the same, and while it does appear to be an attractive option in many parts of the Permian, it's "not particularly good" in at least one section, the Wolfcamp zone, according to Krishnamoorti..."
Texas's Gas Glut Is So Bad Drillers Are Pumping It Down Wells
Bloomberg, 7 June 2019
"Russia has criticized U.S. efforts to supply natural gas to Europe because it is "fearful" of free market competition, Washington's top energy diplomat said this week, in comments that reflect growing tensions with Moscow over President Donald Trump's "energy dominance" policy.The United States has become the world's fastest growing exporter of liquefied natural gas (LNG) and is set to become the world's third largest shipper of the product this year, due to surging output from U.S. shale fields. Trump has said the supplies should provide European allies with an alternative to Russian energy and his Energy Secretary Rick Perry has called the exports "freedom gas," postures that have drawn criticism from Russian officials."They don't like the idea of, even the concept of, competition because it forces a change in their behavior," Frank Fannon, U.S. assistant secretary of state for energy resources, told Reuters in an interview late on Thursday, saying it had forced Russia's state-controlled industry to adjust pricing. "They prefer to operate under opaque conditions in the dark of night, they're fearful of the energy that the U.S. is producing and the exports," he said. In the most recent example of Russian criticism over U.S. energy shipments, Igor Sechin, the CEO of Russian state energy giant Rosneft and one of President Vladimir Putin's closest allies, accused the United States on Thursday of ushering in an "era of energy colonialism", and accusing it of using energy as a political weapon. U.S. officials have often levied similar charges at Russia, which has at times shut off gas supplies to Ukraine in the dead of winter during pricing disputes. Sechin said Washington's efforts to push American gas into Europe came alongside threats by U.S. lawmakers to impose sanctions on Russia, including on its Nord Stream 2 pipeline led by Gazprom. The Trump administration has opposed the pipeline, as did the Obama administration, saying it would increase Russia's economic grip on Europe and deprive Ukraine of transit fees. "Oppression of competitors has become the dominant theme of U.S. economic and foreign policy," Sechin said at a forum in St. Petersburg. Fannon rejected Sechin's comments, saying the Trump administration is pushing for transparent, free markets. ... Trump has slashed regulations on drillers to help boost exports of oil and gas to allies and partners, a policy he calls energy dominance. Russia is also apprehensive about projects Washington has supported for 10 years to bring natural gas via pipelines from Azerbaijan's Shah Deniz field to markets in Europe via the Southern Gas Corridor, Fannon said. The last leg of the $40 billion corridor, the Trans-Adriatic Pipeline (TAP), is on track to start next year. In addition, Fannon said Russia fears U.S. development of advanced nuclear power known as small modular reactors, a technology he said could be commercial in less than 10 years. The reactors are being developed by NuScale Power, a joint venture of Lightbridge Corp and Framatome, and other companies."
Russia "fearful" of America's rising energy exports –U.S. envoy
Reuters, 7 June 2019
"The United States may now be the world's biggest crude producer, but the oil being produced in its prolific Permian basin is increasingly too light in density for domestic refiners or for exports, eroding prices for these orphan barrels. Over the past year, production from the Permian in West Texas and New Mexico has changed, with more super-light oil being extracted, as producers focus drilling in the western part of the basin.As those volumes increase and heavy crude supplies shrink, refiners are grappling with the mismatch in the density of oil they require and what the country produces, traders said. U.S. refineries, geared to mostly process heavier and medium crudes that are imported from neighboring producers, are struggling to blend the lighter oil efficiently, market sources said. That problem has grown more acute this year with heavier crude in short supply after U.S. sanctions on Venezuela, production declines in Mexico and transportation bottlenecks in Canada."
As Permian oil production turns lighter, price outlook darkens
"China is now fully part of the global energy trading system, regularly importing more than 9m barrels a day of oil and a rapidly growing amount of natural gas. But Beijing faces an American assertion of power that threatens to disrupt the current pattern of trade, not least in energy. The Chinese reaction could reshape markets we take for granted. The first American action is direct: a war of competing tariffs on trade between the US and China that affect everything from washing machines to rice and even baseballs. The second is indirect: the US sanctions against Iran that prohibit trade between third countries and Iran including trade in oil. Initially exemptions on such trade were granted to a number of countries including India and China, but in May the US began withdrawing those exemptions....Chinese oil imports have risen rapidly during the past decade. The country may have 2.5m electric vehicles but it also has more than 300m registered vehicles running on diesel and petrol, along with an expanding internal air travel sector. Oil has become inseparable from economic activity and is essential to satisfying the consumer needs of China's growing middle class. Almost half — 44 per cent — of China's oil imports come from the Middle East. As the US becomes ever more self-reliant in oil and gas thanks to the shale revolution, the natural destination for Middle East oil is Asia rather than America. If Iran's oil trade is cut off — either by sanctions or by a physical conflict that closes the Strait of Hormuz — China will be among the first to feel the implications. Energy security is now a Chinese issue.... Longer term, the reminder of China's vulnerability to US actions will focus attention on the challenge of its dependence on outside sources for commodities that have become essential for continued economic success. The result is likely to be a more mercantilist policy on energy trade. If an open trading system cannot be replied upon, Beijing will resort to bilateral deals — securing specific supplies of oil, and perhaps gas too, through direct state-to-state barter deals using all the tools it can offer, from cheap loans to political support and the supply of military and other equipment. Such an approach will go well beyond the limited steps taken so far. A serious bilateral oil-trade plan would include direct investment and ownership of resources and the accelerated development of Chinese companies into multinationals capable of finding and producing energy resources around the world. For Beijing, this step is logical and would be a completely understandable response to a US assertion of extraterritorial power over the world market. For the rest of us the move will be dangerous. If China ties up 9m or 10m b/d of oil — in April imports reached 10.6m b/d, up 11 per cent on April 2018 — under bilateral deals, the market that remains will be smaller and potentially much more volatile."
Is China about to change the global oil trade?
Financial Times, 3 June 2019
"As a $200bn wave of new global investment gets under way, the energy industry is warning that chaotic policymaking and overseas competition are threatening to cut short Australia's tenure as the world's biggest exporter of liquefied natural gas. The energy companies say the government has failed to deliver coherent climate and energy policies, appears willing to intervene for the benefit of local industry over LNG exporters and has been unable to approve more gas exploration....Australia overtook Qatar to become the world's top exporter of LNG in November, but faces intense competition from the likes of the US, Russia and Mozambique for investment from companies who prioritise stable energy policies and clarity over the outlook for costs. Companies are chasing an expected boom in LNG demand as governments look to shift their electricity systems from heavily polluting coal generation to gas. Worries over Australia have emerged as the energy industry prepares to sanction a record 100m tonnes a year of global capacity in 2019 and 2020 to meet an expected surge in demand for LNG by the middle of the next decade. Australia has a $50bn pipeline of LNG projects seeking final investment decisions over the next three years, underlining how high the stakes are."
Australia risks status as a natural gas superpower
"Bulgaria has agreed to buy natural gas from the US for the first time, and signed a deal for deliveries of 140mn cubic metres of liquified natural gas (LNG) in the second and third quarters of 2019, the energy minister said on May 31. Although the amount is not too big, the deal is significant as traditionally Bulgaria completely depends on deliveries from Russia. The gas will be delivered by Dutch-registered company Kolmar NL. In the second quarter of the year the company should deliver 90mn cubic metres of LNG, and in the third quarter another 50mn cubic metres. "This is yet another step towards liberalisation of the gas market and a clear sign of diversification," Energy Minister Temenuzhka Petkova said in the statement. The deliveries from the US cover around 10% of Bulgaria's gas consumption. Bulgaria is trying to diversify its gas deliveris and earlier in May it started the construction of the €220mn Gas Interconnector Greece-Bulgaria (ICGB). Via the interconnector, Bulgaria plans to receive mainly gas from Azerbaijan."
Bulgaria buys first US gas as it breaks away from dependence on Russia
BNE Intelligence News, 2 June 2019
"Britain has not used coal to generate electricity for two weeks - the longest period since the 1880s. The body which manages the way electricity is generated said coal was last used at 15:12 on 17 May. Fintan Slye, director of the National Grid Electricity System Operator (ESO), said the British record for solar power had also been broken this month. Britain broke the record for a week of no coal earlier this month, which Mr Slye said would be a "new normal". The government plans to phase out the UK's last coal-fired plants by 2025 to reduce carbon emissions and Mr Slye said there was "still a lot of work to do". But he added: "As more and more renewables come onto the system, we're seeing things progress at an astonishing rate." The world's first centralised public coal-fired generator opened in 1882 at Holborn Viaduct in London."
Britain in two-week coal-free record
BBC, 31 May 2019
"The number of jobs in renewable energy in the UK has plunged by nearly a third in recent years, and the amount of new green generating capacity by a similar amount, causing havoc among companies in the sector, a new report has found. Prospect, the union which covers much of the sector, has found a 30% drop in renewable energy jobs between 2014 and 2017, as government cuts to incentives and support schemes started to bite. It also found investment in renewables in the UK more than halved between 2015 and 2017. The union compared the situation to the devastation caused to coalmining communities in the 1980s and demanded instead a "just transition" to clean energy. The Prospect report analysed and collated data taken from various sources, including the government, surveys and industry."
Renewable energy jobs in UK plunge by a third
Guardian, 30 May 2019
"Nine in ten US shale oil companies are burning cash, according to Rystad Energy. Rystad has studied the financial performance of 40 dedicated US shale oil companies, focusing on cash flow from operating activities (CFO). This is the cash that is available to expand the business (via capital expenditure, capex), reduce debt, or return to shareholders. Only four companies in our peer group reported a positive cash flow balance in the first quarter of 2019, bringing down the share of companies with a positive cash flow balance from the recent norm of around 20% to just 10%. Total CFO fell from $14 billion in the fourth quarter of 2018 to $9.9 billion in the first quarter of 2019. "That is the lowest CFO we have seen since the fourth quarter of 2017," says Alisa Lukash, Senior Analyst on Rystad Energy's North American Shale team. "The gap between capex and CFO has reached a staggering $4.7 billion. This implies tremendous overspend, the likes of which have not been seen since the third quarter of 2017." With negative cash flows, shale companies have historically relied on bond markets to finance their operations. Without additional funding and any debt refinancing, capex would have to be cut. However, no US shale company has made a public offering since the sharp fall in oil prices – and subsequent share price slide – late last year, marking the longest gap in public capital issuance since 2014. March and April 2019 saw a few of the more indebted operators issue bonds, intended to partly cover outstanding obligations for the coming year. However, pricing for this type of issuance has risen substantially due to the increased Fed Rate and the overall increased risk associated with US oil companies from a market perspective."
Only 10% Of U.S. Shale Drillers Have A Positive Cash Flow
Rystad Energy, 29 May 2019
"In 2013 Gwynedd Council decided that it could not defend Fairbourne from the elements in the long-term. It currently does, along with Natural Resources Wales, who have spent more than £6m on a flood risk management scheme in the area in the past four years. However, a Shoreline Management Plan for the west of Wales, first commissioned by the Cardigan Bay Coastal Group in 2009, "raises significant concerns over the future sustainability of the defence of Fairbourne".... The concerns are based on climate change and the speed at which it takes hold. Sea levels continue to rise. It's estimated that current levels are more than 100 metres higher than during the last ice age, and that they could rise by a further two metres over the next century.In short, there will be no money spent on defending this community of around 400 homes and 850 people after 2054."
The Welsh village being abandoned to the sea because of climate change
Wales Online, 26 May 2019
"Last week, Xi Jinping decided to ditch subtlety. Beating the drum of Chinese nationalism in order to garner attention and support for facing down his country's trade war with the US, the president sent a stark message: Beijing is ready for a long fight. In visits to a rare-earth metals production plant, and a memorial to the Long March, Xi's actions were the Chinese equivalent of wrapping himself in a Union flag and drinking tea from a mug with Winston Churchill's face on it. The Long March, actually a series of marches during the civil war in the Thirties, when the communist armies undertook a 6,000-mile slog from the south of the country to the north...."
Rare earths are Xi's ace card in 'Long March' of trade war
Telegraph, 26 May 2019
"The world invested $1.8 trillion in energy last year, with spending on renewables stalling, while oil, gas and coal projects increased. The International Energy Agency's World Energy Investment 2019 report shows overall global investment in energy stabilised in 2018 after a recent decline, with the power sector continuing to make up the biggest proportion of this spending. Much of that investment has been fueled by the world's rapidly increasing demand for electricity. Investment in coal increased for the first time since 2012, despite reduced Chinese spending to focus on power generation. When it comes to cleaner fuels, there was little movement in the overall investment in renewables and no net addition to capacity, driven in part by the falling costs of some technologies. But production of biofuels, which has fallen behind the IEA's sustainable development targets, saw a rise in investment last year. The agency's report also showed minimal increases in energy efficiency investments, with spending on transport efficiency remaining constant even though sales of electric vehicles are motoring upwards."
The world invested almost $2 trillion in energy last year. These 3 charts show where it went
World Economic Forum, 22 May 2019
"Analysts expect Europe's dependence on imported natural gas to increase even further due to the depletion of domestic gas fields. Until 2025 a 'gap' of approximately 100 bcm will arise which needs to be imported from abroad. There are two options to fulfil the extra demand based on existing or 'under construction' infrastructure: LNG or additional supplies from Russia. According to most analysts, Gazprom's motivation to construct Nord Stream 2 and Turk Stream is more political than economic due to Moscow's desire to circumvent Ukraine and punish her for its pro-European stance. However, the fact remains that Gazprom is still mostly dependent on Ukraine's infrastructure for the majority of its gas sales to European customers. It is in Kiev's interest to maintain its status as a transit country which provides her significant strategic value and generates $3 billion in annual transit fees for the state's coffers. Gazprom has a gas transit contract with Ukraine's Naftogaz until January 1st 2020. To put maximum pressure on Kiev, Moscow intends to complete both Nord Stream 2 and Turk Stream before the end of 2019. Depriving Ukraine of its strategic value and income from transit fees would seriously erode its bargaining position vis-à-vis Gazprom for the import of Russian gas and most likely plunge the country into a recession. However, Denmark delayed the approval to use its EEZ for Nord Stream 2, which is a setback that could postpone the pipeline's completion. Interfax news agency quoted Nord Stream AG, the company responsible for construction activities, that the project is suffering delays and will go into production in 2020 instead of the end of 2019. Gazprom could be preparing for what some analysts call the 'nuclear option' which will seriously damage Russia's position as Europe's most important energy supplier. The intention, however, is to put maximum pressure on Ukraine and remove it permanently from the gas delivery business. To achieve its goal, Gazprom has been filling storages across Europe, including the leasing of additional locations. This way, the energy giant would be able to meet its minimum contractual deliveries to European customers while bypassing Ukraine's pipeline system."
Moscow May Use 'Nuclear Option' In European Gas Race
Oil Price.com, 22 May 2019
"Saudi Arabia has placed a huge bet on American natural gas. In a sign of shifting energy fortunes, Saudi Aramco announced a mega preliminary agreement on Wednesday to buy 5 million tons of liquefied natural gas per year from a Port Arthur, Texas export project that's under development. If completed, the purchase from San Diego-based Sempra Energy (SRE) would be one of the largest LNG deals ever signed, according to consulting firm Wood Mackenzie. Aramco, Saudi Arabia's crown jewel, would also inject a cash infusion into the Port Arthur development in exchange for a 25% stake."This is a major statement about the Saudis entering the LNG market and about how price competitive the outlook is for US gas," said Ira Joseph, head of gas and power at S&P Global Platts. Although the agreement calls for Saudi Arabia to purchase LNG from the United States, Joseph said it's unlikely the fuel would end up being used to meet the kingdom's vast electricity needs. More likely, Aramco will try to sign up buyers in South America and Europe for the LNG. "We expect Saudi Aramco will use this volume to establish a global portfolio as it seeks to become a global gas player," Giles Farrer, Wood Mackenzie's research director, wrote in a report. "
Saudi Arabia wants to buy tons of American natural gas
CNN, 22 May 2019
"Vattenfall and Swedish start-up SaltX have been taking advantage of a simple chemical reaction that occurs when quicklime becomes wet: the salt-like grains soak up the water, becoming calcium hydroxide and releasing large amounts of heat in the process. By removing the water again — a process not dissimilar to baking — the substance turns back into calcium oxide. The process essentially mirrors how batteries work, except that instead of electricity, the system stores heat. SaltX says it has also patented a way of covering the quicklime with tiny particles — known as a nano-coating — to prevent it from lumping together after several heating and cooling cycles. Roeglin says the process can absorb ten times more energy than water, which is currently used for power-to-heat facilities. And unlike tanks of hot water, which slowly cool down over time, the system can retain the chemically-trapped energy for far longer. Need heat? Just add water."
Just add water: Salt battery could help renewable energy use
Japan Today, 12 May 2019
"Surging demand for online video means Britain's use of the internet needs electricity equivalent to six nuclear power stations, scientists say. They established that watching one feature film online consumes the same power as making 60 cups of tea. As demand for services such as YouTube, Netflix and Twitch, a site for gamers, may double or treble by 2030, the problem will only get worse. "We found that streaming a two-hour high-definition film on Netflix [or another online provider] equates to boiling over 10 kettles of water," said Mike Hazas, a researcher in sustainable computing at Lancaster University."
Energy used in streaming one film on Netflix makes 60 cuppas
Times, 12 May 2019
"Three of the largest ports in Europe – Rotterdam, Antwerp and Ghent – are to be used to capture and bury 10m tonnes of CO2 emissions under the North Sea in what will be the biggest project of its kind in the world. The ports, which account for one-third of the total greenhouse gas emissions from the Belgium, Netherlands and Luxembourg region, are to be used to pipe the gas into a porous reservoir of sandstone about two miles (3km) below the seabed. It is hoped the project could be completed by 2030 but the scale of the storage, in two empty gas fields, is unprecedented and raises questions about how the CO2 will affect the deep subsurface, according to the Dutch government."
Empty North Sea gas fields to be used to bury 10m tonnes of C02
Guardian, 9 May 2019
"U.S. shale oil—which just four years ago was the world's second most expensive oil resource—is now the second cheapest source of new oil supply globally, just behind the giant onshore oil fields in the Middle East, Rystad Energy said on Thursday. North America's tight oil has reduced costs over the past four-five years and has proven to be a competitive source of oil supply even when oil prices are not very high, according to the energy research firm. Rystad Energy estimates in its latest cost of supply curve update that the average Brent Crude breakeven price for tight oil is now US$46 a barrel, just four dollars above the average $42 per barrel breakeven oil price for the giant onshore fields in Saudi Arabia and other Middle Eastern countries. To compare, in 2015, North America's shale ranked as the second most expensive resource in Rystad Energy's global liquids cost curve, with an average breakeven price at $68 per barrel. In 2019, onshore Middle East leads the cheapest source of supply, followed by North American shale, offshore shelf with average breakeven price of $49 a barrel, deepwater with a $58 breakeven price, and Russia onshore with $59 a barrel breakeven. The most expensive source of oil supply is the oil sands, where the average breakeven oil price is $83 a barrel, Rystad Energy's cost curve analysis shows. "Tight oil is a short cycle investment with a relatively brief lead time from the sanctioning of new wells to the start of production. This gives E&P companies the flexibility to adapt to market conditions and easily change activity levels," Espen Erlingsen, Head of Upstream Research at Rystad Energy, said, commenting on the analysis. "In the ever-changing oil price environment, this implies tight oil investment has less uncertainty compared to offshore," Erlingsen added. According to the Q1 Dallas Fed Energy Survey, with executives from 82 E&P firms chiming in, average breakeven prices to profitably drill a new well in the U.S. range from $48 to $54 per barrel, depending on the region. Drillers need $50 a barrel on average to profitably drill a new well, down from $52 per barrel when the same question was asked last year. Average breakeven prices in Midland in the Permian were $48, the lowest-cost in the U.S., and the lowest-cost region in the past three years. "
Rystad: U.S. Shale Is Now The World's Second Cheapest Source Of Oil Supply
OilPrice.com, 9 May 2019
"A new record is to be set in Britain with the first ever week of coal-free operation of the electricity system. National Grid Electricity System Operator (ESO) confirmed the last coal generator came off the system at 1:24pm on 1st May, which means the UK reaches 168 hours without coal at 1.24pm today. The ESO, which is aiming for a zero carbon power grid by 2025, relies on a "mix of generation" to balance the system. Fintan Slye, Director of ESO said coal-free runs are going to be a "regular occurrence" as more renewables come onto the electricity grid. He added: "At 1.24pm today, we will reach over a week of no coal being used to operate the electricity system. While this is the first time this has happened, I predict it will become the 'new normal'."
Britain sets new record as it goes coal-free for a week!
Energy Live News, 8 May 2019
"It's the moment the global sustainable energy market has been waiting for. Battery technology, the essential element in ensuring continuity of supply from weather-dependent sources such as wind and solar, has suddenly become cost competitive. For lithium-ion batteries, the 'levelized cost of electricity' (LCOE) - the total cost of building and operating an electricity-generating plant - has fallen by 35% since the first half of 2018, analysis by research company BloombergNEF (BNEF) shows. At the same time, the LCOE for offshore wind has dropped by 24%. Onshore wind and solar's benchmark costs fell 10% and 18% respectively from last year. "Looking back over this decade, there have been staggering improvements in the cost-competitiveness of these low-carbon options, thanks to technology innovation, economies of scale, stiff price competition and manufacturing experience," says Elena Giannakopoulou, head of energy economics at BNEF. Since 2010, the benchmark price for solar has dropped 84%, offshore wind by more than half and onshore wind by 49%. The price of lithium-ion battery storage has dropped by more than three quarters since 2012. Batteries provide the opportunity to cover peaks in demand and to bridge periods when the wind is calm and the sun does not shine. Until now, gas and coal-fired power stations have filled the gaps. But battery storage is increasingly being added to solar and wind plants to help maintain supply. Earlier this year, Abu Dhabi switched on what it said was the world's largest virtual battery plant, able to store 648 MWh to balance demand on the grid and keep the city supplied for up to six hours in the event of a generating outage. The World Economic Forum's Global Battery Alliance says a low-carbon future is unthinkable without batteries, describing them as a core technological enabler for the Fourth Industrial Revolution. Batteries could be harnessed to help 1 billion people globally who lack access to electricity, the Alliance says."
The cost of generating renewable energy has fallen - a lot
World Economic Forum, 7 May 2019
"After nearly two decades of strong annual growth, renewables around the world added as much net capacity in 2018 as they did in 2017, an unexpected flattening of growth trends that raises concerns about meeting long-term climate goals. Last year was the first time since 2001 that growth in renewable power capacity failed to increase year on year. New net capacity from solar PV, wind, hydro, bioenergy, and other renewable power sources increased by about 180 Gigawatts (GW) in 2018, the same as the previous year, according to the International Energy Agency's latest data. That's only around 60% of the net additions needed each year to meet long-term climate goals."
Renewable capacity growth worldwide stalled in 2018 after two decades of strong expansion
IEA, 6 May 2019
"Britain was powered by sources other than coal for over 100 hours at the weekend, the longest time since the start of the industrial revolution, new figures have revealed. The National Grid says the country is increasingly less dependant on coal as renewable energy sources are more reliable and the public is installing solar panels at home in ever greater numbers. Reliance on renewable energy sources is now "a more regular occurrence". Coal now accounts for under 10 per cent of Britain's power output and the government plans to phase out the country's last coal-fired power plants by 2025 in a bid to cut carbon emissions. Of the 31.45 gigawatts (GW) powering the UK on May 5, none was accounted for by the use of coal-fired power stations (1 GW is enough to power 100 million LED lightbulbs). Renewable energy sources have contributed an increasing proportion of Britain's power generation in recent years. In 2018 wind generation exceeded 15GW for the first time."
Britain goes coal-free for 100 hours, setting new record for energy use
Telegraph, 6 May 2019
"HEAT pumps are not an easy technology for people to get a grip of. The idea that you are taking something that is basically cold – be it air, the ground, or water from a lake or river – and making heat by taking a few degrees out of the heat source, is counter-intuitive. This is particularly true when the heat source is at, say, 8C and you are talking about delivering hot water at 40-60C. Yet heat pumps can be shown to do this very successfully, so arguing against them makes no sense. The technology is well proven and has been deployed successfully both in Scotland and for many decades in Scandinavia. Moreover, as Ross Skirton, sales and technical director at Incognito Heat Co, explains, there are plenty of residential premises in Scotland where a heat pump of one sort or another would work very well. ... Mr Skirton points out that over the seven-year period covered by an RHI agreement, the householder can expect to recoup either all, or a very large part, of the capital costs associated with installing a heat pump. These costs will generally work out at around £10,000 for a small house running an air-source heat pump driven system. There are three main types of heat pump – ground-sourced, air-sourced and water-sourced – and it takes a careful onsite appraisal to decide which will be the most efficient solution. "Where the house is located within easy reach of flowing water, we would generally prefer a water-sourced heat pump, since you can extract three or four degrees more heat from the source," Mr Skirton says. He points out that a water-source heat pump is a sealed unit. The fluid used in the heat pump never comes into contact with the water source or the surrounding ground. The key point is that where a household is using, say, 20,000kWh of electricity a year on space heating, with a properly rated heat pump that would come down to 6,000kWh – and the rest would be pure, free, renewable energy. "
Heat from the ground up is a better solution to gas heating
Herald, 3 May 2019
"It is oil companies which are usually labelled as the villains behind drastic climate change, with fossil fuel giants like Shell and ExxonMobil frequently blasted for their role in creating pollution. But big technology companies including Amazon, Facebook, Google, Apple and Microsoft are also under mounting pressure to make a difference in the fight against climate change. Their powerful data centres – energy guzzling heat machines that store all of the information in the online world- already emit over 2pc of the world's greenhouse gas emissions. But the growth of video streaming and cloud services means this is on track to rise five-fold in the next seven years."
Amazon, Apple and Google are gobbling up the world's energy. What are they doing about it?
"Europe is making good on a promise to buy much more American natural gas as it seeks to ease transatlantic trade tension and reduce its reliance on Russian energy. The European Union has imported roughly 8 billion cubic meters of liquid natural gas from the United States since July 2018, more than three times the amount purchased in the preceding two years. The bloc committed at an energy summit in Brussels on Thursday to further purchases so long as the price is competitive. The pledge appears calibrated to appease President Donald Trump, who has applied tariffs to steel and aluminum from the European Union and has threatened new taxes on cars made in the bloc. Natural gas is one area where Europe and the United States have found common ground on trade."
Europe's imports of American natural gas are soaring
CNN, 2 May 2019
" Induction cooktops, running on electricity, are superior to gas stoves. These devices use magnetic waves to heat up pots, and cooks who have tried them quickly fall in love. The perceived advantage of gas stoves is pinpoint control of heat, but induction cooktops are more precise, and faster. For now, induction cooktops are generally more expensive than gas stoves. At retail, 30-inch gas cooktops generally run $500 to $1,000, while induction cooktops of that size run from $800 to $2,000. A change to induction cooking would make sense even if the climate were not a concern, because gas stoves are polluting our homes. Over the past decade, a growing body of scientific evidence has shown that gas stoves throw off pollutants like nitrogen dioxide and carbon monoxide. When you are cooking, those invisible pollutants can easily reach levels that would be illegal outdoors, but the Clean Air Act does not reach inside the home. Scientists link gas stoves to asthma attacks and hospitalizations. In 2008, Johns Hopkins scientists urged doctors to advise parents of asthmatic children to get rid of their gas stoves or at least install powerful exhaust hoods. Asthma is a rampant, discriminatory disease, hitting children and communities of color the hardest. For health and climate reasons, we think people who can afford to switch now need not wait for prices to fall. Enlist a good contractor, replace gas appliances with heat pumps and cap off the gas line. "
Your Gas Stove Is Bad for You and the Planet
New York Times, 1 May 2019
"The results of a new fund manager survey on oil and gas producers show there is increasing momentum for more climate-friendly investment but uncertainty about how to bring slow starters up to speed. Influential players led by Institutional Investors Group on Climate Change and Climate Action 100+ have already started making changes to the resources sector, shown most recently by Equinor'spromise to link executive bonuses to emissions from 2030. Among the 39 managers to answer the UK Sustainable Investment and Finance Association (UKSIF) questionnaire, 86 per cent wanted oil companies to align their businesses with the Paris climate goals, which aim to return global emissions to 2 degrees above pre-industrial levels. Majors have already started spending big on clean energy and started cutting their own emissions, but this might not be enough to keep in line with the Paris goals. According to a Global Witness report, 40 per cent of oil and gas production would have to go by 2030 to keep warming below 1.5 degrees celsius, seeing companies stop expansion capital expenditure completely."
Funds uncertain on oil and gas path
Investors Chronicle, 30 April 2019
"There has been a surge in number of UK homes being supplied with gas from farm and food waste, according to latest data from the Green Gas Certification Schem. One million UK homes are now being at least partly supplied with 'green gas' energy produced from biodegradable farm and food waste, new estimates released today by the Green Gas Certification Scheme (GGCS) have shown. The latest data produced by the GGCS, which issues renewable gas Guarantees of Origin certificates for biomethane injected to the grid, shows there has been a 13-fold increase in the number of UK customers being supplied with biomethane since 2017, with the market hitting the one million mark for the first time at the start of 2019.... Most of these one million homes are being supplied with a mix of biomethane and natural gas, as few energy suppliers offer 100 per cent 'green gas' tariffs at present. Nevertheless, GGCS said there had been a four-fold increase in green gas production since 2015, estimating that current UK production of biomethane has reached around 2.5TWh. By 2050 green gas could supply as many as 10 million homes, equating to 149TWh of energy, the GGCS, predicting the sector could play a key role in helping to meet the UK's climate targets."
Green gas milestone: One million UK homes now supplied with biomethane
BusinessGreen, 25 April 2019
"Iraq will play a crucial part in meeting global oil demand over the next decade, according to a new report from the International Energy Agency (IEA). Iraq is expected to add 1.2 million barrels per day (mb/d) through 2030, the IEA projects, which is the third largest increase out of any other country in the world after the U.S. and Brazil. Already OPEC's second largest producer, Iraq has succeeded in ramping up production to nearly 4.5 mb/d in 2018, a remarkable achievement given where the country has been in recent years. As a result, Iraq has played a pivotal role in global supply. "Iraq's oil sector has navigated well a very turbulent period in the last decade, managing to nearly double its output despite the war against ISIL and large swings in the oil price," the IEA wrote. "As a result, Iraq has accounted for around one-fifth of the net increase in global supply over this period, and is now the fifth largest producer in the world." But there is no shortage of challenges facing Iraq, and the assumed increases "cannot be taken for granted," the IEA cautioned. Obviously, volatile oil prices, and the prospect of a peak demand loom over the horizon. However, Iraq faces several unique hurdles that aren't necessarily prominent issues elsewhere, including having sufficient water for injection, attracting foreign capital, and maintaining a stable political and security environment. On the first point, the IEA notes that having enough water to inject into its oil fields will be a critical element in Iraq growing its oil production. "Without it, production rates could struggle to climb much beyond their current levels," the IEA warned. In order to reach the 6 mb/d of oil production by 2030, Iraq needs an additional 3 mb/d of water for injection. Meanwhile, Iraq may also struggle with having too much heavy oil and not enough refining capacity to handle it. The country's largest oil refinery, the Baiji refinery, was damaged during the war against ISIS years ago and has not been fully repaired. The country's crude slate is skewed towards heavy fuel oil, but it does not have the ability to process much of it. As a result, it imports refined fuels at a cost of around $2 to $2.5 billion per year, the IEA said. This could become a bigger problem heading into 2020 as rules on sulfur concentrations in marine fuels take effect. Global demand for heavy fuel oil is expected to plunge, which could force deeper discounts for Iraqi heavy high-sulfur oil. Meanwhile, Iraq has adequate supplies of natural gas but has been flaring gas at increasing rates as oil production climbs. Gas is needed for power generation and Iraq has resorted to importing larger volumes from Iran to feed its power plants even as it flares its own gas. ... These are serious challenges, but ones that the IEA feels are manageable. If they can be overcome, Iraq can produce as much as 6 mb/d of oil by 2030. However, this is not the first time that the IEA has been bullish on Iraq's oil sector, and notably, the most recent outlook is decidedly more modest than previous iterations. In 2012, the IEA put out a special report on Iraq's energy sector, in which it predicted that Iraq's oil production would double from 3 mb/d in 2012 to more than 6 mb/d by 2020 and 8.3 mb/d by 2035. The IEA even laid out a more remote but optimistic scenario that held out the possibility that Iraq could hit 9 mb/d…by 2020. The IEA now thinks that Iraq can reach 6 mb/d by 2030, which is a decade later than it previously thought."
This Country Will Be Critical For The Oil Industry's Future
OilPrice. com, 25 April 2019
"The industrial processes that underpin our global economy—manufacturing, fuel and chemical production, mining—are enormously complex and diverse. But they share one key input: they, as well as many others, require heat, and lots of it, which takes staggering amounts of fuel to produce. Heat and steam generation is critical to the global economy, but it's also an overlooked and growing source of greenhouse gas (GHG) emissions. The good news is that innovative solar technologies can produce steam at industrial scale—reducing emissions and, increasingly, cutting costs. And given the current climate outlook, it's urgent that industry adopt these new technologies.Despite enormous progress around the world to ramp up renewables and increase energy efficiency, global GHG emissions reached an all-time high in 2018. In a report released in January, the Rhodium Group found that even though renewable energy installations soared and coal plants shut down, carbon emissions in the U.S. rose sharply last year. Emissions from industry shot up 5.7 percent—more than in any other sector, including transportation and power generation. The authors of the Rhodium Group study concluded that despite increased efforts from policymakers and the business to tackle emissions, "the industrial sector is still almost entirely ignored." This must change, at the global level. Worldwide industry is responsible for a quarter of total emissions. And while those from transportation and residential segments are trending down, the International Energy Agency (IEA) projects that industrial emissions will grow some 24 percent by 2050.... This brings us back to heat. Industry is the largest consumer of energy, and a surprising 74 percent of industrial energy is in the form of heat, mostly process steam. Solar steam—making the sun's heat work for industry—is a largely unexplored but promising avenue for reducing emissions. While photovoltaic (PV) panels that convert sunlight into electricity are more common, thermal solutions are what's needed to meet industry's growing demand for heat. In a solar thermal system, mirrors focus sunlight to intensify its heat and produce steam at the high temperatures needed for industry.... to meet the needs of extremely high-temperature (800-1,000 degrees C) industrial processes, the European Union is developing SOLPART, a research project to develop solar thermal energy that can be used to produce cement, lime and gypsum."
Solar Energy Isn't Just for Electricity
Scientific American, 19 April 2019
"Saudi Arabia was built by oil, but natural gas is shaping its future. In fact, that trend applies to most countries' economic growth plans. One of the cleanest, most cost-effective fuels for power generation, industry, transportation, and numerous other sectors worldwide, gas is the ultimate future fuel. Saudi Aramco, the world's leading integrated energy and chemicals company, is making natural gas a strategic focus. Here's why we see gas as the roadmap to a more prosperous, sustainable future – and how innovation is helping us tap its tremendous economic and environmental potential. To put our future aims in context, it's important to see the central role that non-associated gas – found in natural gas reservoirs that do not contain crude oil – has historically played at Saudi Aramco. Our exploration of the Kingdom's abundant natural gas began in 1956, with total production of 12bn ft³ by the late 1960s. The next milestone was 1977's Master Gas System (MGS). With four natural gas liquids (NGL) processing plants, three major export terminals and a cross-country pipeline network, the megaproject provided a sturdy backbone for Saudi Arabia's nascent industrial network, and drove the more economic practice of using or selling virtually all the gas associated with oil production, rather than burning it off. The MGS has achieved 100mn metric tons (mt) of CO2 avoidance over the past 40 years, thanks to that early decision to minimise flaring. These landmark developments laid the groundwork for the next phase: the strategic decision to substitute gas for oil in power generation. As Saudi Arabia enters a new phase of growth with Vision 2030, the Kingdom's economic transformation program, energy demand is rising in the facilities and industrial sectors. Using cleaner-burning natural gas for electricity and freeing up liquid fuels for export and for value-added products like petrochemicals carries huge economic and environmental benefits, and diversifies the energy mix. Over the next decade, Saudi Arabia is taking clean gas to more than 70% of our utilities fuel mix – that's among the highest rates in the world."
Nasir K. Al-Naimi | Vice-President, Petroleum Engineering & Development | Saudi Aramco
Natural Gas World, 18 April 2019
"One important piece of news on the global energy transformation went unnoticed [in 2018], despite the fact that it came from one of the most influential organizations, the International Energy Agency (IEA). The dramatic message was hidden in a graph on page 159 of the 2018 World Energy Outlook (WEO), the annual edition of the most significant report on global energy developments.It shows that with no new investment, global oil production — including all unconventional sources — will drop by 50% by 2025 (Figure 1). That means that the global oil supply crunch is likely to happen already in the next five to six years and not in decades, as many fossil fuel companies hope. The global annual oil production is set to decline by approximately six million barrels per day starting in 2020. That means in the coming years the provision of energy related to oil will reduce annually by an amount equal to the total energy demand of Germany in 2014.... New investments would be needed due to declining availability of oil at current price levels. But, the immense investments, undertaken since the early 2000s to find new [conventional] oilfields, have been unsuccessful (Figure 2). On the contrary, the number of oil discoveries have fallen to a historic low.... By 2014, the oil industry started to roll back investments and rebought their own shares on a large scale. Ever since, the industry has been unwilling to scale up investments again. The expected expansion of unconventional oil production in the USA will not be able to close the growing gap. Furthermore, within the last years, over six billion US dollars were divested from the fossil fuel energy industry. With an increasing number of investment funds, banks, countries, and companies divesting from fossil fuels, this number is expected to further grow within the next years."
The Largely Ignored Problem Of Global Peak Oil Will Seriously Hit In A Few Years
CleanTechnica, 18 April 2019
"A Swiss technology company says it can solve one of the biggest problems preventing the development of electric cars - range anxiety. The company, Innolith AG, is developing a vehicle battery that it says will provide an electric driving range of 1,000 kilometres. The company says the technology will be available commercially within three to five years. If successful, the project will enable car manufacturers to break the range anxiety barrier that has prevented many people from buying electric cars, because of fears that they may become stranded in the middle or near the end of a journey. It is perhaps the most significant factor in holding back the growth of electric car ownership in many countries, after a lack of an easily accessible charging infrastructure. Many car industry figures regard a single-charge range of between 700 and 800 kilometres as the holy grail for electric motoring and believe consumers will not fully embrace EV's until that goal has been achieved. Innolith specialises in inorganic battery technology and it says its new battery will be the world's first 1,000Wh/kg (watt-hour per kilogram) rechargeable battery. It also says the battery will be cheaper to manufacture because it does not involve the use of organic materials, which are expensive and a cause of controversy in many countries where they are mined. Amnesty International has already highlighted abuses of workers' rights in some African countries. Another advantage is that, while traditional electric car batteries use a flammable organic electrolyte, the Innolith battery will utilise a non-flammable inorganic electrolyte, therefore reducing the risk of the vehicle catching fire. The battery is currently being developed at Innolith's laboratory in Germany, with the development and commercialisation process expected to take between three and five years..... The company says the charging time required for a car fitted with its new batteries to reach a range of 400 kilometres will be the same as that of an electric car with a conventional battery, but the firm anticipates a full recharge to the higher range of 1,000 kilometres will require the vehicle to be left plugged in overnight."
Swiss company says it can offer 1,000-kilometre electric driving range within three to five years
RTE, 15 April 2019
"European oil major BP plans to exit from two production sharing contracts (PSC) for projects drilling for shale gas in the southwestern Chinese province of Sichuan, three sources with the knowledge of the matter said this week. BP is the last of the international oil majors, including Royal Dutch Shell, Exxon Mobil, ConocoPhillips and ENI, to quit exploring for shale gas in China because of poor drilling results. Its departure leaves the sector firmly in the hands of domestic companies. In March 2016, BP agreed with China National Petroleum Corp (CNPC) to explore and produce natural gas from shale rock formations in the Neijiang-Dazu block in Sichuan, its first such contract in China. It inked a second PSC on the Rongchangbei block later in 2016. CNPC was the operator in both deals. BP no longer wants to proceed with the Sichuan projects after drilling eight to 10 wells with disappointing results, two of the three sources said. One of the wells, the Wei 206-H1 that was drilled to a depth of 4,368 meters (14,300 feet) in the Neijiang-Dazu block, produced about 10,000 cubic meters a day of gas during test production, a fraction of the output from a typical CNPC shale gas well in the same geological zone, IHS Markit said in a research note. China is only just beginning to develop its vast shale gas resources with production last year making up only 6 percent of total natural gas output, because of geology that makes gas extraction difficult and a challenging operating environment. With BP and the other oil majors gone, PetroChina Co, CNPC's listed arm, and Sinopec Corp are likely to dominate China's shale gas sector using low-cost technology and services developed domestically. BP's Chief Executive Officer Bob Dudley said last week at a conference in Shanghai that the Sichuan projects faced "great challenges" because of its complex geology. To overcome those problems, BP used technology from its shale developments in the United States at the Sichuan site, Chinese business news portal The Paper reported."
BP latest oil major to exit China's shale gas after poor drilling results
Reuters, 11 April 2019
"Ghawar is the jewel in Saudi Aramco's vast production portfolio. Located in the far east of Saudi Arabia, it is 200 kilometres long and 26 km across at its widest point, making it not much smaller than Puerto Rico. It was discovered in 1948, when Aramco was an American operation, and pumped its first oil three years later. Since then, the field has reliably produced five million barrels a day which, back in the 1970s, represented fully 10 per cent of global oil demand. Demand has almost doubled since then. Still, that one field supplies a hefty 5 per cent of global output. Or so we thought. In fact, Ghawar is not as resilient as we were led to believe. We just found out that its output has fallen substantially since Aramco previously came clean on its reserves and production. If Ghawar is losing momentum fast, peak oil – remember that theory? – might be closer than we had thought. And Ghawar is just one of dozens of enormous conventional-oil reservoirs scattered around the planet that are in various stages of decline. Aramco is state-owned and notoriously secretive, making its true size, pumping power and financial strength a guessing game that has obsessed oil traders and analysts forever. But Aramco lifted its veil somewhat this week, when it published a 470-page debt prospectus. The company is raising debt to help fund its US$69-billion purchase of Sabic, the Saudi chemicals giant. Other than confirming that Aramco is the world's most profitable company by a long shot – net income last year was US$111.1-billion – there was a curious item on page 88: Ghawar's maximum production capacity was 3.8 million barrels a day last year. As far as anyone can tell, the last official public document on Ghawar's production was published in 2004, when two senior Aramco executives gave a presentation on global oil-supply scenarios at the Center for Strategic and International Studies in Washington. Their slides showed that Ghawar produced about five million barrels a day between 1993 and 2003 – a quarter greater than last year's figure. The slides also revealed that "peripheral water injection" began in 1965. Water injection is used to boost reservoir pressure as more and more oil is pumped out. As reservoirs get old, more water is pumped in. This appears to be the case with Ghawar. In 1993, its water "cut," was about 25 per cent. A decade later, it was 33 per cent. The latter figure means that for every three barrels of fluid that were brought to the surface, two were oil and one was water. The Aramco prospectus does not say what Ghawar's water cut is today, but it's probably higher than it was in 2003. On paper, Ghawar looks like it can go for a good, long time – the prospectus lists its liquid reserves at 48.2 billion barrels. The figure suggests that, at current maximum production rates, Ghawar has three or four more decades of puff left in its aging body. But typically, conventional reservoirs go into steady, and often fairly sharp, decline after about 50 per cent is produced. Advances in recovery technology can slow that decline somewhat. But the Aramco prospectus doesn't say either why Ghawar's production has dropped so much since the last decade, or what percentage of its reserves are depleted. So we really have no idea how long it can keep pumping 3.8 million barrels a day. All Aramco will say is that more than 80 per cent of its reservoirs are less than 40 per cent depleted. But 20 per cent of them are half gone already. Is one of them Ghawar? Ghawar's slowdown, coupled with the measured fall-off in many other huge finds – from the North Sea to Alaska's Prudhoe Bay – are sending out powerful messages that the U.S. shale boom might not be enough to offset the relentless decline in conventional production. Take Mexico's Cantarell reservoir. In 2004, it was spewing out 2.1 million barrels a day, making it enormous even by Saudi standards. Today, its daily output is only 135,000 barrels and Mexico has become a net oil importer for the first time in half a century. Ghawar's slowdown inevitably brings back memories of the peak-oil theory, which said that we had reached the point of maximum oil production and that the economic consequences of running the world on ever less oil would be grave. One of the biggest proponents of the theory was the late Matthew Simmons, the U.S. investment banker whose 2005 book, Twilight in the Desert, argued that Saudi Arabia in general and Ghawar in particular were less robust that advertised. In his book launch speech, he said the crucial Saudi oil supplies "were coming from only a handful of overworked, aging fields that were all at risk of a sudden production collapse." Mr. Simmons's peak-oil warnings proved wrong. He failed to anticipate the U.S. shale oil revolution. The Permian shale basin in the U.S. Southwest alone produces 4.1 million barrels a day, turning the United States into a powerhouse of the unconventional-oil variety. But he might not have been wrong about Ghawar. Its production is far less than we had known and if it does collapse, peak oil will come a bit sooner."
Is peak oil closer than we think? Saudi Aramco reveals a troubling fact about the world's biggest oil field
Globe and Mail, 5 April 2019
"... researchers at Stanford University are working on a biology-based battery alternative. Their idea is to use microbes to convert excess renewable energy into methane, which could be burned as needed.... In nature, the microorganism Methanococcus maripaludis consumes hydrogen and carbon dioxide and exudes methane. So, the researchers are using renewable energy-powered electrodes to split water and free its hydrogen atoms. Those hydrogen atoms are fed to the microbes, which then pull carbon dioxide from the air and release methane. The gas doesn't dissolve in water, so it can be captured and stored. Then, at times of peak demand or when renewables aren't producing, the methane can be burned much like fossil fuel sources. It might seem backwards to turn renewable energy into methane, which releases carbon dioxide when it burns. But, this methane is produced by pulling carbon dioxide from the atmosphere, so the process is carbon-neutral. One significant advantage over battery storage systems, like Tesla's Powerpacks.... "
Researchers want to store excess renewable energy as methane
Engaget, 5 April 2019
"Saudi Arabia is threatening to sell its oil in currencies other than the dollar if Washington passes a bill exposing OPEC members to U.S. antitrust lawsuits, three sources familiar with Saudi energy policy said.They said the option had been discussed internally by senior Saudi energy officials in recent months. Two of the sources said the plan had been discussed with OPEC members and one source briefed on Saudi oil policy said Riyadh had also communicated the threat to senior U.S. energy officials. The chances of the U.S. bill known as NOPEC coming into force are slim and Saudi Arabia would be unlikely to follow through, but the fact Riyadh is considering such a drastic step is a sign of the kingdom's annoyance about potential U.S. legal challenges to OPEC. In the unlikely event Riyadh were to ditch the dollar, it would undermine the its status as the world's main reserve currency, reduce Washington's clout in global trade and weaken its ability to enforce sanctions on nation states. "The Saudis know they have the dollar as the nuclear option," one of the sources familiar with the matter said. .... A move by Saudi Arabia to ditch the dollar would resonate well with big non-OPEC oil producers such as Russia as well as major consumers China and the European Union, which have been calling for moves to diversify global trade away from the dollar to dilute U.S. influence over the world economy. Russia, which is subject to U.S. sanctions, has tried to sell oil in euros and China's yuan but the proportion of its sales in those currencies is not significant. Venezuela and Iran, which are also under U.S. sanctions, sell most of their oil in other currencies but they have done little to challenge the dollar's hegemony in the oil market. However, if a long-standing U.S. ally such as Saudi Arabia joined the club of non-dollar oil sellers it would be a far more significant move likely to gain traction within the industry.Saudi Arabia controls a 10th of global oil production, roughly on par with its main rivals - the United States and Russia. Its oil firm Saudi Aramco holds the crown of the world's biggest oil exporter with sales of $356 billion last year. Depending on prices, oil is estimated to represent 2 percent to 3 percent of global gross domestic product. At the current price of $70 per barrel, the annual value of global oil output is $2.5 trillion. Not all of those oil volumes are traded in the U.S. currency but at least 60 percent is traded via tankers and international pipelines with the majority of those deals done in dollars.... Other potential threats raised in Saudi discussions about retaliation against NOPEC included liquidating the kingdom's holdings in the United States, the sources said. The kingdom has nearly $1 trillion invested in the United States and holds some $160 billion in U.S. Treasuries. If it did carry out its threat, Riyadh would also have to ditch the Saudi riyal's peg to the dollar, which has been exchanged at a fixed rate since 1986, the sources said. The United States, the world's largest oil consumer, relied heavily on Saudi and OPEC supplies for decades - while supporting Riyadh militarily against its arch-foe Iran. But soaring shale oil production at home has made Washington less dependant on OPEC, allowing it to be more forceful in the way it deals with Saudi Arabia and other Middle Eastern nations. Over the past year, Trump has regularly called on OPEC to pump more oil to lower global oil prices, and linked his demands to political support for Riyadh - something previous U.S. administrations have refrained from doing, at least publicly."
Exclusive: Saudi Arabia threatens to ditch dollar oil trades to stop 'NOPEC' - sources
Reuters, 5 April 2019
"Total subsidiary Saft signed an agreement with Tianneng Energy Technology to expand their production of lithium-ion batteries. They plan to use the Changxing Gigafactory which has a capacity of up to 5.5 gigawatt hours. Production will be focused on supplying the market for electric bikes, vehicles, and energy storage.....It follows a series of moves by big oil companies to move into the electricity sector as industry insiders predict that oil demand will peak within the next two decades. Last week Shell entered the UK domestic energy market in a public way for the first time, rebranding First Utility, which it bought last year, as Shell Energy. The firm said it has moved all customers to renewable energy and plans to become the largest electricity supplier in the world. Total, meanwhile, bought Direct Energie and its renewable energy and gas power plants last year. It hopes to reach 7m customers in France and Belgium in three years. However, the firms also face challenges. Margins in the power space are lower than big oil is used to, and the transition will require huge investment. Despite signs of a shift, low carbon investments still remain a tiny sliver of oil majors' capital spending."
Total expands battery business as oil majors look beyond global peak oil
City AM, 4 April 2019
"A South Australian company has unveiled the world's first operational thermal energy device (TED). The TED creators report the battery can store renewable energy, has higher storage capacity than traditional batteries, and is completely recyclable. The thermal battery has similar functionality to lithium-ion and lead-acid batteries; it can take any form of electrical input and create alternating current (AC) or direct current (DC). Unlike existing batteries, it can charge and discharge at the same time, according to Serge Bondarenko, chief executive officer from CCT Energy Storage. And rather than storing an electrical charge, it converts the electrical input to heat.... The thermal battery's storage capability is 12 times greater than lead-acid batteries and has five to six times the capacity of lithium-ion. "So the storage capacity is significantly higher than what we see now with traditional battery storage devices in the market," says Bondarenko. Acknowledging that all technologies have their challenges, Bondarenko still believes they have a competitive advantage. Their thermal battery is considerably cheaper than lead-acid and lithium-ion."
New Thermal Battery Could Be A 'Game Changer' For Storing Renewable Energy
Forbes, 3 April 2019
"Not that long ago, California was the second most vital U.S. oil producing state. Since peaking in 1985, however, output has plunged almost 60 percent to 460,000 barrels per day (bpd). This collapse is made even more discouraging by the fact that total U.S. crude oil production has been soaring to record heights, up 140 percent to 12.1 million bpd over the past decade. Indeed, the shale revolution that has transformed the U.S. oil and gas industry has completely passed California by. Since 2008, while U.S. crude oil reserves have more than doubled to 45 billion barrels, California's reserves have declined 25 percent to 2.2 billion barrels in the shale-era. The most troubling part for California is that the state still uses a lot of oil. California each day devours around 40 million gallons of gasoline, uses 8 million gallons of diesel fuel, and accounts for 20 percent of all U.S. jet fuel consumption. Although the state is surely a global leader on renewables, wind and solar are strictly sources of electricity and do not really displace the need for petroleum, a designed transportation fuel. For every passenger vehicle in California today that runs on electricity there are about 70 that run on oil. Even reaching the ambitious goal of 5 million plug-ins by 2030 would mean less than 15 percent of the state's cars running on electricity. The inevitable result of plummeting production amid high consumption is that California is forced to import 70 percent of the oil that it needs. ... For its own part, California does have the Monterey shale formation in the central and southern part of the state. The play could hold at least 20 billion barrels of recoverable oil and untold amounts of natural gas. Current Governor Gavin Newsom, however, is not supportive of development like his predecessor Jerry Brown was. Although there are geological issues in the Monterey that make it a difficult play to exploit, many of those differences could be overcome with capital and by deploying the constantly evolving technology that the U.S. shale industry enjoys. The real problem is that California's regulatory and tax policies discourage new oil production in the state...... But overall, missing out on the shale revolution for California might be worse on the natural gas side. Gas is still the main source of power in the state, even accounting for over half of generation in recent years. California's need to import 95 percent of its gas supply is a growing problem because other U.S. states, particularly Western neighbors, are increasingly moving toward more gas to meet rising demand while also lowering greenhouse gas emissions."
California's Oil Industry Collapses Despite Shale Boom
Rigzone, 3 April 2019
"Utilities across Europe are enjoying a windfall, as a gas glut caused by excess liquefied natural gas shipments from Asia drives prices to multi-year lows. A mild Asian winter coupled with nuclear-plant restarts in Japan and ample supplies from the US and Russia have cut down deliveries of LNG to large buyers in the region. As prices for the supercooled fuel have fallen, hitting a three-year low, cargoes have been directed instead to Europe. That is pushing down prices there, too: the UK wholesale day-ahead gas price, for example, is trading just above 31p per therm, the lowest seasonal level since 2016 and below a 5-year average of 46p per therm. The price moves show how gas markets around the world have become more connected thanks to increasing volumes of LNG cargoes moving the gas from one continent to another, freed from an old regime of rigid contracts with fixed destinations. "In the future, gas prices in Europe will be driven by LNG," said Niall Trimble, managing director of oil and gas consultants The Energy Contract Company. LNG will also gain greater influence on European and UK gas markets as volumes from the region's production areas in the North Sea, Netherlands and Norway decline. The UK became a net importer of natural gas in the mid-2000s as North Sea production fell. The UK is among the leading destinations for LNG cargoes thanks to plentiful terminal storage capacity. The amount of LNG used in the UK gas pipeline system quadrupled in the fourth quarter of 2018 from the previous year and jumped 4.5 times in the first quarter of this year. Asia and Europe are the two main LNG importing regions, and until recently, robust demand from China, South Korea and Japan have kept the Japan-Korea Marker (JKM), the Asian benchmark, higher than the European equivalent. Sam Laidlaw, a former chief executive of Centrica, the gas and electricity company, who now leads the private equity-backed Neptune Energy, said he expected the drop in gas prices to be a "short-term phenomenon" as demand picks back up in Asia. He said any resolution of the trade spat between Washington and Beijing would likely see more oil and LNG flow from the US to Asia, tightening supplies available to Europe. National Grid, which plays a role in ensuring UK energy supply matches demand, said in a recent report that it was expecting much higher deliveries of LNG this summer than in 2018. This was because LNG shipping costs had risen over the winter, making Europe, which is a closer destination, a more profitable market than Asia for cargoes from the US and Russia. However, some analysts said that the weakness in the Asian price was encouraging some producers to shut down their facilities for maintenance."
Gas supply glut in Europe drives prices to multiyear lows
Financial Times, 3 April 2019
"Royal Dutch Shell is leaving one of the largest US oil industry groups because of differences over climate policy, underlining the pressure big energy companies face from investors to ensure any lobbying matches their goals on carbon emissions. From next year Shell will not renew its membership of American Fuel & Petrochemical Manufacturers, a trade association that represents nearly 300 US oil refiners and chemicals producers, in part because of the group's opposition to a carbon tax or other prices on greenhouse gas emissions. The company is for now staying in other influential US business organisations, including the American Petroleum Institute and the US Chamber of Commerce, but said it would work in those groups to shape their views. Ben van Beurden, Shell's chief executive, said the company "must be prepared to openly voice our concerns" when it disagreed with industry groups on climate policy. "In cases of material misalignment, we should also be prepared to walk away," he added."
Shell to quit US oil lobby group over climate change clash
"Saudi Aramco's Ghawar field, the largest oilfield in the world, had 58 billion barrels of oil equivalent in combined reserves at the end of 2018, and 48.3 billion in liquid reserves, the company said in its bond prospectus on Monday."
Aramco's Ghawar field had 58 bln barrels of oil equivalent end-2018 - prospectus
"Romania's new energy regulations risk undermining plans by companies to develop big offshore gas projects in the Black Sea, putting billions of dollars of revenue at risk and squandering a chance to challenge Russia's Gazprom in the region. Oil industry officials have warned the changes, which include a cap on some gas prices for local producers until 2022 and a 2 percent turnover tax on all energy firms bar state-owned coal-fired power plants, could slash investment plans. OMV Petrom, which is developing a Romanian gas field with ExxonMobil, said key conditions for the project were still not in place while Black Sea Oil & Gas, controlled by private equity firm The Carlyle Group, warned it could pull out of another project if the rules remain. The European Commission also told Romania in March that gas export restrictions and regulated prices probably contravene EU rules and could be challenged by Brussels. Most of the new measures, first announced in an emergency decree in December, were confirmed on Friday. .... Romania now risks delaying offshore gas projects and playing into the hands of Russia, which blocked Ukraine from exploring its Black Sea resources by occupying Crimea, analysts said..... Romania's Black Sea gas has the potential to challenge Gazprom's dominant role in central and eastern Europe, diversify gas supplies and bring the Romanian government revenue of $26 billion (19.85 billion pounds) by 2040, according to the consultancy. Romania's offshore gas reserves are estimated at 200 billion cubic metres. Russia, meanwhile, has proven reserves of 35 trillion cubic metres, according to BP's statistical review. But while German consumption alone would empty the Romanian gas fields in two years, they could cover the combined 2017 demand of Romania, Bulgaria, Serbia, Hungary and Moldova for more than six years. .... While Romania is almost energy independent - it only gets 10 percent of its needs from Russia - gas imports in the first month of 2019 were roughly 60 percent higher than a year ago, data from gas pipeline operator Transgaz showed."
Romania's Black Sea gas projects hanging by a thread
"In the Asia-Pacific region alone, nearly 2,600 platforms, 35,000 wells, 7.5 million tonnes of steel and 55,000 kilometres of pipelines will need to be decommissioned over the next decade across a region ranging from India to Papua New Guinea and China to Australia. The potential cost for this could rise above £78billion. Malaysia, Thailand, Vietnam and Indonesia are collectively thought to have around 1,500 structures and 7,000 oil fields that will be either 30 years old or require decommissioning by 2038. In the Gulf of Thailand, Chevron is faced with 300 platforms and 6,000 wells that must be decommissioned over the next decade. India has a further 300 structures and up to 1,000 oil fields facing the same scenario. Australia expects 40 offshore fields to cease operations over the next decade. Closer to home, according to industry analysts Wood Mackenzie, up to half of the North Sea's 600 installations – first installed 40 years ago – are scheduled for decommissioning by 2021. The UK government estimates the cost of removal at £20billion over the next 25 years in the North Sea. Globally, more than 4,000 such installations are scheduled for removal and 7,000 fields will cease production by 2022. In a report last year, Decommissioning – Will the Time Ever be Right?, Wood Mackenzie cautioned that 'once thought of as a North Sea problem, decommissioning is quickly becoming one of the biggest issues in the global oil and gas industry'. It calculated that companies face a decommissioning bill of £24billion between 2018 and 2022. Decommissioning in Asia was 'a mammoth task' and Wood Mackenzie warned that governments and companies faced 'cost blowouts'. "
The terrifying cost of scrapping the world's ageing oil and gas rigs
Geographical Magazine, March 2019
"The European Union's use of renewable energy -- such as hydropower, wind and solar -- reached 17.5 percent in 2017, keeping it on track for a target of 20 percent by 2020. Each member state has its own renewable energy goal, based on its situation and potential, ranging from 10 to 49 percent. While 11 countries in the bloc have already surpassed their targets, others are lagging behind, according to EU statistics authority Eurostat. With the target for 2030 at 32 percent, Eurostat says: "While the EU as a whole is on course to meet its 2020 targets, some member states will need to make additional efforts to meet their obligations." Europe's renewable energy leaders are Nordic countries: Sweden, Finland and Denmark. Since 2012 more than half of the total energy consumed in Sweden has come from renewable sources, according to the International Energy Agency. This is due in large part to hydroelectric power, which provides more than 40 percent of the country's electricity output. Swedes heat themselves mainly with biofuels. Denmark -- a small, flat country long dependent on energy imports -- now gets 43 percent of its electricity from wind power after investment starting in the late 1970s when it began phasing out coal plants. Luxembourg and the Netherlands are the EU countries with the lowest consumption of renewables, reaching 6.4 percent and 6.6 percent respectively. Despite its investment in offshore wind farms, the Netherlands is the furthest from reaching its targets. Yet, with a part of the country lying below sea level, it is particularly vulnerable to the consequences of climate change."
How Europe is faring on renewable energy targets
AFP, 31 March 2019
"Production of the so-called shale, or tight oil, will continue to increase through 2030 and reach more than 10 million barrels per day in the early 2030s, the Energy Information Administration said. "EIA projects further U.S. tight oil production growth as the industry continues to improve drilling efficiencies and reduce costs, which makes developing tight oil resources less sensitive to oil prices than in the past," according to the EIA's Annual Energy Outlook 2019.Tight oil, or shale oil, production refers to extraction of crude oil contained in low-permeability formations that, thanks to technological advances, started to be tapped resulting in soaring production in the United States and becoming in 2015 the more common form of oil production. Shale oil production reached 6.5 million barrels per day in the United States in 2018, accounting for 61% of total U.S. production.Most of the increase in recent years in crude oil production in the United States is related to the development of the Permian Basin in western Texas and eastern New Mexico. "Three major tight oil plays in the Permian Basin -- the Spraberry, Bone Spring, and Wolfcamp -- accounted for 41 percent of U.S. tight oil production in 2018," and they will remain very important in coming decades potentially representing half of the cumulative tight oil production in the next 30 years, the EIA said. Bakken and Eagle Ford also remain major contributors to U.S. tight oil, and accounted for 19 percent and 17 percent of crude oil production in 2018. Eagle Ford is in Texas, while the Bakken occupies parts of Montana, North Dakota and Canada....The EIA worked on two alternative cases in which technology and resource assumptions are modified. In one optimistic technology, lower-cost scenario, total U.S. oil production in 2050 is nearly 19 million barrels per day. In the less optimistic scenario total U.S. oil production in 2050 falls to about 8 million barrels per day, it said. The EIA also contemplated the impact that international oil prices could have, and evaluated scenarios contemplating a high as well as a low oil price. In the high oil price scenario, in which oil hits $100 per barrel in 2019 and rises to $208 (in 2018 dollars), that would lead to a peak of 18 million barrels per day by 2024 before declining to 13 million barrels per day in 2050. EIA reports that conventional oil production in the United States during the period covered appears relatively steady at 4 million barrels per day for nearly all of the period. In the low oil price case scenario, which contemplates an average price under $50 per barrel through 2050, total domestic production would increase to nearly 13 million barrels per day in 2022, before declining through the rest of the period. According to the American Fuel and Petrochemical Manufacturers, hydraulic fracturing has been utilized for more than 60 years and has been "safely and effectively applied" to well over a million oil and gas wells in the United States alone.Hydraulic fracking, which injects water mixed with chemicals to penetrate shale formations, is controversial. There are more than 700 studies that have focused on potential risks, with a high number of them showing risks or actual harms, Forbes reported. New York, Vermont and Maryland, which has proven gas reserves, have laws banning fracking."
EIA: U.S. shale output to keep rising until peak after 2030
UPI, 29 March 2019
"Global energy demand grew at its fastest pace in the last decade in 2018, increasing CO2 emissions to a record high, according to a new report. Worldwide energy demand grew by 2.3 percent last year, according to the International Energy Agency's latest Global Energy & CO2 Status Report. That high demand, "driven by a robust global economy and stronger heating and cooling needs in some regions," also prompted a 1.7 percent increase in CO2 emissions to a new high of 33 Gigatonnes. Demand for all fuels increased across the board, but especially natural gas, which accounted for 45 percent of the rise in energy consumption and was especially strong in China and the U.S. "China, India, and the United States accounted for 85 percent of the net increase in emissions, while emissions declined for Germany, Japan, Mexico, France and the United Kingdom," the report noted. Coal's share in global energy continues to decline, and yet, overall demand increased again in 2018. Coal CO2 emissions surpassed 10 Gt in 2018 through power use alone. Asia — especially China — is the driving force behind that growth.... The IEA release calls electricity the "fuel" of the future, and notes global demand increased 4 percent in 2018, outpacing overall energy demand. Electricity is nearing a 20 percent share in total final consumption of energy. This rapid growth is pushing electricity towards a 20% share in total final consumption of energy. Despite the increase in fossil fuel use, renewables also played a large role in meeting energy demand. Renewables increased by 4 percent in 2018, making up nearly a quarter of demand growth. Renewable-based electricity generation also reached its fastest pace within the decade, covering nearly 45 percent of the world's overall growth. Solar, wind, and hydropower ranked 1-2-3, with the sources making up nearly a third of that growth. Most of the rest was attributed to bioenergy. The IEA says renewable use "needs to expand much more quickly" to meet the agency's own scenario for sustainability, from one-quarter of power from renewables today to two-thirds by 2040. "
Global energy demand at highest growth in a decade, emissions reach record high in 2018
Electrek, 27 March 2019
"THE cost to the UK taxpayer of decommissioning oil and gas assets could be much higher than the £24 billion official estimate, MPs have warned in an assessment that could stoke concern about the outlook for the public finances. Public Accounts Committee (PAC) members have highlighted significant uncertainty over the cost to taxpayers of decommissioning offshore oil and gas assets in a report published today. Their report also sounds the alarm about the potential cost of decommissioning assets used in fracking for oil and gas. It complains about a "worrying lack of understanding" in Whitehall about the practicalities involved. The findings will make challenging reading for ministers amid concern the UK could fail to capitalise on opportunities that will be created as firms grapple with the challenges posed by decommissioning as fields run dry in coming decades."
North Sea oil and gas clean up cost concerns highlighted by MPs
The Herald, 27 March 2019
"Equinor, the Norwegian oil-and-gas giant formerly known as Statoil, will announce today that it plans to pour money into an approximately $180 million investment fund focused on battery and related technologies, Fortune has learned. That tech is intended to spread the use of renewables by allowing them to be stored in ways that make economic sense.... Equinor's announcement comes less than three weeks after Norway's government said the country's sovereign-wealth fund, the world's largest, would sell off holdings in oil-and-gas exploration and production companies. Norway's finance minister, Siv Jensen, said the Government Pension Fund Global, which manages about $1 trillion in assets, would take the step to shield Norway's treasury from risk from oil-price declines."
Norway's State-Run Oil and Gas Giant Is Backing a Battery-Research Fund
Fortune, 26 March 2019
"U.S. natural gas consumption increased by 10% in 2018, reaching a record high of 82.1 Bcfd, according to EIA's recently released Natural Gas Monthly. Domestic consumption of natural gas increased across all sectors in 2018, led by a 3.8 Bcfd increase in the electric power sector caused by a combination of recent natural gas-fired electric capacity additions and weather-related factors. The electric power sector consumed 29.1 Bcfd in 2018, or 35% of total domestic U.S. natural gas consumption. Natural gas continued to make up the highest share of utility-scale electricity generation after first surpassing coal-fired generation on an annual basis in 2016. Specifically, natural gas accounted for one-third (35%) of utility-scale electricity generation in 2018, followed by coal (27%), nuclear (19%), and hydropower (7%). New natural gas generator capacity additions continued to displace coal-fired power plants and other less efficient sources of electricity. In 2018, about 14.5 gigawatts (GW) of net natural gas capacity were added, while almost 13 GW of coal-fired capacity were retired."
EIA: Power sector pushed domestic U.S. natural gas consumption to new record in 2018
World Oil, 25 March 2019
"Trade body Oil and Gas UK (OGUK) has estimated that £200bn is needed to improve ageing North Sea oil and gas infrastructure over the coming 16 years. OGUK's Business 2019 Outlook warns that the UK North Sea oil and gas industry faces "fundamental challenges" and that a huge amount of private investment is needed between now and 2035. Challenges facing the industry include increasing pressure to cut carbon emissions, a factor currently acting as a catalyst for the renewables market. IN all £100bn is needed to support ongoing extraction and processing. A further £30bn is needed to support companies already at work extracting of 2.5bn barrels of oil from new sites. Of the £200bn total, £40bn, must be spent on fresh exploration of the North Sea and installation of new infrastructure to extract 2.4bn barrels of oil from sites not already under consideration. Another £25bn is needed for decommissioning ageing assets and there is a suggestion that retired gas and oil pipelines could be turned into carbon capture systems."
Calls for £200bn North Sea oil and gas upgrade
New Civil Engineer, 21 March 2019
"Oil trader and tanker charterer Vitol announced its 2018 results which reported 1.5M more barrels a day of crude oil were traded compared to five years ago.... In a stark warning to shareholders, the company anticipated that oil demand will continue to grow for the next 15 years, even with a marked increase in the sales of electric vehicles, but that demand growth will begin to be impacted thereafter. It is investing in alternate energy sources including low carbon, a joint venture with VLC Energy which constructed the UK's largest battery pack and is also investing in renewable energy assets across Europe."
Tanker charterer Vitol warns oil peak is just 15 years away
Tanker Shipping & Trade, 20 March 2019
"The Trump administration's pro-drilling policy took a blow when a federal judge ordered a halt to oil and gas exploration on more than 300,000 acres in Wyoming, saying the government must account for its cumulative effect on global climate change. The ruling came in a lawsuit filed by a pair of environmental conservation groups against the Obama administration in 2016, challenging the Bureau of Land Management's decision to lease federal lands for energy development in Wyoming, Utah and Colorado. It stressed the difference between assessing environmental impacts in isolation and measuring their collective impact.... While the judge faulted the federal government for merely summarizing the potential impacts without elaborating on the degree to which its decisions might contribute to climate change, he stopped short of voiding the Wyoming leases at issue. Instead, he ordered the bureau to re-examine nine of its environmental assessments and its "no significant impact" findings and barred the BLM from authorizing new drilling in the state until it satisfies its environmental-law obligations."
U.S. Ordered to Halt Oil, Gas Drilling in Swath of Wyoming
Bloomberg, 20 March 2019
"By the end of the year, the governments of Italy, Greece, Cyprus and Israel are expected to sign a multilateral agreement to build the EastMed pipeline, which promises to bring a natural gas bonanza to Europe (Edison.it, accessed on March 4). Russia is currently the largest single provider of gas to the EU, and supplies from the Eastern Mediterranean basin are seen as a viable alternative to state-owned Russian gas monopoly Gazprom. Currently, Russia accounts for around 40 percent of the European bloc's natural gas imports (Ec.europa.eu, November 19, 2018). The planned EastMed gas corridor is projected to cost $7 billion and is backed by the European Commission. It is designed to initially transport 10 billion cubic meters (bcm) of gas per year from offshore reserves in Cyprus and Israel to Greece and, thanks to its connection with the planned Poseidon pipeline, onward to southern Italy. Yet, critics say the project is too expensive and faces serious technical challenges (Cyprus Mail, February 13, 2019; Bruegel.org, May 10, 2017). Furthermore, EastMed is opposed by Turkey, which has territorial disputes with the internationally-recognized Cypriot government in Nicosia, including competing claims to waters around the island. For their part, the Egyptians emphasize that the EastMed initiative is still in the feasibility study stage—a process that will take a couple of years to be completed—and note that Egypt could re-export the region's natural gas to Europe now by using underutilized Egyptian gas liquefaction plants, more quickly and at a lower cost (Cyprus Mail, February 11, 2019). Indeed, Egypt is already moving in that direction. A new conduit will deliver natural gas from Cyprus' Aphrodite field to Egyptian territory. Some experts argue the Cyprus–Egypt pipeline puts the EastMed corridor at risk because the latter needs all Cypriot gas to be commercially feasible (Haaretz, February 27). Interestingly, Italian Deputy Prime Minister Matteo Salvini, the kingmaker in Italy's fractured coalition government led by the anti-establishment Five Star Movement and the nationalist League party, is a supporter of the EastMed gas pipeline (Startmag, December 13, 2018). Salvini's Russia-friendly League is also endorsing the completion of the Trans-Adriatic Pipeline (TAP), which the Five Star Movement has tried to block by raising environmental concerns (Tpi.it, February 27, 2019; see EDM, November 5, 2018). TAP is the westernmost section of the EU-supported Southern Gas Corridor (SGC), a planned system of conduits to carry natural gas from the Azerbaijani Shah Deniz gas field to Italy, via Georgia, Turkey, Greece and Albania. TAP is designed to pipe 10 bcm of Azerbaijani gas to Europe by 2020, with the target of doubling supplies in the following years. The EU aims to diversify gas imports away from Russia with the help of EastMed and TAP, in addition to other energy transit projects. In this respect, Italy's support for the two gas pipelines could be a source of friction between Salvini and the Kremlin, whose relations are reportedly close."
Italy Turns Its Back On Russian Gas
OilPrice.com, 16 March 2019
"The International Energy Agency has warned that crude supplies from Venezuela are at risk of falling sharply and becoming a "challenge" for the global the oil market, indicating it hopes other Opec members will be prepared to help cover any shortfall should the situation deteriorate. In its monthly market report, the IEA — which advises major oil consuming countries — said a power crisis in Venezuela that disrupted crude exports this week could return or worsen, threatening 1.2m barrels a day of oil supplies or more than 1 per cent of global output. "Although there are signs that the situation is improving, the degradation of the power system is such that we cannot be sure if the fixes are durable," the IEA said. "During the past week, industry operations were seriously disrupted and ongoing losses on a significant scale could present a challenge to the market." The IEA said the market had a potential "supply cushion", however, from the fact Saudi Arabia, other Opec members and their allies like Russia have been making production cuts. Oil prices hit a year-high above $68 a barrel on Thursday. "Much of this spare capacity is composed of crude oil similar in quality to Venezuela's exports," the IEA said. "Therefore, in the event of a major loss of supply from Venezuela, the potential means of avoiding serious disruption to the oil market is theoretically at hand."
IEA warns Venezuela chaos may 'challenge' global oil market
Financial Times, 15 March 2019
""The International Energy Agency sees no peak in oil demand and expects the United States will drive global oil supply growth over the next five years, according to its most recent annual oil market forecast, published Monday. "These are extraordinary times for the oil industry as geopolitics become a bigger factor in the markets and the global economy is slowing down," said Dr Fatih Birol, the IEA's Executive Director. "Everywhere we look, new actors are emerging and past certainties are fading. This is the case in both the upstream and the downstream sector. And it's particularly true for the United States, by far the stand-out champion of global supply growth.".... According to the International Energy Agency (IEA), the United States now accounts for 70% of the total increase in global oil capacity out to 2024, adding a total of 4 million barrels per day (mb/d), following "spectacular" growth of 2.2 mb/d in 2018. "The second wave of the US shale revolution is coming," said Dr Birol. "It will see the United States account for 70% of the rise in global oil production and some 75% of the expansion in LNG trade over the next five years. This will shake up international oil and gas trade flows, with profound implications for the geopolitics of energy." In addition to the United States, the IEA forecasts growth among other non-OPEC producers as well, including Brazil, Norway, and new producer Guyana. Iraq will reinforce itself as one of the world's top oil producers as the world's third-largest source of new supply, compensating for losses from Iran and Venezuela, as well as the still-fragile situation in Libya. The IEA also expects upstream investment to increase in 2019 for the third year in a row. Further, for the first time since the industry's downturn in 2015, investment in conventional assets could increase faster than for the shale industry this year. It's worth noting, however, that the IEA's growth forecasts have been paired with pleas for further investment "to ensure adequate spare production capacity." For the IEA, "it is therefore reassuring that 2019 upstream investment is set to rise for the third straight year, according to preliminary plans announced by key oil and gas companies." Conversely, the IEA believes that the oil industry's downstream sector is "on the eve of one of the biggest shakeups ever" in advance of the implementation of the International Maritime Organisation's new rules governing bunker fuel quality in 2020. There have been concerns over the past few years that the shipping and refining industries, despite several years notice, might encounter shortfalls when the new rules come into effect, however, the IEA's updated analysis predicts industry players will be in a strong position to comply across the medium term. Even more troubling, however, than the IEA's predicted demand and investment growth is its contention that it "continues to see no peak in oil demand, as petrochemicals and jet fuel remain the key drivers of growth, particularly in the United States and Asia, more than offsetting a slowdown in gasoline due to efficiency gains and electric cars." According to the IEA — and in the face of "Ongoing trade disputes between major powers and a disorderly Brexit" and acknowledging that "the economic mood is not encouraging" — oil demand is still expected to grow according to its most recent forecast, "although at a more measured pace. The IEA points to the fact that "leading developing economies will continue to expand" as the reason for its prediction oil demand will continue to grow. "China and India will account for 44% of the 7.1 mb/d growth in global demand expected to 2024," wrote the authors of the Oil 2019 Analysis and forecasts to 2024 report. "Despite its recent slowdown, China's GDP has more than doubled in real terms in the past decade and is still growing at a healthy clip. Income levels have grown sharply and the structure of oil demand is moving away from heavy industrial sectors towards consumer needs. As for India, while its GDP per capita is still only a fifth of China's, it is growing more strongly: By 2024, India's oil demand growth will match China." However, the IEA's fossil fuel and energy forecasts have repeatedly underappreciated and underrepresented on-the-ground events and policies which have been shaping energy demand over the past decade.... global quality assurance and risk management company DNV GL, which in September of 2018 published its Energy Transition Outlook 2018 and which predicted oil will peak in 2023. "Like the IEA, DNV GL also sees continued growth in oil use through to the early 2020s," said Bent Erik Bakken, Deputy Programme Director of the Energy Transition Outlook of DNV GL, who spoke to me via email. "The IEA annual oil forecast stops in 2024. But other IEA publications go further, and its NPS projection to 2040 sees continued growth in oil demand." "Unlike the IEA, we forecast that demand will level off in the early 2020s, and, from 2028, oil use will start a steady decline," Bakken continued. "This is related to slowing global growth, but also to the inexorable electrification of the world's fleet of road vehicles. That really starts to take off once light EVs reach strict cost parity with their internal combustion counterparts in 2024. Other factors to consider are the rise of biofuels and, longer term, the use of hydrogen fuel cell technology for long distance heavy goods transport. Moreover, we do not see petrochemicals as a life raft for the oil industry once demand for oil in transport starts to wane. The world's war on plastic will see the markets for plastic will grow more slowly than GDP.""
International Energy Agency Sees No Peak Oil In Sight, US To Lead Oil Supply Growth
Clean Technica, 14 March 2019
"The U.S. government cut its oil production forecast for the first time in six months as drillers scale back in smaller shale plays and the U.S. Gulf of Mexico.While crude output is still expected to reach record levels, the Energy Information Administration trimmed its 2019 forecast to 12.3 million barrels a day -- 110,000 barrels-a-day lower than it had forecast previously. In 2020, production is expected to reach 13.03 million barrels a day -- 170,000 barrels a day lower than last month's estimate."This is just the beginning," said Phil Flynn, senior market analyst at Price Futures Group Inc. in Chicago. "The reality of the situation is that a lot of these guys are not making money and are having a hard time keeping these production levels up. Any pullback is going to make it harder to keep that upward trajectory of oil production moving higher.""
US Slashes Oil Production Forecast
"Forecasts of how much oil and gas could be produced by the UK offshore industry have been revised upwards. The industry regulator now believes 11.9 billion barrels will be extracted by 2050, up from an estimate of 8 billion four years ago. So far 43 billion barrels of oil or its gas equivalent have been extracted from UK waters. The new prediction is driven by lower production costs, technical advances and 30 new fields coming on stream. Estimates of oil and gas potential have been part of the debate about the financial situation facing Scotland should it become independent. The Oil and Gas Authority (OGA) forecast in 2015 that a further eight billion barrels could be pumped by 2050, but that has now been raised by 3.9 million barrels. Head of performance, planning and reporting at the OGA, Loraine Pace, said: "The 3.9 billion barrels identified is great news with 2018 being a productive year. "New discoveries such as Glendronach and Glengorm highlight the future potential of the basin which could be boosted further with new investment, exploration successes and resource progression." The regulator, reporting to the Treasury ahead of the chancellor's spring statement, said oil output last year was up 8.9 % last year, the highest UK oil production rate since 2011. Gas production, however, fell by 3%. The total is expected to fall from this year onwards, but at a slower rate than previously forecast."
UK oil and gas production forecast raised
BBC, 11 March 2019
"Russia was the leading importer of Turkmen gas, until it was displaced by China in 2009. In 2015, Gazprom cut imports of Turkmen gas to 4bn m 3/y, down from the 10bn m3 it had been importing since 2010. In 2016, imports were halted."
Turkmenistan looks to gas expansion
Petrolleum Economist. 20 February 2019
"Far from getting heavier, new global supply is now predominantly very light and very sweet. Almost 86 percent of the incremental production between 2015 and 2018 was light, according to recent data from Rystad Energy AS, and nearly three quarters of the additions expected by 2023 are also expected to fall into that category. Meanwhile the supply of heavier oils is falling. "
Want to Understand the Shale Boom? Try a Microscope
"The United States will surpass Saudi Arabia later this year in exports of oil, natural gas liquids and petroleum products, like gasoline, according to energy research firm Rystad Energy. That milestone, driven by the transformative shale boom, would make the United States the world's leading exporter of oil and liquids. That has never happened since Saudi Arabia began selling oil overseas in the 1950s, Rystad said in a report Thursday. "It's nothing short of remarkable," said Ryan Fitzmaurice, energy strategist at Rabobank. "Ten years ago, no one thought it could happen.".... With ample supply at home, Congress in 2015 lifted the 40-year oil export ban. Overseas oil sales have exploded since then. And the US Gulf Coast is racing to build facilities that can handle surging foreign demand for US crude. "Excess fossil fuels from America will find plenty of eager buyers in fast-growing Asia," Per Magnus Nysveen, senior partner at Rystad Energy, wrote in the report. .... Saudi Arabia currently exports each day about 7 million barrels of crude oil, along with 2 million barrels of natural gas liquids and petroleum products, according to Rystad. By comparison, the US exports about 3 million barrels per day of crude oil and another 5 million barrels per day of natural gas liquids and petroleum products. Rystad expects that gap to vanish this year, although Saudi Arabia would keep a comfortable lead as the world's largest exporter of crude oil alone."
America is set to surpass Saudi Arabia in a 'remarkable' oil milestone
CNN, 8 March 2019
"As if stuck in a partially clogged drain, oil from the hottest U.S. shale play has been caught in a bottleneck due to a lack of pipeline capacity. But the transportation tie-up at the Permian Basin is about to ease up, and a new network of pipelines will help U.S. producers unleash more crude into the Gulf Coast and then onto the world market. "There's a lot of shale capacity being prepared. There's a lot of pipeline capacity. We're going to triple pipelines going into the market from 3 to 9 million in three years, from last year to late 2021," said Francisco Blanch, head of commodities and derivatives at Bank of America Merrill Lynch. Much needed pipeline capacity is being added to take Permian crude from the heart of Texas down to the Gulf Coast, to oil refineries but also to Texas ports that are making plans for more and larger ships to carry oil exports from the U.S. to customers in Asia and elsewhere. The Permian Basin covers an area of more than 75,000 square miles in western Texas and southeastern New Mexico.Citigroup energy analyst Eric Lee said Permian output at just under 4 million barrels a day is up about 1 million barrels from a year ago and should be a million more, or 5 million a day, a year from now, in early 2020. The Permian has benefited from consistent improvements in technology, which increasingly have been capable of extracting more oil from the shale formation. "We're happy to look out to 2023, when it gets to 8 million. ... They figured out how to access it at very low break-evens, like $30/$40. ... There are more layers below it. It's hard to know what those are going to mean, break-even-wise," said Lee. His estimates depend on the price of crude and world oil demand. Breakeven is the price a producer of a barrel of oil needs to recover expenses, or where a producer breaks even. As Permian and other production has grown, so have U.S. exports of crude, allowed by a change in law in late 2015. In one week in the past month, exports reached a record 3.6 million barrels a day, according to U.S. government data. Last week, 2.8 million barrels a day were exported, and the four-week average was about 3 million barrels. The U.S. is now the largest oil producer in the world, pumping 12.1 million barrels a day, according to Energy Information Administration data. "Every incremental barrel that the United States produces will be exported. We're in a situation, of course, where the quality of what we produce is actually higher than what we need," said Raoul LeBlanc, vice president, North American Unconventional at IHS Markit. "U.S. refineries, which turn crude oil into the products we use, were designed to turn cheap crude oil into high quality and upgrade it into the fuels we use."The Permian and other U.S. shale basins produce light sweet crude, while the Gulf Coast refineries were built for heavy crudes, like those from Saudi Arabia, Venezuela and Mexico. With Venezuela under sanctions, there is less available heavy crude, but analysts say so far the refineries are able to find enough but at a higher price differential. "We like to say we're exporting champagne and importing beer," said LeBlanc. The U.S., in the past week, imported 7 million barrels a day. Twice in the past several months, weekly data showed the U.S. to be a net exporter of crude and refined products. "The growth estimates [for the Permian] just kept getting bigger and bigger. They didn't' know what they didn't know," said CFRA energy equity analyst Stewart Glickman. "You do have to be cognizant of the fact that these wells decline very quickly. Between year one and year two there's a pretty big dropoff. You have to drill more well in order to expand. It really depends on whether technological innovations can keep pace with that. For everyone to double in five years might be a stretch. I'm not saying it can't be done," Glickman said. U.S. crude in the Permian is increasingly being drilled by the oil majors....This past week, both Chevron and Exxon announced plans to bump up production significantly in the Permian. Occidental Petroleum and British Petroleum are also active there.... Lee said the expansion of pipelines to the point where they will now provide surplus capacity is typical of the industry. "Once you get to the first quarter of 2020, almost certainly the Permian will be fully de-bottlenecked for now," he said."
This Texas area is expected to double oil output to 8 million barrels in just four years, boosting US exports
CNBC, 8 March 2019
"A new government deal with industry could see nearly a third of British electricity generated by offshore wind farms by 2030. If successful, officials say the plan would see more electricity being generated by renewables than fossil fuels for the first time in UK history, with 70 per cent coming from low-carbon sources. Currently offshore wind provides just 7 per cent of British power, but this would be boosted to 30 per cent by the end of the next decade. Not everyone is convinced by the announcement, with some environmentalists warning renewables would have to be scaled up even further as the nation's nuclear ambitions floundered. According to the government, its promised green power "revolution" would bring 27,000 jobs to the energy sector." ... The deal will increase the involvement of UK companies in offshore wind projects to 60 per cent, ensuring the £557m the government has pledged in state subsidies benefits local communities. This will be accompanied by a £250m investment from industry, which will help ensure British companies are world-leaders in new areas such as robotics, floating wind farms and larger turbines.Alongside the deal, the government will provide more than £4m for British businesses to help countries such as Indonesia and Pakistan move from coal power to offshore wind projects. There will also be more efforts to reduce the cost of offshore wind projects - which have already been halved in the past two years - to help move to a subsidy-free system. The Crown Estate will be releasing new seabed land from 2019 for future offshore wind projects."
Renewable energy to replace fossil fuels as UK's main power source for first time in history, government says
Independent, 7 March 2019
"The country that's driven global oil demand since the turn of the century may hit the brakes sooner than expected as travelers shift toward electric cars or even forgo the open road in favor of trains. China's oil consumption will peak in 2025, five to eight years earlier than market consensus, according to Morgan Stanley analysts including Andy Meng. The reversal will be driven by a transportation model unique to China: While most countries moving up the economic ladder show continued growth in oil demand from increased driving, mass-adoption of electric vehicles and high-speed rail in China will drastically reduce gasoline use, the bank said. If the theory plays out, it could signal a huge shift for the oil market, which has relied on China for more than a third of global demand growth since 1999. An expanding body of research is painting a bleak future for oil, as rapid adoption of electric vehicles could mean global demand peaks by the 2030s, according to Bank of America Corp. and Royal Dutch Shell Plc, a prospect that's likely to worry energy executives and investors. "China will no longer be the growth driver of global crude demand," Meng said in a March 5 report. "We believe the refiners and petroleum stations are the largest potential losers, while the battery companies are likely to become the key winners." To be sure, some of the industry's top prognosticators expect the country's oil demand to keep growing for years, albeit at a slower pace. The International Energy Agency sees China crude consumption expanding through 2040, while the nation's largest energy producer China National Petroleum Corp. has forecast that gasoline use will peak five years before oil demand does in 2030. China's electric vehicle penetration will reach 6.4 percent by the end of the decade and keep rising to 80 percent by 2040, according to Morgan Stanley, adding that an aggressive push by local battery companies into technology innovation may speed up that timeline. Meanwhile the country is seeing solid growth in high-speed rail ridership, driven by a well-developed network and severe traffic congestion. Highways' share of passenger turnover fell to 27 percent last year from 55 percent in 2012. In the U.S., the figure was 87 percent last year, according to Morgan Stanley."
China Oil Use Seen Peaking in 2025
Bloomberg, 7 March 2019
"The Swedish company Climeon claims it can make geothermal power as accessible as wind and solar. Its technology can make use of low-temperature heat, which opens up economically viable geothermal power to much more of the world. And Climeon now seems poised to scale up beyond the five countries it operates in today, after the Bill Gates-backed fund Breakthrough Energy Ventures (BEV) said on March 6 that it will provide $12.5 million in funding.The price of electricity produced using Climeon's technology varies based on factors like the size of the project and access to the heat source. In some cases, Climeon's electricity-generating units have provided electricity for €40 ($45) per MWh, according to Joachim Karthäuser, the company's chief technology officer. For context, that's about the low end of costs for wind or solar power in Europe. Climeon can offer such low prices because it provides its solution in a modular form. Each unit is approximately 8 cubic meters (about 280 cubic ft) and can provide about 150 kW of power, enough to power 150 European homes continuously. Depending on the customer's use, Climeon simply installs more or less units. Each unit contains heat exchangers, which transfer heat from underneath the earth, and convert that energy to turn a custom-designed turbine that generates electricity. The term "geothermal" refers to drawing heat from underneath the Earth. But Climeon's units can use heat from other sources, too. For example, the units have been deployed in steel factories, where water used for cooling hot metal is otherwise cooled and discarded. At about 90°C (194°F), however, it is hot enough to power Climeon's technology. That's a big deal, because Climeon's technology creates a revenue source for these industries that didn't previously exist, cuts the total energy consumed, and also reduces total emissions."
Swedish technology could make geothermal as mainstream as wind and solar
Quartz, 6 March 2019
"There's enough as-yet-unassigned oil under the Atlantic Ocean off Brazil's Rio de Janeiro to keep the entire world running for almost six months. So why is the crude just sitting there? A contract dispute between oil giant Petrobras and the government has been dragging on since 2013, and until it's resolved, drillers can't start targeting those deep-water deposits.... Petrobras' initial exploration at what's known as the pre-salt fields uncovered a lot more oil than expected -- an estimated 6 billion to 15 billion "surplus" barrels on top of the 5 billion that Petrobras has the rights to produce. (For comparison's sake, the world consumes about 36 billion barrels of oil in a year.) The government plans to hold an auction for these areas to raise tens of billions of dollars -- but it needs to conclude the contract review with Petrobras first. Bidding rounds for pre-salt fields outside of the Transfer of Rights area haven't been affected and have drawn interest from international oil majors including Exxon Mobil Corp. and Royal Dutch Shell Plc.... Production from the pre-salt is already making Brazil one of the fastest-growing oil producers that's not a member of the Organization of the Petroleum Exporting Countries. That means Brazil will become an ever-larger headache for OPEC as it tries to balance the global market. Brazil has already surpassed Mexico and Venezuela to become the largest Latin American oil producer, pumping almost as much as OPEC members Kuwait and United Arab Emirates. Growth is expected to accelerate in the coming years as Petrobras and other producers install additional production vessels at pre-salt fields.... Brazil's pre-salt is the biggest group of conventional oil discoveries this century. The biggest field, Mero (formerly Libra), holds an estimated 8 to 12 billion barrels of recoverable reserves. The entire region probably holds more than 100 billion barrels of recoverable oil, according to an academic study. The Transfer of Rights area is just one 3,865-square-kilometer section of the pre-salt, and Petrobras is already producing oil there from the Buzios field. Production from the pre-salt has surged from nothing 10 years ago to more than half of Brazil's total output, at 1.5 million barrels a day. While it is expensive to explore and develop these remote fields deep in the Atlantic, production per well is higher than at other deep-water regions such as the Gulf of Mexico or the North Sea, making them extremely profitable. The break-even oil price for the Mero field is $35 a barrel, according to Petrobras."
Why Billions of Barrels of Oil Go Untapped in Brazil
"Chevron maintains that it will be cash flow positive in the Permian by 2020 and that the company would allocate much of additional cash flow to shareholder distributions. The company appears confident about the path that it is on in West Texas. But the health of the industry is in the eye of the beholder, in many ways. In response to Chevron's financial results, some market analysts were not as impressed. "THE REAL STORY IS THAT THE FRACKING SECTOR HAS BEEN, AND CONTINUES TO BE, A FINANCIAL BUST," Kathy Hipple, Tom Sanzillo and Clark Williams-Derry wrote in a joint commentary for the Institute for Energy Economics and Financial Analysis (IEEFA) and the Sightline Institute. The analysts said that the industry continues to utter the same refrain that it has been for a long time: "Wait 'til next year." They are referring to Chevron's promise to be cash flow positive in the Permian by 2020. "The oil and gas giant is now admitting that its enormous bets on the Permian Basin will continue to bleed red ink for the rest of 2019. Investors will have to wait for yet another year — at least — until Chevron's Permian assets start to pay off," they wrote. In a previous study, the trio of analysts found that a selection of 32 mid-sized U.S. E&Ps spent nearly $1 billion more on drilling and related capital expenditures during the third quarter of 2018 than they generated in sales, which was notable because market conditions were much more auspicious than at any point in previous years. "These results may come as a surprise to investors who incorrectly equate rising output with financial success," they wrote. At the time, U.S. oil production was breaking records, oil prices were at their highest point in years and "[e]ven with those advantages, our sample of mid-size oil and gas producers continued to hemorrhage cash due to the high cost of drilling and the industry's seemingly insatiable thirst for capital." Chevron is a late-comer to the Permian, so presumably they are in the early growth stages, spending on drilling so that they can scale up and eventually turn a profit. But, as the IEEFA and Sightline Institute analysts note, that has been the mantra from most shale companies for more than a decade. If Chevron manages to become cash flow positive, investors will likely forgive and forget. But that remains to be seen. In the meantime, Wall Street is beginning to lose some patience with shale drillers."
The Permian Is A Double-Edged Sword For Oil Majors
OilPrice.com, 28 February 2019
"Israel's gas boom began in 2009 with the discovery of the offshore Tamar gas field, with 10.8tn ft³ of gas in place. A year later, a bigger field, Leviathan, was found, with reserves of 22tn ft3. A year after that, Cyprus discovered the Aphrodite field, with an estimated 4.5tn ft³. The discoveries left Israel with enough gas to meet its needs for more than 50 years, Cyprus 100. Or, more practically, with more gas than either knew what to do with. Exporting the gas to Europe was the obvious answer, but the most obvious route, through Turkey, was a non-starter for Cyprus. Turkey is demanding a share of Cyprus' gas wealth for North Cyprus, a state recognised only by the Turkish government. Meanwhile, Turkey's relations with Israel, which had improved after the 2010 Mavi Marmara incident off Gaza — mainly because of the hope of an inter-state gas deal-deteriorated again in May 2018 after renewed violence in Gaza. Cyprus and Israel joined forces to consider other export options. But a pipeline to Europe via Italy would cost an estimated $7bn, and even building an LNG terminal, at $2-3bn, could be too expensive to make their gas competitive. The only LNG plants in the region were in Egypt, and so negotiations began in November 2015 to reverse the flow in the EMG, with the aim of selling some gas to the Egyptian domestic market and shipping the rest through its ports. For Egypt, the attraction of the deal was cheap gas. The cost of importing it could be partly offset by fees set for Cyprus and Israeli gas to transit its pipelines and LNG plants — if commercial terms can be agreed. Even Eni's discovery of Zohr gas field in May 2015, with its 30tn ft³ gas in place did not dent the equation: much of its production, set to reach 2.7bn ft³/d by the end of 2019, will serve an ever growing domestic market, the balance possibly sharing space with Cypriot and Israeli gas at the two LNG plants. But the logic of the arrangement may be starting to fray, following fresh Egyptian gas discoveries. Eni and Cairo are refusing to comment on rumours that a new offshore field, Nour, is larger still than Zohr. Other fields are, though, coming online, raising expectations that in a few years, Egypt will have enough gas for both domestic demand and to fill the capacity of its LNG plants. What happens then is unclear, although Egypt's liberalisation of its gas market means the government will not have the final say. ... But when, as seems likely, Egypt has more gas available for export than its LNG terminals can handle, options for stranded Mediterranean gas are unclear. Conceivably, changes in Mid-East politics will see Turkey relent, tempted by the big fees it could gain by allowing Israeli, Cypriot and even Egyptian volumes to transit its territory. Potentially economics of scale mean a third Egyptian LNG plant is affordable, but the liquefaction cost would be considerably higher than for the amortised trains. That said, the issue of what to do with all their extra gas is one that many states would like to have."
Egypt's gas paradox
Petroleum Economist, 28 February 2019
"While Israeli leaders have turned their attention to campaigning for the April 9 election, Cyprus and Egypt have been working behind the country's back to advance plans for an undersea gas pipeline. Cyprus and Egypt in September signed an agreement for a subsea pipeline to carry natural gas from Cyprus' Aphrodite field to Egypt. Two weeks ago, the Cypriot cabinet took another step forward by approving the September deal. In doing so, Cyprus ignored Israeli claims to a portion of Aphrodite, which lies in Israeli economic waters. The Cyprus-Egypt pipeline also weakens the economic justification for the projected East Mediterranean pipeline, a $7 billion undertaking that would deliver Israeli and Cypriot natural gas directly to Europe via Greece. Egypt has done little to hide its ambitions of getting the Cypriot pipeline on track before the East Med pipeline is built, turning Egypt into an energy hub that would distribute the region's natural gas, including Israel's, to customers in Europe and the Middle East. In an interview with the Cypriot news agency CNA on February 11, Egyptian energy and mineral resources minister Tarek el-Molla said the two countries were working to accelerate approvals and that a host of multinational energy companies and banks were ready to finance it. .... The leaders of Cyprus, Greece and Israel agreed at a summit in Be'er Sheva in December to proceed with the East Med pipeline. The EU has designated it a Project of Common Interest and has tasked the European Commission to evaluate it. Israeli sources say a feasibility study should take a year to complete. Already a long shot because of the expense and the engineering challenges involved, East Med is becoming something of an Israeli pipe dream. Without it, Israel will not be able to export large quantities of natural gas and attract additional exploration and drilling. Even as Cyprus moves ahead on a pipeline plan with Egypt, it has yet to settle a claim of Israel's regarding Aphrodite, which lies at the edge of Cyprus' economic waters. One tip of the field stretches across the border into Israel's maritime zone and its Yishai field. At stake is as much as 10 billion cubic meters of gas, which is less than 10% of Aphrodite's total reserves and a fraction of the gas already discovered in Israel. But the gas is worth close to $1.5 billion, according to one recent Israeli estimate. During a visit to Cyprus in May, Energy Minister Yuval Steinitz expressed hope that the dispute could be settled within six months and if not, that it would go to international arbitration. Nine months later, the Energy Ministry says it remains unresolved. According to the minutes of a meeting of Energy Ministry officials obtained by TheMarker, Cyprus' view is that the Yishai share of the reservoir is so small as to be not economically viable and is therefore under no obligation to share rights. "
Israel's East Mediterranean Pipeline Dreams Fading as Egypt, Cyprus Go It Alone
Haaretz, 27 February 2019
"Calls for cleaner air and cuts in carbon emissions should boost global demand for natural gas over the next few decades, says Royal Dutch Shell. The Anglo-Dutch energy company expects gas to account for more than 40 per cent of total energy growth until 2035, according to the company's annual outlook for liquefied natural gas. This makes gas the largest source of growth in global energy usage over that period.The predictions from the world's largest buyer and seller of gas come as global trade in LNG, the super-cooled fuel, rose 10 per cent in 2018 to 319m tonnes, thanks to strong demand from Asia, particularly China."
Shell sketches bright future for liquefied natural gas
Financial Times, 26 February 2019
"The recent sharp decline in the cost of renewable energy suggests that the production of hydrogen from renewable power through a power-to-gas process might become more economical. Here we examine this alternative from the perspective of an investor who considers a hybrid energy system that combines renewable power with an efficiently sized power-to-gas facility. The available capacity can be optimized in real time to take advantage of fluctuations in electricity prices and intermittent renewable power generation. We apply our model to the current environment in both Germany and Texas and find that renewable hydrogen is already cost competitive in niche applications (€3.23 kg−1), although not yet for industrial-scale supply. This conclusion, however, is projected to change within a decade (€2.50 kg−1) provided recent market trends continue in the coming years."
Economics of converting renewable power to hydrogen
Nature Energy, 25 February 2019
"Turkmenistan holds the world's fourth-largest natural gas reserves, but most of them remain undeveloped. The authorities now want to upgrade domestic and export infrastructure to make the country a major gas supplier. But a reluctance to open Turkmenistan up to foreign investment could restrain expansion plans. The Turkmen leadership has so far declined to follow the example of countries like Azerbaijan in signing major production-sharing agreements (PSA), allowing the energy majors to invest in the upstream. The country produces around 70bn m3/yr of gas and 260,000 bl/d of oil. Turkmenistan's most important gasfields include Galkynysh, with over 24tr m 3 of gas in place, along with Yashlar-Minara and Bagtyarlik, holding 1.45-5tr m3 and 1.3tr m3, respectively. The government has signed concessions and service contracts, rather than PSAs, to develop these giant fields with Petrofac, LG International, CNPC and Hyundai for a specific timeframe. The Turkmen authorities show no sign of opting for PSAs to attract more international firms. But the upstream is only one part of Turkmenistan's energy sector. The midstream is also being marked out for special attention. President Gurbanguly Berdymukhamedov, addressing an energy conference in 2018, outlined his strategy. "Our aim," he said, "is to form routes for exporting energy resources through diversification and the creation of multi-vector pipeline systems." Turkmenistan, he continued, would seek to implement "large-scale projects" to build "major energy bridges" to both the east and west. The aim of the Ashgabat authorities is to increase gas production rates and expand volumes of refined hydrocarbons, thus boosting exports of oil and gas.... China is the main customer for Turkmen gas, receiving 30-40bn m3 /yr through the Central Asia-China pipeline. A large part of the revenue from sales to China is used to pay off the debt for the construction of the pipeline, which passes through Uzbekistan and Kazakhstan, and was financed by China. Aside from this export route, the Turkmen leadership is hoping for the swift realisation of the planned 1,100-mile (1,800km) Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline. Proponents of this $10bn project say it would carry significant benefits for all the partners involved. Turkmenistan, which has already completed most of the work on its own section (127 miles) would find eager markets in Afghanistan, Pakistan and India, with the gas delivered via newly-built infrastructure. For Afghanistan, TAPI gas would contribute to the economic restoration and the general stabilisation the country. Apart from gas, Afghanistan would also receive significant transit fees. The same goes for Pakistan, the longest section of the pipeline, where major investment would be needed. The main sponsor of TAPI is the Asian Development Bank. Given the security difficulties in Afghanistan, along with financing and logistical challenges, it is not clear when a final investment decision might be taken. Another major development has been the resumption of Turkmen gas sales to Russia. Alexey Miller , chairman of Gazprom, visited Turkmenistan in October 2018 and held talks with Berdymukhamedov. The two men agreed that Gazprom would resume imports of gas from Turkmenistan as of January 2019."
"In some cases (like silicon for solar panels), higher demand is unlikely to be an issue. Silicon is plentiful and we already have the infrastructure to make the material, according to Marco Raugei, an expert in the sustainability of new technology at Oxford Brookes University. But our supply chains for other materials — like neodymium for wind turbines, lithium and cobalt for batteries, and copper for basically everything — may need to shift. Though ore demand for materials usually means more mining (and with it, increased environmental impacts), experts agree that the benefits of renewable energy far outweigh the costs. "There is no such thing as a free lunch," says Charles Barnhart, a professor of energy studies at Western Washington University. "But I want to be clear that when we talk about environmental impacts, we're not trying to decide between 'lesser evils.'" For Barnhart, deciding between more mining for renewables and continuing to rely on fossil fuels is deciding between "completely different sides of the spectrum" because the cost of a business-as-usual future with fossil fuels will cause so much harm. Even though the trade-off will be beneficial, it's worth thinking about where the materials for the anticipated renewables revolution will come from and how the world will change when demand goes up."
Where will the materials for our clean energy future come from?
Inverse, 15 February 2019
"Policy-driven gas demand is growing so fast in China that production and imports are struggling to keep up. The squeeze will ease when Russia's almost-complete Power of Siberia pipeline starts up, but bullish forecasts have reignited interest in a second Russia-China pipeline. Towards the end of this year, on 20 December, Russian and Chinese dignitaries will gather to celebrate the start-up of the Power of Siberia pipeline—the centrepiece of a $55bn natural gas development programme that will eventually deliver 38bn cm/yr of Russian gas to the world's fastest-growing market. The date was agreed back in July 2017 by Gazprom and China National Petroleum Corporation (CNPC), signalling their determination to implement in timely fashion a project of major importance to both countries. Russia has long depended on pipeline exports westwards to Europe for its gas revenues and craved the creation of new pipeline gas markets in Asia. As long ago as the mid-1990s, the then head of Gazprom, Rem Vyakhirev, was proclaiming the newly-formed company's eastwards ambitions. A quarter of a century later, it will be on Alexey Miller's watch that these ambitions are fulfilled. The Power of Siberia project, the backbone of Gazprom's Eastern Gas Programme, is an immense undertaking-Russia's largest energy project since the fall of the Soviet Union. Along with the 3,000km pipeline that runs from gasfields in eastern Siberia to the city of Blagoveshchensk on the border with north-eastern China—the so-called "eastern route"—the scope involves the development of two huge gas resources: the 1.4tr-cm Chayandinskoye field in Yakutia and the 2.7tr-cm Kovyktinskoye field in Irkutsk. Close to the border with China , Gazprom is constructing what will be the largest gas-processing plant in Russia, the Amur plant, which will have processing capacity of 42bn cm/yr. Gas will be delivered under the terms of Russia's largest-ever sales and purchase agreement, signed by Gazprom and CNPC in May 2014. Specifying the supply of 38bn cm/yr over a period of 30 years, it was considered at the time to be worth $400bn. For China, the start-up of the Power of Siberia pipeline cannot happen too soon. Since President Xi Jinping assumed office in 2013, the nation has been vigorously implementing policies to ease the appalling air pollution in its cities and, more recently, to keep to its climate change action pledges under the 2015 Paris Agreement. At the heart of these policies is a switch from coal to natural gas, in heating and electricity generation.... The impact on the nation's demand for natural gas has been astonishing—and unprecedented. Consumption in 2017 was 240bn cm, up from 195bn cm in 2015, a rise of 23%. Imports have skyrocketed. According to customs data, LNG imports doubled between 2015 and 2017, to 38mn t. Moreover, imports during the first 11 months of 2018 were 44% up on the same period in 2017. If that growth rate continues into December, imports in 2018 will reach 55mn t (75bn cm). Pipeline gas imports more than doubled between 2015 and 2017, to 42bn cm. Imports during the first 11 months of 2018 were up 22% on the same period in 2017. If that growth rate continues into December, imports in 2018 will reach 51bn cm. With combined imports set to reach 126bn cm, it is no surprise that the International Energy Agency (IEA) is forecasting China will become the world's largest importer of natural gas in 2019. China imports pipeline gas from Turkmenistan, Uzbekistan and Kazakhstan through the three strands (A, B and C) of the Central Asia-China Gas Pipeline. However, these three lines are approaching capacity and construction of a fourth strand, Line D, has been postponed indefinitely. Smaller volumes are imported via a pipeline from Myanmar. So, start-up of the Power Siberia pipeline will bring welcome relief, though ramp-up will be gradual, partly because China is still working on the construction of the pipeline network that will distribute Russian gas to markets within the country.... During the years of protracted negotiations that led to the 2014 agreement for Power of Siberia gas, Russia and China were discussing two possible routes: the eastern route now under construction; and a "western route" that would bring gas from fields in western Siberia into China via the short stretch of border that exists between Kazakhstan and Mongolia. China argued strongly for the eastern route, because the entry point is close to large demand centres, notably around the cities of Beijing and Tianjin, and eventually got its way. However, discussions continued for deliveries via the western route-also known as Power of Siberia 2, or the Altai pipeline-and a heads of agreement for 30bn cm/yr of gas was signed in 2015. For a while after that, the Power of Siberia 2 concept seemed to be making little headway and stopped appearing on some of Gazprom's maps. Last year was something of a turning point. With completion of the first Power of Siberia pipeline in sight, and the scale of China's gas demand growth becoming ever more apparent, the concept seems to be enjoying a revival. "Intensification of negotiations on the western route" was an agenda item at a meeting between Alexey Miller and Han Zheng, vice-premier of China's State Council, that took place in Moscow in September last year. In the same month, Power of Siberia 2 was a topic for discussion at the Vladivostok Eastern Economic Forum, an annual conference established by President Vladimir Putin, and attended for the first time by Xi Jinping. At best, a fully-fledged agreement on Power of Siberia 2 remains years away, given the various obstacles that would first have to be cleared away. For example, the proposed pipeline route goes through mountainous territory, some of which consists of UNESCO world heritage sites. There have been suggestions that the pipeline might be routed instead through Mongolia, but this would require negotiations on issues such as transit fees. From China's viewpoint, gas would be entering the country through the eastern province of Xinjiang, a long way from major demand centres, and would require an increase in the capacity of the West East Pipeline system that already carries pipeline gas from Central Asia. None of these challenges are insuperable. So, it is conceivable that at some point in the 2020s, Russia could become China's largest gas supplier, exporting up to 68bn cm/yr."
Russia's hunger for second eastern gas outlet grows
""We are going to need very high-energy density batteries to power new advanced technologies that are incorporated into phones, laptops and especially electric vehicles," said Amin Salehi-Khojin, associate professor of mechanical and industrial engineering in UIC's College of Engineering. Salehi-Khojin and his colleagues synthesized several 2D materials that can serve as catalysts. A number of their 2D materials, when incorporated into experimental lithium-air batteries as the catalyst, enabled the battery to hold up to 10 times more energy than lithium-air batteries containing traditional catalysts. Their findings are published in the journal Advanced Materials. "Currently, electric vehicles average about 100 miles per charge, but with the incorporation of 2D catalysts into lithium-air batteries, we could provide closer to 400 to 500 miles per charge, which would be a real game-changer," said Salehi-Khojin, who is also the corresponding author of the paper. "This would be a huge breakthrough in energy storage." Salehi-Khojin and his colleagues synthesized 15 different types of 2D transition metal dichalcogenides or TMDCs. TMDCs are unique compounds because they have high electronic conductivity and fast electron transfer that can be used to participate in reactions with other materials, such as the reactions that take place inside batteries during charging and discharging."
2D materials may enable electric vehicles to get 500 miles on a single charge
ScienceDaily, 10 January 2019
"The number of greenfield oil and gas projects to get their final investment decision could rise threefold on 2018, Norwegian energy consultancy Rystad Energy has forecast. Most of these will be offshore projects, the author of the study, upstream analyst Readul Islam said. The number, which only covers conventional oil and gas deposits, could open up production reserves to the tune of 46 billion barrels of oil and gas, including around 14 billion barrels of oil equivalent in deepwater blocks, some 20 billion barrels in shallower waters, and the rest in onshore deposits, Islam said. The analyst noted "The only supply segment likely to shrink this year is the oil sands, whereas deepwater, offshore shelf and other conventional onshore developments are all poised to show substantial growth. From a geographical perspective, all regions are headed for robust growth except Europe and North America, still bearing in mind that shale plays are not included in these numbers." The forecast includes a lot of projects whose final investment decision was delayed because of the 2014 oil price crash, indicating that oil and gas companies have now managed to bring their costs down enough to make these large-scale projects commercially viable. About a quarter of the projects expected to receive a FID this year are ones that have been delayed because of the 2014 slump in oil prices. Yet there is no certainty that all of these projects will receive their final go-ahead this year. A sharp fall in oil prices could once again put the brakes on many greenfield projects. However, others will go ahead, including a number of liquefied natural gas projects in Africa, Russia, and Australia. In oil, Saudi Arabia will account for about one-fifth of the total new reserves to be tapped this year with the expansion of three offshore projects: Marjan, Zuluf, and Berri."
New Oil, Gas Project Approvals To Triple This Year: Rystad
"The fall in UK electricity generation to its lowest level since 1994, as reported on the Carbon Brief website earlier this month, reflects a trend in the energy market that is too often ignored. The supply side of the energy business — what Opec produces each month and how much gas Russia exports to Europe — is only half the story. The changing pattern of demand is at least as important and poses a real challenge to companies and investors in a sector where returns are already constrained by competition and regulation. The decline in consumption is not limited to the UK or to electricity. Over the past decade, both total energy demand and electricity use have fallen across the developed world. Since 2010 demand has declined in 18 of the 30 countries that are members of the International Energy Agency. There are several different reasons for the decline in consumption. Technical advances have improved the efficiency of products ranging from washing machines and fridges to computer servers have been underpinned by regulatory changes such as the introduction of LED lighting. Economies have deindustrialised to differing degrees, while in some countries a proportion of the fall has been caused by low economic growth. Although analysts and policymakers frequently assert that electricity will lead the shift to a low-carbon economy, there is so far only limited evidence of a real change. Electricity has only marginally expanded its share of final energy consumption since 2000 despite the growth of computers, telecommunications and the proliferation of domestic appliances. A small number of electric cars and the rising use of electricity in other parts of the transport sector starting with the railways have not yet made a material difference. By 2017, electricity contributed less than 1 per cent of final energy consumption in the transport sector, according to the IEA. For the moment, and for the foreseeable future, there are two distinct markets — one consisting of appliances and light industry where electricity is the natural source of energy and a larger market made up of the transport sector, heavier industry and the provision of heat. In the overall market, electricity provides only 19 per cent of the energy consumed — the rest comes from the burning of hydrocarbons — coal, oil and natural gas. In the emerging markets, electricity demand continues to grow to meet basic energy needs. In the developed world, the fall in electricity demand may be more than temporary.As consumers upgrade equipment to ever more efficient models and as regulations force standards to rise, electricity consumption is likely to drop. A revolution in battery technology would in theory stimulate demand for electricity. But any growth in the use of batteries (and other forms of energy storage) will also serve to eliminate waste and the loss of electric power, which as of now can only be used as soon as it is produced. Smart meters and grids will also improve efficiency rather than increasing demand.The sector's growth hopes continue to rest on converting sectors of the economy such as transport and industry from the use of hydrocarbons to reliance on electricity. The pace of change in those areas, however, is limited and complicated by the existence of entrenched capital stock, which would be costly to convert or write off."
Falling demand is the energy sector's next challenge
"The war on single-use plastics could cut demand for oil faster than previously expected over the next two decades, BP has warned. The oil major predicted a peak in global oil demand for the first time last year, and in its latest outlook report warned that a crackdown on plastic waste, which is made from fossil fuels, could play a role in slowing oil demand. BP expects demand for oil to rise 0.3pc a year before plateauing in the 2030s. The "much slower" growth forecast is well below what BP predicted even two years ago. Last year, its central forecast scenario predicted the world's appetite for crude would grow by 0.5pc a year through the next decades before peaking in the late 2030s. "
BP warns war on plastic will help cut global oil demand
Telegraph, 14 February 2019
"Renewable energy sources will be the world's main source of power within two decades and are establishing a foothold in the global energy system faster than any fuel in history, according to BP. The UK-based oil company said wind, solar and other renewables will account for about 30% of the world's electricity supplies by 2040, up from 25% in BP's 2040 estimates last year, and about 10% today. In regions such as Europe, the figure will be as high as 50% by 2040. The speed of growth was without parallel, the company said in its annual energy outlook. While oil took almost 45 years to go from 1% of global energy to 10%, and gas took more than 50 years, renewables are expected to do so within 25 years in the report's central scenario. In the event of a faster switch to a low carbon economy, that period comes down to just 15 years, which BP said would be "literally off the charts" relative to historical shifts. But the company, as in previous editions of its report, does not see oil going away any time soon. The outlook's core scenario envisages that oil demand does not peak until the 2030s, though under its greener scenario that milestone could be reached between now and the early 2020s. Regardless, BP sees a "major role" for hydrocarbons until 2040, which it says will require substantial investment. It expects global demand for oil and gas to be 80-130 million barrels per day by then, up from around 100mb/d today. The company has ambitious plans to grow its oil and gas production 16% by 2025, according to figures compiled by the Norway-based consultants Rystad Energy. The report is gloomy on prospects for avoiding dangerous levels of global warming. The central scenario expects carbon emissions to grow 10% by 2040, as world energy demand grows by a third and fossil fuels continue to play a key role."
Renewable energy will be world's main power source by 2040, says BP
Guardian, 14 February 2019
"A wave energy technology is being developed that could help generate low-cost electricity for thousands of houses. The device costs less than conventional designs, has fewer moving parts, and is made of durable materials. It is designed to be incorporated into existing ocean energy systems and can convert wave power into electricity. Small scale experiments in an ocean simulator show that one full-size device could generate the equivalent of 500kW, enough electricity for about 100 homes. Engineers say that their design could be used in fleets of low-cost, easily maintained structures at sea within decades, to take advantage of powerful waves in Scottish waters. Engineers from the University of Edinburgh and from Italy developed their device – known as a Dielectric Elastomer Generator (DEG) – using flexible rubber membranes. It is designed to fit on top of a vertical tube which, when placed in the sea, partially fills with water that rises and falls with wave motion. As waves pass the tube, the water inside pushes trapped air above to inflate and deflate the generator on top of the device. As the membrane inflates, a voltage is generated. This increases as the membrane deflates, and electricity is produced. In a commercial device, this electricity would be transported to shore via underwater cables. A scaled-down version of the system was tested in the FloWave facility at the University of Edinburgh, a 25m diameter circular tank that can reproduce any combination of ocean waves and currents. The system could replace conventional designs, involving complex air turbines and expensive moving parts. The study, published in Proceedings of the Royal Society A, was carried out in collaboration with the Universities of Trento, Bologna and Scuola Superiore Sant'Anna Pisa in Italy."
Device could deliver wave energy to thousands
University of Edinburgh, 13 February 2019
"The EU appears to have left the door open for Gazprom's controversial gas pipeline project to pour more Russian gas into Europe. The European Commission on Wednesday struck a provisional deal with the European Parliament and the EU's 28 member states to tighten the rules on gas imports into the bloc. The new rules will govern all import pipelines, including Gazprom's planned Nord Stream 2 project, to guard member states against unfair tariffs or anti-competitive practices. One of the key points rules out gas suppliers from owning the pipeline infrastructure transporting their gas into the EU."
EU leaves door open to Russian gas pipeline to Germany
"The oil crash came and went but the debt pile it left across the Gulf is still growing, leaving the region's energy-dependent economies more vulnerable next time a crisis strikes. All but debt-free before crude prices nosedived in 2014, many Gulf governments tried to borrow their way through while making only cautious and halting efforts to cut spending and diversify their economies. Meanwhile, a Saudi-led blockade of Qatar has split the six-state Gulf Cooperation Council and complex regional dynamics mean it's no longer a foregone conclusion that the strong will bail out the weak with no strings attached. If oil prices crash again, the pain could be greater than five years ago, raising the risk of a regional recession because governments would have to slash spending while markets would be more reluctant to lend, according to Bloomberg economist Ziad Daoud."
The Oil Crash Is Over, But Debt Is Still Piling Up in the Gulf
Bloomberg, 13 February 2019
"As of December 2018, Australia has been the world's largest exporter of liquefied natural gas, relegating Qatar to second place, ahead of Malaysia in third position. But the United States is aiming to be among the top three by the end of this year. It has been massively adding liquefaction capacity to profit from enhanced global natural gas demand. The country is expected to add over 6 billion cubic feet of daily liquefaction capacity by 2021. That would come on top of the over 3 billion cubic feet per day stemming from the country's Sabine Pass and Cove Point facilities.... Norway's resources are depleting, and the Netherlands has already announced it will reduce gas supplies by two-thirds as of 2022 and halt them completely by 2030 because of unsafe extraction conditions. Should the Russia-led Nord Stream 2 gas pipeline project go ahead as scheduled, Europe's dependence on Russia will no doubt increase, but relatively cheap gas supplies make the deal so enticing. The US administration, just like Eastern European nations, have vociferously advised against the Nord Stream project, and Washington has pushed its very own solution to the conflict — making more EU nations, and above all Germany, buy LNG from the US.... According to the US Energy Information Administration, imports of LNG to the EU28 averaged 5.1 billion cubic feet per day in 2017, but remained below their peak in 2011. It states that "utilization of import facilities in the bloc has declined from about 50 percent to between 20-25 percent in recent years as expansions in regasification capacity far exceeded demand for LNG imports." Those importing LNG in the EU have seen it as a useful diversification of their energy sources. That certainly makes sense, given that the countries in question have the necessary infrastructure in place to receive LNG from tankers. In the case of Germany, including direct LNG deliveries in its energy mix may also be seen by policymakers as a move toward more diversification, but it wouldn't really need it despite the country phasing out both nuclear and coal power, and it wouldn't need need LNG from the United States. Unlike EU nations such as Belgium and the Netherlands, Germany doesn't have its own terminal to import liquefied natural gas directly. But at a German-US conference on energy security in Berlin on Tuesday, German Economy Minister Peter Altmaier strongly supported the construction of at least two such terminals in northern Germany. Brunsbüttel, Stade or Wilhelmshaven were mentioned as likely locations."
Liquefied natural gas: US hype and German obedience?
Deutsche Welle, 12 February 2019
"The US has welcomed an announcement by Germany that it will build at least two liquefied natural gas (LNG) terminals, a move that could pave the way for American exports to one of Europe's largest energy markets. The announcement could also help to address US concerns over Nord Stream 2, a gas pipeline being built to link Russia to Germany, which Washington worries will increase Europe's dependence on Russian energy imports. In an interview with the Financial Times, Dan Brouillette, the US deputy energy secretary, said he was "very excited" at the German move on terminals, describing it as "potentially a great opportunity for US LNG". "We remain concerned by Germany's increasing reliance on Russia for its gas, so anything it does to improve diversity is a good step," he told the FT. But he insisted that the US was still "not going to drop [its] objections" to Nord Stream 2.... However, experts have said that even if the German terminals are constructed, demand for US LNG will be low because it is considerably more expensive than Russian pipeline gas. LNG is cooled to approximately minus 160 degrees Celsius and then shipped to market on tankers. In the interview, Mr Brouillette said the price of US LNG would fall as more and more export terminals are built and domestic gas production continues to increase. He said four new terminals are "under active consideration by the regulator" and, if approved and built, would bring the total number of US export facilities to 10. As new terminals come on line, "you'll begin to see US LNG prices go down — because of competition between players who own those facilities", he said. Mr Brouillette also welcomed a decision by EU countries last Friday to toughen their rules on Nord Stream 2. Ambassadors to the bloc agreed that the project must meet the four EU energy rules, including on "ownership unbundling" — that is, ensuring that the pipeline is not owned directly by the gas supplier. The rules also dictate that at least 10 per cent of the line's capacity must be offered to third parties. But under a Franco-German compromise, EU ambassadors also agreed that the member state where the import pipeline lands — in this case Germany — will decide how to apply those rules."
US welcomes Germany's announcement of new gas terminals
"The US has become the biggest exporter of oil to the UK for the first time since the Suez crisis, as the growing bounty of shale production starts to supplant North Sea supplies. In January the US supplied the equivalent of almost one in every four barrels of crude processed by UK oil refineries, or 264,000 barrels a day, illustrating the outsized role American oil now has in Britain's energy mix. That level was more than Norway, Russia, Nigeria or Algeria, according to data from the cargo-tracking company Kpler, which have all been major suppliers to the UK in recent years. Meanwhile, operators in the UK portion of the North Sea have battled to stem production declines. While monthly export volumes can be volatile, the rising volume of US crude heading to the UK is part of a trend since Washington lifted widespread restrictions on exports in 2015. In 2018 the average volume of US crude exported to the UK doubled to 160,000 b/d, second only to Norway over the course of the year and up from less than 20,000 b/d in 2016. .... The surge in US crude supplies comes as the country's production has risen close to 12m b/d, up from just 5m b/d a decade ago, thanks largely to oil supplies from shale formations that have been exploited through advances in horizontal drilling and hydraulic fracturing. ... That has allowed Washington to pursue a policy that the Trump administration has dubbed "American energy dominance", with the country overtaking Russia and Saudi Arabia as the world's largest oil producer, as well as becoming a major gas supplier. Shipments overseas have leapt since the US lifted restrictions on exports that had been in place since the Arab oil embargoes of the 1970s, with Washington keen to reap the economic benefits and wield its energy clout as a tool of foreign policy. While oil analysts say the jump in exports to Britain has primarily been driven by economics, the country's growing reliance on one supplier may still raise questions at a time when UK trade policy is already in flux due to Brexit. US exports to the UK peaked in 1957, after President Dwight Eisenhower authorised 300,000 b/d of shipments to relieve shortages caused by the shutdown of the Suez Canal, partly in return for the UK and France agreeing to withdraw troops, according to the book Risk-Taking in International Politics by Rose McDermott. Tight regulations on the UK's own nascent shale industry have also been attacked by energy executives including Ineos's Jim Ratcliffe, the UK's richest man, who have warned the government they are harming British competitiveness. The UK has a diverse range of oil suppliers, with more than 50 countries having exported crude to the country in the past three years, but others closer to home such as Norway may feel they are losing out. Norway's crude exports to the UK, which alongside domestic production have made up the bulk of the feedstock for the country's 1.1m b/d of daily refining activity, fell 13 per cent last year. The rise in US exports to the UK has been driven primarily by two US-based companies, ExxonMobil and Valero, which own two of the six oil refineries still operating in the UK. Exxon's Fawley plant near Southampton, the UK's largest oil refinery, in January imported more than 4.3m barrels of US crude primarily sourced from the Permian shale field in Texas, according to Kpler. Last year Exxon said it planned to spend £500m on the 270,000 b/d facility to expand its lifespan. Fawley is set to take the first US-to-UK supertanker shipment later this month, carrying more than 2m barrels. Valero, the world's largest independent refiner, imported 2.6m barrels of US crude in January to its plant in Pembroke, Wales, while a further 2m barrels went into the Tranmere oil terminal that feeds the Stanlow refinery on the south side of the river Mersey, which is owned by the Indian company Essar."
US becomes UK's top oil supplier for first time since Suez
Financial Times, 6 February 2019
"McKinsey counts more than 350 new electric vehicle (EV) models debuting by 2025, one of the conditions for mass-market adoption. Global demand for gasoline is set to peak around 2021 thanks to electric vehicles (EVs) and fuel efficiency gains. The energy research and consultancy Wood Mackenzie predicts charging infrastructure investment in the US will exceed $18 billion annually by 2030 for equipment, installation, operations, and services. China is expected to have three times more energy demand from EVs by then."
Oil companies and utilities are buying up all the electric car charging startups
Quartz, 5 February 2019
"The crisis, years in the making, has left many of Venezuela's roughly 31 million people destitute and hungry, sent more than two million people into neighboring countries as refugees and created a new source of instability in Latin America. The outcome of the struggle will determine not only who controls Venezuela's government but also its proven oil reserves, which by someestimates are the world's largest.... in the next few days and weeks, the impact of the United States' sanctions will begin to ripple through the country. Fuel shortages are expected to start in the countryside and eventually reach the capital, Caracas, further constricting the country's economy by interfering with people's ability to work and making food and medicine even harder to obtain."
Who Supports Which Leader in Venezuela? Why Is This Important?
New York Times, 4 February 2019
"Surging production from the Permian - the largest shale basin in the US - requires an "optimal" price band of $60 to $70 per barrel to maintain its momentum, according to the chief executive of the biggest player in the area. "WTI [West Texas Intermediate] to remain in the $60 to $70 range and Brent a bit higher than that depending on how that differential works out, I think for US shale that's an optimal range even though development can continue at lower levels because of the lower breakevens," Occidental Petroleum's Vicki Hollub told The National in an interview in Abu Dhabi. WTI is the widely used benchmark for North American crude. The US became the world's largest crude producer last year with output hitting 11.9 million barrels per day in November, outpacing sovereign producer Saudi Arabia, and Russia. The US Energy Information Administration has forecast rising output with US production likely to surge past 12.1 million bpd in 2019."
WTI oil at $60 to $70 "optimal" to support US shale growth, says Occidental chief
The National, 4 February 2019
"The highly anticipated EIA-914 report came out on Jan. 31, showing US oil production surging to 11.9 mb/d for the month of November. Oil markets initially sold-off on that, but close followers of the fundamentals know that the adjustment + weekly actually showed the production figure to be over ~12.1 mb/d for the month of November, so the 11.9 mb/d was actually a "disappointment" versus what the data showed.... This chart illustrates that the growth we saw from US shale over the summer is starting to stall. This is in line with our global oil supply & demand model indicating that Q1 will show stalled US production growth over Q4.... the growth this year may just be ~800k b/d to 900k b/d exit-to-exit, which is a big slowdown from the +2 mb/d we saw last year.... Based on our shale basin analysis, it appears that basins outside of the Permian are now starting to see well productivity growth stall/moving lower. You can see our report here which detailed some of the findings. If US shale well completions are flat this year versus last year, a higher percent of new well production will go towards replacing declines last year. So in order to keep the same momentum going forward, US shale needs to complete more wells with either the same productivity or higher productivity. It's akin to a runner running a treadmill, but that treadmill is getting faster and faster. US shale needs to complete more and more wells each year just to stay flat, which will be a tall order considering 2018 broke the record by a mile."
U.S. Oil Production Hits New Record High, But The Data Shows The Growth Has Flatlined Since
HFI Research, 3 February 2019
"Britain's nuclear power stations recorded a 12% decline in their contributions to the country's energy system over the past month, as outages raised concerns over how long the ageing plants will be able to keep operating. A temporary closure of two of the country's eight nuclear plants resulted in a double-digit drop in nuclear generation in January, compared to the same period last year. Prospects for new nuclear projects have commanded headlines and government attention in recent weeks, with Hitachi and Toshiba scrapping their plans for major new plants. But the fate of the existing plants, which usually provide about a fifth of the UK's electricity supplies, has been pulled into focus by outages due to safety checks and engineering works running over schedule. Nuclear outages also push up carbon emissions because any capacity shortfall will typically be replaced by fossil fuel power stations. Seven of the power stations use an advanced gas reactor (AGR) design, the oldest of which is 43 years old and the youngest 30 years. Most were built with a lifetime of about 35 years in mind. All are due to be closed in the 2020s after owner EDF Energy extended their lives, but there are now fears that ageing infrastructure may reduce their output or even lead them to shut early. Iain Staffell, lecturer in sustainable energy at Imperial College, which compiled the nuclear output data, said: "Just as Toshiba and Hitachi have pulled out of building new reactors, we have one third of the existing nuclear capacity unavailable either for maintenance or because their maximum power has been reduced as they get older. "Many of our reactors were built in the late 70s, and like your typical 40-year-old they aren't in peak physical condition any more.""
Fate of UK's nuclear plants in doubt over ageing infrastructure
Guardian, 3 February 2019
"A Chinese-led consortium has discovered the UK's biggest gasfield in more than a decade, leading experts to say there is life yet in the country's offshore sector. Drilling found the equivalent of about 250m barrels of oil could be recovered from the Glengorm reservoir in the central North Sea, about 5% of the UK's annual gas demand. The find was hailed as significant by industry and the regulator of the region's last oil and gas reserves, where production has been declining since the turn of the century.... Andy Samuel, the chief executive of the regulator, said the UK continental shelf still held an estimated 10bn-20bn barrels of oil and gas, "so there is every chance of yet more significant finds". The number of new wells being drilled has fallen in recent years; in 2018 it fell to a level last seen in 1965. However, the amount of oil and gas found has increased from 83m barrel of oil equivalent in 2014 to 175m in 2017."
Discovery of biggest UK gasfield in a decade raises industry hopes
Guardian, 29 January 2019
"A Chinese-led consortium has discovered the UK's biggest gasfield in more than a decade, leading experts to say there is life yet in the country's offshore sector. Drilling found the equivalent of about 250m barrels of oil could be recovered from the Glengorm reservoir in the central North Sea, about 5% of the UK's annual gas demand.... Andy Samuel, the chief executive of the regulator, said the UK continental shelf still held an estimated 10bn-20bn barrels of oil and gas, "so there is every chance of yet more significant finds". The number of new wells being drilled has fallen in recent years; in 2018 it fell to a level last seen in 1965. However, the amount of oil and gas found has increased from 83m barrel of oil equivalent in 2014 to 175m in 2017
"A year ago, the U.S. government saw American crude production averaging 11.95 million barrels a day .... Shale drillers are set to exceed that this year. The Energy Information Administration now estimates output will top out at 14.53 million barrels a day in 2031, according to its Annual Energy Outlook released Thursday. Why such a big difference? Near-term prices are higher than what the agency assumed last year, boosting the baseline production, according to the EIA. The U.S. will be a net exporter of petroleum -- and energy in general -- next year, years sooner than previous annual estimates, something the EIA flagged in its short-term outlook earlier this month. That's due to the faster increases in crude and natural gas liquids production, combined with slower demand growth, according to EIA Administrator Linda Capuano. "America's move to net exports was supposed to be five or six years off," said Kevin Book, managing director of the Washington-based consultancy ClearView Energy Partners LLC. "Now it's next year. That's big news.""
US Oil Production 23 Years Ahead of Schedule
Bloomberg, 25 January 2019
"Rocks at the bottom of the North Sea may provide the perfect storage location for renewable energy, according to a new study. Excess power could be stored in the form of compressed air inside porous formations on the seabed, providing a reservoir that can provide energy on demand. This pressurised air can be released to drive a turbine, generating a large amount of electricity. This would allow green energy to be stored in summer and released in winter, when demand is highest. Along with battery storage and connections linking Britain's power supply to other European nations, experts hope compressed air energy storage will provide the UK with a constant supply of green energy.... In their new analysis, scientists from the universities of Edinburgh and Strathclyde suggested drilling deep wells into North Sea rocks would create sites at which large quantities of air could be injected into sandstone pores. In their study they used mathematical models to assess the potential of this technique in British waters.... One way to save money and make the entire process more efficient would be to place the underwater wells close to large-scale offshore wind projects so energy could be funnelled straight down into the rock. A similar process in which compressed air is stored in deep salt caverns is already being used at sites in the US and Germany. These results were published in the journal Nature Energy."
North Sea rocks could act as large-scale underwater renewable energy stores, study finds
Independent, 21 January 2019
"Australia's wind and solar boom looks set to power through 2019 following a record year, despite grid constraints and extra scrutiny from network operators to make sure new projects don't spark blackouts like ones that hit two years ago....Australia generates nearly 20 percent of its electricity from renewables. This is forecast to jump to 75 percent over the next 20 years. A total of 14.7 gigawatts (GW) of large-scale solar and wind projects worth A$20 billion ($14 billion) were under construction or reached financial close last year, more than double 2017's record, according to the Clean Energy Council..... Renewable projects added to the grid have grown from 22 with 1.2 GW of capacity in 2013 to a record 45 projects with 2.9 GW added in 2018, AEMO said. There are 114 more applications representing 15.9 GW pending, indicating plenty of potential congestion ahead. The biggest challenge is that developers are all vying to connect to a grid running 5,000 km (3,100 miles) from Queensland in the north to South Australia and Tasmania."
Australia's solar, wind boom to power past grid woes in 2019
Reuters, 20 January 2019
"The Alberta government is spending $23.4 million to convince Canadians why a major oil pipeline project is needed. The marketing campaign, Keep Canada Working, is aimed at getting people to support the Trans Mountain pipeline expansion. The project would triple the amount of oil that flows from Alberta to the B.C. coast for export and increase its value. The message is that Trans Mountain would boost Canada's economy and support jobs across the country. The money is for television, radio, newspaper, internet and billboard ads."
Alberta spending millions to promote Trans Mountain oil pipeline expansion
Windsor Star, 19 January 2019
"America's journey to preeminence in the global oil trade is about to hit another milestone. Propelled by the shale-oil boom, the U.S. is already producing more crude than either Russia or Saudi Arabia, who until recently vied for the top spot. By mid-year America will go one better. At the moment, Saudi Arabia could raise production all the way up to its maximum capacity of 12 million barrels a day, surpassing the 11.8 million daily barrels produced by the U.S. in December, according to the International Energy Agency. Soon even that won't be enough. American crude output is poised to expand by 1.1 million barrels a day this year, according to the IEA, which sees the U.S. exceeding the Saudis' maximum level within the next six months. "By the middle of the year, U.S. crude output will probably be more than the capacity of either Saudi Arabia or Russia," the Paris-based agency said in a report on Friday."
U.S. Could Soon Pump More Crude Than Saudis Can at Their Peak
"The UK's nuclear power capabilities are slowly disappearing. Right now, the country gets about 20 per cent of its power from nuclear – it's second only to gas as a source of electricity. But by the early 2030s, only one of the seven existing nuclear power stations in the UK is still planned to be in operation, and attempts to build replacements continue to falter. On Thursday, Japanese giant Hitachi pulled the plug on the £16 billion Wylfa Newydd nuclear plant on Anglesey in Wales, as well as another planned project at Oldbury in Gloucestershire. It is the latest in a string of blows to the UK's nuclear new build programme. In November last year, Toshiba pulled out of the Moorside project in Cumbria – between them, the three scrapped power stations would have met 15 per cent of the UK's future electricity demands."
Only renewables can fix the UK's nuclear energy crisis
The Week, 18 January 2019
"After closing out 2018 in free-fall amid fears of a global supply glut and economic slowdown, U.S. crude prices have rebounded more than 18 percent to start this year. That's the biggest climb over the first 13 trading days since January 2001, according to New York Mercantile Exchange data compiled by Bloomberg. The swift climb higher has coincided with a steep drop in volatility. After reaching its highest level in more than two years, an index tracking West Texas Intermediate crude options prices has sunk to the lowest since November. Why all the optimism? Analysts and traders credit progress in U.S.-China trade talks, a more dovish stance on interest-rate hikes from the Federal Reserve and signs that OPEC-led production cuts are starting to take a bite out of supplies."
Oil Hasn't Started a Year This Hot Since the Turn of the Century
"U.S. shale production is poised to slow down this year as drillers reduce their budgets in response to lower oil prices, the head of the world's largest oil-field services company said Friday. Schlumberger Ltd. Chief Executive Paal Kibsgaard said on a call with investors that the recent decline in oil prices had prompted a more conservative approach among the world's oil producers, a dynamic he said was particularly pronounced in the U.S. Mr. Kibsgaard said the budgets of U.S. shale drillers, who are customers of Schlumberger, could be slightly down in 2019, especially in the early part of the year. That means the rapid production growth seen in the U.S. in 2018 will slow, he said. "We could be facing a more moderate growth in U.S. shale production in coming years," Mr. Kibsgaard said during the company's fourth-quarter earnings call. Some frackers have already begun scaling back next year's drilling plans amid weak crude prices. U.S. oil prices had fallen more than 30% in recent months. They topped $53 per barrel Friday, which would be their highest close since early December, but are still low enough to force many shale companies to pull back on spending. Producers Chesapeake Energy Corp., Diamondback Energy Inc., Parsley Energy Inc. and Centennial Resource Development Inc. either plan to operate fewer drilling rigs in 2019 or recently lowered production plans, the companies have said in public statements and filings. The cuts so far have been modest, and shale drillers remain on track to push U.S. crude production to new highs this year, though not at the same rate of growth seen in 2018. The Energy Information Administration said Tuesday it expects oil production to reach an average of 12.1 million barrels daily in 2019 from an average of 10.9 million barrels last year."
Shale Boom is Slowing, Oil-field Bellwether Warns
Wall St Journal, 18 January 2019
"While low oil prices are beginning to slow the growth of U.S. shale, in the years ahead oil and gas drilling could be curtailed by a different problem: a shortage of water. Water is a crucial ingredient in the fracking process, and drillers use copious volumes of it. The problem for the U.S. oil industry is that so much of the output growth expected over the next half-decade or so depends very heavily on the Permian basin, where water is increasingly scarce. Water already accounts for about 15 percent of the cost of a shale well, according to analysts at Morgan Stanley. "In the Permian, total spending on water is expected to double over the next 5 years, to $22B, with E&Ps on avg using 50 barrels (bbls) of water for each lateral foot completed," the investment bank wrote in a new report. "Assuming 10k lateral feet per well, this implies that the ~5,500 existing Permian well permits will require ~2.75 billion bbls of water to complete." That's a lot of water in an area that doesn't have a lot of it. "Given the sizeable water need, we believe drought and water scarcity present long-term risks to shale economics, particularly in the Permian, a core area of growth in a drought-prone region," Morgan Stanley warned. Morgan Stanley goes on to provide further detail into the scale of the problem. Morgan Stanley overlaid water scarcity data from the World Resources Institute with Permian well locations, finding that "53% of Permian wells being drilled today are located in areas with high water risk," the investment bank concluded. "While operators are comfortable with water availability at the moment, there are precedents (most recently in 2011/2012 in Oklahoma) where severe drought conditions materially affected completion performance." There is also another separate water problem facing shale drillers. "Produced water" – water that comes out of a well when drilled – must be handled somehow. The volume of produced water that comes out of a shale well can exceed that of oil by a ratio of 10 to 1. The ratio also increases over time as the oil from individual wells begins to deplete, so the cost-per-barrel for water disposal also rises. Water can be injected underground into disposal wells, which carries environmental and seismic risk. Or it is trucked away for recycling or some other form of disposal, often done by third parties, at huge expense. Last year, Wood Mackenzie said that the rising cost of water disposal alone would increase the breakeven price in the Permian by between $3 and $6 per barrel, potentially shaving off future Permian oil production by around 400,000 bpd by 2025.Morgan Stanley notes that shale drillers are increasingly recycling the water they use to drill wells, injecting it back underground to be used again in the next well. That saves on water use, of course, but it also cuts down on the cost of water disposal. The investment bank says simply recycling water could save around $1 per barrel."
Low Oil Prices Are Not The Only Problem For The Permian
OilPrice.com, 17 January 2019
"Hitachi has said it will suspend work on a multi-billion-pound UK nuclear project because of rising costs. The decision puts thousands of jobs at risk if the £13bn plant at Wylfa Newydd in Anglesey, north Wales, is scrapped. The Japanese firm had been in talks with the UK government since June about funding for the project, which was being built by its Horizon subsidiary. The government said it had failed to agree terms with Hitachi. The nuclear industry said it was "disappointing". Hitachi said it would also suspend work on another site, in Oldbury in Gloucestershire, "until a solution can be found". About 9,000 workers had been expected to be involved in building the two nuclear reactors, which were due to be operational by the mid-2020s.... Hinkley, Moorside, Wylfa, Oldbury, Bradwell and Sizewell were identified as the sites for the most significant national wave of new nuclear power construction anywhere in the world. Of those six - only one is under construction, three have been abandoned and two face an uphill battle to get the green light. Under those circumstances you might think the government would be embarrassed that its energy policy was in disarray. But it's not. The collapse of the Wylfa and Oldbury projects today (following the abandonment of Moorside) is evidence of some new economic realities that have seen government enthusiasm for new nuclear fade. The first and most obvious is the cost .... The Nuclear Industry Association says the UK has six sites that are licensed to build new nuclear power stations and eight sites that are currently generating power. However, it said that only one of the eight currently operating are due to be in use by 2030. The GMB union warned of an energy crisis."
Nuclear plant in Anglesey suspended by Hitachi
January, 17 January 2019
"U.S. crude oil production will average 12.1 million barrels per day (MMbpd) in 2019 and 12.9 MMbpd in 2020, with most of the growth coming from the Permian region of Texas and New Mexico. That's according to the U.S. Energy Information Administration's (EIA) latest short-term energy outlook, which estimates that U.S. crude oil production averaged 10.9 MMbpd in 2018."
2019 US Oil Output to Average 12MM Barrels Per Day
Rigzone, 16 January 2019
"Oil demand will grow steadily in the 2020s and peak in the late 2030s, according to Rystad Energy's current long-term outlook. "In our long-term outlook we currently see oil demand growing steadily in the 2020s and peaking in the late-2030s, as we incorporate moderate technological shifts and accelerated efficiency gains that will flatten on-road transportation demand and petrochemical feedstock demand growth towards 2040," Rystad Energy's Chief Oil Analyst Bjornar Tonhaugen said in a statement sent to Rigzone recently. Tonhaugen warned however that in the company's "low case", oil demand could potentially peak ten years earlier, in 2027, "given additional demand displacement by a more rapid transportation electrification, oil-to-gas and oil-to-renewables power switching, and the integration of biofuels and bioplastics". The Rystad Energy representative added that "even in a scenario with more rapid transportation electrification, the E&P industry still needs to make new discoveries and/or find ways to extract more oil out of existing fields to satisfy oil demand to 2040"."
Oil Demand to Grow Steadily in 2020s
"TAE Technologies will bring a fusion-reactor technology to commercialization in the next five years, its CEO announced recently at the University of California, Irvine. "The notion that you hear fusion is another 20 years away, 30 years away, 50 years away—it's not true," said Michl Binderbauer, CEO of the company formerly known as Tri Alpha Energy. "We're talking commercialization coming in the next five years for this technology."... "What we're really going to see in the next couple years is actually the ability to actually make net energy, and that's going to happen in the machine we call Copernicus," he said in a "fireside chat" at UC Irvine."
Energy From Fusion In 'A Couple Years,' CEO Says, Commercialization In Five
Forbes, 14 January 2019
"Oil prices are expected to oscillate close to current levels well into the next decade, averaging around $65-70 per barrel through 2023, according to an annual survey of energy professionals conducted by Reuters. Despite the recent slump in oil prices, forecasts have edged down by less than $5 per barrel compared with the last annual survey conducted at the start of 2018 and have changed little over the last three years. Long-term expectations for the average price of Brent crude remain anchored around $70 per barrel, close to the $72 average realised in 2018 (tmsnrt.rs/2HebsXA). The results are based on the responses from just over 1,000 energy market professionals to a poll conducted between Jan. 8 and Jan. 11. Brent prices in 2019 are expected to average $65 per barrel, unchanged from surveys in 2016, 2017 and 2018."
Oil prices expected to stay anchored around $65-70 through 2023: Kemp
"Who could blame the board of the Japanese company Hitachi if its members decide at their meeting this week to scrap plans for a new nuclear power station at Wylfa on the North Wales island of Anglesey? Hitachi has invested more than £840m in the project over the past six years. The technology has passed all the tests set by the UK's nuclear regulator. But the company has been unable to get the government to put in place the clear and credible financial structure necessary to underpin the investment. That failure has already led other investors to abandon the new plant planned at Moorside in Cumbria....Hitachi's withdrawal would mark the collapse of the energy policy adopted in 2013 by the UK's coalition government. Facing what were believed to be ever-rising energy prices and the need to reduce carbon emissions, the policy plumped for new nuclear, promising that 35 gigawatts of new capacity would be on stream by the mid 2030s — more than replacing the first generation of nuclear plants, which would by then have reached the end of their useful lives. Because the price of gas seemed doomed to keep rising, new nuclear would come to look highly competitive over time as well as reducing dependence on imports. Since then much has changed, and the assumptions which underpinned the old policy now look laughably wrong. The costs of all forms of energy (apart from nuclear) have fallen dramatically and there is no shortage of supply. Electricity demand is down thanks to efficiency gains and new technology. The contract for the first new nuclear station being built at Hinkley Point in Somerset, which enjoys a guaranteed index-linked price for 35 years from the moment the plant is commissioned, looks exorbitant. The indexation dates from 2013. If the plant comes on stream in 2027 as promised, power from Hinkley will cost well over £100 per megawatt-hour. At the same time the cost of renewables has fallen radically, to the point where subsidies are largely unnecessary. As the latest capacity auctions demonstrate, it is beginning to be possible to rely on some measure of storage to manage the peaks and troughs of demand. The demise of Wylfa forces the need for a comprehensive review of energy policy. Since the UK government is too busy preparing for Brexit to focus seriously on any other issue, the review should be conducted independently. The questions are simple: how much energy is likely to be needed? What are the most cost effective ways of reducing emissions? What alternative competitive sources of supply are now available, and what research priorities can improve efficiency and advance the next generation of supplies? Then, crucially, what incentives or guarantees are necessary to secure the required investment? "
After Wylfa — the case for an independent review of UK energy policy
Financial Times, 13 January 2019
"Huge salt caverns hundreds of metres underground are being converted into vast gas stores to ensure the UK has enough energy to heat homes if another Beast from the East hits. A little-known firm employing just 50 people has risen to become the UK's biggest player in gas storage. Storengy, a subsidiary of French energy giant Engie, said it will complete the final five of 20 salt caverns at Stublach in Cheshire this year. That will take its market share from around a quarter now to nearly 30%, far larger than other big players in gas storage, such as SSE. The £500m project started in 2007 and has prompted drilling into salt layers 500m deep, adding water to turn it into brine and then painstakingly extracting that over several years to create caverns to hold gas. The region has a long history of salt mining, with the voids used for other purposes including records from the National Archive. The first 10 of Storengy's caverns were finished and operational from 2016, and it has since added five more, with a final five due for completion by December.... MPs are also investigating whether the UK has enough storage after the country's biggest facility, accounting for about three-quarters of gas stores, closed due to ageing infrastructure. Centrica's Rough gas store off the coast of Yorkshire closed in 2017. The government has rebuffed previous calls to support new gas storage, saying the fact supplies did not run out last winter showed the market was working.... The government said: "Over the past 10 years, analysis undertaken by the government and others has delivered a consistent message: that our gas system is secure, with GB supplies able to meet gas demand even under severe weather conditions for an extended period of time.""
Salt caverns double as UK gas stores to beat cold snaps
"Saudi Arabia has finally silenced its peak-oil critics and simultaneously revived interest in its stalled $2 trillion (£1.6 trillion) plan for a stock market float of state-owned producer Aramco. The kingdom revealed this week it has enough crude to pump at current rates for at least another 70 years. At the end of 2017, Saudi oil reserves stood at an eye-watering 268bn barrels, up from previous estimates of 266bn. By comparison, the UK's remaining cache of retrievable oil under the seabed of the North Sea will be almost completely drained, probably after another couple of decades."
Saudi Arabia has more oil than we may ever need
"Three-quarters of energy industry stakeholders are likely to avoid greater connectivity due to concerns around security vulnerabilities. That's according to new research from international legal practice Osborne Clarke, which suggests concerns surrounding security, data protection and privacy risks are slowing the adoption of technologies such as the Internet of Things and 5G networks. Two-thirds of all businesses from across 11 countries said security concerns are very or extremely likely to lead their business to avoid greater connectivity, with 64% citing data and privacy concerns as another potential barrier – these worries were especially prevalent in businesses in the energy sector, at 74%. Despite this, the report also found the energy sector is the most likely (88%) to recognise the strategic importance of 5G over the next five years. Ashley Hurst, Partner at Osborne Clarke, said: "There is understandable hesitancy around privacy and security issues given the potential consequences of cyber-attack for energy companies but there is a real danger in falling behind the curve for those that don't take advantage of greater connectivity.""
Energy firms 'avoiding greater connectivity due to cyber threats'
Energy Live News, 11 January 2019
"As a big storm was sweeping over the northern parts of the country, paralyzing transportation and economic activity, Bente Nyland took the floor in the Oslo premises of the Norwegian Petroleum Directorate. The directorate director made clear that she had good news to tell. The Norwegian oil and gas production is now about to significantly increase, Nyland said. After 15 years of falling production, the output is bouncing back and a new peak oil is expected in 2023. The volumes of oil and gas will that year be almost on the level of 2004, the Directorate's new shelf report shows.... According to the new shelf report, oil production will by year 2023 increase to 115 million standard cubic meters, a 40 percent increase from 2019. The increase is much due to the major Johan Sverdrup project which comes into production in 2020. In 2018, national oil production amounted to 86.2 million Sm³, a reduction of 6.3 percent from 2017. Additional decrease is expected in 2019, before the output picks pace in 2020. Natural gas production in 2018 amounted to 121.7 billion Sm³, a slight reduction from the previous year. The natural gas production will remain on the same level until at least year 2030, the new report says. At the same time, investments in shelf developments are reaching new heights and an unprecedented number of new licenses are issued. In 2018, a total of 87 production and exploration licenses were awarded to oil companies. The main focus of Nyland and the oil industry is now on the Norwegian Arctic waters. According to the Directorate, nearly two-thirds of the gas resources that have not yet been discovered are located in the Barents Sea."
As climate crisis sets in, Norway taps into new oil
Barents Observer, 10 January 2019
"Saudi Arabia is expected to announce a slight rise in its crude oil and gas reserves on Wednesday after being independently audited, according to a source familiar with the matter. Saudi Arabia's reserves of easily recoverable oil have long been the world's largest. For almost 30 years - despite rising production, large swings in oil prices and improved technology - Riyadh has annually reported the same number for reserves at around 261 billion barrels, according to a statistical review by BP (BP.L). An independent external audit of Saudi Aramco's oil reserves - an essential part of the preparatory work for its planned initial public offering - found the state oil giant to have higher oil and gas reserves than it previously reported, sources familiar with the matter told Reuters in April."
Saudi Arabia to announce slight rise in oil, gas reserves after audit - source
Reuters, 9 January 2019
"Global transportation demand for crude oil is expected to peak in the late 2020s, due to the rise of electric vehicles (EVs), improved efficiency standards for internal combustion engine (ICE) cars, and consumer preferences, Wood Mackenzie said in a recent note. Most major oil companies and analysts also believe that by the late 2020s crude oil demand for transportation fuels will stop growing. As a result, major refiners are preparing for a petrochemical future of their crude oil refining processes to replace part of their gasoline, diesel, and other distillates production after 2030..... Major oil firms, including ExxonMobil, Saudi Aramco, and Sabic, are developing crude-oil-to-chemicals technologies, while many traditional oil refineries will consider retrofitting to maximize production of chemical feedstocks rather than transportation fuels, the energy consultancy said. According to recent estimates by the International Energy Agency (IEA), petrochemicals are expected to account for more than a third of global oil demand growth to 2030, and nearly half the growth to 2050, adding nearly 7 million bpd by then. Petrochemicals "will have a greater influence on the future of oil demand than cars, trucks and aviation," the IEA's Executive Director Fatih Birol said in October 2018. According to a WoodMac analysis from a few months ago, the EV share of the global car fleet is still miniscule, considering that the world's stock of cars is 1.2 billion units. But battery costs and range are less and less the stumbling blocks in EV adoption. Battery is one third of the cost of an EV today. Yet, costs have already declined by 80 percent this decade and will fall further. Battery pack prices will drop below US$200/kWh this year and then fall by around 10 percent each year, WoodMac said in July. "The critical threshold is US$100/kWh – that's when EVs will compete on commercial terms with ICE vehicles. We think we'll get there by 2027," WoodMac says. EVs will displace around 5 million bpd to 6 million bpd of oil demand by 2040—some 5 percent of total oil demand, the consultancy has estimated."
WoodMac: Demand For Oil In Transportation Sector To Peak In A Decade
Oilprice.com, 8 January 2019
"Renewables overtook coal as Germany's main source of energy for the first time last year, accounting for just over 40 percent of electricity production, research showed on Thursday. The shift marks progress as Europe's biggest economy aims for renewables to provide 65 percent of its energy by 2030 in a costly transition as it abandons nuclear power by 2022 and is devising plans for an orderly long-term exit from coal. The research from the Fraunhofer organization of applied science showed that output of solar, wind, biomass and hydroelectric generation units rose 4.3 percent last year to produce 219 terawatt hours (TWh) of electricity. That was out of a total national power production of 542 TWh derived from both green and fossil fuels, of which coal burning accounted for 38 percent. Green energy's share of Germany's power production has risen from 38.2 percent in 2017 and just 19.1 percent in 2010.... Solar power increased by 16 percent to 45.7 TWh due to a prolonged hot summer, while installed capacity expanded by 3.2 gigawatts (GW) to 45.5 GW last year, according to the Fraunhofer data. The wind power industry produced 111 TWh from combined onshore and offshore capacity of just under 60 GW, constituting 20.4 percent of total German power output.Wind power was the biggest source of energy after domestically mined brown coal power which accounted for 24.1 percent..... Coal plants run on imported hard coal contributed 75.7 TWh, or 13.9 percent of the total. Hydropower only accounted for 3.2 percent of power production at 17 TWh, as extreme summer heat dried out rivers and was accompanied by low rainfall. Biomass output contributed 8.3 percent. Gas-to-power plants accounted for 7.4 percent of the total; nuclear energy for 13.3 percent; with the remainder coming from oil and waste burning. Germany was a net exporter of 45.6 TWh of power in 2018, mostly to the Netherlands, while importing big volumes from France."
"The Wall Street Journal compared the well-productivity estimates that top shale-oil companies gave investors to projections from third parties about how much oil and gas the wells are now on track to pump over their lives, based on public data of how they have performed to date. Two-thirds of projections made by the fracking companies between 2014 and 2017 in America's four hottest drilling regions appear to have been overly optimistic, according to the analysis of some 16,000 wells operated by 29 of the biggest producers in oil basins in Texas and North Dakota. Collectively, the companies that made projections are on track to pump nearly 10% less oil and gas than they forecast for those areas, according to the analysis of data from Rystad Energy AS, an energy consulting firm. That is the equivalent of almost one billion barrels of oil and gas over 30 years, worth more than $30 billion at current prices. Some companies are off track by more than 50% in certain regions. The shale boom has lifted U.S. output to an all-time high of 11.5 million barrels a day, shaking up the geopolitical balance by putting U.S. production on par with Saudi Arabia and Russia. The Journal's findings suggest current production levels may be hard to sustain without greater spending because operators will have to drill more wells to meet growth targets. Yet shale drillers, most of whom have yet to consistently make money, are under pressure to cut spending in the face of a 40% crude-oil price decline since October. Companies whose wells appear to lag behind forecasts, according to the analysis, include Pioneer Natural Resources Co. and Parsley Energy Inc., two of the biggest oil and gas producers in the Permian Basin of West Texas and New Mexico. The Journal's review didn't include some leading producers, such as Exxon Mobil Corp. , because they didn't make shale-well projections. Pioneer, Parsley and several other companies disputed the findings, saying the third-party estimates used by the Journal differ from their forecasts on key points such as the likely lifespan of shale wells. Some companies, including major North Dakota producer Whiting Petroleum Corp. , acknowledged the forecasts can be unreliable and said they were moving away from providing such estimates. Another North Dakota driller, Oasis Petroleum Inc., said the projections it provided in investor presentations were estimates made as it tested drilling in vast tracts, including areas it has since abandoned. "It's not a science," said Richard Robuck, the company's treasurer. "It's more of an art.".... Schlumberger Ltd. , the oil-field-services giant, reported in a research paper that secondary shale wells completed near older, initial wells in West Texas have been as much as 30% less productive than the initial ones. The problem threatens to upend growth projections for America's hottest oil field, the company said in October....Flawed forecasting doesn't mean U.S. oil output is about to drop. Shale wells reach peak production quickly and rapidly decline, so companies are constantly drilling new wells. But if thousands of shale wells produce less over their lifetimes, companies will reap less of a long tail than anticipated, requiring them to spend more to sustain output and making it harder for them to reach profitability....Shale companies have attracted huge amounts of capital from Wall Street over the past decade. So far, investors have largely lost money. Since 2008, an index of U.S. oil-and-gas companies has fallen 43%, while the S&P 500 index has more than doubled in that time, including dividends. The 29 companies in the Journal's analysis have spent $112 billion more in cash than they generated from operations in the last 10 years, according to data from FactSet, a financial-information firm.... Shale companies began touting a metric known as estimated ultimate recovery, or EUR, in investor presentations. The estimates, often represented graphically by what is known as a type curve, project how much oil and gas wells are likely to produce over several decades, including the rate of decline. The practice of promoting EURs became widespread after oil prices crashed in 2014 and producers, many in need of capital infusions from Wall Street, talked up their prospects. Wall Street's valuation of many shale companies, which had been closely tied to the value of their proven oil and gas reserves, began diverging..... EUR estimates from many companies were grounded on two assumptions: that they could pack wells closer together, squeezing more value from the land they leased, and that they could replicate their best early wells. The results to date suggest those assumptions were often wrong..... When oil prices plummeted around 75% between 2014 and 2016, to below $30 a barrel, many shale companies used EUR estimates to try to persuade investors that the sector remained a strong place to put their money. The production forecasts made by many companies were "dangerous" because they were based on a small population of wells, and the performance of individual wells varies significantly, said Norman MacDonald, a natural-resource specialist at asset manager Invesco Ltd..... In September 2015, Pioneer Natural Resources, based in Irving, Texas, told investors that it expected wells in the Eagle Ford shale of South Texas to produce 1.3 million barrels of oil and gas apiece. Those wells now appear to be on a pace to produce about 482,000 barrels, 63% less than forecast, according to the Journal's analysis. An average of Pioneer's 2015 forecasts for wells it had recently fracked in the Midland portion of the Permian Basin suggested they would produce about 960,000 barrels of oil and gas each. Those wells are now on track to produce about 720,000 barrels, according to the Journal's review, 25% below Pioneer's projections. Pioneer disputed the conclusions, noting that it assumes its wells will produce for at least 50 years, while Rystad Energy uses 30 years in its forecasts. Pioneer also assumes its well productivity will fall off at a slower rate than the 7% final decline rate Rystad assumes.... While it is difficult to know how long shale wells will remain productive, assuming tens of thousands of them will pump for 50 years without costly interventions to keep them flowing is extremely optimistic, according to specialists on reserves. The oldest case study to date is in the Barnett shale in and around Fort Worth, Texas, where modern fracking began about 20 years ago. Researchers at the University of Texas and Rice University predicted that many wells in the region, which primarily contains natural gas, won't even produce for 25 years. About 73% or more of the total output of wells will come in the first decade, with little value coming after 20 years, the researchers said. The decline rates of as low as 5% that some shale companies have adopted for their wells are optimistic, some academics and industry leaders say. Recent studies by Rystad and analytics firm Wood Mackenzie Ltd. found that a range of 12% to 16% was the most common decline rate after about five years..... Some companies said they were aware of flaws with the forecasting method and how it has been used, but that they provided the numbers to meet demands from analysts and short-term investors such as hedge funds. Some said that if they didn't, their stock would underperform peers that made optimistic claims.... Denver-based Whiting Petroleum is de-emphasizing its production estimates at the direction of its chief executive, Bradley Holly. Mr. Holly, who became CEO in November 2017, said the company is now more focused on generating cash, lowering debt and maximizing a well's returns early in its life. "Your return will really be made in the first two to three years," he said. One reason thousands of early shale wells aren't meeting expectations is that many companies extrapolated how much they would produce from small clusters of prolific initial wells, according to reserves specialists. Some also excluded their worst-performing wells from the calculations, which is akin to eliminating strikeouts when projecting a baseball player's batting average."
Fracking's Secret Problem—Oil Wells Aren't Producing as Much as Forecast
Wall St Journal, 2 January 2019
".... if you look around and see what the world is now facing I don't think in the last two or three hundred years we've faced such a concatenation of problems all at the same time.....[including] the inevitability, it seems to me, of resource wars.... if we are to solve the issues that are ahead of us, we are going to need to think in completely different ways. And the probability, it seems to me, is that the next 20 or 30 years are going to see a period of great instability... I fear the [current] era of small wars is merely the precursor, the pre-shock, for something rather larger to come... we need to find new ways to be able to live together on an overcrowded earth."
Paddy Ashdown, High Representative for Bosnia and Herzegovina 2002 -2006
BBC Radio 4, 'Start The Week', 30 April 2007
"Individual peace is the unit of world peace. By offering Consciousness-Based Education to the coming generation, we can promote a strong foundation for a healthy, harmonious, and peaceful world.... Consciousness-Based education is not a luxury. For our children who are growing up in a stressful, often frightening, crisis-ridden world, it is a necessity."
Academy Award Winning Film Producer David Lynch (Elephant Man, Blue Velvet, etc)
David Lynch Foundation