"Oil prices had stabilized earlier this month when the Organization of the Petroleum Exporting Countries and Russia agreed to slash production by 1.2 million barrels a day. But Russia announced on Monday that its output had increased to more than 11.4 million barrels a day, a record, putting in doubt its commitment to coordinate policies with Saudi Arabia and other oil producers. On the same day, the Energy Department reported that the United States was producing 11.6 million barrels of crude oil a day, nearly a million barrels more than a year ago. The department projects that shale-oil production will climb to record levels this month, and increase by 134,000 barrels a day in January.  A shortage of pipelines has driven down oil prices from the Permian Basin of West Texas and New Mexico, the most productive American oil field. But the completion of a series of pipelines in late 2019 should benefit producers and increase exports, adding even more barrels to the global glut."
Oil Prices Plummet 7% on Fears of a Glut
New York Times, 28  December 2018

"The collapse in oil prices, now hovering around $45 per barrel in the U.S., is terrifying, according to former Shell Oil President John Hofmeister. “It’s getting to a scary point,” he said during an interview on FOX Business’ Varney & Co. “If we get below $40 we’ll see rapid stopping of drilling because the companies simply can’t afford it.” The drop in oil is also a warning sign for the global economy. Viable prices, according to Hofmeister, range from $50 to $60 a barrel. Crude prices sunk to a 17-month low on Friday, down about 24 percent this year, as global oversupply kept buyers away from the market ahead of the holiday break. However, in Hofmeister’s opinion, crude is at its lowest point. “I hope for the sake of both consumers and the industry that we are at the bottom,” he said. Currently national gas prices at the pump average around $2.34 a gallon, as tracked by AAA. While consumers are getting a break, Hofmeister warned that cheaper prices could backfire.""
Oil prices are getting scary: Former Shell Oil president
Fox Business, 21 December 2018

"The biggest American oil field may be about to pump the brakes if crude keeps plunging. Just 10 weeks ago, the Permian Basin was on course to grow almost 1 million barrels a day by the end of 2019, potentially surpassing Iraq, OPEC’s second-largest producer. Now, it may not grow at all, removing a large chunk of expected production from global oil markets. Shale is highly sensitive even to small changes in prices and the Permian is not immune. With West Texas Intermediate oil at $70 a barrel, the basin would likely produce 4.9 million barrels a day by end of next year, but at $40, output will likely stagnate at around 4 million barrels a day, according to Oslo-based consultancy Rystad Energy. As lower prices squeeze cash flows for oil explorers, investors will pressure management teams to reduce 2019 drilling so as not to sacrifice dividends or buybacks, Credit Suisse Group AG analysts led by William Featherston said in a note on Wednesday. “The emerging investor demand is to slow production growth,” the analysts said. It’s already starting to happen. Diamondback Energy Inc., one of the biggest Permian-only producers, is rowing back its 2019 capital budget, forecasting about $2.9 billion of spending, less than analysts’ estimates of $3.2 billion. Chief Executive Officer Travis Stice said the “dramatic decline in oil prices” were to blame as well as higher service costs. Breakevens for new wells in various counties that contain the Spraberry layer of oil-soaked rock in the Permian currently average between $32 to $47 a barrel, according to Bloomberg NEF data. But well performance varies substantially. In Upton County, for example, top-quartile wells make money at $31 a barrel, while the bottom quartile need $65.54 a barrel. “BNEF’s break-even model calculates that an average Permian well can produce oil for under $50 a barrel, but only the top performers in the Denver-Julesburg or Bakken can match that,” BNEF analyst Tai Liu said Friday in a research note.... The Permian’s better productivity means output isn’t dropping, just slowing down, if oil averages $50 a barrel and halting growth at $40, Rystad said. IHS Markit and RS Energy, agree that modest growth is likely at current prices because companies in the Permian have dropped their well costs so much over the last four years through productivity improvements. “There’s a lot less cash flow to go around but it’s not an existential threat like it was in 2014,” said Ian Nieboer at RS Energy, referring to the oil-price crash of that year. Higher-cost production in the Bakken in North Dakota and Eagle Ford in south Texas are more susceptible to the recent price plunge, he said. One of the key advantages of shale is that crude flows from wells within weeks of drilling, rather than years for large, offshore megaprojects that defined the production growth in the early 2000s. That means shale can be turned on or off like a tap, depending on whether it’s profitable or unprofitable at any given price. That may be of no consolation to equity investors starved of earnings, cash flow and dividends but it does help to rebalance oil markets. “If we don’t get those barrels in 2019, they will simply be waiting to show up in 2020, or 2021, or whenever the market needs them,” said Raoul LeBlanc, a Houston-based analyst at IHS Markit. “The eventual limit is sweet spot exhaustion, and in the Permian, that will not happen in the next seven years.”"
Permian’s Growth Spurt at Risk of Being Stunted by Oil Collapse
Bloomberg, 19 December 2018

"Poland took another step towards weening itself off Russian energy supplies on Wednesday by signing a 20-year agreement with San Diego-based Sempra Energy to import U.S. liquefied natural gas. The signing marks the third long-term contract the state-controlled Polish Oil and Gas Company, or PGNiG, has inked with an American LNG company this year. In the coming years, Warsaw plans to replace Russian gas with pipeline supplies from Norway and shipments of LNG, or gas super-chilled to liquid from for transport by sea.... Poland is preparing for a major shift in its energy imports after 2022, when Warsaw says it will allow a contract with Russia's Gazprom to expire. That plan also includes boosting imports from top LNG exporter Qatar and building a pipeline link with Norway.... Duda is particularly opposed to the expansion of the Nord Stream pipeline system that directly links Russia and Germany. Central and Eastern European nations fear Moscow will use the new Nord Stream 2 line to bypass existing infrastructure through Ukraine, making it easier for the Kremlin to exert political pressure on its neighbors without alienating Western Europe.... By 2023, Poland expects to be importing 7.45 million tons of LNG into its Swinoujscie regasification terminal. Today, only six nations import more LNG. Warsaw intends to export some of that gas to 12 Central and Eastern European nations in the Three Seas Initiative, which aims to bolster trade, infrastructure and energy ties throughout the region. Beginning next year, Gazprom's contracts with several European nations come up for contract, according to a recent policy paper by Tatiana Mitrova and Tim Boersma for the Columbia University's Center on Global Energy Policy. While only Poland has signaled it will cut off Russian gas imports, the option to buy U.S. LNG could loom large over the negotiations, the experts say."
Poland's goal of ditching Russian natural gas bolsters American LNG and Trump's energy agenda
CNBC, 19 December 2018

"2018 stands already as the best year for global oil and gas exploration since 2015. Guyana, Russia and the United States top the list with major discoveries. Discovered resources have already surpassed 8.8 billion barrels of oil equivalent (boe) for 2018. Rystad Energy expects the number to grow to 9.4 billion boe by year-end. “We at Rystad expect this discovery trend to continue into 2019 with many promising high-impact wells targeting vast potential,” says Palzor Shenga, senior analyst on Rystad Energy’s Upstream team. Offshore discoveries represent around 82% of total volumes. 2018 has also seen a significant uptick in the reserve replacement ratio to around 15% from 11% in 2017. “Global exploration activity and discoveries have halted their year-after-year decline and look set to rise in the next year. This as an exciting recovery which runs contrary to a decline in global exploration spending from 2014 to 2017,” Shenga adds. Exploration spending decreased by nearly 61% from 2014 to 2018. Exploration investments halted their fall in 2018 and are expected to rise in 2019. “This not only proves that E&P companies are once again willing to invest in exploration, but also highlights their idea of ’smart investments’ to de-risk expenditures as much as possible,” Shenga adds. The decrease in overall exploration costs combined with an improved success ratio have led to tremendous improvement in the discovery cost per boe."
The oil & gas exploration winners of 2018
Rystad Energy, 17 December 2018

"U.S. liquids production registered +3 mb/d in August according to the EIA 914 report, and for oil bulls, U.S. liquids production in 2019 are likely to eclipse +2 mb/d again... U.S. refineries are hitting a cap on how much U.S. shale light oil it can take in considering that U.S. refineries have a crude diet of API ~32....U.S. shale is producing oil that's well above what the global refineries are accustomed to run. Global refineries run an average API gravity of 31.5 to 33, while most of the growth in U.S. shale production is in API gravity 40-45..... If there was growing medium/heavy oil production around the world, then global refineries may absorb the excess U.S. shale light oil, but it's not...With Canada now registering negative y-o-y growth in 2019 due to takeaway capacity issues, global medium/heavy oil production will fall rather than climb. That's exactly the opposite of what's needed here for an oil market that's increasingly showing a higher appetite for medium/heavy oil. We also see this with end user demand in gasoline vs diesel... In essence, the crude quality issue is likely to exacerbate the shortage we see in the oil markets going forward."
U.S. Oil Production Likely To Grow 2 Mb/D In 2019 But Crude Quality Issue Will Get Worse
Seeking Alpha, 13 December 2018

"U.S. crude oil output growth was expected to slow slightly for this year compared with previous forecasts, the Energy Information Administration said on Tuesday, but at a record 10.88 million barrels per day, the nation will end 2018 as the world’s top producer. Output this year was forecast to rise 1.53 million bpd to 10.88 million bpd, down from the EIA’s previous estimate of an increase of 1.55 million bpd. The current all-time U.S. annual output peak was in 1970 at 9.6 million bpd, according to federal energy data. For 2019, U.S. crude oil production was expected to average 12.06 million bpd, the EIA said, up 1.18 million bpd from the prior year which is a small upward revision from the previous forecast of a 1.16-million bpd rise. A shale revolution has helped the United States produce a record amount of oil this year and topple Russia and Saudi Arabia as the world’s biggest producer.... In 2019, oil demand is estimated to rise by 330,000 bpd to 20.81 million bpd, up from its previous estimate of a rise of 220,000 bpd. For 2018, U.S. oil demand is expected to rise by 520,000 bpd to 20.48 million bpd, EIA said, slightly raising its previous forecast of a 510,000 bpd rise to 20.47 million bpd."
U.S. expected to end 2018 as world's top oil producer: EIA
Reuters, 11 December 2018

"Alberta’s oil-production curtailment plan has largely accomplished its mission -- even before it has gone into effect. Since Canada’s top oil-producing province announced mandatory output curbs on Dec. 2, the spot price of Western Canada Select crude has surged more than 70 percent. The grade’s discount to the U.S. benchmark has been chopped in half to around $13 a barrel, the narrowest in more than a year. Other blends, including Edmonton Mixed Sweet and Syncrude, also are surging. Oil producers are saying the 8-day-old plan will bring “significant relief” to the province’s pipeline congestion problem, and it’s even being credited with preventing layoffs for at least one major oil-sands company. The 325,000-barrel-a-day supply cut takes effect next month."
Planned Production Cuts Are Already Easing Alberta’s Oil Crisis
Bloomberg, 10 December 2018

"...the week of November 30 through December 5 saw the United States of America actually export more crude oil and other oil-derived liquids than it imported from other countries. The key part of that sentence is "other oil-derived liquids," which include gasoline, diesel and other refined products. Rolling all of those products into the equation, the U.S. exported about 211,000 barrels per day more than it imported for the week, as reported by Bloomberg. The U.S. did not become a net exporter of "crude oil," as some others in the energy news media mistakenly reported. As Robert Rapier reported at Forbes.com over the weekend, our country is still a sizable net importer of crude alone, an equation that will not be reversed anytime soon.... Regardless, the fact that the U.S. had higher volumes of oil-derived liquids moving out of its various ports than it had coming for a full week is an extraordinary change of circumstance from just a decade ago, a true sea change delivered by the ability to extract oil from the nation's shale formations.... The U.S. Energy Information Adminstration (EIA) reported on November 29 that the country's proved reserves of both oil and natural gas reached all-time record highs in 2017. As the report notes, reported reserves levels surpassed previous highs recorded in 2014 for natural gas and in 1970 for crude oil: 'Proved reserves of U.S. crude oil increased 19.5% from the end of 2016, reaching 39.2 billion barrels and surpassing the previous peak level of 39.0 billion barrels set in 1970. Proved reserves of natural gas increased 36.1% from the end of 2016 to reach 464.3 trillion cubic feet (Tcf) in 2017, surpassing the previous record of 388.8 Tcf set in 2014.' Again, this is all due to the Shale Revolution, enabled by the wedding of hydraulic fracturing with horizontal drilling. The 1970 date of the previous high for U.S. crude oil reserves is notable because it was the year that "Peak Oil" theorist M. King Hubbert predicted that global crude oil production would reach its "peak" in the 1956 paper he presented to an API conference in San Antonio. Hubbert got that part of it kind of right, though he never envisioned that the industry would ultimately find a way to extract oil from shale and shatter all of the oil production records all over again.... the U.S. Geological Survey (USGS) released an update to its previous estimates of the resource potential for the Wolfcamp Shale last week, and the volumes contained in the report, which assesses not just the Wolfcamp Shale itself, but also the conventional Bone Springs formation directly above it, are stunning to say the least: * 46.3 Billion barrels of crude oil; * 20 Billion barrels of natural gas liquids; and * 281 Trillion cubic feet of natural gas." These numbers are almost incomprehensible to most people, so it helps to try to place them into some context: *The most prolific oil resource ever discovered in North America is the Prudhoe Bay field on the North Slope of Alaska.  Over the last 40+ years, Prudhoe Bay has produced about 14 billion barrels of crude oil.  USGS projects that the Wolfcamp will produce 3.3 times that volume over its life.* That 46.3 billion barrels of crude oil represents about 6.5 years of total U.S. consumption. * 281 Trillion cubic feet of natural gas represents 12 years of total U.S. consumption. * Put another way, this is enough natural gas to supply all of our nation’s gas-fired power plants for about 35 years. * 20 billion barrels of natural gas liquids represents roughly 21 years of total U.S. consumption.... All of that gas in place will be produced as "associated gas" coming from wells classified as "oil" wells by regulators in Texas and New Mexico.... As a reminder, the USGS estimates are compiled using the most conservative means possible. They are derived from the "proved reserves" reported by companies to the SEC, and focus on "technically recoverable" resource, which means volumes that can be recovered using currently-available technology. Technology advances in the oil and gas industry each and every day, and as we have clearly seen over the last three years, the pace of advancement is only accelerating over time. So, as enormous and near-incomprehensible as those numbers are, it is important to remember that they are in fact a fraction of what the ultimate recoveries will turn out to be."
The Oil And Gas Situation: A Time For Setting Records
Forbes, 10 December 2018

"...some scientists think a prolonged dip in solar activity known as the Maunder Minimum, which occurred from about 1645 though 1715, helped intensify the Little Ice Age. The Little Ice Age — which subjected Europe and North America to much colder winters than the ones we currently experience — lasted from about 1300 through the mid-19th century, so the Maunder Minimum sits right in the middle of it chronologically.  The potential association between these two events is debated, however; researchers still don't know for sure exactly what caused the Little Ice Age. Solar activity has been trending downward over the last few cycles, and the most recent one, known as Solar Cycle 24, has been the weakest in more than a century. This has sparked some speculation that we could be headed toward another Maunder-like dip — and, perhaps, a bit of a reprieve from some of the worst effects of global warming. But this scenario likely won't come to pass, at least not over the next decade or so, according to the new study, which was published Thursday (Dec. 6) in the journal Nature Communications.  Researchers Prantika Bhowmik and Dibyendu Nandi — both based at the Indian Institute of Science Education and Research Kolkata — came up with a new way to simulate solar activity over century-long timescales. Their approach incorporates magnetic-field evolution models of both the sun's surface and interior. The duo's simulations match up very well with actual solar activity over the past 100 years, as measured by sunspot counts. And they make predictions about the coming Solar Cycle 25. Bhowmik and Nandi's work suggests that the new cycle will begin about a year from now and peak in 2024. The simulations also indicate that the solar-activity slide will stop, at least for a spell: Solar Cycle 25 should be of similar or of greater intensity than Solar Cycle 24. "The behavior of the magnetic field and the particles emitted from the sun has a profound effect on the Earth's climate and living conditions of the Earth's inhabitants, as well as various other activities that involve long-range communication and satellite technology," Somak Raychaudhury, director of the Inter-University Centre for Astronomy and Astrophysics in Pune, India, said in a statement. "Normally, we assume that these effects are too complex for us to predict and restrict ourselves to reacting to these phenomena as best we can," added Raychaudhury, who was not involved in the new study. "Bhowmik and Nandy's models show considerable predictive power, and it looks like we will now be able to predict the fluctuations of solar activity much more reliably.""
No Global Cooling Miracle: Sun's Activity Lull Will Stop Soon, Study Suggests
Space.com, 7 December 2018

"The Permian Basin's Wolfcamp and Bone Spring formations in West Texas and New Mexico hold the most potential oil and gas resources ever assessed, the U.S. Interior Department said Thursday. The region in the Permian's western Delaware Basin holds more than twice as much oil as the largest previous assessment - the Wolfcamp shale in the Permian's separate Midland Basin southeast of Midland. That study was completed two years ago. To put the new results into perspective, the Delaware Basin's Wolfcamp and Bone Spring plays would hold almost seven times as much oil as North Dakota's Bakken shale.The Wolfcamp shale and overlying Bone Spring in the Permian's booming Delaware Basin hold an estimate 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas, and 20 billion barrels of natural gas liquids, according to the U.S. Geological Survey's new assessment.... Much of the new activity in the Permian is in the Delaware's Wolfcamp in Loving, Winkler, Reeves, Culberson and Ward counties on the Texas side, and primarily Eddy and Lea counties in New Mexico. The U.S. is producing record volumes of oil and gas, and nearly one-third of the nation's total crude oil volumes are coming from the Permian. Those amounts are continuing to grow. An older basin, the Permian has become the center of the oil and gas world in recent years through the combination of horizontal drilling techniques and modern hydraulic fracturing, or fracking, technologies. The study is based on undiscovered oil and gas that's considered technically recoverable based on these modern extraction methods. That's different from the proven reserves that oil companies list on their budgets after they drill exploratory wells and study the reservoirs."
USGS: Permian's Wolfcamp is largest potential oil and gas resource ever assessed
Houston Chronicle, 6 December 2018

"Germany will not withdraw its political support for the Nord Stream 2 gas pipeline with Russia, its foreign minister said on Monday, as some lawmakers suggested curtailing the project to punish Moscow for its seizure of Ukrainian ships and their crew. Russia is resisting international calls to release three Ukrainian ships seized last month in the Kerch Strait, which controls access to the Sea of Azov near the Crimea region that Moscow annexed from Ukraine in 2014. Moscow accuses the 24 sailors of illegally entering Russian waters by trying to pass through the strait. Kiev says the sailors did nothing wrong, and its ships have the right to pass through the strait to reach Ukrainian ports in the Sea of Azov."
Germany to back Russian gas link despite Ukraine tensions
Reuters, 3 December 2018

"Israel has set targets for greater use of gas in power generation and transport over the coming decade Israel's top energy official has confirmed that the government is committed to natural gas becoming the primary source of energy in the years ahead. Energy minister Yuval Steinitz told an international energy and business convention in Tel Aviv on 19 November that the use of coal will end by 2030, with a power-generation fuel basket based on 83pc gas and 17pc renewables taking its place. This represents a major shift from current levels—in 2017 power generation comprised 64.1pc gas, 32.5pc coal and 3.5pc renewables. The transportation sector, the minister added, would run entirely on gas. By 2030, compressed natural gas (CNG) will fuel heavy duty trucks and electric cars will use energy generated by natural gas. Ron Adam, the special envoy for energy at the Israeli foreign affairs ministry and Yossi Abu, the CEO of Delek Drilling, each provided updates on various aspects of gas export projects that are underway. Abu noted that exports to Jordan's NEPCO will commence as soon as the vast offshore Leviathan field is operational in Q4 2019. Construction of an Israeli gas transmission system in the north to the border with Jordan is due to be completed by May 2019, while Jordan is progressing at a similar pace with its own north-to-south grid. He added that exports to a private company in Egypt, albeit at relatively small quantities at first from the Tamar field, will start around the same time, via the 89km (55-mile) East Mediterranean Gas (EMG) pipeline that connects Ashkelon in Israel to el-Arish in Egypt. Export volumes to Egypt will increase gradually once Leviathan comes on line and after the final export routes have been decided. These routes could include one or more options to export up to 7bn cm/y of Israeli gas to Egypt. Firstly, the parties could use the Israeli transmission system to export via the EMG line; circumvent the Israeli system (and thus avoid the transmission tariff and the congested lines in the south of Israel) by hot-tapping from the Tamar and/or Leviathan offshore lines for a direct connection to EMG. There is also the option of using the Israeli transmission system in the north to export via the Jordanian grid and into the Pan-Arab pipeline via Aqaba in Jordan and up to el-Arish in Egypt. Finally, there is potential to connect the Israeli Leviathan field together with the Cypriot Aphrodite field, via a direct 400km offshore pipeline to be constructed directly to the Idku LNG export facilities. Another export option, discussed by energy envoy Adam, was one that is being promoted by IGI Poseidon, a 50-50pc joint venture between Depa and Edison that is about to commence a detailed FEED study at a cost of €70mn ($79mn), to look at the technical and commercial feasibility of exporting Israeli and Cypriot gas to the one global market where imports are increasing steadily, the EU."
Israel plans to be powered by natural gas
Petroleum Economist, 30 November 2018

"Thousands of electric vehicles are to be hooked up to Britain's electricity grid to test its ability to cope with power fluctuations caused by a mass roll-out of the technology. The trial of 3,000 of the vehicles in London and the South of England has been approved by Ofgem, Britain's energy regulator, and is being led by Uber and Centrica, the owner of British Gas. The cars will be on the road by the second half of next year and the trial will continue until 2022.  data will be collected about the distance traveled, the cost of trips, as well as the amount of energy consumed and the times of day at which vehicles were charged. The data and results that Uber and Centrica collect from the trial will be shared openly, the companies said. Utility companies are keen to understand how the grid will cope in the event of large-scale adoption of electric cars, especially the additional demand for power they will create at specific times of day, such as when owners return from work and seek to charge them up overnight. The trial area, which will cover roads from Basingstoke to Dover, was chosen as it will be the part of the country that will adopt EVs the fastest in the future, according to UK Power Networks, one of the project's partners."
Centrica, Uber launch electric vehicle trial to monitor impact on UK energy grid
Telegraph, 30 November 2018

"Storm Diana brought travel chaos to road, rail and airports, but the clouds did have a silver lining: the strong winds helped set a renewable energy record. Windfarms supplied about a third of the UK’s electricity between 6pm and 6.30pm on Wednesday, a time of peak energy demand. Output hit a high of 14.9GW, beating a previous record of 14.5GW. The milestone coincides with the official opening on Friday of E.ON’s Rampion windfarm off the coast near Brighton, which is the first in the Channel and can power about 350,000 homes. Blustery weather has buoyed wind output in the past few days, with National Grid reporting thousands of wind turbines were the UK’s No 1 source of power across Wednesday and Thursday, at about 32% of generation. Gas power stations are usually top. Windfarms have moved from a niche source of electricity generation a decade ago – when they supplied less than 2% – to a cornerstone of Britain’s power mix, at nearly 15% of supply last year. The 400MW Rampion project is one of four big offshore windfarms to come online this year, along with a 92MW windfarm in Aberdeen Bay, a 353MW windfarm off the Suffolk coast and a 659MW windfarm off Cumbria, which is the world’s biggest. More vast schemes are in the wings, with a 588MW windfarm in the Moray Firth due to become fully operational next year. The title of world’s largest windfarm will be taken by a 1,218MW project off east Yorkshire a year later. Emma Pinchbeck, the executive director of the industry body RenewableUK, said: “It’s great to see British wind power setting new records at one of the coldest, darkest, wettest times of the year.”"
Windy weather carries Britain to renewable energy record
Guardian, 30 November 2018

"The return of oil flows  from the disputed region of Kirkuk in Iraq is a welcome sign of improvement in the relations between the Kurdistan Regional Government (KRG) and the Iraqi government. Recent geopolitical developments in the region looks to be slowly bringing the two sides closer together. Historically fraught relations between the two sides, which have seen decades of disputes, came to a head last year when the Iraqi Kurds held an independence referendum. This resulted in the Iraqi government taking control over the disputed region of Kirkuk and its surrounding oilfields in retaliation. But after almost a year of negotiations Iraqi officials have announced that an agreement has been reached to export Kirkuk crude through the Kurd’s pipeline, the only conduit to international markets. The breakthrough primarily came as a the result of an intervention by the Trump administration in the US, which is keen to make up for the fall of oil exports from Iran after placing sanctions on their oil industry. The US has recently mounted pressure on Baghdad to restart crude export from Kirkuk to the Ceyhan port in Turkey. US State Department spokeswoman Heather Nauert stated on November 16 that the resumption of exports of Kirkuk oil was “another important step in our efforts to reduce Iran’s oil exports.” Earlier this month, the Trump administration granted Iraq a special waiver of 45-days for purchasing Iranian electricity imports. But the waiver came with conditions; Iraq cannot use US dollars for Iranian imports and must resume crude exports from Kirkuk working in co-ordination with the Kurds. US President Donald Trump has on several occasions stated that he wants to see lower oil prices. His administration has already convinced Saudi Arabia to increase production and it looks like similar efforts have taken place in Iraq. The Kurds and the central government have previously struck agreements regarding the use of the Kurdish pipeline but budgetary and revenue disputes, as well as a Kurdish independence referendum, have led to the deals quickly breaking down.... Another reason for the US to exert more pressure on KRG and Baghdad is Russia’s increasing presence in the country. Last year, the KRG struck a deal with Russian oil company Rosneft buying 60 per cent of the Kurdish-controlled pipeline. It is not clear how exactly how the deal will be stipulated or if Rosneft will have a say in this, but early reports suggest that Iraq will allocate a portion of the 2019 Iraqi budget to the KRG in return for use of the pipeline. Meanwhile, the KRG can continue exporting crude independently from fields under its control in Iraqi Kurdistan. Should the deal hold with exports from Kirkuk increasing, the market will see additional oil flows helping to keep the pressure on oil prices and, in turn, Iran."
Oil flows again from Iraq’s Kirkuk thanks to US intervention
Financial Times, 30 November 2018

"Faced with a rapidly deteriorating economic outlook for her province, Alberta Premier Rachel Notley took her most dramatic action yet on Wednesday with the announcement that her government will buy two trains to move oil out of the province. “We have already engaged a third-party to negotiate and work is well under way. We anticipate conclusion of the deal within weeks,” Notley said during a speech to business executives in Ottawa. The decision comes as the province’s economic picture has worsened dramatically over the past six weeks amid discounts on Canadian oil that recently hit a record US$50 per barrel....The trains would carry capital costs of approximately $350 million and allow the government to move an additional 120,000 barrels of oil per day out of the province by late 2019, which the premier expects would generate $1 million per day in new federal revenues and narrow the discount for Canadian oil by $4 per barrel."
Fiscal and economic insanity': Notley compelled to buy trains to get Alberta oil to market
Vancover Sun, 29 November 2018

"The United States has surpassed the 1970 record for proven oil and gas reserves, roughly doubling the amount of discovered petroleum in the ground in the past decade, the federal government said Thursday. The U.S. shale boom has unlocked large volumes of oil and gas, currently driven by drilling for crude oil in West Texas' booming Permian Basin and for natural gas in the Marcellus and Utica plays in Pennsylvania and neighboring states. Proven reserves of crude oil in the U.S. jumped almost 20 percent to 39.2 billion barrels by the end of 2017, setting a record. The previous record, in 1970, was 39.0 billion barrels. The U.S. is churning out a record of 11.7 million barrels of crude a day, the Energy Department estimates. Likewise, natural gas reserves jumped 36 percent to 464.3 trillion cubic feet, a record that surpassed the previous mark set in 2014. Record-high natural gas production also spiked 4 percent from 2016 to 2017. Since the 1970s, the nation's petroleum reserves had been in decline for roughly three decades. The shale boom changed that more than a decade ago when companies began combining horizontal drilling techniques with hydraulic fracturing, called fracking, to unlock the oil and gas from the tight shale rock."
U.S. oil and gas reserves surpass 1970 record
Houston Chronicle, 29 November 2018

"Renewable energy sources (i.e., biomass, geothermal, hydropower, solar, wind) accounted for nearly 18% of net domestic electrical generation during the first three-quarters of 2018, according to a SUN DAY Campaign analysis of just-released data from the U.S. Energy Information Administration (EIA). In addition, the latest issue of EIA’s “Electric Power Monthly” (with data through September 30, 2018) reveals that solar and wind both showed strong growth with utility-scale solar expanding by 30.3%* and wind by 14.5% compared to the first nine months of 2017. Combined, wind and solar accounted for almost 9% of the nation’s electrical generation (wind – 6.4%, solar – 2.4%) and nearly half (49.7%) of the total from all renewable energy sources. Modest increases were also reported by EIA for geothermal and biomass—5.4% and 1.5% respectively. Taken together, non-hydro renewables, including distributed solar, grew by 14.9%. However, a 5.1% drop in hydropower output netted an increase of only 6.0% in electrical generation by all renewables in the first three-quarters of 2018 compared to the same period in 2017. Notwithstanding its lower production, hydropower remained the leading source of renewable electricity—accounting for 7.05% of total electrical generation, followed by wind (6.41%), solar (2.42%), biomass (1.48%) and geothermal (0.39%). The decline in hydropower coupled with a 4.9% increase in total electricity produced by all sources (driven primarily by a 15.1% expansion of electrical production by natural gas and a 2.2% increase in nuclear power) resulted in renewables increasing their share of domestic electrical output only marginally—from 17.6% in 2017 to 17.8% in 2018."
U.S. solar generation up by over 30% in first three-quarters of 2018
Solar Power World, 29 November 2018

"Buried below the seabed around Japan, there are beds of methane, trapped in molecular cages of ice. In some places, the sediment covering these deposits of frozen water and methane has been eroded away, leaving whitish mounts of what looks like dirty ice rearing up out of the seafloor.  There’s no doubt that methane hydrates could offer a major source of fuel, with recent estimates suggesting they constitute about a third of the total carbon held in other fossil fuels such as oil, gas and coal. Several nations, notably Japan, want to extract it. It is not hard to find, often leaving a characteristic seismic signature that can be detected by research vessels. The problem is retrieving that gas and bringing it to the surface. It all comes down to physics. Methane hydrates are simply too sensitive to pressure and temperature to simply dig up and haul to land. They form at typically several hundred metres beneath the seafloor at water depths of about 500 metres, where pressures are much higher than at the surface, and temperatures are close to 0C. Take them out of these conditions, and they begin to break down before the methane can be harnessed. But there are other ways to do it. “Instead, you have to force those deposits to release the methane from the formation in the seafloor. Then you can extract the gas that comes off,” says Ruppel.... Given the difficulty of retrieving gas from methane hydrate reserves, and the concerns around extraction, the stakes have to be high for a nation to invest heavily in this technology. Having very few other options in terms of domestic energy makes this hard-to-access source of methane an appealing prospect. Japan is not a country that has other carbon-based sources of energy to fall back on....methane hydrates – if they are to play a role in Japan’s energy future – are likely to be used as a bridging fuel, in the transition towards renewables. Natural gas is the least carbon-intensive form of fossil fuel, releasing less carbon dioxide per unit of energy released than coal or oil. But, as a carbon-based fuel, burning it still contributes to climate change.... How useful a role it can play in the future depends on how quickly methane hydrate can be accessed and produced on a commercial scale. The Japanese government hopes to begin commercial projects exploring methane hydrate between 2023 and 2027, according to its latest Strategic Energy Plan. This target could be a bit ambitious. Jun Matsushima, a researcher at the Frontier Research Center for Energy and Resources at the University of Tokyo, puts the estimate at around 2030 to 2050."
Why 'flamable' ice could be the future of energy
BBC, 28 November 2018

"ENGINEERS have called on the UK government to immediately spend £125m (US$159m) designing a hydrogen production, distribution and storage system that would create the world’s largest CO2 reduction project. If realised it would decarbonise 14% of UK heat by 2034, and all told cost £22.7bn. The H21 North of England plan was presented at the Institution of Mechanical Engineers in London on Friday by UK gas network operators Cadent and Northern Gas Networks, and Norwegian state energy giant and CCS expert Equinor. It’s a more ambitious update to the H21 Leeds City Gate project published in 2016 that established how to convert UK gas networks to carry hydrogen. The partners suggest the UK builds a 12.15 GW natural-gas-based hydrogen production facility that would feed hydrogen, in place of natural gas, through the existing gas distribution network to industry and domestic users across the North of England. This would include converting some 3.7m meter points in Teesside, Newcastle, York, Hull, Leeds, Bradford, Halifax, Huddersfield, Wakefield, Manchester and Liverpool, representing some 17% of domestic gas connections. .... After studying national energy requirements and proven production technologies, the team has recommended the UK reforms natural gas into hydrogen using autothermal reforming technology coupled with carbon capture and storage to bury up to 20m t/y of CO2 offshore in the North Sea. The £8.5bn production plant would be sited either in Easington or Teesside on the east coast of England, where natural gas from the North Sea is already brought ashore and processed, and would consist of nine 1.3 GW autothermal reformer units operating in parallel."
Engineers publish £22bn blueprint for UK to take global lead on hydrogen heating
The Chemical Engineer, 27 November 2018

"President Emmanuel Macron said on Tuesday that France would shut down 14 of the country's 58 nuclear reactors currently in operation by 2035, of which between four and six will be closed by 2030. The total includes the previously announced shutdown of France's two oldest reactors in Fessenheim, eastern France, which Macron said was now set for summer 2020. He also announced that France would close its remaining four coal-fired power plants by 2022 as part of the country's anti-pollution efforts. In a speech laying out the country's energy policies for the coming years, Macron said that "reducing the role of nuclear energy does not mean renouncing it". France relies on nuclear power for nearly 72 percent of its electricity needs, though the government wants to reduce this to 50 percent by 2030 or 2035 by developing more renewable energy sources. Macron said France would aim to triple its wind power electricity output by 2030, and increase solar energy output fivefold in that period. He added that he would ask French electricity giant EDF to study the feasibility of more next-generation EPR nuclear reactors, but will wait until 2021 before deciding whether to proceed with construction. EDF has been building the first EPR reactor at Flamanville along the Atlantic coast of northwest France -- originally set to go online in 2012 -- but the project has been plagued by technical problems and budget overruns."
France to close 14 nuclear reactors by 2035 an all coal-fired power plants by 2022
AFP, 27 November 2018

"U.S. shale firms are more profitable than ever after a strong third quarter, according to a Reuters analysis of results for 32 independent producers. These companies are producing more efficiently, generating more cash flow and consolidating in a wave of mergers, the data show. Results at 32 independent shale explorers show nearly a third generated more cash from operations than they spent on drilling and shareholder payouts, a group including Devon Energy, EOG Resources and Continental Resources. A year ago, there were just three companies on that list. The group’s cash flow deficit has narrowed to $945 million as U.S. benchmark crude hit $70 a barrel and production soared. The group overspent by three times as much as recently as June and was $4.92 billion in the hole a year ago, according to Reuters’ analysis of Morningstar data provided by the Institute for Energy Economics and Financial Analysis. The change is evidence shale firms have moved to “harvest mode” after shareholders pressured them to rein in spending and increase payouts, said Shawn Reynolds, a portfolio manager at asset firm VanEck. “The industry is starting to do that.”"
Drax power station storing CO2 gases from biomass fuel
BBC, 26 November 2018

"The biggest power station in the UK has started a project to store carbon dioxide emissions and the gas could be used in the drinks industry. In May, Drax power station near Selby, North Yorkshire, announced a £400,000 pilot scheme to capture the gas produced from burning wood pellets. Drax officials say the scheme would see about a tonne of gas stored each day."
Drax power station storing CO2 gases from biomass fuel
BBC, 26 November 2018

"Consumers are being forced to pay higher energy bills thanks to the cost of installing smart meters – and things could still get worse, according to the spending watchdog. An investigation by the National Audit Office (NAO) into the £11bn roll-out of the meters has suggested that energy bills could rise by more than £500m in total. It criticised the Government for allowing so many first-generation meters, which can “go dumb” after a switch of supplier, to be installed. The costs of the roll-out are being added to energy bills and work out at around £374 per dual-fuel household. While there are said to be long-term benefits of having a smart meter, with the annual saving estimated at £18 a year by 2030, the NAO said the roll-out had had a negative impact on consumers’ bills so far."
Smart meters ‘to add £500m to energy bills’
Telegraph, 25 November 2018

"India is working to establish a natural gas trading exchange, its Prime Minister Narendra Modi said on Thursday, as part of a shift away from a reliance on crude oil based products which are blamed for much of the country's pollution problem. "We want to increase the use of natural gas by 2.5 times by the end of next decade," Mr Modi said in New Delhi at the laying of a foundation stone for the setting up of city gas distribution (CGD) networks in 129 districts which have been auctioned. India wants to develop a transparent market for natural gas where the price is determined on an exchange and aims to increase the use of natural gas in India's total energy mix from 6.5 per cent to 15 per cent between 2028 and 2030."
India's Modi targets gas exchange to ease shift from oil
Business Times, 22 November 2018

"In the complicated world of devolved responsibilities, environmental protection was one of the clearest areas in which law and decision-making was given from Westminster to the devolved parliaments and assemblies. In the quest to go green, Scotland is way ahead of the rest of the UK, with nearly all electricity produced by wind power. In October, 98% of Scotland's electricity was produced by wind turbines, with the devolved government on track to produce all of its electricity from renewable sources by 2020. One area of Scotland which is at the forefront of renewable energy is Orkney, where they generate more electricity from wind turbines than they can use, and also have the world's leading testing facility for emerging wave and tidal power systems. While the owners of wind turbines can sell excess electricity back to the National Grid, Orkney with its 750 domestic wind turbines and several larger ones owned by community energy cooperatives, has come up with a different idea: using the electricity to split water (two resources they have plenty of) to produce hydrogen and oxygen with the help of a hydrogen electrolyser. As Neil Kermode of the European Marine Energy Centre explains, the uses of hydrogen are many: "Once you've got hydrogen you can either turn it back to electricity somewhere else, or there's the ability to store it and transfer the power, or you can use it for heating and burn it, or you can put it in cars for hydrogen fuel cell cars." In Orkney, they're attempting to put their hydrogen to several of these uses. Currently they are using hydrogen to power the fuel cells on the ferries which sail between the islands, providing the vessels with all the energy for their auxiliary powers such as lighting, refrigeration and heating, but the islanders are not stopping there. Their ultimate goal is to replace the diesel ferries with a new generation powered by hydrogen charged fuel cells. "
Why Scotland is leading the way in renewable energy and what we can learn from it
ITV,  22 November 2018

"Millions of gas boilers will need to be replaced with hydrogen alternatives and coupled with electric heating devices if Britain is to hit its carbon targets at the lowest cost, according to the government’s climate advisers. In a report on the role hydrogen could play in the energy system, the Committee on Climate Change (CCC) spelt out the huge but necessary cost the country faces to switch to green heating. The cheapest scenario, it said, is a mix of electrifying heating and fitting hydrogen boilers, and will cost the UK £28bn a year, or 0.7% of GDP, by 2050. While electricity supplies are rapidly switching to low-carbon sources, almost all homes today rely on fossil fuels – predominantly natural gas – for heating and cooking. The public is largely unaware of the alternatives, said the report, and consumer understanding is “far from where it would need to be” before decisions on decarbonising heating are made in the 2020s. While householders can keep their radiators, the CCC envisages that in future they will need to live in much more energy efficient homes with heat pumps that use electricity to draw heat from the ground or air, running alongside gas boilers. Air-source heat pumps cost about £6,000-£7,000 but are expected to become cheaper as they become more mainstream. To meet the long-term goal of cutting carbon emissions 80% by 2050, gas boilers would eventually need to be replaced by hydrogen ones that provide backup heating at times. Chris Stark, the chief executive of the CCC, said the committee had previously been a “bit suspicious” of heat pumps but was now confident enough to recommend their rollout as a hybrid heating measure running alongside gas boilers, before a later move to hydrogen too. “I’ve been cautious about the hydrogen story, because it’s often portrayed as a panacea. [But] I’ve been surprised how well it’s come out of our modelling when it’s accompanied by energy efficiency and electrification from heat pumps,” he said. Stark urged the government to set out its plan for decarbonising heat in the next three years. The report said while ministers may have “a strong temptation politically to ‘kick the can down the road’ by sticking with natural gas for longer”, it would be cheaper and better to act sooner. Despite the high costs of decarbonising heating, the CCC believes the total consumers spend on energy bills could stay similar to today, as it expects electricity prices to fall as more is sourced from wind, solar and nuclear, and costs of running a car to become cheaper owing to the switch to electric vehicles."
UK advised to look at hydrogen heating to hit 2050 emissions targets
Guardian, 22 November 2018

"Dr. Robert Trice, a lifelong rock obsessive who’s also chief executive officer of independent oil company Hurricane Energy Plc, adjusts his glasses and shakes his mop of pale hair. Then he explains his billion-dollar idea.... From inside a ship, sloshing around the 65-foot waves off the coast of the Scottish isles, he plans to poke a diamond-tipped drill-bit into the sea bed. He’ll take it past layers of once-oil-soaked sandstone rocks straight into a strata of solid granite -- what geologists call the basement. Then the drill will turn sideways and hopefully intersect a bunch of naturally formed cracks. If his science is correct, there will be enough oil pooled in those cracks to make him a very rich man. For more than a decade, people in the industry have excoriated his idea for being too expensive, too technically challenging and even geologically ridiculous.... Even after the discoveries Trice has made, he’ll need to produce oil sustainably to truly win over his critics. After his last big find two geoscience professors from Heriot-Watt University penned a blog post, outlining all the challenges facing Trice, titled: “Is Britain’s ‘largest oil discovery in decades’ all it’s cracked up to be?” Though they found the idea “exciting” they pointed out that oil from the sort of reservoir Trice is targeting has been known to initially surge into a well, before rapidly petering out. And even if Hurricane can get all the crude to the surface, some of it may be so viscous and heavy it becomes uneconomical to produce."
Is a Shale-Sized Oil Boom Hiding in Britain’s Atlantic Bedrock?
Bloomberg, 22 November 2018

"Energy sector analysts are questioning how the US’s show of support for the kingdom, as it handles its biggest crisis with the west since the September 11 attacks after the killing of journalist Jamal Khashoggi, could influence Saudi oil policy....Earlier this year the US called on Opec to unleash more barrels on to the market to compensate for any losses from Iran as it prepared to reimpose sanctions on Tehran’s oil industry. Producers led by Saudi Arabia and Russia relaxed supply curbs and pledged to step up production, only for the US to issue allowances this month for big consumers of Iranian oil to buy the country’s crude. This triggered a fall in crude prices, with rapidly increasing US shale oil production and concerns about a slowdown in the global economy that could hit oil demand also weighing on the market. Internationally traded Brent has tumbled from a four-year high of $86 a barrel in October to below $64 a barrel, almost wiping out all the gains from this year. US marker West Texas Intermediate fell from $76 a barrel to below $55 a barrel over the same period. Producers such as Saudi Arabia have flagged a potential oversupply and have started talks about new curbs of at least 1m barrels a day when ministers formally meet in Vienna next month. Even as some industry observers are wary about a reversal in strategy, Gary Ross, of oil fund Black Gold, said lower oil prices would also hit the US energy sector. “It’s not in Trump’s interest for prices to go down another $10 a barrel, because he also has to please US shale producers. At the end of the day the Saudis are going to look to balance the market,” Mr Ross said. US influence on oil policy comes as Saudi Arabia is also trying to maintain co-operation with Russia, with which it has developed an oil alliance since 2016. Crown prince Mohammed bin Salman may meet Russian president Vladimir Putin on the sidelines of a G20 summit, the Kremlin said."
Trump ramps up pressure on Saudi Arabia to lower oil prices
Financial Times, 21 November 2018

"Canada's oil industry is facing record-low prices for its exports, a glaring lack of infrastructure to bring its product to market, and an uncertain long-term outlook. But none of that is stopping the oil patch from increasing production. And as one pipeline project after another fails to launch, the industry is relying more heavily than ever to ship its oil by rail. According to Statistics Canada, the volume of oil on Canada's railroads has soared by 64.6 per cent in just the past year. And in the past seven years, the number of rail cars carrying oil across Canada has quadrupled.  The spike in oil trains began around 2011, a few years before the July, 2013, disaster in which a 74-car oil train derailed in Lac-Megantic, Que., killing 47 people. Besides the obvious risk to the environment and to human life, there is also the fact that oil producers are crowding out other industries that rely on rail. This leads to "higher costs and shipping delays for other industries," Bank of Montreal senior economist Sal Guatieri wrote in a client note Tuesday."
Canada Is Now A Land Of Oil Trains
HuffPost, 21 November 2018

"The rush to shale has emanated from the rapid evolution and deployment of fracking and horizontal drilling technologies to extract petroleum and natural gas from shale rock. Texas and North Dakota have been at the forefront, with the former now yielding more oil than Iraq, the world’s fourth largest producer. Looking forward, given that the United States has accounted for 60 percent of new global oil supply since 2008, one of the most pressing energy concerns remains: how long can the United States continue to produce increasing amounts of oil? It’s surely a difficult question to answer. The shale bonanza itself has proven that predicting future energy production is a fickle business. Back in 2007, for instance, no forecasting body was projecting how quickly a U.S. shale oil (and natural gas) surge would not just change the U.S. outlook but also transform energy markets around the world. Despite using the most advanced forecasting techniques possible, both the Energy Information Agency’sNational Energy Modeling System and the International Energy Agency’s World Energy Model were completely blindsided. So it is clear that nobody can be fully counted on to accurately predict future U.S. crude oil production. One reason is that the benefits of higher prices augmented by the non-stop Nadvance of evolving technologies for production cannot be properly factored into any forecasting model. After all, these factors are always in flux and therefore ultimately unknowable."
Why US Oil Production Won't Peak Anytime Soon
Rigzone, 19 November 2018

"Trump says America needs coal for grid security. The military proves otherwise. Military bases are using wind, solar and battery storage to stay resilient in the face of extreme weather or attack...A new report from the Association of Defense Communities and Converge Strategies details how military bases are turning to renewables to guard against blackouts in the wake of floods, storms or cyber attack. “The [Department of Defense] is deploying these projects because of increasing threats to the U.S. electric grid,” said Wilson Rickerson, a principal at Converge Strategies and a co-author of the report.  The report details how adversaries such as China, Russia, Iran, and North Korea are developing the ability to launch cyberattacks on critical infrastructure — Russian hackers have already proven capable for breaking into the power grid. In response, bases are developing microgrids, installing wind turbines, solar panels, batteries and diesel generators that can supply power in the event the grid fails."
US Military Bases Using Solar, Wind, & Battery Storage For Energy Security
Clean Technica, 17 November 2018

"On November 19th, President Putin will stand shoulder to shoulder with President Erdogan during a ceremony to celebrate the completion of the first string of Turk Stream. The subsea gas pipeline will transfer 15.75 bcm directly from mainland Russia to Turkey. The capacity will double after the second string is completed. The pipeline will be operational at the end of 2019. Despite several setbacks, mutual interests concerning security and trade have ensured the strengthening of cooperation between Russia and Turkey in the face of opposition from the West. The first string of Turk Stream, which is almost completed, is important for bilateral relations. The second string, however, will service the European market and is a sign of Gazprom’s successful strategy in the face of opposition from the EU and several European countries.  Rising tensions between Russia and the West after the crisis in Ukraine and the annexation of Crimea made Moscow reconsider its massive South Stream project. The pipeline would circumvent Ukraine and transport 63 bcm of natural gas to Europe via Bulgaria. The unbundling legislation and strong opposition from both Brussels and several European countries made Gazprom ditch South Stream and opt for a smaller albeit equally important Turk Stream. The strategy has worked as European companies are scrambling to participate in the project.  Pricing disputes between Russia’s Gazprom and Ukraine’s Naftohaz Ukrayiny in the 2000s created a need on the Russian side to decrease transit dependency. After Nord Stream’s success, South Stream would have connected consumers in southeast Europe directly with Russia’s vast gas resources. Critics point out that state-controlled Gazprom intends to increase pressure on Ukraine by depriving it of billions of dollars in transit fees and weakening its negotiating position. The latter would be achieved by reducing the country’s transit importance. Moscow, however, insists that the projects aren’t a malign plan vis-à-vis Ukraine, but have the goal of improving energy security in the region. While both the first and second string reduce transit through Ukraine, the latter is more important for political and symbolic reasons. Gazprom has yet to decide which direction the second string of Turk Stream will be heading: north into South Stream’s backyard or west into Greece and finally Italy. Bulgaria has already increased the capacity of the Trans-Balkan pipeline to 15.75 bcm in a bid to receive the entire volume of the second string. Despite Sofia not being the strongest candidate, it makes sense from a strategic point of view.... Although Turk Stream’s capacity is half compared to South Stream’s, the pipeline has the potential to significantly impact European markets. Despite efforts by Brussels to halt Russian projects in Europe, Moscow seems assured that it will succeed: Nord Stream 2 is already under construction, Turk Stream’s first string is nearly completed, and the second one will follow soon. What is striking in the case of the second string, is the scrambling by Greek, Bulgarian, and Italian companies and politicians to receive natural gas from the Turk Stream pipeline. With every passing day it becomes ever more likely that these pipelines will be completed."
Russia Takes Major Leap In European Gas War
Oilprice.com, 17 November 2018

"... contractors for Gazprom PJSC are building the latest monument to Europe’s growing dependence on Russia for energy: the controversial Nord Stream 2 gas pipeline. Germany could receive more gas pumped directly from Siberian fields as soon as late next year. The $11 billion pipeline is one of three giant projects helping the world’s biggest gas producer strengthen its grip on Europe and Asia. Thousands of miles to the east, the Power of Siberia pipeline will connect with China, and a project under the Black Sea will deliver fuel to Turkey and southeast Europe. Russia has sold gas to Europe since World War II, meeting more than a third of the Continent’s demand last year. That share could rise to 40 percent by 2025 if increased demand from China and its Asian neighbors, and higher prices, continue to tempt liquefied natural gas tankers eastward, says Jonathan Stern, a distinguished research fellow at the Oxford Institute for Energy Studies. “Expensive energy is back, mainly driven by China,” says Fatih Birol, executive director of the International Energy Agency. “We’re seeing record gas imports from Russia.” The decline of Groningen, the giant Dutch gas field, has also increased Europe’s import demand. President Donald Trump, keen to sell natural gas to Europe and capitalize on the U.S. shale boom, has described Germany as “captive” to Moscow. Last year he signed legislation giving him the right to sanction companies involved in Nord Stream 2, including five European partners that are helping fund it. Russian President Vladimir Putin said on Oct. 3 that the pipeline, whose older sibling runs roughly along the same route and began delivering fuel in 2011, would be built even if the other companies pulled out. Nord Stream 2 also has detractors closer to home. Poland, which has a fractured relationship with its former Soviet ally, nixed the formation of a joint venture of European energy companies that would work with Gazprom on the pipeline. The country still buys Russian gas but plans to replace it with fuel from Norway and other countries when its contract expires by the end of 2022. The German government and its biggest utilities point to a commercial relationship with Russia that’s survived the Cold War as well as increasing tensions over Ukraine. “They’ve been a reliable supplier for the last 50 to 60 years,” says Thomas Bareiss, Germany’s state secretary at the Federal Ministry for Economic Affairs and Energy. “And Russia needs to talk to the European Union. It keeps us talking.” Russian natural gas exports to Europe are having another banner year, after the country shipped a record 6.8 trillion cubic feet in 2017. But Andree Stracke, chief commercial officer at the trading unit of German utility RWE AG, isn’t worried by Gazprom’s increasing hold on the market. “At some point, politicians need to say if they are concerned, but for us it is business,” he says. “It is a free accessible market. Whoever wants to sell is welcome to sell their volumes.” Gazprom has also had to adjust to how the European market has evolved. Since gas is now its own traded commodity, its price is less closely linked to the cost of crude oil and more informed by local natural gas prices. Demand for gas could soar after Germany shuts down its last nuclear reactor by 2022 and retires more coal plants, according to Ralf Bickel, a senior energy adviser at Nord Stream 2. “Having additional supply from Russia puts Europe in a much more comfortable situation,” he says."
Russia’s $11 Billion Natural Gas Pipeline Is Primed to Fuel Europe
Bloomberg, 16 November 2018

"Global oil markets are increasingly over-supplied with light distillates, such as gasoline, while there are not enough middle distillates, such as diesel, which has opened a big price differential between the two fuels.  To keep meeting healthy demand for mid-distillates, refiners are processing high volumes of crude and creating a glut of gasoline.... Gasoline prices have been hit by a combination of record refinery processing in the third quarter and flattening consumption from U.S. motorists which have left the market carrying record stocks for the time of year. Diesel prices, on the other hand, have been supported by strong demand from the freight, manufacturing and mining sectors as well as from oil and gas drillers themselves. Distillate prices are also being supported by the prospect of even higher consumption from the start of 2020 when new pollution regulations on bunker fuels used in the shipping industry come into force. Regulations adopted by the International Maritime Organization will require shipping firms to switch from using heavy fuel oil to middle distillates unless they install expensive scrubbers to clean up their sulfur emissions."
Oil market roiled by too much gasoline, not enough diesel: Kemp
Reuters, 16 November 2016

"IEA said once US tight oil plateaus in the late 2020s and non-OPEC production falls back, the market becomes increasingly reliant on the Middle East to balance the market. There is a continued large-scale need for investment to develop a total of 670 billion bbl of new resources to 2040, mostly to make up for declines at existing fields rather than to meet the increase in demand. Meanwhile, with projected demand growth appearing robust—at least for the near term—a third straight year in 2017 of low investment in new conventional projects remains a worrying indicator for the future market balance, creating a substantial risk of a shortfall of new supply in the 2020s, IEA said....  IEA’s forecasts an 8 million-b/d rise in US tight oil output from 2010 to 2025 would match the highest sustained period of oil output growth by a single country in the history of oil markets. A 630 billion-cu m increase in US shale gas production over the 15 years from 2008 would comfortably exceed the previous record for gas. “Expansion on this scale is having wide-ranging impacts within North America, fueling major investments in petrochemicals and other energy-intensive industries. It is also reordering international trade flows and challenging incumbent suppliers and business models,” IEA said. By the mid-2020s, IEA says the US becomes the world’s largest LNG exporter and a few years later a net exporter of oil—still a major importer of heavier crudes that suit the configuration of its refineries, but a larger exporter of light crude and refined products. Meantime, natural gas becomes the second-largest fuel in the global mix after oil by 2040, accounting for a quarter of global energy demand in the NPS. Gas consumption rises 45% to 2040. With more limited room to expand in the power sector, industrial gas demand becomes the largest area for growth. Eighty percent of the projected growth in gas demand is from developing economies, led by China, India, and other Asian countries. This reflects the fact that gas looks a good fit for policy priorities in this region due to widespread concerns over air quality. However, the competitive landscape is formidable, not just due to coal but also to renewables, which in some countries become a cheaper form of new power generation than gas by the mid-2020s, pushing gas-fired plants towards a balancing rather than a baseload role.... IEA expects global energy needs to rise more slowly than in the past but still expand 30% between today and 2040. This is the equivalent of adding another China and India to today’s global demand. India will contribute most, almost 30%, to demand growth. India’s share of global energy use rises to 11% by 2040, though still well below its 18% share in the anticipated global population."
IEA: Oil demand on a rising trajectory by 2040
Oil and Gas Journal, 16 November 2018

"The International Energy Agency published its World Energy Outlook this week, its annual effort at revising assessments of future demand for and supply of fuels and electricity. 1 There’s a familiar theme within it: The IEA expects more renewable-energy use in the future than it did in last year’s outlook, which was more than it forecast in the 2016 outlook. There’s also something noteworthy on transportation: The IEA is calling the top on oil demand from cars. According to the report: Oil use for cars peaks in the mid-2020s, but petrochemicals, trucks, planes and ships still keep overall oil demand on a rising trend. Improvements in fuel efficiency in the conventional car fleet avoid three-times more in potential demand than the 3 million barrels per day (mb/d) displaced by 300 million electric cars on the road in 2040. It’s noteworthy when a long-term projection calls the top on demand for something as fundamental as a component of global oil demand. But demand for oil consumed for transportation is already waning in certain markets and segments. One place is in buses. Electric buses will displace about 233,000 barrels of oil demand a day by the end of the year. Add in the much smaller displacement from electric cars, and there’s 279,000 barrels a day displaced — about as much oil as Greece consumes per day. Another is Europe. As Bloomberg Intelligence’s Rob Barnett notes, the latest figures from Germany show demand for diesel fell 9 percent in the first half of the year. The influence of Green Party lawmakers will dent demand further."
Oil Demand for Cars Is Already Falling
Bloomberg, 16 November 2018

"The International Energy Agency expects global oil consumption to peak no sooner than 2040, leaving its long-term forecasts for supply and demand unchanged despite the 2015 Paris Climate Change Agreement entering into force. The Paris accord to cut harmful emissions seeks to wean the world economy off fossil fuels in the second half of the century in an effort to limit the rise in average world temperatures to “well below” 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial times. But while demand for oil to power passenger cars, for example, may drop, other sectors may offset this fall. “The difficulty of finding alternatives to oil in road freight, aviation and petrochemicals means that, up to 2040, the growth in these three sectors alone is greater than the growth in global oil demand,” the IEA said in its annual World Energy Outlook. From 2020, the European Union will impose much tougher legislation to control vehicle emissions, which many expect to quickly erode use of traditional fuels such as gasoline and diesel, a major source of oil demand. In the report, the IEA looks at three scenarios for oil supply and demand. Its central, or “New Policies”, scenario assumes signatory countries will attempt to meet the requirements set by Paris, as well as existing environmental legislation, while its “450 scenario” assumes signatories will adhere to the agreement and oil demand will fall off sharply and the “current policies” scenario does not factor in the Paris deal. The IEA’s central scenario assumes demand will reach 103.5 million barrels per day by 2040 from 92.5 million bpd in 2015, for which India will be the leading source of demand growth and China will overtake the United States to become the single largest oil-consuming nation. Overall, under the New Policies scenario, the IEA said it sees non-OECD oil demand growth running at the slowest pace for more than 20 years, but this would still be enough to offset a continued fall in OECD country demand, which will be tempered by policies aimed at improving vehicle fuel efficiency.“In the New Policies Scenario, balancing supply and demand requires an oil price approaching $80 a barrel in 2020 and further gradual increases thereafter,” the IEA said, leaving its price forecast under this scenario unchanged from last year’s World Energy Outlook. .. Without factoring in implementation of the Paris Agreement and only assuming the measures adopted by mid-2016 will apply, the IEA’s “current policies” scenario forecasts a rise in demand to 117 million bpd by 2040. On the supply side, in both the New Policies and 450 scenarios, the IEA expects the Organization of the Petroleum Exporting Countries (OPEC) to maintain its strategy of controlling output in order to support prices. It sees a gradual decline in OPEC production out to 2040, when it expects the group’s output to be around 10 percent lower than its current level of 33.8 million bpd, but says this drop will be much slower than the decline in non-OPEC production, which it expects to fall by nearly a third in this time. In the New Policies scenario, global oil output is expected to rise to around 100.5 million bpd by 2040, from 2015’s 92.5 million bpd, while under the 450 scenario, supply is expected to fall to around 71 million bpd. In its Current Policies outlook, the IEA estimates global supply will rise to 113.6 million bpd by 2040."
Oil demand won't peak before 2040, despite Paris deal: IEA
Reuters, 16 November 2018

"When U.S. President Donald Trump asked Saudi Arabia this summer to raise oil production to compensate for lower crude exports from Iran, Riyadh swiftly told Washington it would do so. But Saudi Arabia did not receive advance warning when Trump made a U-turn by offering generous waivers that are keeping more Iranian crude in the market instead of driving exports from Riyadh’s arch-rival down to zero, OPEC and industry sources say.Angered by the U.S. move that has raised worries about over supply, Saudi Arabia is now considering cutting output with OPEC and its allies by about 1.4 million barrels per day (bpd) or 1.5 percent of global supply, sources told Reuters this week. “The Saudis are very angry at Trump. They don’t trust him any more and feel very strongly about a cut. They had no heads-up about the waivers,” said one senior source briefed on Saudi energy policies. Washington has said the waivers are a temporary concession to allies that imported Iranian crude and might have struggled to find other supplies quickly when U.S. sanctions were imposed on Nov. 4. U.S. Secretary of State Mike Pompeo said on Nov. 5 that cutting Iranian exports “to zero immediately” would have shocked the market. “I don’t want to lift oil prices,” he said. A U.S. source with knowledge of the matter said: “The Saudis were going to be angry either way with the waivers, pre-briefed or even after the announcement.” A U.S. State Department official said: “We don’t discuss diplomatic communications.” The U.S. shift toward offering waivers adds to tension between the United States and Saudi Arabia, as Washington pushes for Riyadh to shed full light on the murder of Saudi journalist Jamal Khashoggi in the Saudi consulate in Turkey... Trump had wanted lower oil prices before the U.S. midterm elections earlier this month. Washington gave waivers in November to eight buyers to purchase Iranian oil for 180 days. This was more waivers than were initially expected. Saudi Crown Prince Mohammed bin Salman, a key Trump administration ally, wants prices at $80 or more for his economic reforms, sources familiar with Saudi thinking say."
Upset by Trump's Iran waivers, Saudis push for deep oil output cut
Reuters, 15 November 2018

"The fracking of hard-to-reach oil reserves has helped the US regain its crown as the world's top crude oil producer. But even the International Energy Agency (IEA) is now worried that the shale boom has been overhyped.  Since it first came on stream a decade ago, US shale oil has been hailed as the great black hope for a world still reliant on fossil fuels, despite the worsening effects of climate change. Concerns about the depletion of Middle East oil reserves have been somewhat offset by the resurgence of US oil production, which last month reached 11.6 million barrels per day (bpd), up 20 percent on the previous year. That's already more than a third of the 32 million barrels produced globally per day. The US, whose oil industry peaked in 1970s and was thought to be in terminal decline, has now overtaken Russia and Saudi Arabia to become the world's largest oil producer. Advances in fracking technology have made it possible to drill in tight shale in the North American Permian Basin, which lies under the US states of Texas and New Mexico, as well as further afield. Permian is forecast to become the most lucrative oil patch in the world over the next decade, potentially overtaking Saudi Arabia's Ghawar field. Energy analysts Wood Mackenzie predicts the region will account for two-thirds of the increase in US oil production and contribute one-quarter of world's oil production increase over the next 10 years. Although many oil industry insiders believe the US shale boom is so powerful it can plug a potential supply crunch that the International Energy Agency (IEA) has warned will lead to a global shortage of oil in the mid 2020s, others believe the expansion has been overhyped and that some of most lucrative shale wells may have already peaked.Last month, Paal Kibsgaard, CEO of the world's largest oilfields services company, Schlumberger, warned that the most optimistic projections for US shale oil production may not be met.  Describing a shortage of pipeline capacity in the Permian Basin, Kibsgaard also cautioned over longer-term problems as producers drill so-called child wells in areas that have already been drilled [by parent wells]. He described how child wells are much less productive, but now make up more than two-thirds of all new wells drilled in two large US oil regions. "The well-established market consensus that the Permian can continue to provide 1.5 million barrels per day of annual production growth for the foreseeable future is starting to be called into question,” Kibsgaard was cited by the Financial Times as saying.  The IEA has also warned of the hazards of relying on US shale to plug the shortage, adding that it would require a tripling of US tight oil production from today's level in just seven years. And while the Paris-based agency does see the US dominating the world energy market by 2025, it said in its latest report, released on Tuesday, "it would appear risky" to rely on such a drastic growth in oil production. Another warning about the over-optimistic predictions within the oil industry came earlier this year from Mark Papa, one of the pioneers of modern day fracking or hydraulic fracturing — the technique used to drill for hard-to-reach oil. At an energy industry conference in Houston, Texas, in March, Papa warned: "The impression of US shale as the big bad wolf is perhaps a bit overstated." Among his concerns were revelations that drillers in two other major shale regions — Eagle Ford in Texas and the Bakken in North Dakota — had already drilled through their most lucrative assets. "My theory is that you've got basically resource exhaustion that is beginning to take place. It's no secret that you've only got three shale oil plays in the US of any consequence," Papa said, referring to Permian, Eagle Ford and Bakken. "The rest of them don't amount to a hill of beans.""
US shale oil forecasts too optimistic, even IEA agrees
Deutsche Welle, 14 November 2018

"Back in 2015, we coined the term “shale price band” to describe the economic reality of US crude oil production. Our theory is that the price of US crude in the era of shale oil will stay in a price band between $40 a barrel and $60 a barrel. A price move below $40 a barrel will trigger a supply reduction as projects become uneconomic, while a move above $60 a barrel will accelerate the pace of US crude oil production growth to a level that will ultimately crash prices back down to the band in order to temper production. The US benchmark West Texas Intermediate stayed in the band during 2015, breaking below it in early 2016 only to quickly rebound. It stayed within the band until early 2018 when the supply cuts of the expanded “Opec+” group finally managed to reduce crude oil stocks and support a true break of the $60-a-barrel resistance in WTI. With that break, some analysts were quick to claim that the “shale price band” was disintegrating and decisively broken and that oil prices would spike to $100 a barrel or above by 2019. As US crude oil production was not immediately responding to the spike in prices, it was wrongly assumed that supplies were no longer able to keep pace with global demand growth, and that prices would no longer be capped. Yet, as we approach the end of 2018, the price of WTI has crashed back to our “shale price band”, the crude oil market structure is signalling that supplies are more than ample, and Opec is starting to worry about the return of a prolonged crude oil supply glut. There are always different factors that influence the price variations of crude oil, but one of the main inputs behind the recent price rout has been the return of much higher than expected US crude oil production. This time a year ago, Opec forecast that US oil output in 2018 would be 540,000 b/d higher than in 2017. But in its latest monthly report, it now sees US production rising 1.5m b/d higher than a year ago, matching global demand growth that it calculates at broadly the same level. The shale band has reasserted itself."
The shale price band that never went away from the crude market
Financial Times, 14 November 2018

"Relentless American shale development is set to allow the U.S. to leapfrog the world’s other major oil and gas producers, with the potential for the country to account for roughly half of global crude and natural growth by 2025, the International Energy Agency said Tuesday. In its annual World Energy Outlook report, the IEA said its main projection scenario through to 2040 foresees the U.S. accounting for nearly 75% and 40% of global oil and gas growth, respectively, over the next six years."
U.S. Expected to Produce Half of Global Oil and Gas Growth by 2025
Wall St Journal, 12 November 2018

"Plans to build a huge new UK gas power station are facing a challenge from an environmental law group that argues the project would breach the government’s recommendations on climate change. ClientEarth, which has repeatedly defeated the government in court over its air pollution strategy, has submitted an objection to the planning inspectorate over Drax Group’s proposed 3.6GW plant in North Yorkshire. The intervention is the first by the lawyers against a gas project in the UK. Sam Hunter Jones, a lawyer at the group, said it had acted because the Drax scheme marked a tipping point in the amount of new gas planned by energy firms in the UK. The UK has already given planning approval for 15GW-worth of large-scale gas plants, including at Eggborough, which is not far from the Drax site. Adding the Drax project would take the total to about 18GW, three times the 6GW of new gas the government estimates the country will need up to 2035. Hunter Jones said: “The UK government claims to be a climate leader, yet if major energy projects such as this from Drax are granted planning consent, the UK will risk carbon lock-in that would seriously undermine its ability to meet its climate change commitments.” The planning inspectorate is expected to make its recommendations to the government next spring, with ministers to decide later in the year. ClientEarth believes it has grounds for success under national policy statements that planners have to consider, which say such a major project’s impact must not outweigh its benefits. The group’s written submission said approval risked making the UK’s future decarbonisation significantly more difficult and expensive. Drax said future energy scenarios in the UK indicated the country would need more gas plants in the future to fill in the gaps around wind and solar power. The company also said that building the gas project would enable it to turn off its two remaining coal units in 2023, two years before the government’s coal phase-out deadline of 2025."
New UK gas power station 'would breach climate commitments'
Guardian, 11 November 2018

"An oil shortage is coming says Goldman Sachs, because firms cannot fully invest in future production. Global oil majors are increasingly looking to invest in lower-carbon areas of the energy sector, as they react to pressure for cleaner energy, both from government policy and investors. "In the 2020's we are going to have a clear physical shortage of oil because nobody is allowed to fully invest in future oil production," Michele Della Vigna, Head of EMEA Natural Resources Research at Goldman Sachs told CNBC Friday. "The low carbon transition will come through higher, not lower oil prices," he told CNBC's "Squawk Box Europe." Della Vigna said "Big Oils" are starting to understand that if they want to be widely owned by investors, they need to show that they are serious about minimizing the amount of carbon in the atmosphere."
There will be an oil shortage in the 2020s, Goldman Sachs says
CNBC, 9 November 2018

"Angela Merkel has been accused of pursuing a “Germany First” policy in the mould of President Trump through her dogged support of the controversial Nord Stream 2 gas pipelines from Russia. The €9.5 billion project, which would leave Berlin dependent on the Kremlin for up to half its natural gas imports, is opposed by most of Germany’s neighbours and allies, including Britain, the US, Poland and the Baltic states. More than 90 MEPs and German MPs from across the political spectrum have urged the German chancellor to abandon Nord Stream 2 on the ground that it antagonises her allies and gives Russia strategic leverage over the European Union."
Moscow gas deal is threat to Europe, Merkel told
Times, 9 November 2018

"China has passed Japan to become the world's largest importer of natural gas in recent months, and is expected to maintain that position as it continues to build out both LNG and pipeline capacity to meet rising demand levels. In recent months, the growth of China's natural gas imports has been driven mainly by the pace of LNG imports, which has grown faster than pipeline gas imports, even as domestic gas production levels have struggled to keep up. In Japan's case, which only has access to seaborne LNG but doesn't have any pipeline flows, imports are slowing from the previous year due to nuclear power station restarts. China's total natural gas imports first exceeded Japan's in April 2018, when it posted 6.818 million mt of imported gas volumes compared with Japan's 6.079 million mt of LNG imports, according to official data from the two countries.... demand was largely backed by unprecedented coal-to-gas switching in northern China, particularly around Beijing to cut down pollution levels, which led to a significant change in projected LNG market fundamentals for this year's winter gas demand as well. Since last winter, China has added new LNG import terminals and national oil companies have invested in debottlenecking gas infrastructure like pipelines to facilitate gas distribution, which hit a wall last winter.... Chinese gas demand is forecast to grow by 60% between 2017-2023, and the country alone accounts for 37% of the growth in global demand, according to the International Energy Agency. The flip side is that China's dependence on imports goes through the roof, along with energy security concerns. In 2016, China imported around 34% of its natural gas demand, and this is expected to touch 50% in the next few years. China's pipeline imports are lower than its LNG imports, but this changes once Power of Siberia comes online. Existing pipeline supply comes from Central Asia and Myanmar with a total volume of around 52.2 Bcm in 2018, out of total imports of 121.34 Bcm, according to Platts Analytics estimates. The Power of Siberia pipeline alone will add 38 Bcm of gas supply, ramping up slowly by the middle of next decade. But eventually, even this may not be enough. "Despite Russian gas, we see a growing gas deficit in the China market from 2020 onwards, with a 90 Bcm gap by 2030," Neil Beveridge, senior analyst at Sanford C Bernstein research, said."
China passes Japan to become world's largest natural gas importer
S&P Global, 9 November 2018

"Plans for a new nuclear power station in Cumbria have been scrapped after the Japanese conglomerate Toshiba announced it was winding up the UK unit behind the project. Toshiba said it would take a 18.8bn Japanese yen (£125m) hit from closing its NuGeneration subsidiary, which had already been cut to a skeleton staff, after it failed to find a buyer for the scheme. The decision represents a major blow to the government’s ambitions for new nuclear and leaves a huge hole in energy policy. The plant would have provided about 7% of UK electricity. “This is a huge disappointment and a crushing blow to hopes of a revival of the UK nuclear energy industry,” said Tim Yeo, the chair of pro-nuclear lobby group New Nuclear Watch Institute and a former Tory MP. Greenpeace UK’s executive director, John Sauven, said: “The end of the Moorside plan represents a failure of the government’s nuclear gamble.” After a board meeting of Toshiba on Thursday, the company said it was winding up NuGeneration because of its inability to find a buyer and the ongoing costs it was incurring. The firm has already spent more than £400m on the project."
UK nuclear power station plans scrapped as Toshiba pulls out
Guardian, 8 November 2018

"Russia aims to boost its crude production by a further 300,000 barrels a day by early next year unless a deal is struck with Saudi Arabia to restrain output, two people with knowledge of the plan told the Financial Times. Moscow has been pumping flat out since June and has returned to drilling new fields, raising production to a post-Soviet high of 11.5m b/d as part of an agreement with Riyadh to keep oil markets well supplied as US sanctions crimp Iran’s oil exports. But the scale of the production increase by Russia, whose output has jumped almost 450,000 b/d since May, alongside Saudi Arabia’s own near-record production and higher output in the US, has threatened to overwhelm oil markets, with prices falling 17 per cent in the past month to $71 a barrel. The US decision to issue more waivers to Iran’s customers than expected when it reimposed sanctions this week has added to the sense in the oil market that supplies could be much higher than anticipated just a month ago, when crude was at a four-year high above $86 a barrel. Riyadh is said to be pushing Moscow to consider throttling back output in the new year to help underpin prices and keep the market balanced, fearing crude’s slide could accelerate. But Russia is said to be hesitant at this stage to agree to cuts. Its oil companies are keen to bring on new production having been hamstrung for much of the past two years by Moscow’s alliance with Riyadh, which saw them cut production from the start of 2017 to this summer."
Russia aims to boost oil output unless Saudi Arabia deal is struck
Financial Times, 8 November 2018

"The UK has enough oil reserves to sustain production for the next 20 years and beyond, according to a new industry report. The Oil and Gas Authority (OGA) has estimated overall remaining recoverable reserves and resources of up to 20 billion barrels. However, it said significant investment was required in new field developments for untapped potential to be realised. The OGA said further collaboration between companies was also needed."
Enough UK oil reserves 'for at least 20 years of production
BBC, 8 November 2018

"Poland’s state-owned energy group PGNiG has struck its second long-term deal for US liquefied natural gas in as many months, in the latest demonstration of the country’s determination to break the Russian stranglehold on its gas supplies. At a ceremony in Warsaw attended by Polish president Andrzej Duda and US secretary of state Rick Perry, PGNiG revealed on Thursday it had struck a 24-year deal with US group Cheniere for LNG deliveries that will start in 2019. The deal comes three weeks after PGNiG struck two 20-year deals with subsidiaries of another US group, Venture Global LNG, for deliveries that will start in 2022, when Poland’s existing deals with Russia’s state gas group, Gazprom, expire.  Poland imports almost two-thirds of its gas from Russia but has been working to reduce its dependence on Moscow, which has shown in Ukraine that it is prepared to use gas as a geopolitical tool. Poland’s concerns have been heightened by the start of work on the Nord Stream II gas pipeline, which will link Russia with Germany via the Baltic and allow it to supply western Europe while circumventing Poland and Ukraine. Poland’s desire for diversification chimes in with US president Donald Trump’s push to find new markets for US LNG exports...Warsaw is also set to make a final decision later this year on whether to build a new pipeline under the Baltic Sea to give it access to Norwegian gasfields, a move that would diversify its conventional gas supplies. Last month, PGNiG struck a $220m deal with Norwegian group Equinor to buy its stake in the Tommeliten Alpha gasfield."
Polish gas deal aims to break Russian stranglehold
Financial Times, 8 November 2018

"Refusing plans for an electricity link between Denmark and the UK would compromise the latter's ability to source energy, a planning inquiry was told. The Viking Link is a proposed 473-mile (761km) electricity cable between Bicker Fen, near Boston, and Revsing, in southern Jutland. It includes about 40 miles (64km) of underground cable running through four Lincolnshire council districts. Opponents question its impact. The planning inquiry, being held in Manby, Lincolnshire, heard the Viking Link was vital to the UK's energy security. Michael Humphries QC, speaking on behalf of National Grid Viking Link, said: "To refuse planning permission would be to compromise the UK's ability to meet the urgent need for new infrastructure of this type." As part of the scheme, planning applications were submitted to councils in East Lindsey, North Kesteven, Boston and South Holland. East Lindsey was the only council to refuse permission, fearing the impact upon farming and the landscape. It has now dropped its objections after accepting the impact of the work would be temporary, according to the Local Democracy Reporting Service."
UK-to-Denmark power cable 'vital' for UK energy
BBC, 6 November 2018

"Russian oil output reached another 30-year high of 11.41 million barrels per day in October thanks to the largest oil companies, such as Rosneft and Lukoil, cranking up their production, Energy Ministry data showed on Friday. This was up from 11.36 million bpd in September, a previous post-Soviet record high, and confirms data, cited by an industry source on Wednesday....  Output increases have been facilitated by stronger oil prices as markets prepare for tighter supply once U.S. sanctions against Iran kick in later in November.  In accordance with a global oil deal struck with OPEC and other leading oil producers in December 2016, Moscow pledged to cut its output by 300,000 bpd from 11.247 mln bpd reached in October that year.  Now Russia pumps around 460,000 bpd more than the 10.947 million barrels per day it had initially agreed to cut its production. In June, the participants of the deal agreed to get back to their 100 percent compliance level."
Russia pumps oil at 30-year high in October - energy ministry data
Reuters, 2 November 2018


"Electricity-generating fusion power plants -one of the biggest inventions in history -- might be safe, efficient, reliable and environmentally responsible. But, how far are we from turning science fiction into reality -- meaning a world where nuclear fusion energy will be powering our day-to-day lives? Some 60 years. The upcoming International Thermonuclear Experimental Reactor (ITER), the world's largest fusion reaction research facility in Saint-Paul-les-Durance, some 35 km north of Aix-en-Provence in southern France, aims to develop fusion technology to make commercially-viable fusion energy, the world's clean energy, a reality by the second half of this century. ...  A full-scale demonstration power plant will built on the lessons learned from ITER in 2045. The industrial fusion power plants connected to the grid and operating on a competitive energy market -- but that won't be for another 57 years.  Critics are not very optimistic that just throwing money at fusion will result in a commercially viable source of electricity.  "There is an even more difficult challenge -- to make all of this economical. I don't think we are going to see fusion reactors supplying safe, clean energy for the world -- certainly not in our lifetimes," M.V. Ramana, Professor and Simons Chair in Disarmament, Global and Human Security Liu Institute for Global Issues, School of Public Policy and Global Affairs, University of British Columbia, told IANS."
How far away are we from commercial fusion energy?
IANS, 18 October 2018

"Asia's liquefied natural gas prices are set to go up on the back of surging oil prices and tightening supplies, according to analysts. It comes at a time when demand for LNG is set to shoot up in Asia, driven by China's appetite for natural gas as it seeks to replace coal. If China — the world's number 2 importer of natural gas — imposes tariffs on LNG exports from the U.S., it may cause Chinese buyers further pain in the short run, the experts said. But that could also alter supply chains in Asia and benefit other producers, they added.... Chinese demand has jumped 150 percent between 2017 and 2018 — making up half of the global demand growth, according to Wood Mackenzie in a report. China is expected to import record amounts of LNG again this winter, Browne added. But Wood Mackenzie's supply forecast for Australia shows that "from 2028 there is not enough gas to meet both LNG contracts and demand," Browne said. "More gas will need to be developed and commercialised, or LNG imported, to meet the needs of both the domestic market and to fulfil LNG contracts." "However, no new easy and economical sources of supply are currently available to the market," he concluded. That could hit major buyers of Australian LNG, such as China's Sinopec and Malaysia's Petronas, Browne said. According to a Wood Mackenzie report this week, some decisions surrounding future new LNG projects in Russia, the U.S. and Qatar might be coming up, while producers in Southeast Asia may expand their facilities to meet the demand. The U.S is a growing major exporter of LNG, and about 15 percent of its exports went to China last year. However, the ongoing trade war between Washington and Beijing is set to hit LNG supplies from the U.S. further, analysts said. If both economic superpowers fail to reach a trade deal, the current 10 percent tariff will most likely be increased to 25 percent by the start of 2019, said Hugo Brennan, senior Asia analyst at risk consultancy Verisk Maplecroft."
Asia's natural gas prices are rising. Now higher oil prices and tariffs could cause more pain
CNBC, 17 October 2018

"New Zealand is heading into a gas supply gap and will need a new discovery to arrest the production decline it is on now, MPs heard yesterday. The country has just seven years' firm supply, and production is forecast to start falling away from 2021, according to Patrick Teagle, a New Zealand-based executive for Austrian oil and gas company OMV. Teagle was talking to Parliament's environment select committee. The company, soon to take over operatorship of the Maui and Pohokura gas fields, will work to mitigate the decline in production from those fields as a priority, he said. But that will only slow the decline. What the country needs is a new discovery, just when the government's proposed ban on new offshore exploration is "discouraging" the potential partners that OMV and other firms will need if they are to explore offshore, he said."
NZ heading for gas supply gap, warns industry executive
New Zealand Herald, 17 October 2018

"Almost 50 applications for building new biomethane green gas plants have been lodged with Ofgem, with a raft of projects expected to come online by 2020. A "huge" surge in the number of new 'green gas' biomethane plants is forecast over the next three years thanks to up to £400m of investment in the sector, according to the UK's four main gas network operators. The investment covers funding for 48 new UK biomethane plants which could all be in operation by January 2020, potentially taking the total number of UK plants up from 98 today to 146 by the end of the decade. The surge in development could result in a 50 per cent increase in capacity across the fledgling sector over the next two or three years, the gas networks said. The four gas distribution networks which manage the pipes that connect to biogas plants - Cadent, SGN, Northern Gas Networks and Wales & West Utilities - jointly welcomed the anticipated growth across the sector, as they announced they would be joining forces to facilitate the increase in biomethane capacity. Biomethane plants take waste feedstocks - such as food, manure and sewage - that would otherwise go to landfill and use them to produce grid-quality biomethane gas, which can be used to heat homes and power heavy goods vehicles, producing lower emissions than traditional gas plants. Charlotte Morton, chief executive of the Anaerobic Digestion & Bioresources Association (ADBA), said the surge in 'green gas' plants was due to developers wanting to take advantage of changes to tariffs and the Renewable Heat Incentive (RHI) that will only apply until the end of January 2020."
Green gas: UK gears up for 'huge' surge in new biomethane plants through to 2020
Business Green, 16 October 2018

"Saudi Arabia has not only called the end of Russia’s prominence as a global oil behemoth, but anticipates that Russia’s oil exports “will have declined heavily if not disappeared” within the next 19 years, Mohammed bin Salman said in a recent interview with Bloomberg. When asked whether Russia and Saudi Arabia had made a backroom deal to increase oil production, MbS was more tight-lipped, saying only that Saudi Arabia was “ready to supply any demand and any disappearing from Iran.” With Russia out of the game, Saudi Arabia would have plenty of oil demand to service, according to MbS. MbS did not comment on his rationale for Russia’s exit as a major oil producer. Russia’s oil production in August of 11.21 million barrels per day, near the post-Soviet era high reached the month prior to signing the OPEC+ deal that curbed its production. The 11.21 million barrels places the country in second place of the most prolific oil producers in the world, behind the United States, who overtook both Saudi Arabia and Russia earlier this year, according to EIA data as cited by CNN."
Saudi Arabia Calls The End Of Russia’s Oil Prowess
Oilprice.com, 16 October 2018

"The Permian Basin is six years into a boom sparked by advances in drilling methods that have unlocked a sea of hitherto unattainable oil buried inside a 90,000-square-mile stretch of sedimentary rock straddling Texas and New Mexico. But as the area’s production approaches the level of Iran—the third-largest OPEC member—growth has begun to slow, throttled by shortages of pipelines, workers, power, and roads. There’s a lot, in terms of energy as well as geopolitics, riding on whether this is just a temporary blip or a longer-term deceleration. The U.S. has become an energy superpower because of the Permian. The region’s crude output has doubled in the last four years, and could rise another 50 percent by 2023, according to industry consultant IHS Markit. That could propel the U.S. past Saudi Arabia and Russia, which in recent years have alternated in the role of world’s top oil producer. Such a development would have far-reaching economic and political implications for everything from America’s foreign policy to OPEC’s influence in global energy markets. When U.S. shale emerged as a threat to OPEC in 2014, the cartel tried to kill it off by flooding the market with crude, sending oil prices below $30 a barrel. The move backfired: While some of the weaker U.S. players were swamped, others cut costs aggressively and invested in new technology. The American industry emerged leaner and stronger.... Growth has been powered by improvements in oil extraction methods—notably horizontal drilling and fracking, which pushes sand, water, and chemicals down into the ground to force out oil and natural gas trapped in layers of shale rock that run three-quarters of a mile thick combined. Both technologies had been around for decades; the breakthrough came from deploying them in combination. That’s what wildcatters, including Scott Sheffield at Pioneer Natural Resources Co. and Mark Papa at EOG Resources Inc., began doing in the Permian around 2012. Their success attracted the oil majors: Chevron, Exxon Mobil, and Royal Dutch Shell are all heavily invested in the region now. The Permian’s impact on global oil markets, the U.S. economy, and Donald Trump’s agenda has already been profound. The U.S., the world’s biggest consumer of crude, now imports less oil than at any time since 1968, when Richard Nixon won the presidency. That’s enabled President Trump to conduct foreign policy with a freer hand than predecessors hamstrung by dependence on Middle Eastern producers. Consider his sanctions on Iran. “Today the U.S. has its own petrodollars,” said Harold Hamm, the billionaire CEO of Continental Resources Inc. and a Trump confidante, on a conference call with analysts in August. “We’re seeing the current administration embrace this more and more every day, realizing the importance of it.” Texas and New Mexico will account for a third of the entire world’s growth in oil supply next year, according to the U.S. Energy Information Administration. The payoffs are already visible. Texas has logged 21 consecutive months of job growth tied to the oil industry. And while oil and gas accounts for only about 1.3 percent of the nation’s economic output, that statistic is up a third from 2008.  The Permian, however, is also showing signs of overheating. Sand, which is used to prop open the fractures in rock that allow the oil to flow, has become a precious commodity that fetches about $60 a ton. Truck drivers command salaries of $150,000 a year. Getting a child into day care “is like you’re scalping tickets to a Rolling Stones concert,” says Jessica McCoy, a mother in Midland, Texas, the Permian’s unofficial capital. And the region’s roads, overwhelmed by the sheer volume of trucks barreling down thoroughfares designed for farm traffic, are among the deadliest in the country. Meanwhile, a shortage of pipelines to transport crude from the Permian’s fields to refineries and tankers on the Gulf Coast threatens to cap production growth at least until next year, when new conduits come online. The basin’s total output has been growing by an estimated 31,000 barrels a day, down from the 134,000 barrels-a-day gains logged in October of last year."
The Permian Oil Boom Is Showing Signs of Overheating
Bloomberg, 16 October 2018

"Scottish Power has become the first major UK energy firm to completely drop fossil fuels in favour of wind power, after selling off its remaining gas and hydro stations to Drax for £702m. While customers will still get some electricity from non-green sources that the company has purchased from other operators, the firm indicated it would now be freed up to invest more in UK renewable energy sources like sunlight, wind, rain, tides and waves. It plans to invest £5.2bn over the next four years to more than double its renewable capacity."
Scottish Power becomes first major UK energy company to generate all electricity from wind
Independent, 16 October 2018

"Fracking is due to return to the UK this week, as the shale gas company Cuadrilla prepares to start operations at a well in Lancashire – provided it can see off a last-minute legal challenge. It will be the first horizontal shale well to be fracked in the UK. The drills have penetrated two kilometres deep and later this week Cuadrilla will pump in water, sand and chemicals at high pressure to fracture the rock and release the gas. It will be the first time since 2011 that fracking has taken place in the UK. This is not a commercial well, and the gas will be flared rather than captured. But could it mark the start of a new fossil fuel boom in the UK?...Industry figures think anything resembling commercial production is several years off. Ken Cronin, chief executive of industry body UK Onshore Oil and Gas (Ukoog), said: “I’ve said I’d like to see first commercial production site by 2020. I think that is still possible.” That would be incredibly fast for a sector that has been promising to deliver for years, but has been beset by delays. Cuadrilla’s former chairman, Lord Browne, has previously said it would take up to five years and 20-40 wells to ascertain if the UK has a viable shale industry..... Most experts think it unlikely that a shale industry across northern England and the Midlands would match the scale of the North Sea fields, which still supply around half the country’s gas despite declines in recent years. The British Geological Survey believes there is more than 3.7 trillion cubic metres of gas in the Bowland shale – a formation that runs across most of the north and centre of England. Today the UK consumes about 85 billion cubic metres a year, suggesting shale gas could supply the country’s needs for decades. But – and this is a huge but – no one knows how much of the gas will make economic sense to extract. Until a number of wells have been tested to see how fast the gas flows out, as Cuadrilla is about to do, fracking’s potential contribution to UK energy security remains unknown. An industry-commissioned report by EY claimed in 2014 that the sector would create around 64,000 jobs, based on 4,000 horizontal wells being drilled by 2032. So far, just one company has drilled one horizontal well. There is a debate over how much gas the UK needs in the future, and whether it matters if the UK is increasingly reliant on imports. Around half the UK’s gas today arrives via pipelines or ships. Cronin said: “If you look at all the forecasts … they all have a significant amount of gas in the system and therefore significant imports. Our view is there is an economic incentive for producing your own gas supply.” But gas demand has been falling in recent years as homes get better insulated, products become more energy-efficient and renewable sources grow. The government projects gas demand will decline by a tenth by 2020.... because no exploratory fracking has taken place for seven years, no one really knows if it can compete. Countries including the US and Qatar are ramping up their LNG exports, which are transported via huge tankers, and could theoretically make up the shortfall in North Sea production. Despite David Cameron’s claim that fracking would bring down gas prices, few expect the industry to grow to a scale where it has any significant impact on pricing. Oil prices have continued to climb in recent weeks, after concerns US sanctions were hitting Iran’s crude exports in November. With Brent now at a four-year high of $84 a barrel, experts say that it could soon hit $100. Jarand Rystad of Norwegian consultancy Rystad Energy told the Observer he expects $100 oil by Christmas."
The frackers are back: but will there ever be a British shale gas boom?
Observer, 6 October 2018

"The UAE has quietly started construction of a giant oil storage facility in a network of caverns, ­according to ­industry sources. The Mandous facility will have the capacity to store 42 million barrels of oil in three different caverns located in the emirate of Fujairah. State-owned Abu Dhabi National Oil Company (Adnoc) is responsible for the project and has forbidden domestic media in the UAE from writing about the facility, citing national security ­reasons. It is thought that when the project is completed the reserves will act as a buffer in case of severe disruptions to oil supplies. A $1.8bn (£1.4bn) engineering contract to construct the underground ­facility was awarded to South Korea’s SK Engineering and Construction at the end of last year. There was no publicised contract signing ceremony due to the sensitive nature of the project. The UAE is the latest in a series of countries that have invested in underground oil storage facilities. Over recent years, China has invested heavily in large-scale storage facilities for crude, which are mainly made up of above-ground tanks. Above-ground tankage requires less investment for countries that do not have suitable underground caves, but are more vulnerable to a military ­attack.Japan and South Korea already have existing subterranean oil storage facilities and, in 2014, Singapore ­officially opened the Jurong Rock ­Caverns, a network of tunnels with ­capacity to store 10 million barrels of oil underground. In June, India approved plans to create two new underground oil storage facilities with a total capacity of 48 million barrels. The facilities will be constructed in Chandikhol in India’s east and Padur in the south and will have capacities of 30 million barrels and 18 million barrels respectively. When completed, the projects will bring India’s total strategic reserve ­capacity to nearly 90 million barrels. The US started building its strategic petroleum reserve after the Arab oil embargo in 1973, which resulted in soaring global oil prices and rationing at petrol pumps. It stores 660 million barrels of oil in a network of 60 caverns that have been carved into rock salt in Louisiana and Texas. Crude oil prices have risen by around 50pc over the last 12 months amid uncertainty over global supply. There are concerns that Saudi Arabia and Russia will not sufficiently increase output to replace Iranian exports when US sanctions snap back on Nov 4. Saudi Arabia has already said that it is boosting production and will supply needy refiners. Alexander Novak, Russia’s Energy Minister, has said that prices may hit $100 this autumn, due to fears about future supply."
UAE is building £1.4bn oil reserve underground
Telegraph, 5 October 2018

"Petrochemicals are rapidly becoming the biggest driver of global oil consumption — ahead of trucks, aviation and shipping — accounting for more than a third of the growth by 2030, the International Energy Agency said. The move comes as cars and other passenger vehicles become less aggressive users of oil because of efficiency improvements, alternative fuels, and electrification, the Paris-based energy body said in a report published on Friday. Chemical products derived from oil and gas are used to make goods, from plastic packaging and detergents to mattress foams and coatings for television screens, which are increasingly the markers of modern life. The sector is growing quickly and is expected to have an outsized impact on the energy sector, accounting for nearly half of oil demand growth by 2050. But the IEA said there is a policy “blind spot” when understanding the ramifications of this trend. “As the global economy develops, the future of the petrochemicals industry is of major significance for both global energy security and the environment,” Fatih Birol, executive director, said in the report. The plastics segment is the fastest-growing group of bulk materials in the world, compared with others such as steel, aluminium or cement. Meanwhile synthetic nitrogen fertilisers underpin nearly half the world’s food production. The US and Europe, among other advanced economies, use 20 times as much plastic and up to 10 times as much fertiliser as many developing countries in Asia on a per capita basis, indicating the sector’s significant growth potential. But there has been mounting environmental concerns over plastics pollution in oceans. A public outcry in Europe has led to unprecedented measures to tackle waste, including a ban on single-use cutlery, plates and straws."
Petrochemicals to become dominant driver of oil demand growth — IEA
Financial Times, 4 October 2018

"U.S. crude oil shipments to China have “totally stopped”, the President of China Merchants Energy Shipping Co (CMES) said on Wednesday, as the trade war between the world’s two biggest economies takes its toll on what was a fast growing businesses. Washington and Beijing have slapped steep import tariffs on hundreds of goods in the past months. And although U.S. crude oil exports to China, which only started in 2016, have not yet been included, Chinese oil importers have shied away from new orders recently. “We are one of the major carriers for crude oil from the U.S. to China. Before (the trade war) we had a nice business, but now it’s totally stopped,” Xie Chunlin, the president of CMES said on the sidelines of the Global Maritime Forum’s Annual Summit in Hong Kong. Ship tracking data in Refinitiv Eikon confirmed that U.S. crude oil shipments to China ground to a halt in September.“It’s unfortunately happened, the trade war between the U.S. and China. Surely for the shipping business, it’s not good,” the CMES president said. He also said the trade dispute was forcing China to seek soybeans from suppliers other than the United States, adding that China now bought most its soybeans from South America."
U.S. crude oil shipments to China "totally stopped" amid trade war - shipping exec
Reuters, 3 October 2018

"While electric and plug-in hybrid vehicles are still a tiny fraction of global sales, growth rates have been spectacular. In the second quarter, deliveries increased by 77 percent year-on-year to 411,000 vehicles worldwide, according to Bloomberg NEF. Even before the latest rally in oil prices, that was forecast to rise a further 49 percent by the same quarter next year. “We’re already seeing demand outstripping supply,” said Fiona Howarth, CEO of Octopus Electric Vehicles, a British car-leasing firm. High oil prices “will add to the acceleration of growth. EVs are coming quicker than most people think.”  Crude oil has jumped 27 percent this year to more than $85 a barrel and major traders predict prices could reach $100 this winter as U.S. sanction of Iranian exports strain global supply. The rally has started to feed through to prices at the pump. In the U.S., average gasoline prices are on the verge of breaching $3 a gallon for the first time since 2014."
Oil’s March Toward $100 Is Just What Electric Cars Need
Bloomberg, 3 October 2018

"Shell has approved a $12bn (£9.3bn) investment in a mega energy project to send supercooled gas from Canada to China and other Asian countries as they turn from coal to gas. The scheme will be Canada’s biggest ever infrastructure project and is the world’s first major liquefied natural gas project to be given the go-ahead in five years. Shell has a 40% stake in the $31bn Canada LNG joint venture, along with Malaysian, Chinese, Japanese and South Korean energy firms. The world’s appetite for LNG, where gas is cooled to -162C (-259.6F) so it can be shipped in huge tankers, had exceeded expectations in the past year and made the project viable, Shell said. China is forecast to massively increase its consumption of LNG as it looks to gas as a solution to its air pollution problems caused by coal power stations. “We believe LNG Canada is the right project, in the right place, at the right time,” said the company’s chief executive, Ben van Beurden. Shell is the world’s leading trader of LNG, thanks to its £47bn acquisition of gas firm BG Group three years ago. But earlier this year the company said an LNG supply crunch would occur in the next decade because of a lack of new projects and rising demand, which it expects to double by 2035. Construction will begin immediately on the Canada project, with gas ready to ship in the mid-2020s, potentially as early as 2023 according to some analysts. Jessica Uhl, Shell’s chief financial officer, said: “We believe the market needs more supply – and the timing of when this project will come onstream sits nicely with the market fundamentals.” The Anglo Dutch firm said the Canada LNG project would be more competitive than rival US projects, because supplies would reach Asian countries in 10 days rather than 24 days for gas shipped from the US Gulf, which has to travel via the Panama canal. “Regardless of what others are doing, this is the most competitive to be built,” Uhl said. The scheme will be reliant on a new 416-mile pipeline being built to transport gas from fields in northern British Columbia to the coast, where it will be processed and stored before being transferred to tankers."
Shell approves $12bn liquefied natural gas project in Canada
Guardian, 2 October 2018

"Mexico will need to double to about $4 billion its annual oil exploration investment to reverse a 14-year decline in output, a move that will require more funding by Pemex and private producers, a top official with the state-run firm said Friday. The nation's oil industry needs Petroleos Mexicanos to invest more than $2.5 billion per year and another $1 billion to $1.5 billion from private companies to fully replace its reserves, Jose Antonio Escalera, the firm's chief of exploration, said at an energy conference in Acapulco.... "The reason why Mexico has seen an output decline since 2004 is not because of lack of potential, it is because it stopped exploring," Juan Carlos Zepeda, chief of Mexico's energy regulator National Hydrocarbons Commission (CNH), said at the energy conference. Pemex said it will not meet its annual output target in 2018, and is likely to see a further slide in 2019."
Mexico must double oil exploration spending to halt output fall
Reuters, 28 September 2018

"China’s National Development & Reform Commission (NDRC) has written a draft policy that would increase the renewable energy target from 20% to 35% by 2030. For a long time, it has seemed that the Chinese 2030 renewable energy target of 20% was incredibly low given the amount of renewable energy it has been adding. For example, in 2017, China installed more than 52 gigawatts (GW) of solar, which is about as much as has been installed in the United States since … forever."
China Proposes 75% Increase To 2030 Renewable Energy Target
CleanTechnica, 27 September 2018

"Increasingly optimistic oil and natural gas companies are planning to ratchet up their borrowing this fall, according to a new survey from the international law firm Haynes and Boone. The report found that 78 percent of firms surveyed this month plan to increase borrowing; with at more than one-third expecting to increase borrowing by 20 percent or more. The report, released Wednesday, also found that high oil prices are prompting companies to lock in prices for 50 percent to 60 percent of their 2019 production. West Texas Intermediate crude oil generally hovered between $45 and $60 last year. Now, it's closer to $70, while the European benchmark Brent oil price hit a four-year high Tuesday when it topped $82. The Haynes and Boone report also looked at factors worrying oil and gas producers. "In prior years, producers were worried about a sudden drop in commodity prices or high costs of oilfield services," Kraig Grahmann, head of Haynes and Boone's Energy Finance Practice Group, said in a statement. "Now, when asked about the biggest challenge facing oil and gas industry participants, survey respondents were most concerned about midstream capacity constraints in transporting production to market." The pipeline capacity shortage was cited by 42 percent as the greatest challenge. Oilfield services cost was the second biggest concern followed by price volatility, cost of capital and "other." Trade war tension, at 6 percent, was at the bottom of the list.  "It indicates that people expect the price — if there's volatility — would not fall below their break-even costs," said Buddy Clark, co-chair of Haynes and Boone's Energy Practice Group. That point is in the mid-$50 range for many drillers, Clark said, but could be lower in some parts of the Permian Basin. The report didn't specifically focus on the Permian Basin, but pipeline bottlenecks have been a major concern there for much of the year. New pipelines have been greenlit by midstream companies, but much of the capacity won't be on line until at least next year.... There have also been natural gas pipeline constraints over the year in the Marcellus and Utica shales, covering Pennsylvania, West Virginia and neighboring states. The firm, which tracks oil and gas bankruptcies, also had a warning about excessive debt. Industry bankruptcies are way down from from the post-oil price crash peak of 2016. But the debt involved in oil and gas bankruptcies so far in 2018 have already exceeded all of 2017.... The U.S. Energy Information Administration recently reported that the oil and gas companies it surveyed had reduced debt for seven consecutive quarters, and the debt was at its lowest point since the third quarter of 2014. "The latest worst is now behind us," Clark said. "It's now recover mode. But who knows how long this recovery will continue.""
Oil and gas drillers plan to borrow more despite worries about Permian Basin bottlenecks
Dallas News, 27 September 2018

"A major gas field has been discovered west of the Shetland Isles. With estimated recoverable reserves of one trillion cubic feet, the discovery in the Glendronach field by French energy giant Total will result in gas feeding into the Shetland Gas Plant.The company said tests had confirmed "good reservoir quality, permeability and well production deliverability".... The gas find came as welcome news for the UK oil and gas industry which, although recording a healthy recovery since the slump in oil prices in 2014, has seen a slump in exploration activity this year. In its Economic Report earlier in September, Oil and Gas UK said that only four new oil and gas wells had been drilled in the North Sea in the first eight months of the year and that, on the most optimistic predictions, only 12 were expected by year's end – the lowest total since 1965.“Record low drilling activity, coupled with the supply chain squeeze, threaten industry’s ability to effectively service an increase in activity and maximise economic recovery,” commented Ms Michie.Nevertheless, North Sea oil and gas companies are predicted to generate a £10 billion cash surplus this year, providing the Treasury with £2 billion in tax receipts."
Major gas find boosts UK offshore industry
Relocate, 26 September 2018

"Brazil’s most productive field, Lula, located in the offshore Santos basin, should hit peak production in 2020 or 2021, an executive at Royal Dutch Shell said on Wednesday. Cristiano Pinto da Costa, Shell’s General Manager for the Lula, Sapinhoa, Iracema and Lapa fields, all located in the Santos basin, made the comments on the sidelines of an oil conference in Rio de Janeiro. The field averages 879,000 barrels of oil per day, and is operated by Brazil’s state oil company Petroleo Brasileiro in a consortium with Shell and Portugal’s Galp."
Shell sees peak oil output for Brazil's Lula field in 2020, 2021
Reuters, 26 September 2018

"This year, emerging markets will overtake developed nations in terms of the amount of renewable wind and solar power they have installed, according to Moody’s, the credit rating agency. In the decade to 2016, the amount of solar power generated across the world has risen by 50 per cent, while wind has increased by 22 per cent, according to BP’s annual review of world energy. While developed economies have been leaders in the development of renewable power, much of the recent momentum has come from developing nations — and from China and India in particular, which are now the biggest and the third-biggest renewable electricity markets, respectively. Swami Venkataraman, co-author of the recent Moody’s report, said: “Countries such as China and India [are] leading the charge, as new renewables become competitive with other sources of power even in developing nations.” Fuelled by a dramatic reduction in the costs of wind and solar technology, both China and India have raced ahead with installing renewable power as they look to build on their impressive economic growth. The pace of this new installation of renewable power sources has cheered defenders of the Paris climate agreement even after President Donald Trump withdrew the US from the accord. “The magnitude of the technology cost deflation is way ahead of anything forecast by anyone in the world,” says Tim Buckley, director at the Institute for Energy Economics and Financial Analysis. Last year, China added 50 gigawatts of solar power capacity, according to the International Energy Agency — more than it added for coal, gas and nuclear power capacity put together, and equivalent to the combined solar capacity of France and Germany. India, the world’s fastest-growing major economy, added around 9.5GW of solar. The country is on course to hit 28GW by the end of 2018 — six times what it had installed three years ago. Wind is growing less quickly, but from a higher base. Last year, China added 15.6GW of wind capacity — an increase of 10 per cent. Underpinning the growth in solar in particular has been a collapse in the cost of solar panels, both as a result of improving technology and oversupply in China. By 2017, the price of solar modules had fallen more than 80 per cent since 2009, according to the International Renewable Energy Association, while that of wind turbines had fallen by about half over the same period. There are signs, however, that the momentum could be about to slow down."
China and India lead the surge to solar energy
Financial Times, 25 September 2018

"World oil production will soar to new records over the next five years, as a dramatic expansion in demand from airlines offsets the arrival of electric cars, according to a report from Opec. In a forecast that will dismay environmentalists – and which questions the theory that oil company reserves will become “stranded assets” – Opec’s annual report significantly revised production estimates upwards. Most of the production increase will come from countries outside Opec, led by explosive growth from frackers in the United States, with China and India leading the increase in demand. Opec expects global oil demand to reach nearly 112m barrels per day by 2040, driven by transportation and petrochemicals. That is up from almost 100m today and higher than last year’s projection. Coal will continue to be be burned in record amounts, despite concerns about its impact on climate change. Opec estimates that coal usage in the OECD countries will plummet by a third by 2040, but it will increase by 20% in developing countries to reach five times the volumes burned in the west. The world’s airlines will be the single fastest growing user of oil, increasing consumption by 2.2% a year on average, to 2040. However, the largest absolute growth is expected to come from road transport. The number of vehicles on roads across the world are expected to leap from 1.1bn now to around 2.4bn in 2040. In its central scenario, Opec expects just 320m of those to be electric, a number that climbs to 720m in a scenario where battery-powered cars take off rapidly. It said that if the higher prediction for electric cars came to pass, oil demand would only slip slightly to 109m bpd rather than 111.7m bpd by 2040, the report said. Opec revised downwards its forecast for the market share of diesel vehicles because of the fallout from the dieselgate scandal and electric strategy announcements by carmakers over the past year. Renewable energy production will rise rapidly but even by 2040 will meet only around 20% of global energy demand by 2040, according to projections in the report."
Opec predicts massive rise in oil production over next five years
Guardian, 23 September 2018

"The United States military spends about $81 billion a year to protect oil supplies around the world and keep fossil fuels flowing into American gas stations, according to new analysis. Securing America's Future Energy, a think tank that advocates for reducing U.S. dependence on oil, released the study the same day President Donald Trump claimed that some Middle Eastern countries are pushing up crude prices while benefiting from U.S. military protection.  The $81 billion price tag is likely "very conservative" and doesn't include the full cost of the 15-year war in Iraq, according to SAFE, whose CEO Robbie Diamond also leads the pro-electric car group the Electrification Coalition. The estimate pencils out to 16-20 percent of the Defense Department's annual base budget, showing the nation's oil habit has a direct military cost, SAFE said. It also means the government subsidizes the cost of oil to the tune of $11.25 per barrel and the price of transportation fuels like gasoline and diesel by 28 cents a gallon. Americans "spend somewhere around $3 per gallon, but we're really paying a lot more because of all the operations in the Middle East," said retired General Charles Wald, vice chairman and senior adviser at consulting firm Deloitte and a member of SAFE's Energy Security Leadership Council. U.S. crude oil production is poised to reach 11 million barrels a day and eclipse output from top producer Russia, but the United States still imports roughly 8 million barrels a day. On Thursday, Trump renewed his call for the 15-nation oil producer group OPEC to tamp down crude prices, which are near four-year highs. Trump suggested that OPEC members like Saudi Arabia, Iraq and Kuwait owe the United States, saying "We protect the countries of the Middle East, they would not be safe for very long without us....Defending Persian Gulf oil is a "major distraction" from "existential defense issues," said John Lehman, former Secretary of the Navy under President Ronald Reagan and another member of SAFE's council. "Our existential threats are what we should be concentrating on. We should concentrate on East Asia and an increasingly revanchist Russia," he said. Factoring in in the cost of the Iraq War, the price of protecting oil is closer to $30 per barrel, or 70 cents a gallon, over a 20-year period, a separate analysis found. SAFE said that cost is largely separate from the ongoing cost of $81 billion a year. "The wars in the Middle East have been related to the balance of power in that region and control over oil states," Lehman said. "You don't want to fall into the trap of the left and say that we only went into Iraq for their oil but depending how you phrase it, the costs can be attributed to the strategic dependence we have on Gulf oil.""
US spends $81 billion a year to protect global oil supplies, report estimates
CNBC, 21 September 2018

"The United States military spends about $81 billion a year to protect oil supplies around the world and keep fossil fuels flowing into American gas stations, according to new analysis. Securing America's Future Energy, a think tank that advocates for reducing U.S. dependence on oil, released the study the same day President Donald Trump claimed that some Middle Eastern countries are pushing up crude prices while benefiting from U.S. military protection.  The $81 billion price tag is likely "very conservative" and doesn't include the full cost of the 15-year war in Iraq, according to SAFE, whose CEO Robbie Diamond also leads the pro-electric car group the Electrification Coalition. The estimate pencils out to 16-20 percent of the Defense Department's annual base budget, showing the nation's oil habit has a direct military cost, SAFE said. It also means the government subsidizes the cost of oil to the tune of $11.25 per barrel and the price of transportation fuels like gasoline and diesel by 28 cents a gallon. Americans "spend somewhere around $3 per gallon, but we're really paying a lot more because of all the operations in the Middle East," said retired General Charles Wald, vice chairman and senior adviser at consulting firm Deloitte and a member of SAFE's Energy Security Leadership Council. U.S. crude oil production is poised to reach 11 million barrels a day and eclipse output from top producer Russia, but the United States still imports roughly 8 million barrels a day. On Thursday, Trump renewed his call for the 15-nation oil producer group OPEC to tamp down crude prices, which are near four-year highs. Trump suggested that OPEC members like Saudi Arabia, Iraq and Kuwait owe the United States, saying "We protect the countries of the Middle East, they would not be safe for very long without us....Defending Persian Gulf oil is a "major distraction" from "existential defense issues," said John Lehman, former Secretary of the Navy under President Ronald Reagan and another member of SAFE's council. "Our existential threats are what we should be concentrating on. We should concentrate on East Asia and an increasingly revanchist Russia," he said. Factoring in in the cost of the Iraq War, the price of protecting oil is closer to $30 per barrel, or 70 cents a gallon, over a 20-year period, a separate analysis found. SAFE said that cost is largely separate from the ongoing cost of $81 billion a year. "The wars in the Middle East have been related to the balance of power in that region and control over oil states," Lehman said. "You don't want to fall into the trap of the left and say that we only went into Iraq for their oil but depending how you phrase it, the costs can be attributed to the strategic dependence we have on Gulf oil.""
US spends $81 billion a year to protect global oil supplies, report estimates
CNBC, 21 September 2018

"Sometime in the next few weeks, global oil consumption will reach 100 million barrels per day (bpd) - more than twice what it was 50 years ago - and it shows no immediate sign of falling. Despite overwhelming evidence of carbon-fuelled climate change and billions in subsidies for alternative technologies such as wind and solar power, oil is so entrenched in the modern world that demand is still rising by up to 1.5 percent a year. There is no consensus on when world oil demand will peak but it is clear much depends on how governments respond to global warming. That’s the view of the International Energy Agency (IEA), which advises Western economies on energy policy. As Bassam Fattouh and Anupama Sen of the Oxford Institute for Energy Studies said in a presentation last month, the debate over peak demand “signifies a shift in perception from scarcity to abundance”, which is already changing the behavior of all players in the world oil market, including exporters. “Taking the ‘peak demand’ argument forward, it is generally thought that the world is on the brink of another energy transition, in which conventional sources such as oil will eventually be substituted away in favor of low-carbon sources.” OPEC Secretary-General Mohammad Barkindo told a conference in South Africa on Sept. 5 that global consumption would hit 100 million bpd this year, sooner than anyone had projected. With a sophisticated global infrastructure for extraction, refining and distribution, oil produces such a powerful burst of energy that it is invaluable for some forms of transport such as aircraft. Of the almost 100 million barrels of oil consumed daily, more than 60 million bpd goes for transport, and alternative fuel systems such as battery-powered electric cars still have little market share. Much of the remaining oil is used to make plastics by a petrochemicals industry that has few alternative feedstocks. Although government pressure to limit the use of hydrocarbons such as oil, gas and coal is increasing, few analysts believe oil demand will decrease in the next decade. If the current mix of policies continues, the IEA expects world oil demand to rise for at least the next 20 years, heading for 125 million bpd around mid-century. Oil demand would rise less quickly if governments moved some way toward reducing the use of carbon-based fuels, putting into action already-announced plans, the IEA says. But it warns governments that existing plans are unlikely to make a huge dent in carbon emissions, and only a thorough change in energy use will bring down oil demand. The problem for the countries the IEA advises is that they are no longer primarily responsible for rising oil consumption. While oil demand in the big, developed economies has stalled, consumption is increasing rapidly in countries outside the Organisation for Economic Co-operation and Development. Non-OECD oil demand has almost doubled over the last two decades as new industries develop in countries across Asia, Central and South America and Africa. The research unit of China National Petroleum Corp predicts China’s oil demand will top out at around 13.8 million bpd as early as 2030. Some analysts argue world oil demand could come down much faster if there were more efficiency gains in vehicles, greater market penetration by electric cars combined with lower economic growth and higher fuel prices. Investment in solar power is rising rapidly and even Saudi Arabia, the de-facto leader of the Organization of the Petroleum Exporting Countries, is supporting the industry, creating the world’s biggest solar power project. Goldman Sachs has said oil demand could peak by 2024 under some circumstances, but slow adoption of new technology in less-developed economies could delay the change. Consultancy Wood Mackenzie is somewhere in the middle of the range, expecting demand for transport to flatline from 2030 and overall use to peak in 2036. Its chief economist, Ed Rawle, argues a fall in oil demand is coming, whatever happens: “The signs of peak oil demand really are there into the future. It’s a question of when, not if.”"
Now near 100 million bpd, when will oil demand peak?
Reuters, 20 September 2018

"Russia’s crude production has jumped to a new post-Soviet record, boosting the nation’s budget revenue as it prepares for talks with OPEC+ on further cooperation, according to a government official.The country’s oil output is currently fluctuating between 1.54 million and 1.55 million tons a day -- driven mainly by state-run giant Rosneft PJSC -- the official said, asking not to be named as the information isn’t public yet. That equates to 11.29 million to 11.36 million barrels a day, beating the previous record of 11.25 million barrels a day set in October 2016 before Russia agreed with the Organization of Petroleum Exporting Countries to cut production."
Russia Oil Production Jumps to a New Post-Soviet Record
Bloomberg, 20 September 2018

"Russia is only three years away from maximizing oil extraction output before costs and taxes drive down production, Russia’s energy minister has warned. The Russian economy has relied on its key export oil in the face of Western sanctions that drove down prices and weakened the ruble. “We expect about 553 million [metric] tons of oil production in 2018. We will reach a peak of 570 million tons in 2021,” Interfax quoted Energy Minister Alexander Novak as saying Tuesday. Almost half of current capacity could be lost in less than two decades, Novak said, with levels expected to drop to 310 million tons by 2035. Current reserves stood at 29.7 billion metric tons of oil as of early 2017, he estimated. Without stimulating oil production, the minister warned the budget risks losing 3.3 trillion rubles ($46.2 billion) in taxes and 1.3 trillion rubles ($19.4 billion) in investments beginning in 2022. “This is the inevitable result of increased production costs and excessively high taxes in West Siberian oil fields,” Novak said."
Russia is Only 3 Years Away From Peak Oil, Energy Minister Warns
Moscow Times, 19 September 2018

"High gas prices have triggered a resurgence in electricity generation from coal as it becomes the cheaper option. Britain could see its first increase in carbon emissions in six years if coal-fired power plants continue to undercut gas ones, according to Imperial College London. Coal plants were the biggest source of electricity as recently as 2013 but their share of the energy mix fell precipitously and they supplied less than 7 per cent of UK power last year. Their demise was driven by environmental legislation, carbon pricing, which penalises polluting coal more than cleaner burning gas, and low gas prices. However, gas prices have risen over recent months after supply disruptions and low storage levels, and are at ten-year highs."
Old king coal is back as gas costs rise
Times, 18 September 2018

"Britain’s ability to meet its emissions targets is being challenged by a comeback for coal power stations that threatens to drive up the energy sector’s carbon emissions for the first time in six years. Coal plants have become more economic to run than their gas counterparts in the past month because wholesale gas prices have hit 10-year highs. A report by Imperial College London said the extra coal-burning had increased emissions by 15% in September, equivalent to an extra 1,000 tonnes of carbon dioxide per hour. If the trend continues in the coming months, the sector’s emissions would rise by as much as 1.2 million tonnes this year, according to researchers at the university. The energy sector is the UK’s second biggest emitter after transport. However, it has been the economy’s standout success for cutting emissions in recent years because of the rapid growth in renewables and the phaseout of coal. A reversal of that success, even if only temporary, could pose a dilemma for ministers, who have to meet legally-binding carbon targets. The UK’s carbon budgets, set by the Committee on Climate Change in order to meet the long-term goal of an 80% cut in emissions by 2050, dictate how much the country can emit over five-year periods. The UK is due to easily meet its third carbon budget, which runs from 2018-2023, but any prolonged rise in energy emissions would make future budgets harder to hit. Dr Iain Staffell, the author of the Imperial College London report, said: “If the only thing that has done well starts to backslide, I think that’s going to be a real problem in meeting these [carbon] targets because they’re just ratcheting up and getting more and more difficult.”... The market intelligence firm ICIS said that it expected coal would account for 10.5% of electricity generation this winter, up from 10% last year. However, it warned that figure could go up significantly if there was a repeat of last winter’s ”Beast from the east” cold spell, or further outages at French nuclear power stations, which the UK relies on via links across the English Channel. “If similar capacity issues or a cold snap were to be seen again this winter, we could expect the forecast 10.5% share of coal to increase significantly,” the group told the Guardian. Coal’s comeback off high gas prices comes despite two coal power stations shutting later this month and EU carbon prices at 10-year highs. The UK has yet to say whether it will stay within the EU emissions trading system (ETS) when it leaves the EU but the energy industry has lobbied the government to stay in the scheme, which is the world’s biggest carbon market."
Coal comeback could drive up UK energy emissions – report
Guardian, 17 September 2018

"The United States likely surpassed Russia and Saudi Arabia to become the world’s largest crude oil producer earlier this year, based on preliminary estimates in EIA’s Short-Term Energy Outlook (STEO). In February, U.S. crude oil production exceeded that of Saudi Arabia for the first time in more than two decades. In June and August, the United States surpassed Russia in crude oil production for the first time since February 1999. Although EIA does not publish crude oil production forecasts for Russia and Saudi Arabia in STEO, EIA expects that U.S. crude oil production will continue to exceed Russian and Saudi Arabian crude oil production for the remaining months of 2018 and through 2019. U.S. crude oil production, particularly from light sweet crude oil grades, has rapidly increased since 2011. Much of the recent growth has occurred in areas such as the Permian region in western Texas and eastern New Mexico, the Federal Offshore Gulf of Mexico, and the Bakken region in North Dakota and Montana. The oil price decline in mid-2014 resulted in U.S. producers reducing their costs and temporarily scaling back crude oil production. However, after crude oil prices increased in early 2016, investment and production began increasing later that year. By comparison, Russia and Saudi Arabia have maintained relatively steady crude oil production growth in recent years."
The United States is now the largest global crude oil producer
EIA, 12 September 2018

"Russia is getting closer to concluding a deal on a new route for transporting gas to China, its energy minister said on Wednesday. That comes as the Chinese government has been pushing to switch businesses and households to gas and away from coal for heating as part of its war on pollution. Russian President Vladimir Putin met his Chinese counterpart, Xi Jinping, on Tuesday in Vladivostok...The so-called western route would come in the wake of an East Siberian route through which Russian gas giant Gazprom is due to start supplying China with natural gas in December 2019, increasing volumes gradually to 38 billion cubic metres per year."
Russia says getting closer to deal on new gas route to China
Reuters, 12 September 2018

"Brent crude rose more than 1% to $80.13 - the first time it has breached $80 since late May. The rise reflects concern about the impact of US sanctions against Iran that will target oil exports. "Iran is increasingly becoming the preoccupation of the crude market," said consultants JBC Energy. "The last couple of weeks have seen the expected squeeze on Iranian crude flows taking shape, with overall outflows down markedly." Gordon Gray, HSBC's global head of oil and gas equity research, said there were "real risks" that Brent could hit $100 a barrel. "The fact that much higher supply is already needed from the likes of Saudi Arabia - and the low levels of spare capacity remaining - leave the global system highly vulnerable to any further significant outage," he said."
Oil pushes past $80 as Iran fears mount
BBC, 12 September 2018

"The number of new oil and gas wells being drilled in the North Sea has crashed to levels not seen since the basin was first tapped more than half a century ago. The UK’s oil and gas industry warned that the record low was a cause for “serious concern” and left the sector at a crossroads. Just four exploratory wells have been drilled in the first eight months of the year, with the most optimistic projections pointing to a total of 12 expected by the year end. That would put 2018 on a par with 1965, the second year that the modern era of exploratory work got under way in the North Sea and when the Beatles were dominating the UK singles charts."
North Sea oil and gas drilling falls to lowest level since 1965
Guardian, 11 September 2018

"Qatar has announced it will supply China with liquefied natural gas (LNG) for the next 22 years, as the gas-rich emirate battles an economic blockade by neighbouring states. State-owned Qatargas made the announcement in a statement on Monday, saying it would supply China with around 3.4 million tonnes of LNG annually for 22 years. "This agreement underscores Qatar's trusted capability in ensuring energy security to countries around the world, particularly in Asia," Qatargas CEO Saad Sherida al-Kaabi said.... China wants LNG for a push to replace coal with cleaner-burning natural gas, in a bid to reduce its air pollution crisis. Qatargas is the world's largest liquefied natural gas producer with a production capacity of 77 million tonnes per year. The deal comes days after Qatar pledged to invest some 10 billion euros ($11.6 billion) in Germany. For more than a year, Qatar faced a land, air and sea blockade imposed by Saudi Arabia and its allies. The bloc has cut off ties with Qatar accusing it of supporting "terrorist" groups, which Doha strongly denies. The cold shoulder from its neighbours has prompted Qatar to fall back on more distant allies, with the US, China and Germany being its three biggest trading partners. On Friday, German Chancellor Angela Merkel confirmed Berlin's plans to build an LNG terminal in Germany."
Qatar agrees to supply China with natural gas for next 22 years
The New Arab, 10 September 2018

"DNV GL predicted overall energy demand in the U.S. and Canada would continue to shrink as the regional economy becomes less based on manufacturing and as electricity plays a greater role. This would eventually lead to energy demand falling 43 percent by 2050, it added. The world's largest oil firms have different views over the potential for an oil demand peak, but all say that even if demand peaks, trillions of dollars of investments in oil gas would be required to develop new barrels."
Natural gas will overtake oil to become North America's 'single largest energy source' this year, risk management firm says
CNBC, 10 September 2018

"Production cuts, halted projects and operations, as well as renewed interest from investors has helped drive uranium prices up by 30% in the past four months, but experts remain cautious about the long-term outlook for the commodity. Decade-low prices have had a negative effect on the profitability of existing mines and a devastating effect on the capacity of early-stage projects to raise the necessary funding to be mine-ready when demand picks up. “The overall nuclear fuel chain remains a challenging environment, with low prices across the chain weighing on margins for producers and consumers,” BMO analysts Colin Hamilton and Alexander Pearce said in a seminar part of the World Nuclear Association’s (WNA) Symposium, which kicked off in London on Wednesday.... “Given the concentration of production in a few regions (Kazakhstan and Russia now represent over 50% of global primary production), any supply disruptions could lead to meaningful price moves as security of supply concerns return,” Raymond James’s mining analyst Brian MacArthur told the Northern Miner in August. The source of uranium supply has changed dramatically over the last decade, creating a situation where security of supply issues could quickly return if supplies to the west from Russia and Kazakhstan were cut off, MacArthur concluded."
Uranium supply crunch may be just around the corner — experts
Mining.com, 6 September 2018

"World oil consumption will reach 100 million barrels per day (bpd) later this year, hitting that level much sooner than previously forecast, OPEC’s secretary-general said on Wednesday.Mohammad Barkindo also told an energy conference in South Africa’s Cape Town that a stable environment was needed to encourage oil industry investment to meet the rising demand. “The world will attain the 100 million barrels a day mark of consumption later this year, much sooner than we all earlier projected. Therefore stabilizing forces which create conditions conducive to attracting investments are essential,” he said. “The priority ... is on ensuring stability is sustainable, spreading confidence in the industry and encouraging an environment conducive to the return of investments,” he added. The Organization of the Petroleum Exporting Countries with Russia and other producers have implemented a deal since January 2017 on cutting 1.8 million bpd from output to prop up prices that fell below $30 a barrel in 2016 from over $100 in 2014."
Oil demand to hit 100 mln bpd sooner than projected: OPEC's Barkindo
Reuters, 5 September 2018

"India is set to overtake China as the biggest source of growth for oil demand by 2024, according to a forecast announced Monday by research and consultancy group Wood Mackenzie. The country's oil demand is set to increase by 3.5 billion barrels per day from 2017 to 2035, which will account for a third of global oil demand growth. India's expanding middle class will be a key factor, as well as its growing need for mobility, according to Wood Mackenzie. On the other hand, China — currently the second-largest oil consumer in the world — may soon need less oil. In 2017, it overtook the U.S. as the biggest importer of crude oil, but it's set to see a decline in oil demand growth from 2024 to 2035, Wood Mackenzie Research Director Sushant Gupta told CNBC. That's due to two trends: Alternative energy sources such as electricity and natural gas are displacing the need for gasoline and diesel. And, a more efficient freight system and truck fleet will also result in sluggish road diesel demand, Gupta said. For India, as demand grows, an oil shortage is already imminent. The country is only expected to add 400,000 barrels per day in firm refinery capacity out to 2023 — paling in comparison to demand growth — warned Wood Mackenzie. "We think the most likely situation is that India would need between (3.2 million and 4.7 million barrels per day) of new capacity out to 2035 to remain self-sufficient in transport fuels. So we are talking about a future capacity which is 1.7 to 2.0 times the current. This is clearly an uphill task, unless domestic refiners can commit to their planned capacity additions," Gupta said in a Wood Mackenzie release accompanying the India demand projection. With India's refinery yields still highly tilted toward diesel, Wood Mackenzie added that India needs to start focusing on increasing gasoline. However, with a global surplus of gasoline expected in the long run, India could consider importing the fuel, the research firm suggested."
India is set to overtake China as the top driver of global oil demand growth
CNBC, 29 August 2018

"Global oil markets have stopped being the puppet masters driving European natural gas prices. Gas is no longer as localized a commodity, only moved relatively short distances through pipelines, and tied to oil in European supply contracts because the fuels competed in power generation. “Gas has become its own market, it is driven by forces which are very distinct from oil,” said Muqsit Ashraf, managing director and global lead for energy for Accenture Strategy. “There’s been a move toward a more globalized gas world, where gas could be moved around more readily, but the substitution link with oil has broken off, so oil and gas are not competing against each other.” European gas markets started their transformation more than two decades ago with the privatization of British Gas in the 1980s, a boom in infrastructure construction from liquefied natural gas receiving terminals to interconnectors and a regulatory drive to create and promote more transparent and liquid markets. That gave rise to the emergence of trading hubs, of which the Title Transfer Facility in the Netherlands and the National Balancing Point in the U.K. are now the biggest. That contrasts with the localized markets of the past, where gas and oil competed, not just in power generation but also other sectors such as the petrochemical industry. As gas suppliers needed investments to build longer pipelines and LNG import terminals, they required the assurance that the capital was going to be covered. That’s how oil embedded itself in gas supply contracts, which became a norm for the gas industry. As gas hubs developed and LNG gained momentum, the share of oil-linked gas supply in Europe fell to less than 30 percent from about 80 percent in 2005, Ashraf said. That proportion will continue to shrink to a minimum some buyers require for security of supply, while the share of gas-to-gas competition expands. “Gas is competing with gas: piped gas from Russia is competing against piped gas from North Africa, competing against LNG from Qatar, LNG from Nigeria, and soon LNG from the U.S.,” he said. “As volumes and liquidity increase and ability of companies to actively trade and drive the gas-on-gas competition also increases.”
Oil Has Stopped Dictating Which Direction European Gas Will Go
Bloomberg, 28 August 2018

"Energy markets are riding high after European gas stores were depleted by the freezing temperatures brought by the “Beast from the East”. Local gas production has also continued to fall. Gas stores stand only 58pc full, ­compared with 77pc this time last year and despite substantial injections over the summer. The task of replenishing these stores has become more difficult because North Sea production is dwindling and global gas players would rather sell in Asia where returns are higher. US energy giant ConocoPhillips said last week that its Theddlethorpe Gas Terminal in Lincolnshire supplied its last gas to the grid earlier than expected after 46 years of production. Meanwhile, gas production from the Netherlands is due to fall by a quarter compared to last year after the government agreed to wind down output from the giant Groningen gas field following earthquakes, after decades of drilling. Shipments of gas via super-chilled tankers of liquefied natural gas are likely to remain in short supply as ­sellers divert cargoes to Asia, where prices are as much as a quarter higher than in Europe."
European gas prices hit three-year highs and are set to keep rising as companies scramble to store enough gas for winter
Telegraph, 26 August 2018

"Energy bills are expected to rise when the temperature falls this winter, as the price of gas soars amid a squeeze on supplies and storage. The price for winter gas is close to 50pc higher than it was this time last year and experts expect prices to rise further, with costs passed on to households and businesses. Supply jitters have unsettled the market in the wake of a cold spring, while the rising price of oil and carbon allowances drive costs higher still. ­Although major energy companies typically buy about half their gas a year before it is used, many smaller firms secure a tenth of their supply in advance, threatening higher bills for consumers or financial strain for providers..... Gas stores stand only 58pc full, ­compared with 77pc this time last year and despite substantial injections over the summer. The task of replenishing these stores has become more difficult because North Sea production is dwindling and global gas players would rather sell in Asia where returns are higher. US energy giant ConocoPhillips said last week that its Theddlethorpe Gas Terminal in Lincolnshire supplied its last gas to the grid earlier than expected after 46 years of production. Meanwhile, gas production from the Netherlands is due to fall by a quarter compared to last year after the government agreed to wind down output from the giant Groningen gas field following earthquakes, after decades of drilling. Shipments of gas via super-chilled tankers of liquefied natural gas are likely to remain in short supply as ­sellers divert cargoes to Asia, where prices are as much as a quarter higher than in Europe."
European gas prices hit three-year highs and are set to keep rising as companies scramble to store enough gas for winter
Telegraph, 26 August 2018

"U.S. National Security Adviser John Bolton said during a trip to Kiev on Friday that the Ukraine government should consider looking for alternatives to natural gas supplies from Russia. Speaking to reporters in Ukraine for talks with President Petro Poroshenko, Bolton also said Kiev should consider inviting U.S. companies to explore gas in Ukraine."
Trump adviser says Ukraine should mull alternatives to Russian gas
Reuters, 24 August 2018

"Europe’s natural gas prices have risen to their strongest level for this time of year, lifting the cost of electricity for factories and utilities. Shaking off gloom depressing broader commodity markets, the U.K. benchmark for gas is nearing levels last seen in December when a key supply line exploded, and seven traders and analysts expect further gains. The move bucks the normal seasonal pattern of weaker prices in the summer when heating demand dwindles and contrasts with slumps in everything from oil to gold, sugar and zinc. China’s energy demand is drawing in cargoes of liquefied natural gas that might otherwise have stayed in Europe, firming the gas market at a time when power generators are demanding the fuel to meet rules from governments to lower pollution from coal. Those trends along with carbon emission prices at a 10-year high is increasing the cost of electricity in Britain to Germany and France... very little LNG was imported for consumption in the region, with most leaving for higher-demand markets in Asia and South America.... Gas held in European storage tanks fell below 20 percent full for the first time by the end of the winter, and even if levels have since increased, they are still near the lowest ever for the time of year with just five weeks to go before the official heating season starts in October.... European gas demand rose for a third year in 2017 and has remained elevated. Record-breaking temperatures in July and August in Europe forced French nuclear plants to shut as the temperature of cooling waters rose, and also halted coal generators in Germany, where barges delivering supplies had difficulty moving up unusually low rivers. That boosted demand for gas, which companies have been encouraged to use as an alternative to more polluting coal. Another factor: the cost of European emissions permits has more than doubled this year, tilting the economics of power generation away from more-polluting coal units and toward cleaner generators burning gas. Those factors leave Europe’s gas market in the most bullish mood in years. That’s causing pain for customers at the U.K.’s biggest energy supplier Centrica Plc, who already are shouldering two price hikes this year....China’s thirst for energy of all kinds is driving the market, along with delays in giant LNG supply terminals just when they are most needed. While the nation’s trade spat with the U.S. is shaking commodities markets, demand for gas in its liquid form is holding up as the government in Beijing seeks to shift away from coal. China may become the world’s biggest LNG importer by 2021, overtaking Japan, according to JPMorgan Chase & Co. “You’ve got China soaking up supply while Europe wants more,” said Lawson Steele, an analyst in London at Berenberg."
Europe's Unprecedented Natural Gas Rally Drives Up Power
Bloomberg, 23 August 2018

"Castigated by U.S. President Donald Trump as relying too much on Russian gas supplies, German Chancellor Angela Merkel heads to Azerbaijan this week to discuss the development of a southern pipeline to deliver gas to Europe from the Caspian.The visit underscores Merkel’s openness to finding alternative sources of affordable gas even as she remains committed to the Nord Stream 2 pipeline, which will carry gas directly from Russia under the Baltic Sea to Germany. “We have a big interest in further developing the Southern Corridor,” a senior German government official said. “This is part of the EU’s diversification strategy of getting gas from other regions, not just Russia, to Europe.” In Baku, Merkel will discuss energy issues, including improving the infrastructure to help transport gas from Azerbaijan to Europe via Turkey, officials said. Azerbaijan looks set to play a crucial role as it plans to launch the second stage of a gas pipeline from the vast Shah Deniz field to Europe. Shah Deniz II is expected to produce 16 billion cubic metres (bcm) of gas a year from 2020, with 10 bcm earmarked for Europe and 6 bcm for Turkey and Georgia. Later, gas could be brought from Turkmenistan, Iran and Iraq to Europe. In a sign of progress, Iran, Russia, Kazakhstan, Turkmenistan and Azerbaijan agreed in principle this month on how to divide the potentially huge oil and gas resources of the Caspian Sea. However, the southern pipeline is dwarfed by Nord Stream 2, a Gazprom initiative that will double Russia’s export capacity to Europe to 110 bcm. That pipeline is welcomed by much of German industry, which wants as much cheap gas as possible. Last month Trump, who is pressing Germany to buy more U.S. liquefied natural gas, lambasted Germany as being “a captive” of Russia due to its dependence on Russian energy, a charge Germany denies. Trump has called Nord Stream 2 “horrific”. Germany imported 39 percent of its gas from Russia in the first half of 2018, figures from state foreign trade authority BAFA showed. Merkel discussed energy in talks with Russian President Vladimir Putin at a palace outside Berlin at the weekend. She is trying to assuage some Nord Stream 2 critics by ensuring Ukraine does not suffer from lower gas transit revenues."
After Trump attack on Russia ties, Merkel eyes Azeri gas
Reuters, 22 August 2018

"Castigated by U.S. President Donald Trump as relying too much on Russian gas supplies, German Chancellor Angela Merkel heads to Azerbaijan this week to discuss the development of a southern pipeline to deliver gas to Europe from the Caspian. The visit underscores Merkel’s openness to finding alternative sources of affordable gas even as she remains committed to the Nord Stream 2 pipeline, which will carry gas directly from Russia under the Baltic Sea to Germany. “We have a big interest in further developing the Southern Corridor,” a senior German government official said. “This is part of the EU’s diversification strategy of getting gas from other regions, not just Russia, to Europe.” In Baku, Merkel will discuss energy issues, including improving the infrastructure to help transport gas from Azerbaijan to Europe via Turkey, officials said. Azerbaijan looks set to play a crucial role as it plans to launch the second stage of a gas pipeline from the vast Shah Deniz field to Europe. Shah Deniz II is expected to produce 16 billion cubic metres (bcm) of gas a year from 2020, with 10 bcm earmarked for Europe and 6 bcm for Turkey and Georgia. Later, gas could be brought from Turkmenistan, Iran and Iraq to Europe. In a sign of progress, Iran, Russia, Kazakhstan, Turkmenistan and Azerbaijan agreed in principle this month on how to divide the potentially huge oil and gas resources of the Caspian Sea. However, the southern pipeline is dwarfed by Nord Stream 2, a Gazprom initiative that will double Russia’s export capacity to Europe to 110 bcm. That pipeline is welcomed by much of German industry, which wants as much cheap gas as possible. Last month Trump, who is pressing Germany to buy more U.S. liquefied natural gas, lambasted Germany as being “a captive” of Russia due to its dependence on Russian energy, a charge Germany denies. Trump has called Nord Stream 2 “horrific”. Germany imported 39 percent of its gas from Russia in the first half of 2018, figures from state foreign trade authority BAFA showed."
After Trump attack on Russia ties, Merkel eyes Azeri gas
Reuters, 22 August 2018

"Utah is a yawn amid the drilling frenzy that has upended the energy picture in recent years. It accounts for just one of every 100 barrels of oil produced nationwide. But a couple of executives who have spent decades hunting for oil across the Middle East, South America and Canada are betting that the next energy patch will be near here, in a remote stretch of craggy desert known as Asphalt Ridge. They are trying something that has repeatedly failed in Utah: mining the state’s enormous deposits of oil sands, an arduous process of extracting oil from hard rock. The two oversee Petroteq Energy, a Canadian company that aims to have the first commercially viable oil sands production in the United States underway here by early September. Petroteq’s claims challenge the notion that oil sands mining is in eclipse. The heavy oil produced from oil sands is among the most carbon-intensive fuels, a drawback as concerns about climate change grow. Even in Canada, where oil sands production dominates the energy industry, some major oil companies have written off or withdrawn their investments. The Keystone XL pipeline designed to carry the fuel to American refineries has been stalled by environmentalists with protests and lawsuits. They typically call oil sands “a carbon bomb.” David Sealock, Petroteq’s chief executive, is undeterred. He likens his tiny operation — with its modular mixing vessels, rock crushers and conveyor belt — to a humble Lego set. But when he picks up a canister of newly processed oil, he smiles at the acrid odor. “That’s the smell of money,” he said. “We have a very disruptive technology,” said Mr. Sealock, who has worked for Chevron in several countries and managed two oil sands companies in Canada. “There was a treasure chest here that didn’t have a key, and this technology is the key.” He says what makes his operation different from larger and deeper Canadian mining operations and all the past failures in Utah is a cocktail of solvents that can separate oil from rocks at little cost and with no water or air pollution. He and the other veteran executive, Jerry Bailey, say that their approach will be far cleaner than oil sands mining in Canada, which is more water intensive and leaves vast toxic tailing ponds. “What’s in Canada is an environmental nightmare,” said Mr. Bailey, a former ExxonMobil senior executive in the Middle East and now president of Petroteq. “With our operation, nothing goes in the air, nothing goes in the ground, and there is no water involved.” If Petroteq can make a go of it here, Mr. Sealock and Mr. Bailey say they can unlock billions of barrels of oil in Utah and surrounding states, and from other shallow oil sands deposits around the world. They say they are talking with companies in Australia, Colombia, Venezuela and Trinidad and Tobago about joint ventures or licensing agreements. Utah has the nation’s largest deposits of raw oil sand, or bitumen — enough to produce as much as 15 billion barrels of oil and potentially more, according to the Utah Geological Survey. Years of attempts to mine the sands profitably here have failed. One company, U.S. Oil Sands, went bankrupt last year before it could begin production.... Under its system, Petroteq mines and crushes the oil-saturated sands into small chunks, then moves them along a 150-foot conveyor belt into a tank where they are mixed with solvents. The mix is then transferred to a second tank, where a centrifuge spins the lumpy liquid, separating the oil from the sands. Clean sand is moved to a reclamation landfill. Finally, the solvents are distilled out of the oily liquid and recycled over and over again. The company says virtually no chemicals are left in the sand that is put back. Executives say their solvents and the rest of their operations have passed all regulatory procedures."
A Plan to Unlock Billions of Barrels of Oil From Utah’s Sands
New York Times, 21 August 2018

"China, seeking to skirt U.S. sanctions, will use oil tankers from Iran for its purchases of that country’s crude, throwing Tehran a lifeline while European companies such as France’s Total are walking away due to fear of reprisals from Washington.The United States is trying to halt Iranian oil exports in an effort to force Tehran to negotiate a new nuclear agreement and to curb its influence in the Middle East.  China, which has cut imports of U.S. crude amid a trade war with Washington, has said it opposes unilateral sanctions and defended its commercial ties with Iran. On Monday, sources told Reuters Chinese buyers of Iranian oil were beginning to shift their cargoes to vessels owned by National Iranian Tanker Co (NITC) for nearly all their imports. The shift demonstrates that China, Iran’s biggest oil customer, wants to keep buying Iranian crude despite the sanctions, which were reimposed after the United States withdrew in May from a 2015 agreement to halt Iran’s nuclear program."
China defies U.S. pressure as EU parts ways with Iranian oil
Reuters, 20 August 2018

"Conserving oil is no longer an economic imperative for the US, the Trump administration has declared in a major new policy statement that threatens to undermine decades of government campaigns for efficient cars and other conservation programs.... The position was outlined in a memo released last month, without fanfare and in support of the administration’s proposal to relax fuel mileage standards. Growth of natural gas and other alternatives to petroleum has reduced the need for imported oil, which “in turn affects the need of the nation to conserve energy”, the US energy department said. It also cited fracking, which has unlocked shale oil reserves, for giving “the United States more flexibility than in the past to use our oil resources with less concern”. The administration is formally challenging old justifications for conservation – even congressionally prescribed ones such as mileage standards. The memo made no mention of climate change. Transportation is the single largest source of climate-changing emissions. Donald Trump has questioned the existence of climate change, embraced the notion of “energy dominance” and called for easing what he calls burdensome regulation of oil, gas and coal, including repealing the Obama Clean Power Plan.  Despite the increased oil supplies, the administration continues to believe in the need to “use energy wisely”, the energy department said – without elaboration. Department spokesmen did not respond to questions about that statement.....Oil prices have dropped. Just 10 years ago, prices peaked at $147 a barrel, pummeling the global economy and giving the Organization of the Petroleum Exporting Countries (Opec) a massive transfer of wealth from countries dependent on imported oil. Prices now are about $65 and the US is vying with Russia to be top world oil producer. US production hit an all-time high this summer..... Current administration proposals include one that would freeze mileage standards for cars and light trucks after 2020, instead of continuing to make them tougher. The proposal would increase US oil consumption by 500,000 barrels a day, the administration says."
Conserving oil no longer necessary for US, says Trump administration
Guardian, 19 August 2018

"Conserving oil is no longer an economic imperative for the US, the Trump administration has declared in a major new policy statement that threatens to undermine decades of government campaigns for efficient cars and other conservation programs.... The position was outlined in a memo released last month, without fanfare and in support of the administration’s proposal to relax fuel mileage standards. Growth of natural gas and other alternatives to petroleum has reduced the need for imported oil, which “in turn affects the need of the nation to conserve energy”, the US energy department said. It also cited fracking, which has unlocked shale oil reserves, for giving “the United States more flexibility than in the past to use our oil resources with less concern”. The administration is formally challenging old justifications for conservation – even congressionally prescribed ones such as mileage standards. The memo made no mention of climate change. Transportation is the single largest source of climate-changing emissions. Donald Trump has questioned the existence of climate change, embraced the notion of “energy dominance” and called for easing what he calls burdensome regulation of oil, gas and coal, including repealing the Obama Clean Power Plan.  Despite the increased oil supplies, the administration continues to believe in the need to “use energy wisely”, the energy department said – without elaboration. Department spokesmen did not respond to questions about that statement.....Oil prices have dropped. Just 10 years ago, prices peaked at $147 a barrel, pummeling the global economy and giving the Organization of the Petroleum Exporting Countries (Opec) a massive transfer of wealth from countries dependent on imported oil. Prices now are about $65 and the US is vying with Russia to be top world oil producer. US production hit an all-time high this summer..... Current administration proposals include one that would freeze mileage standards for cars and light trucks after 2020, instead of continuing to make them tougher. The proposal would increase US oil consumption by 500,000 barrels a day, the administration says."
Conserving oil no longer necessary for US, says Trump administration
Guardian, 19 August 2018

"Meeting Britain’s 2050 climate goals will require the nation to wean itself off using natural gas for heating, but the nation’s electricity system probably won’t cope unless thermal storage technology improves. Reducing greenhouse gas emissions from the heating sector is “one of the toughest challenges the country faces in its low-carbon transition,” according to a report published Friday by the U.K. Energy Research Centre, a body that advises the public and private sector on sustainable energy. The U.K. is heavily dependent on gas with the fuel meeting about two thirds of domestic energy demand. When the weather’s cold, the gas system handles a morning surge in demand by drawing on fuel stored in pipelines overnight. Right now, the electricity system can’t do the same because there’s no large-scale options to store power or heat. Transferring demand for heating from the gas network to the electricity system would be a “significant challenge” in cold weather, UKERC said in the report published Friday. UKERC analysis of local gas demand during coldest days of winter 2017-18 shows a very fast ramp up in demand from 5 a.m. until 8 a.m when heating consumption surged by more than 100 gigawatts. That happened on 25 percent of days during the heating season last winter.  Meeting that demand would be a huge leap for the power system, where peak supply only reached 53 gigawatts last winter. Reducing the demand for heating by energy efficiency measures would help ease the load on the power system, UKERC said. Insulation in new buildings and retrofitting older properties would help cut consumption."
The U.K. Needs More Energy Storage to Cope Without Gas-Fired Heating
Bloomberg, 16 August 2018

"In 2010, using solar power to boil your kettle would have cost you about £0.03. By 2020, according to estimates by our research team at UBS, the cost will have fallen to half a penny. By 2030, the cost could be so near to zero it will effectively be free. This is great news for the planet, and probably also for the economy. Abundant, cheap, clean power can be put to many uses — not just making tea. But the same simple truth— that renewables could soon be cheaper than all the alternatives — is contributing to a wave of corporate action in the energy sector.  Until recently, wind and solar in most parts of the world relied on generous subsidies — meaning renewables could only grow at the speed governments were prepared to pay for them. But in the past year large wind and solar projects have appeared that are viable without any subsidy or tax break at all. This means renewables can start to grow as fast as technology development allows, rather than at the pace that the world’s energy ministers decree....  All this pressure on costs ....  is pushing the developers towards a new, global race for scale. First, wind and solar farms are getting bigger. Some solar projects now count more than a million individual panels and offshore wind turbines can be taller than a skyscraper, with blades that are close to 100m long. Second, the companies themselves are getting bigger as they seek to exert more purchasing power on their supply chains and squeeze more synergies, data and operating expertise out of their renewable portfolios. In a global auction model, the winner must bring all these potential advantages to the table."
Renewables are primed to enter the global energy race
Financial Times, 13 August 2018

"The U.S. has gone from a big-time net importer of oil to a small-time one. The latest base-case forecast from the EIA is that it will be a “modest net exporter” from 2029 through 2045. Neither the EIA nor anyone else (that I know of, at least) foresaw a huge increase in U.S. oil production over the past decade, though, so let’s leave the forecasts aside."
The U.S. Becomes an Oil Economy
Bloomberg, 13 August 2018

"After 22 years, an end is in sight for a dispute over a sea that questioned whether it was even a sea. On Friday, the Kremlin announced that an agreement had been reached between Russia, Iran, Kazakhstan, Azerbaijan and Turkmenistan – the five littoral states bordering the Caspian Sea. Barring last-minute hiccups, the new convention will be signed in the Kazakh port city of Aktau on Sunday. Negotiations up to this point have been tough. The convention comes only at the end of two decades, 51 working groups, more than a dozen meetings between foreign ministers, and four presidential summits.  But then again, a lot is at stake – namely billions of dollars of oil and gas contracts. The Caspian, the largest enclosed body of water in the world, contains a massive 48 billion barrels of oil and 9 trillion cubic metres of natural gas in proven offshore reserves. And that is what we know about: there may be much more, but territorial disputes have frustrated attempts at proper exploration. The Caspian problem arose after the breakup of the USSR. Before then, the water was split between two nation states: Iran and the Soviet Union. Afterwards, there were four new nations to deal with: Russia, Kazakhstan, Azerbaijan and Turkmenistan. One of the major stumbling blocks has been the status of the sea itself. Is it really a sea or a lake?.... In the absence of an agreement, the countries have continued to develop the seabed they believed belonged to them. To some extents, the treaty will formalise what is already happening.  But, crucially, it will also reaffirm Russia’s geopolitical dominance in the region. It is understood the convention will contain clauses asserting that only the Caspian five will have the rights to use the sea region for military purposes. Airspace would be divided between the signatory states, and Russia’s Caspian Flotilla will be guaranteed access to the entire sea. Moscow was reported to have been concerned about the possibility of Nato building future ties in the region."
Caspian Sea: After 22 years of wrangling, deal over oil and gas rich body of water reached – and it's good news for Russia
Independent, 10 August 2018

"The EU has caved in to demands to buy more US gas in a bid to cool trade tensions with the world’s largest economy. Gas and soybeans topped President Donald Trump’s list of goods he wanted the EU to buy more of during discussions in July with European Commission President Jean-Claude Juncker. The shopping list formed part of Mr Trump’s strategy of using tariffs to lever concessions from trading partners. The plans to purchase more US gas were unveiled ahead of crunch trade talks set to take place on August 20. The summit is aimed at halting the escalation of tit-for-tat tariffs on billions of imports imposed by the US and EU in recent months."
EU caves on demands to buy more US gas in bid to stave off trade war
Telegraph, 9 August 2018

"The downturn that began in 2014 led to a severe cutback in spending on [oil] exploration and development. Spending plunged by 25 percent in 2015, followed by another 26 percent decline in 2016. Since then upstream expenditures have bottomed out, rebounding 4 percent last year. The industry is only track to increase spending by another modest 5 percent in 2018. But there is little sign that the industry will return to spending at the same rate that it did prior to the downturn.Lower spending has translated into a steep drop off in new discoveries. In 2014, the industry discovered an average of about 1,350 million barrels of oil equivalent (mboe) every month. In 2015, that average ticked up to 1,404 mboe per month, according to Rystad Energy. But that figure fell off of a cliff in 2016, crashing to just 697 mboe/month, and fell again to 625 mboe/month last year. New discoveries are set to rebound to 826 mboe/month in 2018 as drilling activity rebounds, Rystad Energy says, up 30 percent compared to last year. ExxonMobil’s three discoveries in Guyana represent a big slice of that total. But the discoveries are still a fraction of what they used to be, back when the oil industry was spending much more. According to Rystad Energy, the oil industry needs to add around 33 billion barrels of oil every year, but the industry is on track to only add 20 billion barrels in 2018..... “The years of underinvestment are setting the scene for a supply crunch,” Virendra Chauhan, an oil industry analyst at consultancy Energy Aspects, told the Wall Street Journal.... Of particular concern is the rate of depletion at conventional fields. “After more than three years of E&P underinvestment, the international production base has started to show accelerating signs of weakness with noticeable year-over-year production declines in 15 of the world's producing countries,” Schlumberger CEO Paal Kibsgaard told analysts on an earnings call. “These developments underline the growing need for increased E&P spending in particular in the international markets as it is becoming apparent that the new projects coming online over the next few years will likely not be sufficient to meet the increasing demand.” The average decline rate climbed from 3 percent in 2014 to 6.3 percent in 2016, although it improved to 5.7 percent in 2017.... U.S. shale production is expected to slow over the next year, but then accelerate once again after several Permian pipelines come online in late 2019 and early 2020. The Permian will be one of the largest sources of supply growth in the medium-term. But most analysts expect shale output to plateau in the 2020s before entering decline. The lack of new large-scale projects scheduled to come online in the early 2020s raises the risk of a supply crunch. On the other hand, with peak demand looming, maybe it won’t be a problem after all?"
A supply crunch in the oil market looks inevitable
Business Insider, 3 August 2018

"GlobalData’s latest estimate shows that China’s shale output is growing rapidly and will reach approximately 1,500 mmcfd by 2020, a 72% increase compare to 2017. The National Energy Administration (NEA) has revised down the production target of shale gas to 2,900 mmcfd by 2020 from the initial goal of 5,800 mmcfd, according to the Shale Gas Development Plan (2016-2020) released on 30 Sep 2016, however it is still too ambitious. Cao Chai, Oil and Gas Analyst at GlobalData, says: “After the recent research and development, China has achieved technological improvement with horizontal drilling and hydraulic fracturing; but more advanced technology is required to develop shale gas due to deposit depths and ultra-low permeability of shales.”"
Challenges keep China’s shale gas at early stage of development
Open Access Government, 3 August 2018

"More than 5,500 churches including some of the UK’s most famous cathedrals have converted to renewable power to help tackle climate change. Church of England places of worship, along with Catholic, Baptist, Methodist, Quaker and Salvation Army congregations, have made the switch to 100% renewable electricity, and faith leaders are urging more to follow suit. Fifteen Anglican cathedrals including Salisbury, Southwark, St Albans, Liverpool, Coventry and York Minster are among the buildings signed up to green electricity tariffs. Church leaders said climate change was “one of the great moral challenges of our time” and hurt the poor first and worst. With the average annual church electricity bill around £1,000, British churches have diverted more than £5m from fossil fuels to clean energy providers, it is estimated. The number of cathedrals running on 100% renewable electricity is down to the Church of England’s procurement group, Parish Buying. Other churches have made the move through the Big Church Switch campaign run by the Christian charities Christian Aid and Tearfund and the Church of England’s environment programme."
5,500 UK churches switch to renewable energy
Guardian, 3 August 2018

"The electrification of cars on the roads of the UK is slowly increasing. There are currently 155,000 EVs in the country, with around 4,500 more being registered every month. By comparison, there are around 30 million fuel-powered cars. But, as of July 2018, there are only around 17,400 public charging points in the UK. There are still mental and physical barriers to people taking the plunge into electrification, and, considering the UK government’s goal of halving non-electric vehicle sales by 2030 and ending them by 2040, we need to stop just throwing money and concepts at the problem and start building the infrastructure we need....Local authorities can ask for money to help install charging points in their districts, but often they have a very poor idea of what they’re doing, or will just not take up the grant money at all. This was noted in January this year, when the DoT wrote to local councils to try and persuade them to take advantage of the department’s scheme to subsidise residential charging points..... The question of location is generally one of the hardest ones to answer when it comes to charging points. According to the 2017 English Housing Survey, 36 per cent of homes in the UK don’t have off street parking, which makes getting charging points and cables to the cars tricky. This problem extends to businesses too – and since these, along with parking areas in major public areas, are meant to be the key locations for drivers to charge their cars, this additional difficulty is another hurdle for EV adoption....The next problem? Once you introduce more charging points, and then standardise all of them, the grid that powers them isn’t ready. The UK’s National Grid currently has enough energy in its system to support a nation full of EVs, no matter what time of year. What’s lacking is the ability to charge them all simultaneously, which would be a problem if drivers charged their vehicles at the same time in the evening. One way around unmanageable peak consumption is smart charging, which can vary the rate at which the cars charge, depending on overall demand. But there are still a lot of details to work out, such as what the regulatory mechanism or software would look like, and if this would be better handled at a national or local level. Ofgem, Britain’s energy regulator, has recently issued its own guidance on this subject, calling for incentives to encourage people to charge their EVs outside of peak hours, which would increase the number of cars currently supportable by the country’s electricity network by 60 per cent. This is very similar to the National Grid’s own opinion, which is that flexible charging would halve the estimated additional generation needed to manage the demand. Malcolm McCulloch, head of Oxford University’s Energy and Power group, says that if car charging could be done intelligently, then only 20 additional megawatts of power would be needed- that’s the equivalent output a reasonably sized offshore wind farm. If not, then the capacity of the National Grid would need another 20 gigawatts, which is double the amount of energy currently generated by all the UK’s nuclear power stations. In short, with good strategy, it’s an issue of power, not energy. McCulloch also suggests that this should be done automatically by the charging system, and could be handled on a local level in order to better manage demand. While good news for UK power generators who wouldn’t have to make large investments in generation, it would mean that EV drivers could sometimes be caught out by the idiosyncrasies of automated charging. Another technology being researched by automakers, and already used in limited markets by Nissan and Mitsubishi, is vehicle to grid (V2G). Using the same kind of tech that would allow for automated charging, this function lets car owners sell the energy in their batteries to the network when it isn’t in use. This would help balance out the demand on power generation and put it to more efficient use. But there are potentially major pitfalls: a long power cut overnight could mean everyone in an area waking up only to find their cars won’t move, or more prosaically the charge and discharge cycles created would likely cause wear and tear on a battery."
How the UK's energy grid will cope with the electric car revolution
Wired, 3 August 2018

"Bulgaria opened a new looping section of its transit gas pipeline to Turkey on Friday, expanding its capacity and adding the possibility of two-way flows as the Balkan country bids to transport Russian gas from the TurkStream pipeline to Europe. The new 20-km looping link in southeastern Bulgaria will boost the Transbalkan pipeline’s capacity to 15.7 billion cubic meters (bcm) of gas per year from its current 14 bcm, and will help increase security of gas supplies, officials said. “Now we have constructed a pipeline that will allow for reversible flows, so we can get gas from Turkey, from Azerbaijan and Russia,” Prime Minister Boyko Borissov said at the official ceremony, which was also attended by Turkish Energy Minister Fatih Donmez. Sofia has also launched a tender for an 11 km pipeline to provide a higher capacity link between the new looping section and the Turkish border. The process has been put on hold however, as one Bulgarian company is appealing the tender conditions. At present Russia’s Gazprom ships about 13 bcm of gas through Ukraine and Bulgaria to Turkey. The shipments however may cease next year, when Moscow expects the first line of TurkStream to become operational. Turkstream is part of the Kremlin’s plans to bypass Ukraine, currently the main transit route for Russian gas to Europe, and strengthen its position in the European gas market. It consists of two lines with an annual capacity of 15.7 bcm each that will run under the Black Sea to Turkey. The first line, already completed, will be used for local consumption. The second line is planned to run through Turkey to southeastern and central Europe. Bulgaria has said it wants to serve as an entry point to Europe, but Russia is yet to decide whether that pipeline will ship gas via Bulgaria or Greece."
Bulgaria expands pipeline to Turkey in bid for Russian gas
Reuters, 3 August 2018

"Global solar and wind installations have reached one trillion watts (1 terawatt) in capacity, recently released BloombergNEF (New Energy Finance) analysis shows... This milestone accounted for installations that have occurred over the past 40 years, with 90% having been installed within the past 10 years. Product and installation costs for wind and solar energy have fallen significantly since the 1970s, in part because of innovations in technology, integration and access.Wind power installations accounted for 54% of the total. However, solar is expected to overcome wind by 2020, owing in part to reduced costs of solar panels and energy storage systems. China has 1.1 trillion watts of solar installations planned by 2050. The report credits Germany’s efforts to redesign the energy market through its Renewable Energy Sources Act in the early 2000s as a key factor that increased renewable energy adoption. Solar and wind were previously thought to be too risky for investment, but the act promoted the development of renewables while making the financial considerations more transparent to potential investors. Coupled with energy storage deployments, solar and wind have provided better access to generated capacity, which utilities are increasingly incorporating into their business model to as a way of maintaining grid stability."
As costs fall, global renewable energy installations hit new milestone
Axios, 2 August 2018

"Oil giant BP is splashing out £8billion on thousands of acres of land containing 4.6billion barrels of oil and gas in the United States. It is snapping up miner BHP Billiton's shale operations in Texas and Louisiana in its biggest deal in 20 years, with bosses and analysts saying it would transform the business. The wells in the oil-rich Permian, Eagle Ford and Haynesville basins produce around 190,000 barrels of oil a day. The deal puts BP at the heart of the boom in production from US shale rock that has upended global markets, putting the US on course to become a net oil exporter by 2025.... BP has swooped for 5,500 drilling locations across 470,000 acres of land in a major bet on assets that BHP had to offload under pressure from shareholders after blowing billions. BHP bought at the peak of the oil boom in 2011 and invested heavily until the oil price collapsed. Doubts have been raised over whether growth in the Permian basin will slow as the pipes and other equipment aren't being built fast enough. David Lawler, boss of BP's US Lower 48 onshore oil and gas explorer, said his teams had spent the last four years improving how efficiently they get oil and gas out of the rocks. The oil price has also risen to around $70 per barrel."
BP's £8bn bet on fracking
This Is Money, 27 July 2018

"Six months ago, Texas was on the cusp of breaking oil production records. In June, crude oil production reached 4.3 million barrels per day, putting Texas on track to “shatter” the previous record of 1.263 billion barrels in 1972. “We’re going to blow that record out of the water,” Karr Ingham, Texas oil economist and creator of the Texas Petro Index (TPI), said during a mid-year briefing in Houston July 26. “Both crude and natural gas production will easily set new annual production records in 2018.” Ingham called the natural gas production “extraordinary” considering about 92 percent of the active rigs in Texas are drilling for crude oil. He said natural gas production growth is largely accidental, produced from wells that are drilled to produce crude oil. “Over 35 percent of Texas natural gas production is classified by the Railroad Commission as ‘casinghead gas’ or gas associated with crude oil production,” he said. “Natural gas production growth is not the current goal of Texas oil and gas producers and continued production expansion is pushing prices lower, especially in the Permian where the takeaway capacity for that gas is increasingly insufficient.”At mid-year 2018 (end of June), the Texas upstream oil and gas industry had added 47,000 jobs after losing more than 115,000 during the downturn. The Texas Workforce Commission reports that Texas added 4,800 upstream jobs in June alone. Additionally, 80 rigs have been added since the beginning of the year and the statewide monthly average rig count in June was 534. Still, the employment numbers and rig count are not at the levels seen during the peak in November 2014. “It simply takes fewer rigs and fewer people to produce ever higher amounts of crude oil and natural gas,” Ingham said. He refers to the efficiencies achieved by producers, service companies and drilling companies as “stunning” and said those efficiencies were partly born from necessity due to the severity of the downturn. “Texas continues to dominate the upstream energy landscape in 2018,” said Ingham. At the midpoint of 2018, Texas contributed 40 percent of U.S. crude oil production and 30 percent of natural gas production. More than 50 percent of working rigs in the U.S. are in Texas and nearly 54 percent of all U.S. direct upstream oil and gas jobs are in Texas."
Texas to 'Shatter' Oil Production Records with Fewer Rigs and Workers
Rigzone, 27 July 2018

"By trading energy between countries with different weather patterns, Europe could make the most of wind and solar power.... research led by University College Cork in collaboration with Imperial College London and ETH Zürich suggests that despite the unpredictable nature of wind and solar energy, the European power system can comfortably generate at least 35% of its electricity using these renewables alone by 2030, without major impacts on prices or system stability."
Wind and solar power could provide more than a third of Europe’s energy by 2030
Imperial College London, 26 July 2018

"Being an emerging-market economy can be tough when oil prices surge and your currency crumbles. While Brent crude, the global benchmark, has advanced 11 percent this year in dollar terms, it’s gone up by multiples of that in Russian rubles, Brazilian reais and Turkish lira, to name just a few. That leaves those governments with a tricky choice: subsidize the purchase of increasingly expensive fuel, or allow consumption to be eroded and accept the accompanying economic and political risk. So far, several of the larger emerging-market countries that previously had subsidies appear to be returning to them, albeit less aggressively than they did when crude soared to a record a decade ago. While such interventions may place a strain on their budgets, they also mean the threat to oil demand should be cushioned for now."
No Dodging The Oil Bullet as Emerging Economies Risk Demand Hit
Bloomberg, 24 July 2018

"A sunny start to the summer and high winds earlier this year have helped Britain’s power generation market to hit a new renewables record. In the second quarter of 2018, 28.1% of the country’s electricity came from renewable energy sources, according to a new report by energy market analyst EnAppSys – a new record and a sharp contrast to the 5.9% posted in Q2 2010.  Although wind speeds are generally lower over the summer months, wind farms continued to provide the largest share of renewables generation in Q2 2018, with 9.5 terawatt hours (TWh) produced. The next highest share of renewable generation came from solar farms (5.2 TWh), which were boosted by the June heatwave and the longer daylight hours in late spring/ early summer. Gas was once again the main power source, with more than four tenths of overall generation coming from gas-fired plants in Q2 2018. High carbon prices ensured that gas remained more dominant in the market than coal, which produced less than 1 TWh in the quarter – or just 1% of overall power generation. The second quarter saw 40.7% of electricity generation come from gas-fired power stations, with renewable projects contributing 28.1% and nuclear plants 22.5%. Coal-fired power stations produced 1.3%, while 7.4% came from electricity imports. Of the 28.1% share of renewables generation, almost one half (49.2%) came from wind farms, 27.1% from solar farms, 20.8% from biomass plants and 2.9% from hydro plants."
North East energy market analyst reports wind and solar power renewables record
Business Up North, 13 July 2018

"There is no doubt that Germany relies on Russia for much of its natural gas. Russian gas accounted for about half of Germany's imports in 2017, according to BP's Statistical Review of World Energy. Nearly all the rest came from the Netherlands and Norway, which produce gas in the North Sea. But here's the problem with Trump's claim. Natural gas is just one of the fuels that powers Germany's industry, households, power plants and vehicles. While natural gas plays a significant role in fueling Germany — especially in heating German homes — it's hardly the dominant fuel source. Looking at all the energy sources Germany has at its disposal — factoring in the energy it produces and imports — natural gas accounted for about 20 percent of the fuel it could tap in 2016, according to the latest figures from the International Energy Agency. The picture is similar for the energy consumed by end-users like households and businesses in Germany. Natural gas accounted for roughly 20 percent of the country's total final consumption in 2016."
Trump is exaggerating Germany's reliance on Russia for energy
CNBC, 13 July 2018

"The UK is not on course to meet the fourth or fifth carbon budgets. That’s the conclusion of a new report from the Committee on Climate Change (CCC), which warns the public faces an “unnecessarily expensive deal” to make the shift to a low carbon economy unless the government acts now. A carbon budget sets a restriction on the total amount of greenhouse gases the UK can emit over a five-year period, with the fourth covering 2023 to 2027 and the fifth between 2028 and 2032. The report states while the UK has seen rapid emissions reductions in the electricity sector – 75% since 2012 – it has failed to decarbonise other industries, including transport, agriculture and buildings. It suggests risks to the delivery of existing policies must be “reduced significantly” and “effective new policies” must be brought forward to deliver commitments beyond the achievements in electricity generation and waste, with the latter sector seeing a fall in emissions of 48% since 2008. The CCC commends the ambition of the government’s Clean Growth Strategy, however, it notes there are few new detailed policies to reduce emissions into the next decade and beyond.... It suggests the government should demonstrate it is serious about future deployment of carbon capture, zero carbon transport, hydrogen or electrification of heat, adding key technologies should be supported to bring down costs and support the growth of the low carbon goods and services sector. CCC Chairman Lord Deben said: “Although the UK seeks to lead the world in tackling climate change, the fact is that we’re off track to meet our own emissions targets in the 2020s and 2030s… We recognise that over the last 10 years, the government has shown it has the know-how and commitment to drive down UK emissions in the electricity sector by acting early and consistently to avoid costly interventions later. “We now have to ensure that the government learns from this experience and presents a programme to tackle emissions right across the economy, including in buildings, transport and agriculture. This action is now urgent in order to meet the UK’s legal-binding climate change targets and to prepare to fulfil the obligations of the Paris Agreement.”"
UK not on track to meet fourth and fifth carbon budgets
Energy Live News, 28 June 2018

"The U.S. shale boom and the massive Russian expansion of natural gas pipelines will make the United States and Russia the dominant spenders on oil, petroleum products, and natural gas pipelines through 2022, data and analytics company GlobalData says in a new report. The other big spenders between 2018 and 2022 will be Canada, China, and Nigeria, according to the analytics firm. The U.S. will be leading the capital expenditure (capex) on oil and gas pipelines, with an estimated US$88.4 billion on new pipelines by 2022, while Russia is seen spending US$78.8 billion. In the United States, spending on natural gas pipelines will account for around 40 percent of the total planned pipelines by 2022, with crude oil and natural gas liquids (NGL) expected to have 31-percent and 24-percent shares of expenditure, respectively. In Russia, the spending is mostly focused on natural gas pipelines, which will account for 88 percent of the planned pipelines expected to come online by 2022. Petroleum products pipelines and oil pipelines are the next major planned pipelines with capex share of 7 percent and 4 percent, respectively."
U.S. And Russia To Dominate World’s Oil & Gas Pipeline Spending
OilPrice.com, 28 June 2018

"Smart meters will allow energy firms to introduce "surge pricing" to charge households more for gas and electric at peak times, a former senior Ofgem manager has warned.   So-called "time of use" tariffs would see households pay more for watching television, charging gadgets and running the washing machine during popular times such as in the mornings and evenings.   The controversial deals would see energy prices peak on special events like Christmas Day and Easter when millions of households are all using ovens to cooking lunch at the same time. Under the Government's £11bn smart meter roll out every home in the UK will be offered a smart meter by 2020, in an effort to help people save money and use less energy. Unlike ordinary meters, smart meters transmit information about when households use most energy to suppliers. At present customers will smart meters are charged a flat fee per unit of energy used."
Government's smart meter roll out 'will lead to gas and electric surge pricing'
Telegraph, 28 June 2018

"Add Kazakhstan to the list of oil producers whose supply is restricted. The central Asian nation’s output slipped by about 240,000 barrels a day between Sunday and Tuesday, data from the country’s Ministry of Energy show. The cause and duration of the dip aren’t known, but the country suffered a few supply outages earlier this year involving the giant Kashagan field in the Caspian Sea. The reduced output comes at a time when several countries are pumping less. Venezuela’s economic crisis has brought with it a plunge in oil production, while fighting in Libya has cut flows through two key ports. Angola and Canada are also down, while the U.S. is pressuring buyers of Iranian crude to cut purchases from the Persian Gulf country to zero with tanker tracking showing that the measures may already be working.....The United States is pushing countries to halt oil imports from Iran, OPEC’s third largest producer, from November, a senior State Department official said, and it will not grant any waivers to sanctions. Saudi Energy Minister Khalid al-Falih said on Saturday the kingdom will increase output by hundreds of thousands of barrels, with exact figures to be decided later...."
Kazakh Oil Output Dips as List of Disrupted Producers Lengthens
Bloomberg, 27 June 2018

"Higher oil prices, lower offshore development costs, and improved gas demand outlook have made the oil and gas industry more confident in approving investment in new projects whose total worth has exceeded US$110 billion since the beginning of 2017, research and consulting firm Rystad Energy said in a new analysis this week. After oil and gas projects worth just US$50 billion were approved in 2016, the industry “has vastly accelerated the pace of approving investments for new projects over the past 18 months,” Rystad Energy said. “Deepwater projects on either side of the Atlantic Ocean – from Norway to the US and from Angola to Brazil – are leading the charge towards new approvals. Higher oil prices, an improved outlook for gas demand and lower offshore development costs are driving this rebound in the industry,” Rystad Energy senior research analyst Readul Islam noted. Over the past 18 months, a total of 17 deepwater projects have been approved. Of those approvals, as many as 16 projects were in the queue for final investment decision, but were placed on hold during the oil price crash. “These same projects can now pass operators’ investment criteria down to $30 per barrel,” Rystad said, noting that the halved breakeven prices were achieved through a combination of standardized and leaner designs and significantly lower service prices. While many oil and gas projects—both offshore and onshore—have been revitalized over the past 18 months, new investment approvals have lagged in liquefied natural gas (LNG) and oil sands projects.... Rystad Energy doesn’t see any of the nine oil sands projects that were intentionally delayed during 2014-2016 progressing in this decade. “The oil sands price outlook has stagnated due to a variety of market access issues,” Islam said. In LNG, prices are generally trailing oil prices by a few months, so pricing is expected to improve and lead to more than half of the nine delayed LNG projects to be sanctioned by the end of the decade. “In an increasingly carbon-conscious world, LNG and oil sands projects occupy opposite ends of the desirability spectrum, and Rystad Energy expects more than half of the nine LNG projects originally delayed to gain approval before the end of this decade,” Islam said. Last month, Rystad Energy said that the current tailwind in the oil market is likely to propel 100 new offshore projects to be sanctioned in 2018."
$110 Billion In Oil And Gas Projects Revived As Prices Rise
OilPrice.com, 27 June 2018

"A majority of energy firms expect to see “increased investment” in gas over future oil exploration, a survey by a technical advisory company to the to the sector revealed today. The survey by DNV GL found that 64% of oil and gas sector leaders said that they “expect to increase or sustain” spending on gas projects this year as the industry as a whole looks to prioritise gas energy sources over traditional oil. A further 86% of the 813 senior industry respondents surveyed said they expect gas, such as natural gas, to “play and increasingly important role” in the energy mix, up from 77% last year. The Transition in Motion report findings show the oil and gas industry future outlook and seeks to identify the primary drivers for investment within the global energy transition."
Gas to overtake oil as world’s primary energy source, say DNV GL
Energy Voice, 26 June 2018

"Saudi Arabia plans to pump up to 11 million barrels of oil per day (bpd) in July, the highest in its history, up from about 10.8 million bpd in June, an industry source familiar with Saudi oil production plans told Reuters on Tuesday.OPEC agreed with Russia and other oil-producing allies on Saturday to raise output from July by about 1 million bpd, with Saudi Arabia pledging a “measurable” supply boost but giving no specific numbers.... The move by Saudi Arabia, the world’s top oil exporter, is a clear indication it is serious about bringing oil prices down, after major consumers such as the United States, China and India raised concerns that prices were rising too high, too quickly. Benchmark oil prices jumped over 2 percent on Tuesday and U.S. crude topped $70 for the first time in two months, as Washington pushed allies to halt imports of Iranian crude.... OPEC and non-OPEC said in their statement on Saturday that they would raise supply by returning to 100 percent compliance with previously agreed output cuts, after months of underproduction. That would mean a roughly 1 million bpd increase in output. OPEC sources have said OPEC alone would produce around 770,000 bpd out of the 1 million bpd, with non-OPEC pumping about 185,000 bpd. Out of OPEC’s share Saudi Arabia was likely to produce between 300,000 bpd and 400,000 bpd, above its current production target of 10.058 million bpd, OPEC sources said. Saudi Arabia pumped just above 10 million bpd in May, but remained under its target."
Saudi Arabia plans to pump up to 11 million bpd of oil in July, a record high: source
Reuters, 26 June 2018

"The US has told its allies to cut all oil purchases from Iran to zero by November as it prepares to reinstate sanctions against the country. The State Department said it does not plan to offer waivers or allow countries to wind down imports from Iran. Oil prices jumped following the announcement. The US has said firms that continue to do business with Iran risk punishment once sanctions are reintroduced."
US tells allies to halt Iran oil imports by November
BBC, 26 June 2018

"Oil prices soared on Friday after oil producers agreed to modest crude output increases to compensate for losses in production at a time of rising global demand. The Organization of the Petroleum Exporting Countries and other top crude producers, meeting in Vienna, agreed to raise output from July by about 1 million barrels per day (bpd). The real increase, however, will be around 770,000 bpd, according to Iraq, because several countries that recently suffered production declines will struggle to reach full quotas, while other producers may not be able to fill the gap.... International marker, Brent, traded above $100 a barrel for several years until 2014, dropping to almost $26 in 2016 and then recovering to over $80 last month. The most recent price rally followed an OPEC decision to restrict supply in an effort to drain global inventories. The group started withholding supply in 2017 and this year, amid strong demand, the market tightened significantly, triggering calls by consumers for higher supply. Falling production in Venezuela and Libya, as well as the risk of lower output from Iran as a result of U.S. sanctions, have all increased market worries of a supply shortage."
Oil jumps as OPEC agrees to modest output hikes
Reuters, 22 June 2018

"Renewable energy is set to provide close 50% of the world's energy by 2050, mostly because of falling battery costs. That's according to a new report from Bloomberg New Energy Finance, which takes a long-term look at the world's energy production. According to the report, major gains in renewable energy production will come as a result of huge strides in battery technology. Power storage is one of the biggest bottlenecks to the widespread adoption of renewable energy sources like solar and wind.  The report also suggests that the average cost of developing a solar photovoltaic plant is expected to drop by 71% in the next 30 years. The cost of installing a utility-scale wind power plant is expected to drop 58% over the same period. Coal is expected to be the biggest loser in the ongoing battle for energy dominance: Bloomberg NEF expects coal to provide only 11% of the world's power needs by 2050, down from 38% today. Despite President Donald Trump's pro-coal stance, close to 40% of US coal plants have already been either shut down or marked for closure, Bloomberg reports. A recent report from the investment bank Lazard showed that the cost of producing one megawatt-hour of electricity — a standard way to measure electricity production — fell to around $50 for solar power in 2017. The cost of producing one megawatt-hour of electricity from coal, by comparison, was $102 — more than double the cost of solar, according to Lazard's math. In the first quarter of 2018, solar accounted for 55% of all US electricity added, according to a new report from the Solar Energy Industries Association. That's more than any other type of electricity. Batteries are also getting cheaper and more efficient at storing power from renewable sources, which are inherently less regular than the burning of gas or coal. The price of lithium-ion batteries — the standard battery used in electric vehicles — has fallen nearly 80% since 2010, according to Bloomberg NEF, and will continue to fall as more companies develop electric vehicles. Overall, Bloomberg NEF expects $11.5 trillion will be invested in the renewable energy market between 2018 and 2050, with $8.4 trillion of that going to wind and solar and a further $1.5 trillion going to carbon-neutral power sources like nuclear and hydro."
A new report shows where our energy will come from 30 years from now — and coal is the biggest loser
Business Insider, 21 June 2018

"Chinese oil buyers will keep taking crude from the United States through September, but plan to reduce future purchases to avoid a likely import tariff amid a trade spat between the world’s two largest economies, multiple industry sources said.Beijing has put U.S. energy products, including crude oil and refined products, on lists of goods that it will hit with import taxes in retaliation for similar moves by Washington. Beijing did not specify when it will impose a 25 percent tax on oil, and that gives buyers time to adjust purchases while waiting for the outcome of trade talks, the sources said... China shipped in 3.89 million tonnes, or about 315,500 bpd of U.S. crude in the first quarter of this year, nearly eight times the amount a year earlier and 3.5 percent of China’s top crude oil imports, according to Chinese customs. The grades include WTI, Mars and Southern Green Canyon. Nevertheless, uncertainty over the timing of the tariff and the outcome of U.S.-China trade talks has kept some buyers from booking further ahead. Chinese refineries typically order U.S. oil three months in advance due to shipping distances."
China to reduce U.S. oil imports post-September amid trade spat: sources
Reuters, 21 June 2018

"Hedge fund manager Pierre Andurand, one of the most storied oil traders of his generation, has a simple message for Opec and Russia as they meet in Vienna to discuss raising output: do not shoot all your bullets just yet. The oil specialist, who has returned investors in his eponymous $1.2bn fund 135 per cent net of fees in the past five years, warned the cartel that trying to cap the oil price rally too aggressively right now would leave it short of capacity in the future. “Maybe Opec can cap the upside for oil in the short term but it would be incredibly dangerous for them to shoot all their bullets now,” Mr Andurand said in an interview with the Financial Times at his offices in London’s Knightsbridge last week. “There is very limited spare capacity in the market so I think they will be careful about how much they raise, otherwise they risk creating problems in the future if their additional supply is easily absorbed.” The France-born trader, who spent time with Goldman Sachs and Vitol, the world’s largest independent oil dealer, before entering the hedge fund world a decade ago, has been consulted by Opec members before about the outlook for crude.... Mr Andurand’s view is that the oil rally has not just been stoked by planned supply cuts by major producers, which started early last year. Demand has risen fast, inventories are down, and companies have slashed investment in future supplies. Production problems in Venezuela and Libya and renewed US sanctions on Iran’s exports are adding to a sense of tightness in the market. “The fundamentals of markets can be very slow to turn,” Mr Andurand said. “We’re heading into a supply deficit now and just as the market was previously in surplus for three to four years I’d expect it to remain largely in deficit for a similar amount of time.” It is for this reason he thinks Opec and Russia are likely to tread cautiously when they meet over Friday and Saturday, with delegates and ministers already gathering in the Austrian capital. So-called spare capacity available to deal with unexpected supply outages is at its lowest in years, with Saudi Arabia the only country sitting on more than a few thousand barrels a day of additional production in a 100m b/d market."
Oil trader warns Opec not to raise output too fast
Financial Times,  21 June 2018

"The biggest U.S. shale region will have to shut wells within four months because there aren’t enough pipelines to get the oil to customers, the head of one of the industry’s largest producers said. The worsening bottleneck in the Permian region that straddles west Texas and New Mexico offers an unexpected fillip to OPEC and other oil producers outside the U.S., who’ve seen rampant production from America’s shale producers grab market share."
The Biggest U.S. Oil Patch Is Near Its Limit
Bloomberg, 20 June 2018

"New pipelines could be laid to bring Russian gas through North Korea to the South and even on to Japan following the diplomatic thaw with Pyongyang, Seoul’s leader suggested on Wednesday. President Moon Jae-in was speaking to Russian news media before a three-day visit to Moscow starting on Thursday, with the presidential Blue House releasing the transcript. Russia and South Korea agreed in 2008 to lay gas pipelines through the North to bring Russian natural gas to the South. But the project failed to take off due to tensions over the North’s nuclear weapons programme. Restoring inter-Korean railways and linking them to trans-Siberian railways would also enable overland transport from trade-dependent South Korea to Europe, Moon added."
Russian gas could be piped through North Korea to the South and Japan, Moon says before visit to Moscow
South China Morning Post, 20 June 2018

"The UK’s reliance on importing French power to keep the lights on has increased by almost a quarter this year in further evidence of Britain’s energy cost crunch. Energy prices in Britain are now around a fifth higher than they were this time last year on the wholesale market. Meanwhile, across the Channel, nuclear power plants have flooded France with cheap electricity which is being sold at a tidy profit to struggling British suppliers. “French nuclear plants have been far more reliable this year to date than last year,” said Jamie Stewart, the ICIS Energy analyst, “which has kept a firm lid on French power prices.” The stark fundamental differences between the UK and its biggest electricity trade partner have nudged British imports, via twin high-voltage sub-sea cables, to a total of 6.4 terawatt hours so far this year. Last year Britain imported less than 5TWh over the same period. Energy brokers at Marex Spectron told The Sunday Telegraph that the “anomalously strong” imports from France are closer in line with Britain’s winter appetite for foreign energy than typical summer trends. The trend has also re-energised industry debate over Britain’s energy trading future once it leaves the EU next year. Even with the bumper imports of cheap French nuclear power, Britain’s energy prices remain around 20pc higher than last year in a major threat to energy companies braced for the Government’s price cap to descend on the market at the end of the year. In response, suppliers have drawn the ire of ministers by raising the price of energy tariffs to survive the cost crunch. Many of the cheapest suppliers have shown signs of existential strain. UK power prices hit 10-year highs in March following the freezing temperatures brought by the “Beast from the East” and show no sign of returning to typical summer prices due to the strong price of gas. The Siberian storm drained gas from storage facilities across Europe in the final weeks of winter, making it more difficult for suppliers to replenish the stocks over the summer. On the ICIS Power Index, a key benchmark for energy trends, the three-week rolling average price of wholesale power stands at £52.70/MWh after spending much of last year fluctuating between £42 and £48 per megawatt hour."
British reliance on French energy increases by more than quarter
Telegraph, 16 June 2018

"[US] Net crude oil and petroleum imports declined in 2017 to a record low, and the federal government expects net imports to decline even further this year.  The Energy Information Administration reported this week that total U.S. crude oil and petroleum product net imports will fall from an annual average of 3.7 million barrels per day in 2017 to an average of 2.5 million b/d in 2018 and to 1.6 million b/d in 2019, which would be the lowest level of net oil imports since 1959. Net imports peaked in 2005 at 12.5 million b/d and have declined 70 percent or 8.8 million b/d by 2017. Exports of petroleum from U.S. have been a major factor in the U.S. trade deficit narrowing to a seven-month low in April. The dramatic rise in U.S. crude oil production was a major factor in the rise in U.S. petroleum exports and the reduction in oil imports from foreign countries. Domestic oil production averaged 10.7 million barrels b/d in May, up 80,000 b/d from the April level. EIA projects that U.S. crude oil production will average 10.8 million b/d in 2018, up from 9.4 million b/d in 2017, and will average 11.8 million b/d in 2019. The EIA also noted that U.S. dry natural gas production increased last year and exports of liquefied natural gas (LNG) increased, too. Dry natural gas production averaged 73.6 billion cubic feet per day (Bcf/d) in 2017. EIA forecasts dry natural gas production will average 81.2 Bcf/d in 2018, establishing a new record. EIA expects natural gas production will rise again in 2019 to 83.8 Bcf/d.  “Growing dry natural gas production supports increasing forecast LNG exports,” EIA stated. Exports averaged 1.9 Bcf/d in 2017, and EIA forecasts an average of 3.0 Bcf/d in 2018 and 5.1 Bcf/d in 2019. EIA expects West Texas Intermediate crude oil prices to average almost $70 per barrel, and natural gas spot prices at Henry Hub to average $2.99 per million British thermal units this year. For the 2018 April–September summer driving season, EIA forecasts U.S. regular gasoline retail prices to average $2.87 per gallon, up from an average of $2.41 last summer. The higher forecast gasoline prices are primarily the result of higher forecast crude oil prices. Monthly average gasoline prices are expected to reach a summer peak in June of $2.92 and are forecast to decline gradually afterwards to $2.84 in September."
Net oil imports decline to record low
Abelene Reporter News, 16 June 2018

"American oil companies have been pushing output to new records week after week, even as the 24-nation coalition of major crude producers prepares to discuss relaxing self-imposed production controls. West Texas Intermediate, the benchmark U.S. crude, averaged about $66 a barrel this week and is more than 40 percent higher than a year ago. Crude output in the U.S. rose by 100,000 barrels a day last week to a record 10.9 million, according to the Energy Information Administration."
Oil Explorers Expand Drilling in U.S. Fields
Bloomberg, 15 June 2018

"China’s imports of Venezuelan crude oil could sink to their lowest in nearly eight years in July as the OPEC producer struggles with shrinking output and mounting logistics issues, according to people familiar with the matter and shipping data. ...Venezuela was the eighth-largest crude supplier to China last year, with 435,400 barrels per day (bpd), behind Brazil, according to China customs data....But it already dropped to the ninth position in the first quarter of this year with an average volume of 381,300 bpd as China ramped up imports from Iraq, Kuwait and Brazil. Venezuelan crude exports to India have also dropped 20 percent in the first five months to 323,600 bpd, according to data from shipping and industry sources."
Venezuela oil exports to China slump, may hit lowest in nearly 8 years: sources, data
Reuters, 15 June 2018

"The EU has agreed to increase the share of renewables in its energy production to 32% by 2030. It’s up from a previous target of 27%, however, short of levels sought by the European Parliament and some governments. The agreement also includes plans to review the goal by 2023 on whether it should be increased further. The new target will support the region’s overall goal of reducing greenhouse gas emissions by at least 40% below 1990 levels by 2030."
EU agrees 32% renewable energy target for 2030
Energy Live News, 14 June 2018

"With oil price recovery taking hold, several U.S. oil and gas companies entered 2018 with a compelling plan - sell undeveloped or less essential fields and invest the money to boost returns from their sweetest, most productive spots. There is a catch, though. The strategy assumes that with crude now up more than 150 percent from its February 2016 bottom enough firms are keen to crank up production, even if it means buying fields with higher extraction costs and lower margins. So far, sale attempts suggest those buyers may be hard to come by. After a bruising downturn, shareholders are looking to get a cut of improved profits and asset sale proceeds rather than underwrite acquisitions, those involved in these deals say. “Oil and gas companies are no longer rewarded for simply ‘grabbing land’ and public investors have become more discerning regarding acquisitions,” notes Jon Marinelli, head of U.S. energy investment and corporate banking at BMO Capital Markets... Dealmaking for oil and gas fields going into 2018 was already stagnating. While last year's total sales were only marginally down from 2016 at $67.3 billion, the first quarter accounted for around 38 percent of that figure, according to data provider PLS. If proposed sales fail to materialize this year, it could mean a time of reckoning for these oil and gas firms.“If these companies cannot execute the divestiture(s) that gave investors’ confidence on their future leverage profile, you would likely see less risk-tolerant investors trim or sell their positions,” said Tim Dumois, portfolio manager at BP Capital Fund Advisors, which invests in energy stocks...While BHP’s Permian and Eagle Ford land is generally considered attractive because of low production costs, one of the Eagle Ford asset packages and its Haynesville fields mainly produce shale gas, making them less appealing to buyers given stubbornly-low gas prices."
U.S. energy firms chasing oil price rally stumble on old baggage
Reuters, 14 June 2018

"This week the 2018 BP Statistical Review of World Energy was released, which covers energy data through 2017. It is the definitive source for global energy production and consumption figures, and a primary source of data for numerous companies, government agencies and non-government organizations....the report shows that the world achieved a new oil production record of 92.6 million barrels per day (BPD), which is the 8th straight year global oil production has increased. The United States was the world's top oil producer in 2017, exceeding 13 million BPD* for the first time ever. Saudi Arabia was second at 12.0 million BPD, while Russia came in at 11.3 million BPD. Oil consumption, which is quite a bit higher due to the inclusion of biofuels and fuels derived from coal and natural gas, also set a new record of 98.2 million BPD. U.S. consumption rose by 1.0%, and still leads the world at 19.9 million BPD. China's demand rose by 4% to a new record of 12.8 million BPD.  Global natural gas production jumped 3.0% to a new record of 355 billion cubic feet per day. The U.S. led all countries in both production and consumption of natural gas.  Global coal consumption increased by 1.0%, but remains 3.5% below the peak reached in 2013. Coal consumption declined in the U.S. and European Union, but crept 0.5% higher in China. China remains the world's top coal market, with the country consuming 50.7% of the world's coal in 2017. But the growth of renewables wasn't enough to prevent a new record for total fossil fuel consumption. Consequently, carbon dioxide emissions rose in 2017. Global carbon dioxide emissions rose 1.6% to a new record of 33.4 billion metric tons. Carbon dioxide emissions actually declined by 0.5% in the U.S. as more coal-fired power was phased out, but strong growth was registered in the Asia Pacific region, Europe and in Africa. Of the 18 Asia Pacific countries reported, only Japan showed a decline in carbon dioxide emissions."
The Numbers: World Sets New Records In Use Of Solar, Wind -- And Oil
Forbes, 14 June 2018

"The International Energy Agency estimates that by 2050 the global energy system will require an additional $29tn of capital to be invested — over and above the growth capital required to meet the expanding demand for energy globally. Much of that investment will have to come from capital markets.... we need to be clear on the scale of the challenge ahead. The industry has historically relied on two stabilisers to restore balance when markets become oversupplied: production declines in mature oilfields and ever-growing demand.In future cycles, the industry will not be able to rely on support from the latter. Peak demand has not yet occurred, but we are sure it is coming. When it does, it will have a big, and under-appreciated, destabilising effect...the idea that the oil industry should transition to becoming a renewables business is to us, questionable. The business models are very different and the oil industry is likely to have a different cost of capital to the renewables sector. We see few oil companies with a record of creating real shareholder value in this area. The second option looks to us a better one — be ready to invest less and return more cash. The time to stop investing is not today. But that point is coming. The industry needs to be clear that its future is one of long-term decline — whilst returning increasing sums of cash to investors. There is a possibility that the industry over-invests as we reach that point of peak demand, leaving an oversupply that persists for a long time. Fighting for market share in a declining market would be even worse. The best thing that management teams could do today is make a pledge that when the time comes, it will face its future as a declining industry. On balance we believe that the emphasis should be on us as investors, not on oil companies, to allocate the $29tn of incremental capital that is needed to finance the new energy system."
Oil must face its future as a declining industry
Financial Times, 13 June 2018

"A barrel of oil in the United States now costs about $67 a barrel, down nearly $4 over the past month, although that is still about 45 percent higher than at this time last year. Saudi oil officials have agreed to boost production publicly, in coordination with Russian officials who would like to export more oil to bolster the country’s economy. That may well upset Iran, Venezuela and other OPEC members that want higher oil prices, making the coming meeting a contentious one....whatever the advantages for consumers and American foreign policy, oil price relief could be modest and short-lived. Mr. Trump, for instance, is pursuing several policy goals that cut against each other. He wants lower gasoline prices to keep the economy humming. At the same time, he wants to squeeze Iran and Venezuela with sanctions, which would inevitably lower the amount of oil on the world market. Venezuela’s oil exports are falling by tens of thousands of barrels every month, and Iranian exports could fall by between 200,000 and a million barrels a day by next year, analysts say. A boom in oil production in the United States has helped increase global supplies in recent years even as OPEC countries cut back to raise prices. But experts believe a shortage of pipelines will limit the amount of oil that companies can extract from the Permian basin of West Texas and New Mexico, the main source of new American production, until late 2019. Scott D. Sheffield, chairman of Pioneer Natural Resources, a major Texas oil producer, said if there were a significant decline in Venezuelan and Iranian exports, “and Saudi doesn’t increase output, we’re going to see $100 oil by the end of the year.” Just a few years ago, $100 a barrel was considered normal. But prices collapsed in 2014, falling in the United States to below $30 in early 2016, as a glut of oil filled up tankers. Now the world’s big oil producers are seeking a sweet spot for oil prices.... Two years ago, Russia agreed to slash 300,000 barrels per day to help OPEC stabilize prices. But more recently, Rosneft and other Russian oil companies have been lobbying Mr. Putin to increase production to take advantage of higher prices and for tax reasons, energy experts say. The Russian oil companies, increasingly active in Venezuela and the Middle East, have recently raised their production capacity. They also prefer lower prices because they pay higher marginal corporate tax rates when prices go above $75 a barrel. “Russian firms have long been pushing to produce more,” said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University. “They have invested heavily in new production capacity and see far more upside from additional production rather than higher prices.” The Russians are aligned with Iran in Syria and support the Iran nuclear deal, but they stand to gain financially if the agreement falls apart. American sanctions clamping down on Iranian exports would allow Russia to buy Iranian oil cheaply and resell it at a higher prices. Russia might also replace European investors in Iranian oil fields."
United States, Saudi Arabia and Russia Find Agreement on Oil Policy
New York Times, 13 June 2018

"Global spending on renewable energy is outpacing investment in electricity from coal, natural gas and nuclear power plants, driven by falling costs of producing wind and solar power. More than half of the power-generating capacity added around the world in recent years has been in renewable sources such as wind and solar, according to the International Energy Agency."
Global Investment in Wind and Solar Energy Is Outshining Fossil Fuels
Wall St Journal, 11 June 2018

"Ministers must come clean to households about the higher energy bills they face if the UK continues to deter new onshore windfarms, the government’s top climate change adviser has said. Lord Deben, the chair of the committee on climate change (CCC), said there was no logical argument against onshore wind turbines in the parts of the UK that want them. The Conservative peer said the technology was the cheapest form of electricity generation and he hoped the government would rethink its opposition to subsidies to it. The government ended subsidies for the windfarms in 2015 but the energy minister Claire Perry has recently said she is “looking carefully” at a U-turn for windfarms built in Wales and Scotland. Last week, the government gave its backing to windfarms on remote islands, such as the Isle of Lewis. Deben told the Guardian: “There is no doubt, and I feel very strongly about it, that onshore wind is the cheapest form of electricity. If the Scots want to have it, on which basis should we say they shouldn’t have it?” Advocates believe onshore windfarms could be built for subsidies guaranteeing prices as low as £50 per megawatt hour – below the average £62.14 awarded to the latest offshore windfarms and far lower than the £92.50 for the Hinkley Point C nuclear power station. The payments are a top-up on the wholesale electricity price of around £45/MWh, with the difference paid by householders through their energy bills. Hinkley alone is expected to add £10-15 to annual bills by 2030. “If you don’t build onshore wind, the government has to say how much of an extra cost this is to the public,” said Deben. The CCC advises the government on how to meet its legally binding climate targets. Deben, who as the Conservative MP John Gummer was the environment secretary from 1993 and 1997, added that the government has to make “major changes” to meet its carbon targets for 2025 and 2030, implying that a shift on onshore wind could be one of those.... Millions of households have seen their energy bills rise in the past few weeks. All of the big six suppliers have increased their prices, blaming government policy costs such as the clean energy subsidies, along with rising wholesale costs. Deben also issued a challenge to housebuilders to make new homes more efficient, saying they had to face up to the “social inequity” of future generations facing unnecessarily high energy bills. “Energy efficiency is a social issue. No house should be built to condemn people in the future to having to pay a great deal for their energy,” he said.... Deben still feels new nuclear power is needed as part of the UK’s efforts to cut carbon emissions. However, he said new technology and the falling costs of renewables meant the challenge of ensuring energy security was not as great as in the past. “The government has got to recognise that keeping the lights on, which is its first worry, is much easier than thought because you can get a huge amount of energy from offshore wind, smart grids and short-term battery storage.” A spokesperson at the Department for Business, Energy and Industrial Strategy (BEIS) said: “The government does not believe that new large-scale onshore wind power is right for England but it could be right for other areas, where local public support exists.”"
Opposing onshore UK windfarms 'means higher energy bills'
Guardian, 10 June 2018

"Iran is pursuing a plan to increase its oil output by 460 million barrels within three years, oil minister Bijan Zanganeh said on Saturday, according to SHANA, the news site of the Iranian oil ministry. The plan will focus on increasing output from 29 oilfields, including in Ilam, Khuzestan, Gachsaran, Falat Qareh and Fars, Zanganeh said. The bulk of the work to increase the output at the oilfields will be carried out by Iranian companies, Zanganeh said."
Iran to increase oil production by 460 million barrels in three years: oil minister
Reuters, 9 June 2018

"The European Union imports 69% of its natural gas, according to the European Commission. The latest available data shows 37% of the imported gas comes from Russia, about 33% from Norway, and 11% from Algeria. And while the European Union vowed to cut its dependency on Russian gas after the crisis in Ukraine, Russian exports to Europe have risen to record levels in the last two years. Austrian imports of Russian gas nearly doubled in the first quarter of 2018, compared to last year. "There are many reasons for this, namely the decline of production in the Netherlands, the fact that some [liquified natural gas] developments have been delayed, and also the fact that Russian gas is very competitive in terms of price," said James Henderson, director of the Natural Gas Research Programme at the Oxford Institute for Energy Studies. "In reality, Russian gas is the best option," he added. A number of EU countries, particularly those closest to Russia, are still almost completely dependent on Moscow for their gas. What's more, much of Russia's natural gas is pumped through Ukraine, a risky route given the conflict between the two countries..... Plans for a new gas pipeline that would bypass Ukraine have been in the works for years, but Europe is deeply divided over the project. Opponents say the Nord Stream 2 pipeline would only increase the European Union's dependence on Russian energy. But Germany and some other countries argue that it would give Europe more energy security."
Europe is still addicted to Russian gas
CNN, 5 June 2018

"Vladimir Putin, President of the Russian Federation, and Sebastian Kurz, Austrian Federal Chancellor witnessed today the signing of an agreement for the extension of natural gas supplies to Austria until 2040, signed by Alexey Miller, Chairman of the Gazprom Management Committee, and Rainer Seele, Chairman of the OMV Executive Board. The existing gas supply contract would have run until 2028. OMV believes that Europe's gas demand will rise; particularly due to highly efficient gas- fired power plants which will gradually be replaced by those powered by coal. At the same time, equity production in Europe is set to decline, as recently seen in the Netherlands. According to the International Energy Agency (IEA), demand for natural gas in Europe will increase by more than 20% by 2030.... Chairman of the OMV Executive Board, Rainer Seele: “By 2030 the European Union will have to import more than 80% of its demand for natural gas. With the extension of the gas supply contract, we are making an important contribution to the supply for Austria as well as for other European countries in the light of increasing demand. This will also enable us to reduce CO2 emissions.”"
OMV and Gazprom Sign Extension for Natural Gas Supplies to Austria
Oil Voice, 5 June 2018

"A PIONEERING project aiming to turn air into liquid for energy storage has opened in Bury. The world’s first grid-scale liquid air energy storage (LAES) plant, based at the Pilsworth landfill gas site, will act as a giant rechargeable battery, soaking up excess energy and releasing it when needed. The demonstration scheme is owned by Highview Power in partnership with recycling and renewable energy company, Viridor, and has been backed with more than £8 million in government funding. It is hoped that it will help electricity grids cope with the increased uptake in renewable energy. LAES works by using electricity to cool air to -196°C, transforming it into a liquid that can be stored in insulated tanks. The liquid is then converted back to a gas involving a expansion process that releases stored energy, which turns a turbine to generate electricity. In addition to providing energy storage, the new plant will also convert waste heat to power using heat from the on-site landfill gas engines. The plant was officially switched on by Professor John Loughhead, chief scientific adviser at the Department for Business, Energy and Industrial Strategy (BEIS), today. Gareth Brett, CEO at Highview Power, said the plant was 'the only large scale, true long-duration, locatable energy storage technology available today'. He added that demand response aggregator KiWi Power will be able to draw energy from the plant to power about 5,000 average-sized homes for around three hours, in a process that produces no emissions. Highview Power say such plants could 'easily store enough clean electricity generated by a local windfarm to power a town like Bury (around 100,000 homes) for many days'. They are already in negotiations to build bigger plants, which they hope will provide the UK with a stable and secure source of homegrown energy and pave the way for wider use of the technology."
World's first liquid air energy storage plant opens in Pilsworth, Bury
Bury Times, 5 June 2018

"Petrol prices rose by 6p a litre in May - the biggest monthly increase since the RAC began tracking prices 18 years ago. Average petrol prices hit 129.4p a litre, while average diesel prices also rose by 6p to 132.3p a litre. The RAC said a "punitive combination" of higher crude oil prices and a weaker pound was to blame for the increases. It pointed out that oil prices broke through the $80-a-barrel mark twice in May - a three-and-a-half year high."
Petrol prices in record monthly rise, says RAC
BBC, 5 June 2018

"The government has confirmed it is considering putting taxpayers' money into a project to build a new nuclear power station at Wylfa in North Wales. It's a decision that, if taken (and it almost certainly will be), will mark a significant U-turn in the government's approach to procuring new nuclear power. In 2010, the government was adamant that the UK public should never have to run the risk of lengthy and costly overruns that have become a hallmark of nuclear plant construction. In the case of Hinkley Point C in Somerset, the government made much of the fact that come what may, the UK taxpayer would be insulated from the skyrocketing costs that the contractor, EDF, had incurred on a similar plant in France. But there was a price to pay for that taxpayer protection: very expensive electricity. In return for shouldering all the risk, EDF demanded a price for the electricity that Hinkley will (one day) produce that is double the current going rate. The National Audit Office and the Public Accounts Committee were critical of that deal and there was considerable pressure to significantly reduce the cost of power from the Wylfa plant. It's expected it will come in around £77 per unit, compared to £92.50 for Hinkley."
Government U-turn on nuclear deal
BBC, 4 June 2018

"The UK is pioneering a new way to store power with the world’s first grid-scale liquid air energy storage plant. The Pilsworth liquid air energy storage (LAES) plant, which is owned by Highview Power, opens on Tuesday in Bury and will act as a giant rechargeable battery, soaking up excess energy and releasing it when needed. This is particularly useful with the rapid growth in renewable energy, which accounted for 29 per cent of all electricity generated in the UK in 2017. It generates excess power when the sun is shining and the wind is blowing but is not reliable at times of peak demand. Coal-fired power stations that typically handled peak electricity demand are being shut down and National Grid, which owns and operates the electricity transmission network, pays small gas and diesel generators to bridge the gap. LAES is another, non-polluting option, according to Gareth Brett, chief executive of Highview Power, which developed the technology. “LAES is arguably the only viable, long-duration, locatable energy storage technology available,” he said. He added that the system, which was developed in conjunction with Birmingham university, has 33 patents and is cheaper than batteries at large scale. It is also more durable: plants last for up to 40 years and can be installed anywhere. LAES works by cooling air to -196°C, transforming it into a liquid that is stored at low pressure in insulated tanks. When power is needed the liquid air is pumped to high pressure and heated. The result is a high-pressure gas that is used to power a turbine and create electricity. The Pilsworth plant has a capacity of five megawatts and can store 15 megawatt hours (MWh) of electricity — enough to power about 5,000 average-sized homes for around three hours. A commercial-scale plant would have a capacity of 50mw. Sean McLoughlin, a clean energy analyst at HSBC, said that liquid air energy storage was a more “complex” version of compressed air energy storage but had the advantage of being more space efficient. ​”Cryogenic cooling presents costs challenges and practical issues, which makes it in my view still an early-stage technology​,” he said. The most common forms of energy storage today are lithium ion batteries and pumped hydro storage, but the growing importance of solving the energy storage challenge has led to increased investment in other technologies....  Around 60 per cent of the global energy storage market comprises long-duration, grid- connected storage and LAES technology could meet almost half, according to Colin Roy, chairman of Highview power. “Worldwide there is a huge market [for LAES] worth $15bn a year,” he said."
World’s first liquid air energy storage plant opens near Manchester
Financial Times, 4 June 2018

"Associated natural gas is the gas that also comes along as a basically free byproduct when crude oil (petroleum) gets produced. Especially with oil prices rising this year (which obviously encourages more drilling), associated gas continues to be an integral part of the U.S. natural gas portfolio. We have three key associated gas fields: the shale plays of Bakken in North Dakota, Eagle Ford in south Texas, and the mighty Permian in west Texas, the last one constituting over half of our associated gas. U.S. associated gas has become so important that some believe it has installed an inverse relationship for oil and natural gas prices, where higher oil prices lead to more oil drilling that leads to more associated gas production that leads to lower gas prices. Yet for now, it's indeed worth noting that despite the latest run-up in oil prices that has just pulled back a bit, natural gas prices have been at high levels not seen since early-February, with prompt month closing in the recently elusive $3.00.  Unfortunately, many Permian producers haven't been able to capitalize on the rise in crude prices because they hedged production at a lower rate of $50 or $55 a barrel. ... The reality is that, despite some flaring issues that would be greatly helped by more pipelines (producers know that flared methane is wasted product), associated gas has neatly backfilled the fall of offshore gas. The federal Gulf of Mexico now yields just 3-4% of our total gas output, compared to 25% in 2000, and production has been consistently plummeting there. Offshore, however, could easily be put back in play with higher prices and the Trump administration goal to develop "The Offshore U.S. Oil And Natural Gas Treasure Trove." As for the Permian, like many of the southern-based plays, much of its future gas output is destined for our burgeoning LNG export complex being built along the Gulf Coast. "NextDecade asserts that the Permian may hold nearly 500 trillion cubic feet of natural gas at breakeven prices below zero dollars." We now have 350 Tcf of proven gas reserves total."
The Rise Of U.S. Associated Natural Gas
Forbes, 3 June 2018

"Russian state gas giant Gazprom (GAZP.MM) said on Saturday it had signed a protocol with the Turkish government on a planned gas pipeline and agreed with Turkish firm Botas to end an arbitration dispute over the terms of gas supplies. The protocol concerned the land-based part of the transit leg of the TurkStream gas pipeline, which Gazprom said meant that work to implement it could now begin. Turkey had delayed issuing a permit for the Russian company to start building the land-based parts of the pipeline which, if completed, would allow Moscow to reduce its reliance on Ukraine as a transit route for its gas supplies to Europe. A source said in February the permit problem might be related to talks between Gazprom and Botas about a possible discount for Russian gas. Turkish President Tayyip Erdogan said earlier on Saturday Turkey and Russia had reached a retroactive agreement for a 10.25 percent discount on the natural gas Ankara buys from Moscow."
Russia and Turkey ink pipeline agreement, end gas dispute
Reuters, 26 May 2018

"Feeding seaweed to cows could slash the amount of climate change-inducing methane emissions from their burps. Preliminary research has indicated a small amount of marine algae added to cattle food can reduce methane emissions from cattle gut microbes by as much as 99 per cent. Now, scientists in California are hoping to help farmers meet strict new emissions targets by performing the first ever tests of seaweed feed in live dairy cows. While their early results are yet to be released, team leader Professor Ermias Kebreab at the University of California, Davis, said their initial experiments were “very surprising and promising”. “Results are not final, but so far we are seeing substantial emission reductions,” he said."
Feeding cows seaweed cuts 99% of greenhouse gas emissions from their burps, research finds
Independent, 25 May 2018

"It looks like China will make another bet on US natural gas, building new gas terminals at ports in four provinces. The facilities will accommodate the country’s increasing reliance on foreign gas. The CEO of Kunlun Energy said in its annual shareholders meeting (paywall) that the company is conducting feasibility studies to build import terminals in four provinces. Kunlun is a subsidiary of China’s state-owned oil and gas company China National Petroleum Corporation (CNPC). Earlier this year, CNPC signed a 25-year contract (paywall) with Cheniere Energy, a US-based liquified natural-gas producer. It was the first ever long-term contract to export liquefied natural gas from the US to China. The US wasn’t selling liquified natural gas to China in any significant amount before 2016, and just last year China became the third largest export market for US liquefied natural gas, making up about 15% of the total exports, after Mexico and South Korea, according to figures from the US Energy Information Administration. China’s domestic production of natural gas can’t keep pace with the country’s needs."
China is preparing to buy a lot more natural gas from the US
Quartz, 25 May 2018

"According to a new report released by United Kingdom based energy market analytics firm Aurora Energy Research the rise of green technologies such as electric vehicles and clean energy will see fossil fuel demands slashed. The cumulative revenues from these polluting energy sources will be an estimated $21 trillion lower from 2018 to 2040 than in a business as usual scenario. “Our new analysis points to a possible energy future of mass electrification, digitalisation, and new technologies, in which the rise in electric vehicles and continued improvements in fuel efficiency lead to peak oil demand occurring in the mid-2020s, and oil prices falling to less than half their current level by 2040. Indeed, this flips the very idea of “peak oil” – previously hypothesised for the supply side – as electricity grows in importance as a transport energy source,” said Richard Howard, head of research at Aurora Energy Research. The rollout of 540 million electric vehicles by 2040 combined with fuel efficiency advancements will cause oil demand to peak in the mid-2020s, cutting oil income by $19 trillion from 2018 to 2040. With this decrease in demand continuing into the 2030s, the report estimates that oil prices could fall as low as $32 per barrel in 2040. However, one fossil fuel will emerge as a “winner” as it balances renewables in power generation and acts as a substitute for oil within the petrochemicals sector: gas. The report predicts long-term gas demand will increase by 15% compared to business as usual.  “Gas and power will become increasingly important energy vectors in the future, whilst the shift away from coal power generation in many nation states leads to a collapse in coal demand and prices,” added Howard. Prices for coal are predicted to drop to $28 a ton by 2040 from about $90 now, barely enough to cover the cost of production and transport. In further good news, technological advancements and consumer engagement will likely be more effective than the Paris Agreement in reducing carbon emissions. The report predicts these changes will result in the total CO2 emissions from fuels becoming almost 25% lower than business as usual."
Electric Vehicles and Clean Energy Could Slash $19 Trillion from Fossil Fuel Revenues by 2040
Interesting Engineering, 24 May 2018

"Russia’s natural gas export monopoly is set to expand its position as the dominant fuel supplier to Europe after a deal between the two resolved a seven-year-old anti-trust dispute. The agreement between Gazprom PJSC and the European Commission gives gas buyers more flexibility in handling imports and greater leverage to push for lower prices. That’s likely to make flows from Russia more attractive than alternatives such as expensive new links to fields at Europe’s southeast corner or tanker shipments of liquefied natural gas. Easing tensions with Russia will make it more difficult for countries from the Middle East and Americas to get a piece of Europe’s lucrative energy market, where gas is trading at roughly double the level prevailing in the U.S. Cheaper supplies on more flexible terms also makes it more difficult for Europe to broaden its sources of energy to reduce the risk of a cutoff from any one of them, an idea that President Donald Trump’s administration has been pressing. “Gazprom knows that Europe will always represent its key market, it knows that it’s very difficult to diversify away from Europe,” said Simone Tagliapietra, analyst at the Bruegel research group in Brussels. “If the Russian gas becomes cheaper, U.S. LNG will be less competitive if the U.S. is not able to cut down the price.” Europe relies on Russia for about a third of its gas, and Gazprom’s shipments to the continent reached a record a last year and are only expected to grow. In recent weeks, as the weather warms and demand for heating eases, the pipeline company is shipping in supplies of the fuel at rates that are more typical for a hard winter. While the deal with Russia enables eastern member states to get fairer prices, it simultaneously increases the political premium they will have to pay for getting gas from overseas and diversifying away from Russia. Alternatives include LNG shipped in from places such as Algeria and Qatar. It may also put pressure on the U.S., which is trying to gain a footing for its own LNG exports in Europe’s market. Trump and his officials are promoting U.S. supplies as a way to ensure energy security against Russia. Those suggestions had a warm reception in Poland and Lithuania, where policymakers have historically sensed a greater threat from Russia. And incidents linked to Russia such as meddling in elections and the poisoning of a former spy in London have put security issues at the forefront of the debate. At a briefing in Copenhagen, a U.S. envoy pleaded for Europe to consider carefully who it’s relying on for gas -- urging Europe both to take more LNG and to scrap the Nord Stream 2 pipeline that would give Russia a pipeline route to Germany that avoids countries like Ukraine that rely on transport revenue."
Russia Tightens Grip on Europe's Gas Supply With Gazprom Deal
Bloomberg, 24 May 2018

"For seven straight years, the US has pumped more oil and gas out of the ground than any other country. That lead will only widen, states the US Energy Information Administration (EIA). The independent energy statistical agency describes the US as “the undisputed oil and gas leader in the world over the next several decades.” It comes as Russia and Saudi Arabia are constraining production to lift prices, while new technology is making vast new pools of once unprofitable hydrocarbons economical to extract in the US. In an analysis released May 21, the EIA estimates that the US pumped the equivalent of 30 million barrels of oil per day in 2017, a record high. (The figure includes all hydrocarbons such as natural gas, crude oil and others.) That puts the US well ahead of other major producers, including Russia and Saudi Arabia. US natural gas production stole the top spot from Russia in 2008, and exceeded Saudi Arabia’s oil production in 2013. Since 2008, US petroleum and natural gas production has jumped nearly 60%. What happened? New fracking and drilling technology unlocked cheap ways to extract US shale oil and natural gas, even as consumption stayed steady. That has allowed the US to satisfy more of its own consumption, while relying on Canada for most (40%) of its imports. Petroleum imported from Persian Gulf countries now accounts for just 1.74 million barrels per day, or 17% of the total."
US oil and gas production is leaving Saudi Arabia and Russia behind
Quartz, 23 May 2018

"OPEC member Angola is halving the tax rates on development of oil discoveries with less than 300 million barrels of reserves as new President Joao Lourenco is trying to incentivize oil and gas investment in the African country to stop the decline in oil production.... Angola’s oil fields are maturing and are nearing depletion. Unless new investments are made in new discoveries, things will continue getting worse, the International Energy Agency (IEA) warned in its Oil 2018 report in March 2018. Lourenco, Angola’s first new president since 1979, is trying to implement a reform package that could both spur economic growth and investment in the country’s oil resources."
Can Angola Overcome Its Oil Production Decline?
OilPrice.com, 22 May 2018

"The Metropolitan Police Service has bought 11 hydrogen-powered Toyota Mirai cars to help create what it claims will be the world’s largest fleet of zero-emission fuel-cell electric police vehicles. It says the cars, which will be equipped to work as both marked and unmarked vehicles, will produce water as their only tailpipe emission as hydrogen is turned into electricity to power its motor. Their introduction is expected to support the Mayor of London’s clean air strategy by helping to reduce the amount of carbon dioxide, particulate matter and nitrogen dioxides produced by the Met’s fleet. The cars will have access to five hydrogen filling stations across the capital – a number that’s set to increase in the future – and each car is expected to be able to cover approximately 300 miles on a full tank of hydrogen."
The Metropolitan Police Service has bought 11 hydrogen-powered Toyota Mirai vehicles
Energy Live News, 21 May 2018

"Oil demand is set to face an even bigger threat from fuel-efficient engines than from electric vehicles over the next two decades, according to Bloomberg New Energy Finance. Engine and other vehicle improvements that increase the distance vehicles can travel per unit of fuel will erode global oil consumption by 7.5 million barrels a day by 2040, more than the 6.4-million-barrel decline due to electric vehicles, BNEF forecast in a report Monday. Demand from passenger cars is set to peak in 2022 before falling to 15.9 million barrels a day from 24 million now, according to the note. “Improvements in the fuel economy of the internal combustion engine and the increasing uptake of passenger electric vehicles are set to have a profound effect on the future of oil in the transport sector,” BNEF analysts including Richard Chatterton wrote in the report. While analysts are painting an increasingly bearish picture for oil beyond the next 20 years as more electric vehicles hit roads and engines become more efficient, some in the energy industry see the threat as overblown. The CEO of Saudi Arabia’s state crude producer said in March the need for petroleum isn’t going away any time soon, and Exxon Mobil Corp. has said its traditional fossil fuels business isn’t threatened by climate-change policies.... Regulatory standards, improvements in engine design and greater integration of hybrid technologies will lead to an increase in the average efficiency of new internal-combustion engine cars sold in all regions over time, according to the BNEF report. While the erosion in demand because of the transformation in how people travel on road will begin slowly, it will accelerate after 2030 as EVs rapidly become more popular, the report said. By 2040, 55 percent of all new car sales and 33 percent of the fleet will be electric, according to BNEF. The penetration of EVs in total new passenger vehicle sales will differ between countries out to 2040, it said. “We expect EVs to hit almost 40 percent of sales in China in 2030, but just 4 percent in India,” BNEF said in the report. On the flip side, electricity demand from new-energy transportation could rise nearly 20-fold between the end of this decade and 2040, when consumption from electric passenger vehicles and buses will reach 2,000 terawatt-hours, or about 6 percent of total global use, BNEF said. The bulk of that will be from passenger EVs, with only a tenth coming from electric buses...* The use of gasoline, the most prevalent fuel consumed by the global light duty vehicle fleet, will decline 7.1 million barrels a day, accounting for about 88 percent of the drop in oil demand between 2018 and 2040 *Diesel demand is forecast to fall by 1 million barrels.*Oil demand from passenger cars will peak at about 24.4 million barrels a day in 2022, before dropping by 0.5 percent to 1.5 percent a year until 2030. *The global passenger car fleet will expand by 50 percent to almost 1.7 billion vehicles by 2040, adding 6.3 million barrels a day in oil consumption. * Intelligent mobility, which includes ride hailing services, car sharing and autonomous vehicles, will displace 0.48 million barrels of oil a day by 2040."
Fuel-Efficient Cars Will Be Worse for Oil Than Electric Vehicles: BNEF
Bloomberg, 21 May 2018

"Russia is ready to continue shipping some gas to Europe via Ukraine after the Nord Stream 2 gas pipeline is built, but only if it makes economic sense, Russian President Vladimir Putin said Friday. “Once we launch Nord Stream 2, we will continue to pump gas through Ukraine if it is economically feasible and viable for the companies that operate this project,” he said, speaking alongside German Chancellor Angela Merkel in Sochi. Nord Stream 2 is meant to carry 55 billion cubic meters of gas from Russia to Germany via the Baltic Sea when it is completed in 2019, doubling the capacity of the existing Nord Stream pipeline. Poland and the Baltics are vehemently opposed, fearing it would leave them vulnerable to Russia’s geopolitical pressure by circumventing Ukraine. Kiev is also worried it would lose billions of euros in transit fees. Germany has recently begun linking Nord Stream 2 with continued Ukrainian gas transit. “After Nord Stream 2 is finished, the role of Ukraine as a transit state will have to remain because it is a strategic point for us and Germany is prepared to participate in that process,” Merkel said."
Putin says Ukraine gas transit after Nord Stream 2 needs to make economic sense
Politico, 18 May 2018

"PetroChina, the country’s top gas producer, has curbed supplies of the fuel to some industrial users in northern and western regions, in the first sign of emerging tightness only two months after China experienced one of its worst winter gas crunches. To prevent another around of winter shortages, state-run PetroChina started from early May limiting gas supplies and hiking prices for major customers, including city gas distributors and inland gas liquefaction plants in some western provinces, four sources briefed on the matter said. They declined to be identified as they are not authorized to speak to the media.... China’s natural gas consumption rose almost 14 percent in the first four months of the year to 71.1 million tonnes, according to Reuters calculations based on official data. That led to a surge in spot liquefied natural gas (LNG) imports in recent weeks and has lifted prices to a two-month high of $8.7 per million British thermal unit. The expansion in demand, driven by an extension of Beijing’s gasification drive and an improving economy, exceeds a 10-percent annual growth forecast by state energy giant CNPC early this year."
PetroChina cuts gas supplies to major users to prevent shortages
Reuters, 18 May 2018

"Germany brushed aside U.S. concerns about a major natural gas pipeline that will deliver Russian gas to Europe, suggesting President Donald Trump’s administration appears to be protecting its own interests. German Economy Minister Peter Altmaier defended the planned Nord Stream 2 pipeline as Chancellor Angela Merkel meets President Vladimir Putin in Russia. Yesterday, the U.S. warned it may impose sanctions to prevent Russia’s gas export monopoly Gazprom PJSC from completing the Nord Stream 2 link under the Baltic Sea. Russia supplies more than a third of Europe’s gas demand, and its market share is growing as nations led by Germany close their most polluting power stations. Merkel is scrapping coal and nuclear power, making gas increasingly the most important fuel. Altmaier said U.S. efforts to block the link seem to be aimed at protecting Europe as a market for exports of gas in its liquid form from America.... The remarks underscore a deepening rift between the U.S. and its allies over how to balance efforts to isolate Russia economically with the need to maintain energy supplies. While gas in the U.S. is about third of the cost of the European equivalent, it ends up being more expensive when costs are added to liquefy and ship it on tankers to terminals from Belgium to the Netherlands. The chart below shows the costs Russia charges key European countries for its gas, with Germany among the lowest.... European domestic gas production is declining. Capacity from other importers, namely Norway, is approaching its limits. “The gas needs to be replaced. We need more imports,” Andree Stracke, chief commercial officer of German utility RWE AG’s supply and trading unit, said in an interview in Amsterdam this week. “Norway is more or less at the max.” Gazprom aims to increase its share in Europe to as much as 41 percent by 2035 from about 35 percent last year, and Stracke agreed that’s a reachable target. “The Russians don’t need to battle for market share, they’ll just increase it naturally,” Stracke said.... Pipeline gas flows from Russia and Norway are at “exceptionally high” levels, and that helps deter a further advance in gas prices, Stracke said. For LNG producers, Europe isn’t the first port of call because they can fetch higher rates from hungrier utilities in Asian nations that lack pipeline links. Once an occasional exporter of LNG from Alaskan fields, the U.S. has started started shipping the fuel from the lower 48 states two years ago after a boom in shale gas fracking flooded domestic markets. Ships carrying LNG from the U.S. are not contractually tied to a specific recipient."
Germany Brushes Aside U.S. Objection to Russia Gas Pipeline Link
Bloomberg, 18 May 2018

"India is seeking assurances from Saudi Arabia, OPEC's biggest producer, that oil prices will remain "stable and moderate," its government said in a statement on Friday. Energy minister Dharmendra Pradhan spoke with Saudi oil minister Khalid Al-Falih late on Thursday to "express his concern about rising prices and its negative impact on consumers and the Indian economy," it said. World oil prices have spiked by nearly 20% in 2018, and are up more than 40% over the past 12 months. President Donald Trump's decision to pull out of the Iran nuclear deal -- leading to concerns about Iranian supplies -- and a collapse in Venezuelan production have accelerated the price rise in recent weeks. Brent crude, the global benchmark, crossed $80 per barrel on Thursday, while US crude futures hit $71.60 per barrel early Friday, their highest level since 2014. Indian concerns about oil price rises are understandable. Low oil prices played a big role in making it the world's fastest growing major economy in the recent years. Every $10 increase in the price of a barrel knocks 0.2% to 0.3% off India's growth rate, according to the country's latest economic survey."
India is freaking out about rising oil prices
CNN, 18 May 2018

"Enduro Resource Partners, an oil and natural gas exploration company founded in 2010 by the prominent Fort Worth father-and-son team Jon Brumley and Jonny Brumley, has filed for bankruptcy reorganization as the company prepares to sell its holdings in six states. The company has been "undermined by persistently low oil and gas prices during the past several years," Kimberly Weimer, Enduro's chief financial officer, said in the documents, filed in Delaware Tuesday. Enduro's debt, she said, "became insurmountable." The filings did not list a total amount of the company's debt. "Like many other upstream energy companies, (Enduro) did not anticipate in the early part of this decade that they would eventually succumb to the demands of repaying the capital they borrowed to invest in their exploration and production activities," Weimer said. Crude oil prices and natural gas have "declined dramatically" since mid-2014, about the time OPEC started to increase its supply on the world market weakening demand, the filing said. Enduro has oil and gas properties in Texas, North Dakota, Louisiana, New Mexico, Wyoming and Montana. Enduro sank $26 million more into the company in 2016, but it wasn't enough. The company was unable to restructure its debt, the filings said. By September 2017, Enduro realized it wouldn't be able to pay $208.7 million owed to Bank of America by March 30 of this year. It also owes $141.2 million to Wilmington Trust, documents said."
Oil and gas company owned by prominent Fort Worth family files for bankruptcy
Star-Telegram, 17 May 2018

"U.S. shale oil producers don’t benefit quite as much as you might expect from high crude prices, thanks to pipeline bottlenecks and price hedging. “Many of these shale companies are spending more than they are making, or close to it,” said Matt Badiali, senior research analyst at Banyan Hill. “These companies aren’t exposed to the higher prices because many of them hedged their oil production at $50 per barrel,” he said—well below the $62.88 he pegged as the average in the first quarter of this year.... Figuring out the break-even cost per barrel for shale oil producers is a bit tricky, though experts agree that it runs lower than current futures prices. Jerry Bailey, president of Petroteq Energy Inc., said the cost of oil production from shale is in the range of $30 to $50 a barrel for most companies. “When WTI is at $70 and assuming the sales are close to that figure, there is still a healthy profit margin.” But the production cost per barrel for shale drillers can differ depending on a number of factors.... Drilling in the Bakken, which covers parts of Montana and North Dakota as well as parts of Canada, has climbed by 28% over last year and in the Permian, which covers parts of western Texas and southeastern New Mexico, it’s up 31%, according to Williams. For 2017, U.S. shale oil production was estimated at 4.67 million barrels a day—representing about half of total domestic crude production, according to a monthly short-term energy outlook from the Energy Information Administration. Separately, an EIA monthly report on drilling activity estimated oil output from seven major U.S. shale plays at 7.034 million barrels a day in May. It’s expected to climb to a record 7.178 million barrels a day in June. Shale oil producers “are just not generating enough cash to fund all of their investment in new wells,” so the remainder comes from investors and borrowing, said Williams. “But the cash flows in over time, after you spend the money on drilling the well.” Inflation is another important factor. When oil prices were falling in 2014 and 2015, both staff and drilling costs fell sharply, but this “trend has since reversed as the market has tightened considerably and heavy cost inflation has returned,” said Matthew Parry, head of long-term research at Energy Aspects. He estimates that the U.S. shale oil industry is “probably dealing with these rising costs more than most, and wouldn’t be at all surprised if their cost inflation tests 20% in 2018.” That would “pull back a lot of the returns that would otherwise have been garnered at today’s plus-$70 WTI price level. That said, shale producers can boost production levels fairly quickly. Cinquegrana estimates that it takes about seven months to bring shale production online, while deep water Gulf of Mexico output can take seven years to ramp up.”
Why surging oil prices don’t always mean big profits for U.S. shale producers
MarketWatch, 17 May 2018

"The resilience of fossil fuels is sobering, even after massive capital assault. Over the past decade, the world has spent US$ 3.0 trillion on renewable energy, according to the International Energy Agency (Figure 2). For that expenditure, the clean cadre has taken a couple of points of share away from coal, the black stuff that seems to have nine lives (Figure 3). That’s a pricy calculus to date: some trillion-and-a-half dollars has been the ticket to steal only a percentage point of market share from an easy, reviled target. It’s true: The price of renewable energy and electric energy storage is coming down quickly. Such new technologies are a marvel, in fact a necessity for the future. So, maybe the next trillion dollars of capital will buy more market share than just faint chatter on a chart. Meaningful “transitions” occur when new offerings handily clobber the installed user base. When calculators came to market the use of slide rules went into rapid demise. In the world of energy, where renewables and electric vehicles are the new entrants, it is as if calculators are coming to market, but slide rule sales are increasing their presence too. For now, we’re in an era of “energy diversification,” where alternative sources to fossil fuels, notably renewables, are growing alongside—not at the expense of—the incumbents. In large part, the rigidity of the establishment is because the long-term cost of bringing a Joule of energy to consumers, from every source and system, is falling. And in western economies energy producers of all types are innovating to reduce their environmental footprint and make their products cleaner too. Over the past few years, there has been growing acceptance of a narrative that I call Plan A: “Technology will facilitate the rapid demise of fossil fuels.” Plan A is not working, because all systems, including fossil fuels, can deploy technology and compete to assault or defend market share."
The Myth Of An Imminent Energy Transition
OilPrice.com, 17 May 2018

"American shale drillers are still spending more money than they are making, even as oil prices rise. Of the top 20 U.S. oil companies that focus mostly on fracking, only five managed to generate more cash than they spent in the first quarter, according to a Wall Street Journal analysis of FactSet data. Shale companies have helped propel U.S. oil output to all-time highs, surpassing 10 million barrels a day and rivaling Russia and Saudi Arabia. But the top 20 companies by market capitalization collectively spent almost $2 billion more in the quarter than they took in from operations, largely due to bad bets hedging crude prices, as well as transportation bottlenecks, labor and material shortages that raised costs. Many of the producers did better to start this year than at any point since 2014, when oil prices began a crash that the industry is fully recovering from only now. Still, the companies spent about $1.13 for every $1 they took in. While many shale operators have positive net income this year, many shareholders have begun paying closer attention to how much the companies are spending, as they seek to compel them to live within their means and begin to produce stronger returns. Hedging played a big role in companies’ underwhelming cash generation. Seeking stability after years of wild fluctuations in crude prices, many operators entered into derivatives contracts in late 2017 that effectively ensured they could sell some of their 2018 output for $50 to $55 a barrel. Now that prices have risen to more than $70 a barrel, many are failing to capture the value of the rally.... Investors remain broadly hopeful that shale companies’ performance will improve in 2018 due to rising oil prices and global demand. But concerns about the companies’ ability to manage expenses linger.... Shale producers failed to generate cash even as one of their primary obstacles to profitability in past years, oil-field-services costs, rose only modestly. While trucking and labor shortages in the Permian are already vexing many companies, some costs related to drilling contractors have increased by 15% or less because rates were locked in last year when oil prices were low. But those costs could climb further later this year, analysts say. Shale companies’ profitability may also be threatened by rising costs for the immense amounts of sand and water needed for fracking. Modern fracking jobs now require 500 tons of steel pipe, enough water to fill 35 Olympic swimming pools and enough railcars filled with sand to stretch for 14 football fields, according to Rice University’s Center for Energy Studies. Many companies may be forced to choose between hitting production targets, and promises to investors to keep spending in check, said James West, an analyst at Evercore ISI. “Service pricing is going to hit them like a brick wall,” he said. “I’m personally not convinced [they will] stick to capital discipline. In their heart of hearts, they just want to grow.”"
Oil Is Above $70, but Frackers Still Struggle to Make Money
Wall St Journal, 17 May 2018

"Windfarms provided more electricity than Britain’s nuclear power stations in the first three months of 2018, the first time it has ever done so across a quarter. Between January and March, wind power produced 18.8% of the UK’s energy needs, compared to nuclear’s 18.76%. Gas was still the dominant source of the country’s electricity, at 39.4%.  Overnight on 17 March, wind accounted for almost half (47%) of Britain’s electricity, another new record, a report by researchers at Imperial College London revealed. Despite doubts over wind’s ability to keep up supply during cold, calm spells, it provided between 12% and 43% of Britain’s electricity demand during the so-called Beast from the East, when the UK was struck by a prolonged and vicious cold snap at the end of February. The opening of a new 2.2GW cable connecting Scotland - which has 7.7GW of wind capacity – to North Wales also helped to generate additional capacity over the first three months of the year. Nuclear power was held back in the first quarter after two reactors temporarily went offline for maintenance, while another shut down after seaweed clogged the plant’s cooling system.  But the apparent progress in renewables came as MPs warned there had been a “dramatic and worrying collapse” in clean energy investment over the past three years. Despite low-carbon sources providing more than half of Britain’s electricity needs last year, annual investment in clean energy dropped 50 per cent in 2017, according to the Commons environmental audit committee. A report published by MPs blamed government policy changes, including cuts to clean energy subsidies."
Wind power overtakes nuclear energy in UK for first time over last three months
Independent, 16 May 2018

"Oil prices may continue to rally past 3½-year highs and all the way to $85 a barrel as soon as July, according to Pulitzer Prize-winning author and closely followed energy analyst Dan Yergin. Prices in the oil market have been steadily rising since last year, fueled by strong demand and output caps imposed by major producers aimed at draining a global crude glut. More recently, oil futures have rallied faster than expected as geopolitical tensions rattle the market. Brent crude, the international benchmark for oil prices, rose toward $80 a barrel on Tuesday after hitting its highest level since November 2014. Yergin said the cost could continue to climb due to the combined impact of falling output in crisis-stricken Venezuela, renewed U.S. sanctions on Iranian crude exports, and wars in Yemen and Syria that involve major oil-producing nations."
Oil prices could rise to $85 a barrel by July, warns energy expert Dan Yergin
CNBC, 16 May 2018

"According to Bloomberg Economics, $100 oil would knock off 0.4 percent from U.S. GDP in 2020 compared to if oil traded at just $75 – not trivial by any means, but not devastating either. “The price of a barrel will have to go much higher before global growth slips on an oil slick,” economists Jamie Murray, Ziad Daoud, Carl Riccadonna and Tom Orlik said.  A survey of economists by CNBC found a mixed picture with some responding that higher oil prices are largely “a wash” for U.S. economic growth. It is a notable shift in tone and substance from the past, when higher oil prices as an economic headwind was taken as a given. "We think the effect will round to a wash,'' Michael Feroli, chief U.S. economist with J.P. Morgan Chase, told CNBC. He noted that higher oil prices would reduce GDP by 0.2 percent, but that would be offset by an increase of 0.2 percent in capital spending. That conclusion was echoed by St. Louis Federal Reserve President James Bullard who agreed that higher oil prices spark more activity in the energy sector, offsetting some of the losses elsewhere. "This will also encourage U.S. production, and compared to years past, oil prices have a more neutral effect on the U.S. economy,'' Bullard said. "It used to be a big oil shock was probably bad news, … but now I think it's neutral." Still, the marginal impact is only true up to a certain point. Drivers can stomach $3-per-gallon gasoline, but $4 per gallon is another matter. Also, the benefits accruing to the energy sector and related industries are concentrated, while the economic drag on consumers is widespread. If retail gasoline prices average $2.96 per gallon this year, it will wipe out a third of additional take home pay from the 2017 tax cuts, according to Morgan Stanley. Moreover, to the extent that higher oil prices stokes inflation, it could spur more aggressive action from the U.S. Federal Reserve. More rate hikes would drag down the economy, making the cost of borrowing more expensive. It would also strengthen the U.S. dollar, hurting export industries."
Will $100 Oil Kill The U.S. Economy?
OilPrice.com, 15 May 2018

"The UK has no need to build new large gas-fired power stations to replace the coal plants that the government has pledged to switch off by 2025, the World Wide Fund for Nature has argued. The gap can instead be filled by renewables, battery storage and flexible technologies, allowing the UK to go from “coal to clean” and skip new gas completely, according to a report by the environmental group. The analysis challenges the orthodoxy that phasing out coal will require large new gas plants. Amber Rudd, when energy secretary in 2015, said: “In the next 10 years, it’s imperative that we get new gas-fired power stations built.” Big energy firms including Drax and Germany’s RWE want to build large-scale gas plants on the sites of former power stations in Yorkshire and Essex, respectively. Almost half of the gas industry’s hopes for new power stations for Europe are slated for the UK but developers have failed to win subsidy contracts through the main route to market, the government’s capacity market. The government is planning to launch a review of the scheme later this year, which renewables proponents fear could tilt the balance. Gareth Redmond-King, the WWF’s head of climate and energy, urged ministers to ensure the review does not open the door to gas.... The last large gas plant to be built in the UK was in Carrington in 2016 – the first since 2012. Using official government forecasts, the WWF found that the growth in electricity produced by wind, solar and other renewables would more than replace the lost power from old coal plants. Around 95% of that renewable energy capacity is already being built or contracted under government subsidy deals. Most of the growth will come from windfarms out at sea. The government has allocated a £557m pot of funding for more renewables subsidies between now and 2025. That should bring forward the remainder of the new capacity needed as coal drops off the grid. WWF also called on the government to reconsider support for solar power and onshore windfarms, both of which have had subsidies axed..... Tom Glover, the UK country chair for RWE, said: “The exact amount of gas capacity required is extremely uncertain but the vast majority of forecasts anticipate a significantly higher requirement than suggested in this report.”"
'From coal to clean' – UK does not need to turn to gas, says WWF
Guardian, 13 May 2018

"The US is likely to quadruple its installed base of residential battery energy storage between 2018 and 2022. That’s according to information firm IHS Markit, which says less than 200MW of residential battery energy storage was installed in the US prior to 2018 – it believes this figure will soon by eclipsed by more than 850MW being deployed. The company says residential energy storage is already economically attractive in some markets when paired with solar photovoltaics but believes demand will shift from off-grid and backup systems to grid-connected units able to intelligently interact with other infrastructure. It says these technologies are likely to become the largest drivers in the market and will be able to optimise rate structures, improve self-consumption of solar energy and participate in grid balancing. California and Hawaii are forecast to be the largest markets during the period but Massachusetts, New York and Arizona are also expected to experience strong growth."
US to ‘quadruple residential battery storage by 2022’
Energy Live News, 12 May 2018

"The geologist who earned the wrath of shale drillers a decade ago with forecasts that natural gas was about to run out is now warning that the Permian Basin has just seven years of proven oil reserves left. Arthur Berman, a former Amoco scientist who now works as an industry consultant near Houston, said the Permian region of Texas and New Mexico that currently pumps more oil than any other North American field won’t last for long. And the Eagle Ford shale about 350 miles (560 kilometers) away in South Texas isn’t looking good either. Berman’s grim outlook, based on analyses of reserves and production data from more than a dozen prominent shale drillers, flies in the face of predictions from the U.S. Energy Department, Chevron Corp. and others that the Permian is becoming one of the dominant forces in global crude markets. Permian output already exceeds that of three-fourths of OPEC members. “The best years are behind us,” Berman told a gathering of engineers, geologists, lawyers and financiers at the Texas Energy Council’s annual gathering in Dallas on Thursday. “The growth is done.”"
Shale's Big Boost Comes With Newfound Thrift as Oil Hits $70
Bloomberg, 11 May 2018

"No region was hit quite as hard by the downturn as Latin America. Oil production across the region has fallen 20%, from 9.6m barrels a day as the crisis took hold in 2015, to around 8m b/d. A region-wide recovery to pre-crash output levels could still be years away..."
Latin America’s oil production struggles to recover
Petroleum Economist, 11 May 2018

"Unit costs dropped to $32.6 per barrel in 2016 from $39.4 per barrel in 2014 as companies tried to adjust to lower crude prices. Costs crept back up to $33.2 per barrel in 2017, according to a new report on the sector by Westwood Global Energy Group, based on 25 companies. However, cost cuts since 2014 and a reduction in the Brent discount in the peer group’s revenue has resulted in the breakeven oil price for the group dropping to $44.8 per barrel in 2017 from $61.5 per barrel three years ago. Westwood analyst Robert Stevens said the lower Brent breakeven price meant most firms in the group should be profitable this year, regardless of cost cuts stalling. Mr Stevens said: “The breakeven is around $45 per barrel, but the Brent crude price is currently $20 higher than that, so these companies don’t need unit costs to fall any further, with a few exceptions. “At current oil prices, most of the companies are fairly comfortable and should be profitable this year in terms of free cash flow generation.” The companies in this year’s study were slightly different to those which featured a year ago, when Mr Stevens said the sector was “out of the emergency room, but still in hospital”. Larger companies like Marathon Oil and Hess have been added to the analysis, and their exposure to relatively high cost US onshore assets has caused the overall cost base and breakeven price to go up. Mr Stevens said: “We reported in November that cost cutting was slowing down. Now, unit costs are pretty much flat. They’re not going down any more. “Overall, as an industry benchmark, I think it is fair to say we are not going to see costs coming down much further if oil prices stay where they are. “That’s a negative but there are positives. Higher oil prices mean companies are making more money. “They’re less in debt than they were a year ago.”... Australian firm Woodside had the lowest breakeven of $27 – with Scandinavian duo Aker BP and Lundin also below $30. Fourteen of the 25 companies were between $40 and $55.... Mr Stevens said Marathon had stopped conventional exploration to focus on US onshore plays. Meanwhile Hess is divesting from conventional assets outside Guyana, which has become the largest new oil province to emerge since pre-salt Brazil. In terms of exploration, he said Brazil and Suriname were also “exciting”, though there are doubts about the Barents Sea after a number of dry wells in 2017. Mr Stevens is also slightly sceptical about the profitability of US shale. He said: “If you look at Marathon, it makes a big song and dance about  prioritising US shale, but the company makes more from international E&P than US onshore. “Marathon has made a loss from US onshore for the last three or four years – its international business is the cash arm. “So it’s slightly misleading how US onshore plays are being presented. There are sweet spots of profit, but on the whole it hasn’t been profitable.”"
E&P cost cutting has ground to a halt, says Westwood
Energy Voice, 7 May 2018

"A “suitable price” for crude is $60 to $65 a barrel, Amir Hossein Zamaninia, deputy oil minister for international and commercial affairs, said in an interview Sunday in Tehran. Oil Minister Bijan Namdar Zanganeh said earlier in the day that Iran supports “reasonable” oil prices and is not an advocate of costlier crude. Brent crude futures surged above $75 a barrel to a three-year high on Monday as traders braced for the possible re-imposition of U.S. restrictions on Iran. The Persian Gulf country’s regional arch-rival Saudi Arabia is said to want crude closer to $80 a barrel, in part to support a stake sale in state energy giant Aramco. The OPEC nations continue to clash in proxy conflicts from Syria to Yemen. The Organization of Petroleum Exporting Countries will meet next month in Vienna. Together with allied producers, OPEC began reducing oil production last year in a drive to clear a global glut. The curbs have all but eliminated surplus oil inventories.... Even so, Saudi Arabia, the world’s largest crude exporter, is urging fellow members to keep curtailing output. The constant fluctuation in oil prices is destabilizing for future investment and security of supply, Zanganeh said."
Iran opposes higher oil prices, signalling divide with Saudi Arabia
Bloomberg, 7 May 2018

"Oil prices rose to their highest levels since late-2014 on Monday, boosted by Venezuela's deepening economic crisis and a looming decision on whether the United States will re-impose sanctions on Iran. Brent crude oil futures were at $75.63 per barrel at 0909 GMT, up 76 cents from their last close. Earlier in the session, they touched their highest since November 2014 at $75.89 a barrel.  U.S. West Texas Intermediate (WTI) crude futures rose 80 cents to $70.52 per barrel. Monday was the first time since November 2014 that WTI had climbed above $70 per barrel. China's Shanghai crude oil futures, launched in March, broke their dollar-converted record-high, rising as far as $72.54 on Monday. The increases came despite nine U.S. oil rigs bringing the total count to 834, energy services firm Baker Hughes said on Friday. Analysts said a crisis in Venezuela, a major oil exporter, underpinned prices. "The growth in production in the U.S. is being counterbalanced by the simultaneous decline in Venezuela," said Commerzbank analyst Carsten Fritsch. U.S. oil firm ConocoPhillips has moved to take key Caribbean assets of Venezuela's state-run PDVSA to enforce a $2 billion arbitration award, actions that could further impair PDVSA's declining oil production and exports. Venezuela's output has halved since the early 2000s to 1.5 million barrels per day (bpd), as the South American country has failed to invest enough in its oil industry.  Widespread expectations that U.S. President Donald Trump will withdraw from the Iranian nuclear pact added a further risk premium. Iran re-emerged as a major oil exporter in 2016 after international sanctions against it were lifted, and Trump has a May 12 deadline to determine whether to extend sanction waivers. On Monday, Saudi Arabian Energy Minister Khalid al-Falih said he is concerned about low oil industry investment and potential shortages in the future. But U.S. output has soared by more than a quarter in the last two years, to 10.62 million bpd. It will likely rise further this year as its energy firms keep drilling for more."
Oil surges to fresh highs on growing supply worries
Reuters, 7 May 2018

"Last week, Britain went for three consecutive days without burning any coal to generate electricity, the longest run since the power industry was born in the 1880s. Warm weather meant that electricity consumption was relatively low, and demand could be met from gas (33 per cent), nuclear (24 per cent) and wind (20 per cent). The decline in coal use means that the UK’s carbon dioxide emissions from fossil fuel use dropped last year to their lowest level since 1890, while the UK’s retail electricity price is below average for the EU. That does not mean that the UK’s abandonment of coal has been entirely worry-free. In the cold snap in February, the country’s remaining coal-fired plants were running flat-out, generating about a fifth of its power. Britain’s increased reliance on gas is also raising concerns, particularly because of the decision to allow the Rough storage facility to close last year. Rough provided about 70 per cent of Britain’s gas storage, giving it a critical role in underpinning security of supply, and several energy companies have warned that giving it up will result in greater price volatility and a heavier reliance on imports, by pipeline and as LNG. In a paper for the Oxford Institute for Energy Studies back in March, Jack Sharples argued that “increasing exposure to price volatility” would be the greatest challenge to the UK’s security of supply for gas." In the US coal is also waning, despite President Donald Trump’s pledge to “put our miners back to work”. Coal-fired plants are still expected to supply about 29 per cent of US power generation this year, but the Energy Information Administration expects coal consumption to continue to fall into the early 2020s, under pressure from cheap gas and renewables.... Meanwhile Germany, for only the second time ever, covered 100 per cent of its electricity demand from renewables for a time this week, with wind power providing 52 per cent and solar 37 per cent of supply. The feat, achieved for about two and a half hours on Monday, was helped by the fact that the day was a public holiday. The use of coal for power generation in Germany dropped sharply last year, but it still provided 37 per cent of the country’s electricity, and the industry’s future is the subject of intense debate. Allianz, Europe’s largest insurer, on Friday added to the pressure with an announcement that it would immediately pull its coverage from single coal-fired power plants and coal mines, and phase out all coverage of coal-related risks and investments in coal by 2040....Brent crude rose above the $75 mark last week for the first time since 2014, and by the end of this week was still close to that level. The FT’s David Sheppard analysed the five factors driving the price, from the Opec-led output curbs, to the collapse of Venezuela’s oil industry, to the pipeline capacity constraints that are holding back US shale producers. Higher crude prices mean higher petrol prices, and increased fuel costs are starting to bite for US consumers. For many Americans, the rise in fuel costs since 2016 has been greater than the benefit of the tax cuts passed at the end of last year. The US is the world’s second-largest crude producer as well as its largest consumer, so the net effect of higher prices may not be noticeable, but the squeeze on consumers could be very real for politicians seeking re-election. The oil price is a complicating factor for Mr Trump’s decision on whether to pull out of the international deal over Iran’s nuclear programme. The latest IMF Regional Economic Outlook, covering the Middle East, suggested one reason why Saudi Arabia might want to see crude continuing to rise: it included an estimate that the kingdom would need oil at $87.90 this year to balance its budget."
The week in energy: King Coal faces a revolution
Financial Times, 5 May 2018

"Pierre Andurand, one of oil’s most prominent hedge fund managers, said the current reluctance of energy companies to invest in new production meant $300 a barrel was "not impossible" within a few years. Andurand, who’s often espoused bullish views, said in a series of tweets on Sunday that concern about the impact of electric vehicles on future demand was limiting investment in projects with long lead times. "So paradoxically these peak demand fears might bring the largest supply shock ever," he wrote. "If oil prices do not rise fast enough, $300 oil in a few years is not impossible." The hedge fund manager, who runs oil-focused Andurand Capital Management LLP, also went against the conventional view that triple-digit oil prices will dampen demand growth. "So no, $100 oil will not kill the economy," he wrote. "And we need +$100 oil to encourage enough investments outside of the U.S." A spokesman for Andurand declined to comment on the tweets, which were later removed from Andurand’s Twitter account. His comments on demand echo those of Saudi Oil Minister Khalid Al-Falih, who earlier this month suggested that prices could rise further from their current level close to $75 a barrel without doing economic damage. “We have seen prices significantly higher in the past, twice as much as where we are today”, and the global economy has the ability to absorb costlier crude, Al-Falih said. In 2008 Brent crude rose to nearly $150 a barrel, before crashing."
Oil Hedge Fund Manager Says $300 Oil ‘Not Impossible’
Bloomberg, 30 April 2018

"A United Arab Emirates energy company and two Chinese firms emerged Thursday as the only winners in Iraq's rushed bidding round for nearly a dozen hydrocarbon-rich areas. Only nine companies out of 26 originally prequalified decided to take part. And major oil companies — Russia's Bashneft, Lukoil and Gasprom, America's ExxonMobil, and France's Total — were supposed to bid but withdrew. The auction, Iraq's fifth auction since opening its vast resources to international energy companies in 2009, was announced last year with the deadline to receive bids on late June. But last month, Oil Minister Jabar Ali al-Luaibi unexpectedly moved the date to April, leaving the companies with a short period of time to study the offered contracts. Al-Luaibi's move was seen as a political maneuver ahead of May 12 national elections in which he is campaigning for a seat in parliament. He hopes to represent the oil-rich southern province of Basra as a member of the Victory Alliance, which is led by Prime Minister Haider al-Abadi, who is running for re-election. Addressing the bidders, al-Laubi denied any other reason other than developing the country's border fields that "were neglected for five decades in a best way possible." In previous bidding rounds, officials spent months hosting conferences, road shows and discussions with companies before issuing final contracts. The UAE Crescent Petroleum landed three deals almost without any competition. Two are for the Gilabat-Qumar and Khashim Ahmer-Injana gas fields in Diyala province in northwestern Iraq. The company will be entitled to 9.21 percent and 19.99 percent of net profits, respectively, from the two fields. The third deal is to explore and develop the oil-rich Khider Al-Mai block that is shared by the southern Basra and Muthana provinces. The UAE company's share in the net profit will be 13.75 percent. China's Geo-Jade company won the rights to explore Naft Khana block in Diyala, rich with oil and dried gas, and Huwaiza block in southern Mayssan province. Its share of net profits from the two blocks will be 14.67 percent and 7.15 respectively. And China's UEG won the rights to explore and develop Sindbad green oil field in Iraq's Basra region. It will be entitled to 4.55 percent of the net profit. Six other blocks — Zurbatiya, Shihabi, Jebal Sanam, Fao and the Arabian Gulf in Iraq's territorial waters in the Persian Gulf— in central and southern Iraq received no bids.... Iraq's previous bidding rounds succeeded in awarding rights to develop major oil and gas fields that hold more than half of its 153.1 billion barrels of proven oil reserves. Then, the auctions drew majors like U.S.'s Exxon Mobil, Royal Dutch Shell, the U.K.'s BP, China's CNPC and Russia's Lukoil. As a result, Iraq's daily production and exports have jumped to levels not seen since the late 1970s and early 1980s. The nation is now OPEC's second-largest producer behind Saudi Arabia with daily production of around 4.36 million barrels a day from Baghdad-controlled oil fields, up from nearly 2.4 million a day in 2009. Daily exports averaged 3.450 million barrels a day last month."
Iraq awards UAE, China rights to develop oil in northeast
Associated Press, 29 April 2018

"Shutting down oil and gas operations in the North Sea is likely to cost double the government’s current target, leaving younger generations with a hefty tax bill. An analysis of current government figures suggests the goal of £39bn to dismantle the region’s pipelines and wells is a significant underestimate. Instead, a figure of over £80bn is cited as a far more realistic projection in the new report for the Intergenerational Foundation (IF). The higher price tag will leave each child in the UK with a bill of up to £3,000 if the government allows companies drilling in the North Sea to avoid their decommissioning obligations."
Cost of dismantling North Sea oil and gas likely to be double government target
Independent, 29 April 2018

"Oil will be in plentiful supply and prices are likely to remain under pressure in the long term, according to the outgoing chairman of BP, who said there must be no let up in the company’s efforts to lower costs. Carl-Henric Svanberg, the Swede who is due to step down at the end of this year, said BP was “still working with the assumption that this is going to be a world with an abundance of oil” despite recent tightening in the crude market.  Brent crude, the international benchmark, has climbed to more than $75 a barrel for the first time in four years, reflecting increasing demand, supply curbs from Opec producer nations and Russia, and concern about geopolitical tensions in the Middle East.  This is fuelling a resurgence of profitability for the world’s largest oil and gas companies, several of which announced sharp increases in first-quarter profits last week. BP reports its results on Tuesday.  However, Mr Svanberg, who has been chairman for eight years, said there would be no return to the ill-disciplined spending that characterised the industry until oil prices crashed from more than $100 a barrel in 2014. .... BP has cut its unit production costs by 46 per cent since 2013 and reduced capital expenditure by a third. Bob Dudley, chief executive, has set a target to lower the group’s break-even point — the oil price needed to cover dividends and capital investment — to less than $40 a barrel within five years, from about $50 last year....  Most of the big oil and gas groups are echoing Mr Svanberg’s rhetoric about the need to maintain spending discipline, given the prospect of growing US shale supplies and long-term curbs on oil demand from the rise of renewable energy and electric vehicles. However, Mr Svanberg saw little threat of a precipitous decline in oil demand, highlighting forecasts from the International Energy Agency that, even if the world delivered on the Paris climate agreement, there would still be a need for 95m barrels of oil a day in 2040. “Even more than 20 years out, the world market for oil and gas will be similar to what it is today,” he said. “It is not disappearing in front of us.” "
BP sees no let up in pressure on global oil prices
Financial Times, 29 April 2018

"The UK has been powered without coal for three days in a row, setting a new record and underlining the polluting fuel’s rapid decline. Coal has historically been at the cornerstone of the UK’s electricity mix, but last year saw the first 24-hour period that the the country ran without the fuel since the 19th century. New records were broken last week when zero power came from coal for nearly 55 consecutive hours.That milestone in turn was smashed on Monday afternoon and the UK passed the 72-hour mark at 10am on Tuesday. The coal-free run came to an end after 76 hours. Without the fossil fuel, nearly a third of Britain’s electricity was supplied by gas, followed by windfarms and nuclear on around a quarter each. The rest came from biomass burned at Drax power station in North Yorkshire, imports from France and the Netherlands, and solar power. Drax said it expected to go without coal on Tuesday.  The coal-free records are a reversal from the recent highs that coal plant owners experienced during the so-called “beast from the east” cold snap. During cold weather in February and early March, demand for gas to use in heating pushed up the price of gas for power, which brought coal power stations online. However, overall power demand is now much lower following the recent warm weather, making it easier for gas, renewables and nuclear to cover much of the UK’s needs."
UK runs without coal power for three days in a row
Guardian, 24 April 2018

"The UK would have to build 6,100 wells to replace just 50 per cent of gas imports between 2021 and 2035, a new study has found, casting doubt on Conservative calls a US-style fracking “revolution” in the UK at the last general election. The party claimed it would push down gas prices for consumers and make Britain less reliant on imports from countries including Russia. But a new study by Cardiff Business School has found that one well would have to be drilled and fracked every day for 15 years for half of gas imports to be replaced. And if the quantities of gas produced per well was at the lower end of the amount forecast, the report suggests the number of wells required could rise to as many as 16,500 in total. Drilling 6,100 wells would require more than 1,000 separate well pads for drilling equipment each covering 3.5 hectares. Each well pad requires access roads and facilities such as mobile portacabins for offices. The amount of space is equivalent to around 4,900 football pitches, according to Friends of the Earth, which commissioned the study. Rose Dickinson, from the organisation said: “This would mean an industrialisation of our countryside at a rate that nobody has yet fully appreciated and would put many more communities in the firing line of this dirty and unwanted industry.” Fracking has been banned or suspended in Scotland, Wales and Northern Ireland, leaving England as the only country where it remains an option....  In addition, the Labour Party, Liberal Democrats and the Greens are all opposed to the practice, which involves pumping water and chemicals deep underground to fracture shale rock to access gas reserves. The Conservatives’ 2017 manifesto said: “The discovery and extraction of shale gas in the United States has been a revolution. Gas prices have fallen, driving growth in the American economy and pushing down prices for consumers. "The US has become less reliant on imported foreign energy and is more secure as a result. We will therefore develop the shale industry in Britain.” When he was mayor of London Boris Johnson was a particularly vocal supporter of fracking in Britain.  The foreign secretary wrote that the UK was “increasingly and humiliatingly dependent on Vladimir Putin’s gas or on the atomic power of the French state,” and calling for the UK to “get fracking right away”.  Britain imports 59.8 per cent of all the gas we use. Of that figure, around 1 per cent now comes from Russia.  Norway is the principal source of UK gas imports, at 75 per cent, up from 65 per cent in 2016, according to government figures. Meanwhile, over the past six years the UK’s renewable electricity output has leapt from providing 9 per cent to almost 30 per cent of UK electricity, recent government figures reveal. Daniel Carey-Dawes, senior infrastructure campaigner at the Campaign to Protect Rural England, said: "The fracking industry has always been clear that fracked gas would replace what's currently imported, but what wasn't clear was the scale of land take that would involve. "The many thousands of wells that would be needed, peppered across our precious landscapes, would cause harm to the English countryside on an industrial scale." The report concludes that “there is no evidence that fracked gas can be brought to market at sufficiently low cost, and sufficiently great volume to make any significant profit, or to make any difference to the UK energy security position.” A Department for Business, Energy & Industrial Strategy spokesperson told The Independent: “The UK Government is committed to ensuring we have secure energy supplies that are reliable, affordable and clean. As part of this, shale gas has the potential to be a home-grown energy source which can lead to jobs and economic growth, contribute to our security of supply, and help us achieve our climate change objectives. “We have been clear that shale development in the UK must be safe and environmentally sound and we have a strong regulatory system in place.”
More than 6,000 fracking wells needed in UK to halve gas imports, study says
Independent, 25 April 2018

"...buses with battery-powered motors are a serious matter with the potential to revolutionize city transport—and add to the forces reshaping the energy industry. With China leading the way, making the traditional smog-belching diesel behemoth run on electricity is starting to eat away at fossil fuel demand. The numbers are staggering. China had about 99 percent of the 385,000 electric buses on the roads worldwide in 2017, accounting for 17 percent of the country’s entire fleet. Every five weeks, Chinese cities add 9,500 of the zero-emissions transporters—the equivalent of London’s entire working fleet, according Bloomberg New Energy Finance. All this is starting to make an observable reduction in fuel demand. And because they consume 30 times more fuel than average sized cars, their impact on energy use so far has become much greater than the passenger sedans produced by companies from Tesla Inc. to Toyota Motor Corp. For every 1,000 battery-powered buses on the road, about 500 barrels a day of diesel fuel will be displaced from the market, according to BNEF calculations. This year, the volume of fuel not needed may rise 37 percent to 279,000 barrels a day because of electric transport including cars and light trucks, about as much oil as Greece consumes, according to BNEF. Buses account for about 233,000 barrels of that total. “This segment is approaching the tipping point,” said Colin McKerracher, head of advanced transport at the London-based research unit of Bloomberg LP. “City governments all over the world are being taken to task over poor urban air quality. This pressure isn’t going away, and electric bus sales are positioned to benefit.” China is ahead on electrifying its fleet because it has the world’s worst pollution problem. With a growing urban population and galloping energy demand, the nation’s legendary smogs were responsible for 1.6 million extra deaths in 2015, according to non-profit Berkeley Earth....  Other cities are taking notice. Paris, London, Mexico City and Los Angeles are among 13 authorities that have committed to only buying zero emissions transport by 2025. London is slowly transforming its fleet. Currently four routes in the city center serviced by single-decker units are being shifted to electricity. There are plans to make significant investments to the clean its public transport networks, including retrofitting 5,000 old diesel buses in a program to ensure all buses are emission-free by 2037. Transport for London, responsible for the city’s transport system, declined to comment for this article because of rules around engaging with the media ahead of May local government elections. Those goals will have an impact on fuel consumption. London’s network draws about 1.5 million barrels a year of fuel. If the entire fleet goes electric, that may displace 430 barrels a day of diesel for each 1,000 buses going electric, reducing U.K. diesel consumption by about 0.7 percent, according to BNEF.  Across the U.K. there were 344 electric and plug-in hybrid buses in 2017, and BYD hopes to be picked to supply more. It has partnered with a Scottish bus-maker to provide the batteries for 11 new electric buses that hit the city’s roads in March. Falkirk-based manufacturer Alexander Dennis Ltd. began making electric buses in 2016 and has quickly become the European market leader with more than 170 vehicles operating in the U.K. alone."
Electric Buses Are Hurting the Oil Industry
Bloomberg, 25 April 2018

"U.S. conglomerate General Electric will test the world’s largest wind turbine in a facility in northeast England, it said on Tuesday. GE Renewable Energy, the renewable arm of the U.S. firm, and the British government-funded Offshore Renewable Energy Catapult signed a five-year agreement to test GE’s Haliade-X 12 megawatt (MW) turbine in Blyth, Northumberland. “This is an important agreement because it will enable us to prove Haliade-X in a faster way by putting it under controlled and extreme conditions,” John Lavelle, president & CEO of GE’s Offshore Wind business said in a statement. Britain is aiming to be a leader in offshore wind technology and its capacity could grow by five times current levels to 30 gigawatts by 2030, according to a report funded by a range of industry participants. Britain’s energy and clean growth minister Claire Perry welcomed the agreement and said it highlights Britain’s world class research and testing facilities. The largest wind turbines currently in operation are MHI Vestas’ 9 MW turbines installed at Vattenfall’s windfarm off the coast of Aberdeen, Scotland. Companies have been building larger turbines to help get more power from each turbine installed and drive down the cost of the electricity they produce."
General Electric to trial world’s largest wind turbine in Britain
Reuters, 24 April 2018

"Electric buses were seen as a joke at an industry conference in Belgium seven years ago when the Chinese manufacturer BYD Co. showed an early model. “Everyone was laughing at BYD for making a toy,” recalled Isbrand Ho, the Shenzhen-based company’s managing director in Europe. “And look now. Everyone has one.” Suddenly, buses with battery-powered motors are a serious matter with the potential to revolutionize city transport—and add to the forces reshaping the energy industry. With China leading the way, making the traditional smog-belching diesel behemoth run on electricity is starting to eat away at fossil fuel demand. The numbers are staggering. China had about 99 percent of the 385,000 electric buses on the roads worldwide in 2017, accounting for 17 percent of the country’s entire fleet. Every five weeks, Chinese cities add 9,500 of the zero-emissions transporters—the equivalent of London’s entire working fleet, according Bloomberg New Energy Finance. All this is starting to make an observable reduction in fuel demand. And because they consume 30 times more fuel than average sized cars, their impact on energy use so far has become much greater than the passenger sedans produced by companies from Tesla Inc. to Toyota Motor Corp. For every 1,000 battery-powered buses on the road, about 500 barrels a day of diesel fuel will be displaced from the market, according to BNEF calculations. This year, the volume of fuel not needed may rise 37 percent to 279,000 barrels a day because of electric transport including cars and light trucks, about as much oil as Greece consumes, according to BNEF. Buses account for about 233,000 barrels of that total. “This segment is approaching the tipping point,” said Colin McKerracher, head of advanced transport at the London-based research unit of Bloomberg LP. “City governments all over the world are being taken to task over poor urban air quality. This pressure isn’t going away, and electric bus sales are positioned to benefit.” China is ahead on electrifying its fleet because it has the world’s worst pollution problem. With a growing urban population and galloping energy demand, the nation’s legendary smogs were responsible for 1.6 million extra deaths in 2015, according to non-profit Berkeley Earth.... Other cities are taking notice. Paris, London, Mexico City and Los Angeles are among 13 authorities that have committed to only buying zero emissions transport by 2025. London is slowly transforming its fleet. Currently four routes in the city center serviced by single-decker units are being shifted to electricity. There are plans to make significant investments to the clean its public transport networks, including retrofitting 5,000 old diesel buses in a program to ensure all buses are emission-free by 2037.... Across the U.K. there were 344 electric and plug-in hybrid buses in 2017, and BYD hopes to be picked to supply more. It has partnered with a Scottish bus-maker to provide the batteries for 11 new electric buses that hit the city’s roads in March. Falkirk-based manufacturer Alexander Dennis Ltd. began making electric buses in 2016 and has quickly become the European market leader with more than 170 vehicles operating in the U.K. alone. More work is on the horizon, with London’s transport authority planning a tender to electrify its iconic double-decker buses, Ho said."
Electric Buses Are Hurting the Oil Industry
Bloomberg, 23 April 2018

"Oil prices retreated from multi-year highs as US President Donald Trump lashed out at the world’s largest oil producing nations during a meeting which exposed rifts at the heart of the Opec cartel. President Trump blamed the group for forcing global prices to “artificially” high levels, and warned that it “will not be accepted”, in a tweet during a key meeting between Saudi-led oil producers and Russia. The meeting revealed a splintering of views between the pair over whether to keep a squeeze on crude production to drive prices higher or begin to ease supply cuts again. The uncertainty quickly punctured the confidence of the oil market over the last week, causing prices to plummet from fresh highs of $74.70 a barrel on Thursday to below $73 before making a modest recovery. The Organisation of Petroleum Exporting Countries (Opec) met with non-Opec nations in Saudi Arabia on Friday to discuss the progress of its year-long supply deal just days after oil prices rallied to their highest level since December 2014."
Opec v Trump: oil markets retreat as rifts emerge
Telegraph, 20 April 2018

"Russia’s No. 2 oil producer Lukoil has started operations at a $3.4 billion gas processing plant at its Kandym gasfield in Uzbekistan, which is seen as central to its efforts to boost gas production and exports to China. The Russian government said in a statement on Thursday that the gas processing complex, with a capacity of 8 billion cubic meters (bcm) per year, had been launched ahead of schedule. Lukoil has not revealed any data on gas exports to China from Uzbekistan. Lukoil also said on Thursday it has raised a $660 million loan to finance part of the cost of building the gas plant in Uzbekistan. Lukoil is working in the country under a production-sharing agreement that accounts for a quarter of all of Uzbekistan’s gas output. The company plans to double gas production in Uzbekistan to 16 bcm per year by 2020 from 8 bcm in 2017. Lukoil’s total gas output reached almost 33 bcm in 2017. Uzbekneftegaz head Alisher Sultanov said last September that Uzbekistan had contracts to export up to 6 bcm of gas to Russia and up to 10 bcm to China per year."
Russia's Lukoil starts up Uzbekistan gas plant for Chinese exports
Reuters, 19 April 2018

"The UK has just gone a record amount of time without using coal to generate electricity. National Grid confirmed Britain operated without coal for more than two days, or just under 55 hours, between 10.25pm on Monday to 5.20am this morning. The previous record was a stretch of 40.5 hours between the 28 October and 30 October 2017. The UK has made strides towards a low-carbon economy over the past few years, including the continued work to phase out its last remaining coal-fired power plants by 2025. Government figures released last month revealed the UK's carbon emissions dropped by three per cent last year as coal-fired power generation plummeted. Coal use for electricity fell 28 per cent between 2016 and 2017 to a record low as two more coal-fired plants were shut down over the year. This time last year, Britain spent 24 hours without using coal as part of its energy mix for the first time since the Industrial Revolution. The UK has set a target of cutting emissions to 80 per cent below 1990's level by 2050."
Britain just went more than two days without coal – a new record
City AM, 19 April 2018

"There are increasing signs that a break above $80 for a barrel of oil is now on the cards, after benchmark Brent crude prices closed on Friday night at $72.58 a barrel. That capped a weekly gain of 7.9%, while West Texas Intermediate (WTI) oil closed at 67.39, which left both measures at their highest level since 2014. Heightened geo-political tensions have been the main catalyst for the recent price action, and the US-led attack on chemical weapons facilities in Syria over the weekend did nothing to dispel the threat of further conflict in the region. Markets are also assessing the prospect of a breakdown in the nuclear disarmament deal between the US and Iran, with President Donald Trump pushing for key changes by May 12 which could see the US withdraw from the agreement..... The analysts forecast that geo-politial tensions will keep oil elevated above $70 a barrel through April and May, before prices decline towards $60 a barrel by the end of the year."
Forces are aligning that could see oil rise back above $80 a barrel
Business Insider, 16 April 2018

"China is taking its first steps towards paying for imported crude oil in yuan instead of the U.S. dollar, three people with knowledge of the matter told Reuters, a key development in Beijing's efforts to establish its currency internationally. Shifting just part of global oil trade into the yuan is potentially huge. Oil is the world's most traded commodity, with an annual trade value of around $14 trillion, roughly equivalent to China's gross domestic product last year. A pilot program for yuan payment could be launched as early as the second half of this year, two of the people said. Regulators have informally asked a handful of financial institutions to prepare for pricing China's crude imports in the yuan, said the three sources at some of the financial firms.... China is the world's second-largest oil consumer and in 2017 overtook the United States as the biggest importer of crude oil. Its demand is a key determinant of global oil prices. Under the plan being discussed, Beijing could possibly start with purchases from Russia and Angola, one of the people said, although the source had no details of anything in the works. Both Russia and Angola, like China, are keen to break the dollar's global dominance. They are also two of the top suppliers of crude oil to China, along with Saudi Arabia. The move would mark a major step in reviving usage of the currency of the world's second-largest economy for offshore payments after several years of on-again, off-again measures."
China is reportedly taking the first steps to pay for oil in yuan: Sources
Reuters, 31 March 2018

"Britain's greenhouse gas (GHG) emissions fell by 3 percent last year from 2016 levels, largely due to a decline in coal-fired power generation and marking the fifth straight yearly drop, preliminary government data showed on Thursday. Output of the heat-trapping gases in Europe's second-largest emitter behind Germany fell to 456 million tonnes of carbon dioxide equivalent (CO2e), the Department for Business, Energy and Industrial Strategy (BEIS) said. Thursday's data shows Britain's GHG emissions have fallen 43 percent since 1990, meaning it is more than half way towards meeting a legally binding target to cut its GHG emissions by 2050 to 80 percent below 1990 levels. A breakdown of the 2017 figures showed emissions of carbon dioxide (CO2), the main greenhouse gas blamed for climate change, fell 3 percent to 367 million tonnes. Energy-sector CO2 emissions fell by 8 percent as coal-fired power production dropped, and was replaced by record output from renewables such as wind and solar. Separate provisional data, released by BEIS on Thursday, showed power generation from coal plants fell 26 percent in 2017 to 21.36 terawatt hours (TWh), making up less than 7 percent of Britain's total electricity supply. Britain plans to close all coal-fired power stations by 2025 unless they are fitted with technology to capture and store carbon emissions. Earlier this month, it also rejected plans for a new open cast coal mine in northeastern England on climate grounds. Gas-fired power generation fell almost 6 percent in 2017, while renewable power generation from wind and solar soared, the data showed. Wind power rose 33 percent to a record 40.9 TWh while solar generation was up 43 percent to a record 2.9 TWh."
Britain's greenhouse gas emissions fall again as coal use plummets
Reuters, 29 March 2018

"The OIES paper UK dependence on imported hydrocarbons: how important is Russia? notes that one of the greatest risks is the lack of domestic gas storage capacity, now Centrica's Rough storage facility under the North Sea is being closed. That means the UK is more dependent on spot LNG cargoes and extra pipeline gas purchases from Europe via two interconnectors from Belgium and the Netherlands—which includes Russian gas in the mix, of course—to fill the gap during unforeseen spikes in demand. This also leaves the country more vulnerable to spikes in the UK National Balancing Point (NBP) prices, such as that which accompanied cold weather in early March. "If the NBP price spikes had not attracted LNG deliveries to replenish storage tanks at the UK's LNG terminals, and the period of both cold weather and consequent increased UK gas demand had continued, the UK could have faced a more severe gas shortage," the paper said.... As the UK becomes more dependent on gas imports, given dwindling gas supply from its parts of the North Sea, so NBP pricing has moved closer to that in north-west Europe. That means any interruption in gas flows to continental Europe would also affect UK gas prices. So, if European support for the UK over the nerve agent attack—manifest in the round of diplomatic expulsions that took place in March—or, indeed, anything else leads to restrictions on Gazprom's gas supply to European markets, then the UK would also probably feel the impact. Despite this, the idea that Gazprom or even its European gas marketing arm could directly affect UK gas supply seems remote—there are plenty of other places to buy gas in Europe. But Brexit could increase gas supply risks faced by the UK, should the UK's departure from the EU mean it is no longer be part of gas-sharing mechanisms in place to deal with regional gas shortages. If the UK becomes a competitor to the EU for LNG cargoes or pipeline gas, then securing supplies in an emergency would become that much harder."
UK gas security safe from Russian reprisals
Petroleum Economist, 29 March 2018

"Oil prices are likely to rise this year thanks to supply disruptions and an OPEC-led deal to limit production, but doubts over the future of compliance with the multilateral agreement and rising U.S. production could stem the upward momentum, a Reuters poll showed on Thursday. A survey of 31 economists and analysts polled by Reuters showed Brent crude <LCOc1> would average nearly $64 a barrel in 2018, versus $63 forecast in the February survey, but below the $67.18 average for the benchmark so far in 2018.  Brent prices have risen 4 percent this year, supported by a deal between the Organization of the Petroleum Exporting Countries and non-OPEC producers led by Russia to curb output by about 1.8 million barrels per day (bpd) through 2018. The price briefly rose above $70 a barrel this week, supported by tension in the Middle East and declining output in Venezuela, one of the group's largest producers, where economic crisis has cut production to its lowest in nearly 30 years. A sustained drawdown in U.S. inventories also helped push the price up towards $70, a peak last seen in December 2014."
Oil to rise in 2018 as OPEC wages tug-of-war with U.S. shale - Reuters Poll
Reuters, 29 March 2018

"The economics of generating electricity from fossil fuels are deteriorating rapidly as renewable energy technology plunges in costs. That’s the conclusion of a Bloomberg New Energy Finance report on the levelized cost of energy, a measure that takes into account the expenses from buying equipment, servicing debt and operating power plants using each technology. In most places, wind and solar will work cheaper than coal by 2023, the research group said Wednesday. “Some existing coal and gas power stations, with sunk capital costs, will continue to have a role for many years, doing a combination of bulk generation and balancing,” said Elena Giannakopoulou, head of energy economics at BNEF. “But the economic case for building new coal and gas capacity is crumbling.” The findings put in context the many factors upending the calculations about the best way to generate electricity in the coming years. In a 104-page report, BNEF examined the economics of the industry in key jurisdictions from China and the U.S. to India and Australia, assessing the main renewable technologies. One new factor: lithium-ion batteries have enjoyed a 79 percent drop in costs since 2010, making the idea of storing energy a possibility the coming years. The price per megawatt-hour for generating from wind farms built on land fell 18 percent in the first half of 2018 to $55 while photovoltaics dropped 18 percent to $70.... The cheapest solar and wind costs can now be found in China and India, which are also among the worst polluters. The tumbling costs will continue until at least until 2040 for both renewable energy sources worldwide and they’ll become cheaper than coal and gas within five years, the report showed. Coal and gas generate more than a third of the world’s electricity. For now, they remain the cheapest sources of electricity even after the sharp drops in the cost of wind and solar power. Battery costs are also starting to change the way power utilities think about how they generate. At the moment, electricity is costly to bottle up at scale, with most storage done through pumped hydro projects. Those raise water into a reservoir when power prices are cheap then allow it to flow over a turbine when the electricity is needed. Cheaper batteries could allow utilities to store up electricity that was generated during the day by solar farms and use it at night. They could preserve power from windy days for times when it’s calm. Adding a battery to an existing wind or solar plant can give it access to high-value hours. By 2025, four-hour battery energy storage will start to compete with gas plants, even in countries with cheap gas generation like the U.S., BNEF said."
Fossil Fuels Squeezed by Plunge in Cost of Renewables, BNEF Says
Bloomberg, 28 March 2018

"China met its 2020 carbon intensity target three years ahead of schedule last year, the official Xinhua news agency reported on Tuesday, citing the country’s top climate official Xie Zhenhua. China, the world’s biggest energy consumer, cut its 2005 carbon intensity level, or the amount of climate-warming carbon dioxide it produces per unit of economic growth, by 46 percent in 2017, Xie told a forum in Shanghai on Tuesday.Carbon intensity fell 5.1 percent in 2017 compared to the previous year, Xinhua said, suggesting that China’s war on pollution also helped reduce greenhouse gas emissions. China originally promised to cut its 2005 carbon intensity by 40 percent to 45 percent. The pledge, first made in 2009, was included in the country’s commitments to the international community ahead of negotiations for a new global climate pact in Paris in 2015. However, China struggled to honor another promise to establish a nationwide emissions cap and trade system by 2017, with the scheme delayed by technical problems, including the reliability of emissions data. The country eventually settled for a scaled-back scheme involving only the power sector, which was launched in December last year. In his speech, Xie said the national market, though only at an embryonic stage, already covers about 1,700 power firms with total carbon dioxide emissions in excess of 3 billion tonnes, making it the world’s biggest. He said China would continue to work to expand coverage to other industries."
China meets 2020 carbon target ahead of schedule: Xinhua
Reuters, 27 March 2018

"Qatar has proposed that Russian companies take part in tenders for the further development of gas fields in 2019-2020, RIA news agency cited the Qatari envoy to Russia Fahad bin Mohammed Al-Attiyah as saying on Sunday. “Russian companies, like others, may try to win the tender, which will be announced,” he is quoted as saying. Russian President Vladimir Putin will meet the Emir of Qatar in Moscow on March 26, the Kremlin said on Friday. They will discuss the development of Russian-Qatari relations, as well as international and regional issues, according to a Kremlin statement."
Qatar proposes Russian companies develop gas fields in 2019-2020 -RIA
Reuters, 25 March 2018

"China is set to launch its long-awaited renminbi-denominated oil futures contract on Monday, as the world’s largest crude importer seeks to extend its influence over the pricing of barrels sold into Asia. The Shanghai International Energy Exchange has set the opening price for the front-month of its crude futures contract at Rmb416 a barrel, about $66. China imported 8.4m barrels a day last year, outpacing the US, which buys 7.9m b/d from overseas markets, according to the US energy department. After establishing itself as a leading buyer of physical barrels, China has ambitions to exert the same power over the trillions of dollars traded each year in oil futures contracts. The country also seeks to make its currency a bigger player on the world stage, extending its clout over the global economy."
China seeks to extend oil market clout with new contract
Financial Times, 25 March 2018

"Proven oil and gas reserves in Mexico fell again this year as new discoveries failed to keep pace with ongoing production, but officials pointed to the first-ever reserves contributed by private companies operating their own blocks as silver lining. Overall reserves fell by more than 7 percent at the start of 2018 compared with a year earlier to total 8.483 billion barrels of crude oil equivalent (boe), according to data published on Friday by Mexico's National Hydrocarbons Commission (CNH). The vast majority of Mexico's proven reserves have been contributed by national oil company Pemex, which enjoyed a decades-long monopoly until a 2013 constitutional reform ended it, paving the way for private producers to enter the sector. But a relatively small amount of the reserves now reflect discoveries made by private and foreign oil companies."
Mexico oil reserves dip again as private firms begin to contribute
Reuters, 23 March 2018

"... in 2018 the UK has bought some liquid natural gas from Russia. Energy consultancy Wood Mackenzie said that this year the UK has imported three cargoes of Russian LNG from the Yamal gas project in northern Siberia. Murray Douglas, research director at Wood Mackenzie, said: "Each cargo provides around 0.1 billion cm of gas. UK gas demand so far in 2018 stands at 21.15 billion cm. So, direct Russian gas imports to the UK have accounted for 1.4% of total supply so far." A BEIS spokeswoman confirmed that Russian LNG was unloaded at the Isle of Grain terminal near Kent, and at the Dragon LNG terminal in south Wales. Consultancy firm McKinsey has said that the closure of the Rough gas storage facility in the North Sea means that the UK is more reliant on gas imports from overseas. In the early part of this decade, the UK's reliance on imported energy had an upward trend, according to the ONS, but then started falling. Net imports accounted for 36% of energy use in the UK in 2016, down from a peak of 48% in 2013."
Salisbury attack: How much of the UK's gas comes from Russia?
BBC, 18 March 2018

"Scientists have created the world’s first rechargeable proton battery, a crucial step towards cheaper and more environmentally-friendly energy storage. While the battery is just a small-scale prototype, it has the potential to be competitive with currently available lithium-ion batteries. The rechargeable battery, created by researchers at RMIT university in Melbourne, uses carbon and water instead of lithium. The lead researcher Professor John Andrews said that as the world moved towards renewables, there would be a significant need for storage technologies that relied on cheap and abundant materials....The battery itself produces no carbon emissions and it can store electricity from zero-emissions renewables. Andrews said it could be commercially available within five to 10 years. “When it is commercially available, it would be a competitor to the Tesla Powerwall and then eventually we’d hope we might find applications at the scale of the huge Tesla battery [in South Australia] and even larger.”"
Look, no lithium! First rechargeable proton battery created
Guardian, 9 March 2018

"The dream of nuclear fusion is on the brink of being realised, according to a major new US initiative that says it will put fusion power on the grid within 15 years. The project, a collaboration between scientists at MIT and a private company, will take a radically different approach to other efforts to transform fusion from an expensive science experiment into a viable commercial energy source. The team intend to use a new class of high-temperature superconductors they predict will allow them to create the world’s first fusion reactor that produces more energy than needs to be put in to get the fusion reaction going. Bob Mumgaard, CEO of the private company Commonwealth Fusion Systems, which has attracted $50 million in support of this effort from the Italian energy company Eni, said: “The aspiration is to have a working power plant in time to combat climate change. We think we have the science, speed and scale to put carbon-free fusion power on the grid in 15 years.” The promise of fusion is huge: it represents a zero-carbon, combustion-free source of energy. The problem is that until now every fusion experiment has operated on an energy deficit, making it useless as a form of electricity generation. Decades of disappointment in the field has led to the joke that fusion is the energy of the future – and always will be.  The just-over-the-horizon timeframe normally cited is 30 years, but the MIT team believe they can halve this by using new superconducting materials to produce ultra-powerful magnets, one of the main components of a fusion reactor. Prof Howard Wilson, a plasma physicist at York University who works on different fusion projects, said: “The exciting part of this is the high-field magnets.” Fusion works on the basic concept of forging lighter elements together to form heavier ones. When hydrogen atoms are squeezed hard enough, they fuse together to make helium, liberating vast amounts of energy in the process.However, this process produces net energy only at extreme temperatures of hundreds of millions of degrees celsius – hotter than the centre of the sun and far too hot for any solid material to withstand. To get around this, scientists use powerful magnetic fields to hold in place the hot plasma – a gaseous soup of subatomic particles – to stop it from coming into contact with any part of the doughnut-shaped chamber. A newly available superconducting material – a steel tape coated with a compound called yttrium-barium-copper oxide, or YBCO – has allowed scientists to produce smaller, more powerful magnets. And this potentially reduces the amount of energy that needs to be put in to get the fusion reaction off the ground.... The experimental reactor is designed to produce about 100MW of heat. While it will not turn that heat into electricity, it will produce, in pulses of about 10 seconds, as much power as is used by a small city. The scientists anticipate the output would be more than twice the power used to heat the plasma, achieving the ultimate technical milestone: positive net energy from fusion. Prof Wilson was also cautious about the timeframe, saying that while the project was exciting he couldn’t see how it would achieve its goal of putting energy on the grid within 15 years."
Nuclear fusion on brink of being realised, say MIT scientist
Guardian, 9 March 2018

"India and China are set to contribute nearly 50 per cent to the increase in the global demand for oil over the next five years, the International Energy Agency (IEA) said in its report on oil sector for 2018. According to IEA, demand is expected to grow at an annual rate of 1.2 million barrels per day (mbd) until 2023, as the oil demand would reach 104.7 mbd, up by 6.9 mb day from 2018. “As China’s economy becomes more consumer-oriented, the rate of growth in oil demand slows down to 2023, compared with the 2010-17 period. By comparison, the pace of oil demand growth will pick up slightly in India,” it says. The report says that though there is no peak oil demand in sight, the pace of growth will slow down to 1 mb per day by 2023 after expanding by 1.4 mb per day in 2018. “There are signs of substitution of oil by other energy sources in various countries. A prime example is China, which has some of the world’s most-stringent fuel efficiency and emission regulations. As the country recognises the urgent need to tackle poor air quality in cities, efforts are intensifying,” it adds.... “Oil market is likely to tighten by 2023 with increased risk of price volatility. The market could go through two phases during the next six years. Through 2020, record supply from non-OPEC countries more than covers expected demand growth. By 2023, if investments remain insufficient, the effective global spare capacity cushion falls to only 2.2 per cent of demand and raises the possibility of oil prices becoming more volatile until new supplies come on line,” research agency CARE Ratings said in its comments on the IEA report. It added that there would still be a continued reliance on OPEC countries for a major share of global supply. “Within OPEC, more than 2 mbd of spare capacity is held in Saudi Arabia. In turn, this emphasises the crucial role OPEC’s largest producer continues to play in providing stability to global oil markets,” it said."
India, China to fuel 50% of rise in global oil demand in 5 years, says IEA
Business Standard, 8 March 2018

"The world could suffer an oil supply crunch by 2023, raising the risk of price spikes, because investment in exploration remains stubbornly low, experts have warned.Rising oil production from the United States will meet most of growing demand over the next three years, but after that markets could start to get much tighter, according to the International Energy Agency.In its annual oil market outlook, Fatih Birol, the agency’s executive director, said that investment in exploration and production still showed “little sign of recovering from its plunge in 2015-16”. He said that this “raises concerns about whether adequate supply will be available to offset natural field declines and meet robust demand growth after 2020”.”
‘Crunch is looming’ for oil supplies
Times, 6 March 2018

"Russia and Pakistan are negotiating potential energy deals worth in excess of $10 billion, according to Pakistani energy officials. ....Russia last month appointed an honorary council in the Pakistan’s northern Khyber Pukhtunkhwa province, where its companies are in talks to build an oil refinery and a power station.But the biggest deals focus on gas supply and infrastructure to Pakistan, one of the world’s fastest growing liquefied natural gas (LNG) import markets.“On a strategic basis, Russia is coming in very fast on the energy side,” said a senior Pakistani energy official.In October, Pakistan and Russia signed an inter-governmental agreement (IGA) on energy, paving the way for Russian state-giant Gazprom to enter negotiations to supply LNG to Pakistan.The talks are expected to conclude within three months and Gazprom is considered “one of the front-runners” to clinch a long-term supply deal, according to the Pakistani official. Based on two monthly LNG cargo deliveries, that deal would be worth about $9 billion over 15 years, he added.There is also growing confidence that a gas pipeline due to be built by Russia, stretching 1,100 km (680 miles) from Lahore to the port city of Karachi, will go ahead.US sanctions against Russian state conglomerate Rostec, as well as a dispute over North-South pipeline transport fees, have held up the $2 billion project since it was signed in 2015.The North-South pipeline would be the biggest infrastructure deal by Russia since early 1970s, when Soviet engineers constructed the Pakistan Steel Mills industrial complex."
With gas and diplomacy, Russia embraces Cold War foe Pakistan
The Nation, 6 March 2018

"Oil production growth from the United States, Brazil, Canada and Norway will more than meet global oil demand growth through 2020, the IEA said, adding that more investment would be needed to boost output after that.Non-OPEC production is set to rise by 5.2 million bpd by 2023 to 63.3 million bpd with the United States alone accounting for nearly 60 percent of global supply growth.Production in 2017 rose by 670,000 bpd as drillers added 200 rigs, “beating all expectations”, the IEA said.Output from OPEC producers will grow at a much slower pace, the IEA said, adding it expected Venezuelan production declines to accelerate, offsetting gains in Iraq. Birol said Venezuela’s production outlook may need to be cut in coming years as well.As a result, OPEC’s crude oil capacity will grow by just 750,000 bpd by 2023, the IEA said.With shale and other non-OPEC supply rising, demand for OPEC crude plus withdrawals from inventories will average 31.8 million bpd in 2019, the IEA said, 1.8 million bpd less than its last medium-term forecast.This is lower than demand of 32.3 million bpd expected in 2018 and below the IEA’s latest estimate of OPEC’s production of 32.16 million bpd.With forecast capacity of 36.3 million bpd, OPEC will be supplying less than 35 percent of global demand by 2023 compared to its historic share around 40 percent.Boosted by economic growth in Asia and a resurgent U.S. petrochemicals industry, global oil demand will increase by 6.9 million bpd by 2023 to 104.7 million, according to the IEA.Despite steep non-OPEC oil production gains, the IEA warned that a decline in mature fields meant more investment was needed across the globe after 2020.“Upstream investment shows little sign of recovering from its plunge in 2015-2016, which raises concerns about whether adequate supply will be available to offset natural field declines and meet robust demand growth after 2020,” it said."
IEA sees U.S. oil output surge stealing OPEC share in next five years
Reuters, 5 March 2018

"Russia’s oil and gas condensate production will grow in the next few years, peak in the early 2020s and then begin to fall due to the sanctions and the industry’s taxation scheme, the International Energy Agency (IEA) said in an oil market report.... In 2017, Russia hit a record oil output of nearly 11 million barrels per day despite its participation in a production cut agreement between OPEC and non-OPEC states. According to the agency,  further growth is possible in the next few years if restrictions envisaged by the agreement are lifted and new projects are launched."
IEA: Russia’s oil output to reach its peak in 2020
Vestnik Kavkaza, 5 March 2018

"Canada will continue to pump out more barrels from the oilsands over the next few years, but delays to pipeline approvals and uncertainty over the provision of more export capacity is undermining the next wave of development, according to the International Energy Agency. In its annual five-year oil forecast published Monday, the IEA warned that Canadian oil pipeline constraints are part of a wider capacity crisis brewing across North America. “Colossal growth in North American supply from 2018 to 2023 raises the crucial question of whether there is enough pipeline capacity to transport and sell all of that oil,” the Paris-based agency said in a report. “If sufficient capacity is not built, the increase in production we foresee could be at risk, with serious implications for global markets.” Despite the pipeline shortages, Canada will be among the countries leading growth in oil output over the next few years, taking its overall production to 5.6 million barrels per day by 2023, compared to 4.8 million bpd this year.... While supply from non-OPEC countries will more than cover expected demand growth till 2020, the situation could become more acute by 2023, if investments remain insufficient and effective global spare capacity cushion falls to only 2.2% of demand, the lowest number since 2007. “This raises the possibility of oil prices becoming more volatile until new supplies come on line,” the IEA said."
Pipeline shortage could choke North America’s oil supply with ‘serious implications for global markets’, IEA warns
Financial Post, 5 March 2018

"The U.S. may take over as the world's leading oil producer this year and continue to dominate crude growth for at least the next five years, the the International Energy Agency said Monday. The problem is that global energy investments outside of U.S. onshore shale aren't keeping pace with worldwide oil demand growth trends and crude shortages could eventually emerge, said IEA Executive Director Fatih Birol while speaking at the CERAWeek by IHS Markit conference in downtown Houston. Oil and gas spending internationally is yet to rebound from the 2014 bust in oil prices. "Are we seeing enough (global) investments to provide the boosts?," he said. " Our answer is absolutely not." The world isn't going to hit peak oil demand in the next few years, so more investment in production is needed, especially since about 3 million barrels a day are taken offline each year from as mature fields dry up, he said. The U.S. projected to add more than 3.5 million barrels a day through 2023, the IEA said. Brazil, Canada, Norway, Iraq and Iran also are increasing production, but much more slowly, although some of that is offset by declines in Venezuela and other nations. The IEA isn't projecting much crude production growth from the Organization of the Petroleum Exporting Countries in part because of agreement to limit production to help boost global oil prices."
U.S. shale leading oil growth as rest of the world falls behind
Houston Chronicle, 5 March 2018

"While the United States is indeed exporting 1.5 million barrels per day of crude oil overseas (9% of U.S. crude oil consumption), a development enabled by the lifting of the crude oil export ban in late 2015, we are still importing 7.6 million bpd (47% of U.S. crude consumption). This makes the United States still a net importer of crude oil. Even accounting for U.S. net exports of petroleum products (3.5 million bpd in November, 2017), the United States remains a net importer of crude oil and petroleum products overall. And we will continue to be so for at least the next several years, even under the most optimistic production forecasts....For now, what the shale boom has done is substantially reduced our net imports of crude oil, from roughly 66% of U.S. consumption ten years ago to 38% by November, 2017. This decrease means that the overall U.S. economy will be less sensitive to oil price shocks than it was in the past—such as the 1973-1974, 1979-1981 and 1990 oil price shocks that are associated with U.S. recessions.The net effect of an oil price shock is to shift money from oil consuming countries into oil producing countries. So when net imports were 10 million bpd ten years ago, a one dollar increase in the price of oil meant that an additional $10 million would be going out the door every day. The decrease in U.S. net imports substantially blunts this impact.”
U.S. Shale Boom Has Led To Big Payoffs, But Energy Independence Isn't One -- Nor Should It Be
Forbes, 5 March 2018

"The US will dominate oil production growth over the next two years, keeping the market well supplied, but a crunch could loom after 2020 if investment into future global output fails to keep up with rising consumption, the International Energy Agency said.Crude prices above $60 a barrel, prompted by robust world demand for oil and output cuts from global producers led by Opec and Russia, have spurred a second wave of production growth from US shale companies.These producers, which are more efficient than before the oil market crash in 2014, will help US output grow by 3.7m barrels a day by 2023 — more than half of the world’s total growth, the Paris-based body said in its five-year oil market outlook.The agency revised higher its US output estimates by more than 2m b/d compared with last year’s report. The US, together with Brazil, Canada and Norway, will ensure supply growth meets rising consumption over the next two years with total supply outside of the Opec cartel expected to reach 63.3m b/d in 2023.But the IEA said a pullback in spending on exploration and production since the price crash could be “storing up trouble”. A recovery in investment has “barely started” and the world is at risk of a shortage in extra production capacity.“Upstream investment may be inadequate to avoid a significant squeezing of the global spare capacity cushion by 2023,” the IEA said. “With global demand rising steadily, the response from the supply side is crucial.”The ability to produce additional barrels in the event of a supply shock is important and without sufficient spending, the amount of extra capacity on hand could drop to just over 2 per cent of demand — the lowest since 2007.For decades the world has relied on Opec countries, particularly the cartel’s de facto leader Saudi Arabia, to provide this security. The kingdom hold’s the largest share of the world’s spare capacity at more than 2m b/d.“This emphasises the crucial role Opec’s largest producer continues to play in providing stability to global oil markets,” the IEA said.The report comes as the industry debates whether a more resilient US oil industry will be able to deliver production growth robust enough to meet rising demand in the coming years, keeping a ceiling on prices.The US is expected to surpass Saudi Arabia and could rival Russia as the world’s biggest producer, disrupting an oil order in place for decades.But the IEA said US oil alone would not be enough and the amount of oil required from Opec producers was expected to rise to 34.1m b/d, up from 32.3m b/d in 2018.Every year the world must replace another 3m b/d of production, which is lost because of declining output rates from mature fields. It also must meet demand growth driven by an expanding global economy led by India and China.The agency says that a peak in total oil demand is not in sight, but growth may slow to 1m b/d by 2023 from 1.4m b/d this year. Total demand is forecast at 104.7m b/d in 2023.”
IEA warns of oil supply crunch after 2020
Financial Times, 5 March 2018

“A global energy watchdog says booming production in the United States will meet 80 percent global growth in demand for oil over the next five years.The International Energy Agency believes slow growth from OPEC will be offset by oilfields in the U.S.The group, based in Paris, issued its annual oil market report on Monday. The resurgence in U.S. production is the most prominent change since the group's last forecast.The retreat by oil producers during an oil-price plunge between 2014 and 2016, however, continues to raise the specter that not enough money has been spent on exploration, which can result in shortages and price spikes. The IEA predicts that within five years, the cushion of production capacity over expected demand will fall to its lowest level since 2007."
US oil expected to meet most of world's growth in demand
Associated Press, 5 March 2018

“Last month, an engineer at a small power company in Solihull took a call from National Grid. A large gas plant had failed. Could the engineer’s company, UK Power Reserve, start up one of its small gas power units to help?Without standing up, the engineer sent a text message asking for one of UKPR’s 20MW plants to be fired up. Two minutes later, the plant, a series of gas engines in green containers, each with its own chimney, was up and running.A few hours later, the large gas power station was back on line and UKPR turned off its unit.The episode showed how small, flexible power plants are now bridging the supply gaps, especially at a local level, between intermittent renewables and Britain’s fleet of large, but slow-to-fire-up, gas and coal plants.Although they only generate small amounts of power, these mini units are cheap to build at around £5m for a 6MW plant and nimble to operate. They are increasingly valuable at times of peak demand, such as during last week’s extreme weather, or when the wind does not blow or the sun does not shine.Proponents of renewable power, which accounted for just over 29 per cent of the UK’s electricity generation last year, argue that battery storage will help smooth out the peaks and troughs.Sceptics say there will always be a need for baseload generation, large gas or nuclear plants, to ensure the country’s energy security.And in between, there is likely to be a growing need for low-cost, rapid-response power that can fill in close to where it is needed. “There is a strong need for flexible generation in the GB power market given the continuing growth in intermittent renewables,” said Simon Virley, head of Power & Utilities at KPMG and a former government energy adviser.The amount of such distributed generation, in terms of installed capacity, has almost doubled in the past six years; it accounted for just 15 per cent of installed capacity in 2011 but rose to 27 per cent or 26GW in 2016, according to National Grid figures.Lucrative government subsidies have been a big driver behind the growth of the industry, which also includes diesel-powered generators and storage.The government’s latest capacity auction last month, through which companies bid for subsidy contracts to deliver power at peak times, saw small new gas plants among the big winners.UKPR secured 200MW of gas-fired power capacity in the auction. The contract wins will boost the company’s generating capacity past the 1GW mark, equivalent to the output of two large-scale combined cycle gas turbine plants but spread across 40 different sites.”
Mini power plants smooth out UK’s energy landscape
Financial Times, 4 March 2018

"OIL and gas production over the next three decades could be 2.8 billion barrels higher than previously anticipated.While crude oil production fell by 2.6 per cent between 2016 and 2017, a new report from the Oil and Gas Authority (OGA) said that last year production in the UK Continental Shelf (UKCS) had been “maintained at a level not seen since 2011”. The industry body has now revised upwards its projection for the North Sea over the period 2016 to 2050 to a total of 11.7 bn barrels of oil equivalent (boe).That is 2.8 bn boe higher than had been forecast before leading industry figure Sir Ian Wood produced a report on maximising yield in the North Sea in 2014.A new report on oil and gas production and expenditure from the OGA said the industry in the UK had produced 1.63 million boe a day in 2017.This was despite the closure of the Forties pipeline system in December, which was shut down for three weeks after a crack was discovered.Without this, production would have risen in 2017. Overall operating costs in the sector rose by 3 per cent in 2017 to £6.9 bn – although this was still 27 per cent lower than the 2014 high.However capital expenditure fell for the third year in a row, to £5.6 bn, and is expected to fall for the “foreseeable future”, the OGA said.The report stressed its projections were “best estimates rather than a definitive prediction of future UK production of oil and gas”, as future North Sea production was “dependent on a number of different factors”.But it said: “The future potential of the basin could be boosted further through investment, exploration successes and resource progression. The OGA is supporting this through emphasis on the revitalisation of exploration, the implementation of area plans and promoting the development and adoption of new technologies.”OGA chief executive Andy Samuel said: “The extra 2.8 billion barrels identified shows the future potential of the basin which could be boosted further through investment and exploration successes. 2017 continued to be a productive year and production levels are set to rise in 2018 as more new fields come on-line.”
North Sea set for oil boom as estimates are increased by billions of barrels
The National, 2 March 2018

“The United States will overtake Russia as the world’s biggest oil producer by 2019 at the latest, the International Energy Agency (IEA) said on Tuesday, as the country’s shale oil boom continues to upend global markets.IEA Executive Director Fatih Birol said at an event in Tokyo the United States would overtake Russia as the biggest crude oil producer “definitely next year”, if not this year.“U.S. shale growth is very strong, the pace is very strong … The United States will become the No.1 oil producer sometime very soon,” he told Reuters separately.U.S. crude oil output rose above 10 million barrels per day (bpd) late last year for the first time since the 1970s, overtaking top oil exporter Saudi Arabia.The U.S. Energy Information Administration said early this month that U.S. output would exceed 11 million bpd by late 2018. That would take it past top producer Russia, which pumps just below that mark.Birol said he did not see U.S. oil production peaking before 2020, and that he did not expect a decline in the next four to five years.The soaring U.S. production is upending global oil markets, coming at a time when other major producers – including Russia and members of the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) – have been withholding output to prop up prices.U.S. oil is also increasingly being exported, including to the world’s biggest and fastest growing markets in Asia, eating away at OPEC and Russian market share.Meanwhile, U.S. net imports of crude oil fell last week by 1.6 million bpd to 4.98 million bpd, the lowest level since the EIA started recording the data in 2001, reflecting further erosion in a market OPEC has been relying on for decades.Birol said production growth was not just strong in the United States.“Canada, especially the oil sands, and Brazilian offshore projects. These are the two major (non-U.S.) drivers,” he said.On the demand side, Birol said the IEA expected growth of around 1.4 million bpd in 2018."
U.S. to overtake Russia as top oil producer by 2019 at latest: IEA
Reuters, 27 February 2018

"Venezuelan President Nicolas Maduro promised on Saturday to recover 70 percent of the country's lost oil production in the first half of 2018. "I can tell you, the unprecedented injustices led to an important fall of a million barrels of oil," Maduro said in an interview with state television without giving more specific figures or defining a time period for the output decline. "I think that in the first half of this year, we will have recovered 70 percent of production," he said. Venezuela's oil production dropped by nearly 13 percent last year according to figures released by OPEC in January, hitting a 28-year low that suggested a deepening economic crisis and increased chances of a debt default. Venezuela produced 2.072 million barrels per day (bpd) in 2017 compared with 2.373 million bpd the previous year, registering a near 300,000 bpd drop. Maduro has criticized an "economic war" led by the United States as well as corruption in the state oil company PDVSA for shrinking production."
Venezuela's Maduro says to recover 70 percent of oil output decline
Reuters, 25 February 2018

"Russia remained the top crude oil supplier to China in January, data showed, beginning 2018 on a strong note after the start-up of an expanded trans-Siberia pipeline and as Beijing released more crude import quotas to independent refiners. Angola and Iraq took the second and third positions for the month, leapfrogging Saudi Arabia, which was the second-largest supplier to China in 2017. Russian supplies came in at 5.67 million tonnes, or 1.34 million barrels per day (bpd), up 23.4 percent from a year earlier, data from the Chinese General Administration of Customs showed on Saturday. The January number compared with 1.194 million bpd in December. Last month, data showed Russia notched up its second year as China’s largest supplier in 2017, surpassing Saudi Arabia - OPEC’s top exporter - by some 150,000 barrels each day. The strong Russian exports to the world’s largest crude oil buyer came as a second East Siberia-Pacific Ocean (ESPO) pipeline, as well as expanded domestic connections in China, started commercial operation in January. In a reshuffle of the pack, Angola ranked second with 4.68 million tonnes, or 1.1 million bpd, of crude in January, down 5.4 percent from a year earlier."
Russia remains China's top oil supplier as pipeline expands
Reuters, 24 February 2018

"The Dutch government Thursday appeared poised to meet demands to halve production at Europe's biggest gas field, as dozens of farmers mounted tractors to protest damaging earthquakes in the region. Economics Minister Eric Wiebes said he wanted to cut output in the northern Groningen gas field "as soon as possible" to a new recommended level of 12 billion cubic metres.  But first he said he wanted to discuss the issue with neighbours France and Germany, hoping to make a decision next month. Dozens of Groningen farmers meanwhile arrived in The Hague with their tractors to protest against fracking, as MPs debated the issue in parliament. The drama came as the Dutch mine safety board urged the government Thursday to take drastic action, seeking to halt the earthquakes which have plagued the region for years. "A major intervention is necessary in order to properly meet the safety standard and to reduce the risk of damage," the board said. Although no-one can predict when earthquakes will happen in the northern region, "we advise the minister to reduce the gas production as soon as possible to a maximum production level of 12 billion cubic metres per annum." This would be well below the current gas production of some 21.6 billion cubic metres, which was set in April 2017, and was already drastically scaled back from 53.9 billion cubic metres in 2013. Residents have increasingly called for all gas production to be halted in the region. "All our homes are falling apart," Annemarie Heite, 47, told AFP as she joined other farmers with their tractors at a protest close to the parliament, adding the problem had been "ignored for the past five years by our government." "These are man-made quakes and combined with the clay soil we have in Groningen everything is falling apart, our cultural heritage, our farms, our churches and eventually also the people." The low magnitude earthquakes are said to result from huge air pockets left underground because of gas extraction. But tempers rose after more than 900 homes were damaged in early January when Groningen province was hit by a 3.4-magnitude quake -- its largest since 2012. "Farmers are usually not protesters. They stay at home. But if their businesses are being ruined, you go bankrupt," Harm Wiegersma, from the Dutch dairy farmers union, told AFP. "This is a clear call for help from farmers," he added. Gasunie, which transports gas in the Netherlands and northern Germany, said however such a radical cut in Groningen gas risked leaving homes without heating next winter.....  Last year, a total of 18 quakes measuring 1.5 magnitude or higher were measured in the Groningen gas field, according to the Royal Dutch Meteorological Institute (KNMI). Top officials from ExxonMobil, NAM and Shell met MPs late Thursday and vowed that thousands of compensation claims for damage to homes and businesses would be paid. "NAM is financially robust," said Marjan van Loon, chief executive of Shell Netherlands. "All the bills will be paid," she stressed, adding Shell and ExxonMobil would discuss how the costs would be divided up. On Wednesday, the Dutch government announced it was setting up a new independent commission next month to assess all claims.  It will handle some 6,000 outstanding claims filed before March last year, as well as another 8,000 registered since then.  The aim is to have as many claims as possible settled by July, with the government then claiming the money back from NAM."

Dutch farmers protest fracking as govt set to cut gas output
AFP, 1 February 2018

"There have been varied reports regarding the effectiveness of security for smart grids. For example, some experts claim smart grids are at risk of cyber attack, while the National Cyber Security Centre’s (NCSC) technical director Ian Levy says: “Components of the smart metering system all interact in planned ways in order to contribute to the overall security of the system.” Rather than replacing the existing energy network, smart grids build on the existing power grid communication protocols – which already have a number of known vulnerabilities – as well as adding new communications networks to the transmission and distribution grid. “Any additional communication with existing infrastructure offers more doors to attackers to hack into the power grid,” says Zoya Pourmirza, a postdoctoral research associate at Newcastle University. There have been recent incidents where the power supply from a conventional power grid has been interrupted. One of the most recent was when multiple regional distribution power companies in Ukraine were hacked in December 2015, resulting in substations being switched off and tens of thousands of people left without electricity. ... attackers can be broadly subdivided into these categories: * Terrorists attacking another country by switching off the power grid. * Rogue states manipulating the energy market to destabilise the country. * Criminals monitoring power usage to determine when homes are empty. There is also the potential for corporations to manipulate the billing systems of their competitors, which is an attack type more likely to be carried out in some nation states than others. The network infrastructure of smart grids will now incorporate connections by anyone involved in the energy sector, from communication service providers to price comparison websites. Any of these could potentially, and inadvertently, provide an unauthorised access point into a smart grid."
How secure are smart energy grids?
ComputerWeekly, January 2018