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Former Shell Scientist M. King Hubbert Speaks On Peak Oil in 1976
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What Happened To The $11 Oil?

"The chairman of Royal Dutch/Shell, Mark Moody-Stuart, three months ago unveiled a five-year plan that assumed a price of $14 a barrel. He has since publicly mused about oil at $11. Sir John Browne, chief executive of BP-Amoco, is now working on a similar assumption. Consumers everywhere will rejoice at the prospect of cheap, plentiful oil for the foreseeable future. Policymakers who remember the pain of responding to oil shocks in 1973 and in 1979-80 will also be pleased."
The next shock?
Economist, 4 March 1999

".... today's $11-a-barrel price [is].... [the] lowest inflation-adjusted oil prices of the past half-century ...   Even if consumption rises dramatically over time, most analysts believe prices should remain in check because of advanced technology and because OPEC nations need to sell as much as they can to maintain their incomes..... Low oil prices are excellent news, of course, for big energy consumers. A sustained $10-per-barrel drop in the price of oil cuts about 0.7 points from the annual U.S. inflation rate over five years and adds about 0.3 points to the U.S. economy's growth.... [I]f you're still operating under the assumption that the earth's petroleum--or at least the cheap stuff--is about to run out, you're not going to thrive in the new oil era. Technology is making it possible to find, produce, and refine oil so efficiently that its supply, at least for practical purposes, is basically unlimited."
TREMORS FROM CHEAP OIL
Businessweek, 14 December 1999


2017

"We're running out of new oil. Explorers in 2017 discovered the least amount of oil since at least the 1940s, according to Rystad Energy, an oil and gas consultancy. It estimated that less than seven billion barrels of oil equivalent were found this year through Thursday. Some energy companies will announce more discoveries next year in their 2017 annual reports, but Rystad expects this to increase the 2017 total by 10% at most. New discoveries have fallen every year since 2014, when oversupply triggered an oil crash that cut its price by more than half. The plunge forced many upstream oil producers to reduce their spending, and helps explain why discoveries are also down. But that's not the only reason: explorers are finding less oil resources per field, according to Rystad. An average offshore discovery held about 100 million barrels of oil equivalent (boe) in 2017, down from 150 million boe in 2012. The last time oil and gas companies added to their reserves by as much as they were producing was in 2006, when the so-called reserve replacement ratio reached 100%. It was down to 50% in 2012, and 11% in 2017. This doesn't mean we're about to run out of crude oil. Major producers including the US have emergency reserves. Moreover, the industry's headache for the past few years has been too much oil. The Organisation of Petroleum Exporting Countries, a cartel of big producers, has agreed to deal with the oversupply problem by cutting output until the end of 2018. Also, there are usually a few years in between when an oil firm makes a large discovery and when it's ready for production. That means we can count on recent discoveries to keep our engines running for some time. And there were some major discoveries this year, like the 1 billion barrels found off the coast of Mexico by Premier Oil, Talos Energy, and Sierra Oil & Gas. But if oil discoveries continue trending down, we could be talking seriously about oil shortages in about a decade from now, Rystad estimates.  "While there have been some notable successes this year, we have to face the fact that the low discovered volumes on global level represent a serious threat to the supply levels some ten years down the road," said Sonia Mladá Passos, a senior analyst at Rystad, in a press release."
Oil discoveries are at an all-time low — and the clock is ticking
Business Insider, 23 December 2017

2016

"The Permian Basin in West Texas may be the second biggest field in the world after Ghawar in Saudi Arabia,” he said. Zhu Min, the deputy director of the International Monetary Fund, said US shale has entirely changed the balance of power in the global oil market and there is little Opec can do about it. “Shale has become the swing producer. Opec has clearly lost its monopoly power and can only set a bottom for prices. As soon as the price rises, shale will come back on and push it down again,” he said. The question is whether even US shale can ever be big enough to compensate for the coming shortage of oil as global investment collapses. “There has been a $1.8 trillion reduction in spending planned for 2015 to 2020 compared to what was expected in 2014,” said Mr Yergin. Yet oil demand is still growing briskly. The world economy will need 7m b/d more by 2020. Natural depletion on existing fields implies a loss of another 13m b/d by then. Adding to the witches’ brew, global spare capacity is at wafer-thin levels - perhaps as low 1.5m b/d - as the Saudis, Russians, and others, produce at full tilt. 'If there is any shock the market will turn on a dime,' he said. The oil market will certainly feel entirely different before the end of this decade. The warnings were widely echoed in Davos by luminaries of the energy industry. Fatih Birol, head of the International Energy Agency, said the suspension of new projects is setting the stage for a powerful spike in prices. Investment fell 20pc last year worldwide, and is expected to fall a further 16pc this year. “This is unprecedented: we have never seen two years in a row of falling investment. Don’t be misled, anybody who thinks low oil prices are the ‘new normal’ is going to be surprised,” he said. Ibe Kachikwu, Nigeria oil minister and the outgoing chief of Opec, said the ground is being set for wild volatility. “The bottom line is that production no longer makes any sense for many, and at this point we’re going to see a lot of barrels leave the market. Ultimately, prices will shoot back up in a topsy-turvey movement,” he said...Saudi Arabia has made it clear that there can be no Opec deal to cut output and stabilize prices until the Russians are on board, and that is very difficult since Russian companies are listed and supposedly answerable to shareholders."
Saudis ‘will not destroy the US shale industry’
Telegraph, 24 January 2016

2015

"Ten years ago you couldn’t avoid it if you tried. Books by James Howard Kunstler, Richard Heinberg, Kenneth Deffeyes, and others were warning that worldwide oil production would inevitably peak soon, based on analysis similar to that of celebrated geologist M. King Hubbert, who predicted, in 1956, that U.S. oil production would peak between 1965 and 1970. Darn if he wasn’t right. With the presumed world peak in oil production, national economies hooked on injecting oil straight into their largest arteries then began to decline. Peak oil doesn’t mean oil would disappear – half of it would still be left – just that less of it would be produced each year going forward, and shell-shocked economies would fall into a permanent state of recession as consumers battled, Mad Max-like, for every last barrel. Except “events never play out the way one expects,” said James Murray, a speaker at a session entitled “Is Peak Oil Dead and What Does It Mean for Climate Change?” at the AGU Fall Meeting in the City by the Bay. Technology came to the rescue, in the forms of fracking and three-dimensional directional drilling. U.S. oil production soared upward 54 percent in just five years, from 3.3 billion barrels in 2009 to 5.1 billion barrels in 2014. Although world oil production increased by only 8.5 percent in that time, it was enough to keep it from peaking. So is peak oil now an outdated concept, or does it still lie in our future? The latter, most experts at the AGU meeting were saying, while admitting they hadn’t foreseen the technological revolution that has allowed U.S. oil and gas production to soar over the past decade. Those resources are finite, and the cost of extracting them increases once the low-hanging fruit are picked. Oil has dropped to about $35 per barrel because oil producers, hungry for unconventional oil from tar sands and gas from shale, overproduced. Yet they’re still not making money, said James Murray from the University of Washington. Shale oil – what the industry calls “tight shale” – “is profitable for drillers, hotels and restaurants, but not for investors,” he said. Cash flow in this sector was $10 billion in the red in 2014, even as yet more money is plowed into it from, Murray thinks, investors desperate for yields as the Federal Reserve keeps inerest rates extremely low. Murray said the break-even price for conventional oil is $20 per barrel, but $75 per barrel for tight oil. So oil companies are drawing back: U.S. oil production seems to have peaked in July 2015, and even the Eagle Ford shale basin in Texas and the Bakken field in North Dakota are cutting back. “The world may be close to peak oil production,” Murray concluded....David Hughes, president of Global Sustainability Research, Inc. in Calgary, pointed out that “the remaining reserves [of fossil fuels] are large, but of lower quality and require more energy to produce.” He estimated that more than 90 percent of what are known in the field as 'unconventional sources' – shale gas and oil and tar sands oil – 'are not recoverable.'"
Whatever became of 'peak oil'? Still to come?
Yale Climate Connections, 18 December 2015

2014

"It is now generally accepted by those actually studying the issue that production of 'conventional oil,' which is what the early 'peakists' were talking about 10 or 15 years ago, really did stop growing back in about 2005-2008. Since then official 'oil' production numbers have continued to climb slowly, but included in the 'official' numbers as put out by the US and international agencies is not all your grandfather’s oil. Instead the compilers of our oil statistics have learned to lump all sorts of liquid hydrocarbons of varying utility together and tell us that oil in the form of 'all liquids' continues to grow. Now these hydrocarbons such as natural gas liquids, biofuels, tar sands, and shale oil have uses, but they either cost considerably more to produce than conventional oil, or do not have the same energy content as conventional oil. In at least one case, 'refinery gains' which are sort of like whipping up a pint of cream into gallons of whipped cream, have no additional energy in their expanded state at all. They simply fill more barrels and let us pretend we have more energy to use than we actually do. While the financial press continues to chatter endlessly about the technological breakthroughs that have brought us millions of barrels of new shale oil, sadly they have the basics of the story wrong. It is the high prices that 'oil' has been selling for in the last ten years, not the decades-old fracking technology that has allowed very expensive shale oil to be produced that is new. Even with the recent $40 per barrel price decline, oil is still selling for four times what it was going for 12 or 13 years ago. It is the surge in prices to circa $100 a barrel has allowed very expensive oil such as that from fracked shale wells, the Canadian tar sands, and deep offshore oil wells to be produced; now with oil selling for closer to $70 a barrel the question is how long oil that is no longer economic to produce will keep being extracted. The other question is just how much of our oil supply is in danger of being mothballed until prices climb again as they surely will. The reason for the current fall in prices is still in debate. The 'oil' supply has continued to creep up in recent years, but starting last June the demand for $100+ oil was no longer there. While demand in the 'rich' OECD countries has been down since the 2008 oil price spike, this year it seems to be the slowing Chinese economy and its reduced demand for raw materials that has been behind the sinking demand. Many of the developing economies have been growing and using more oil each year due to growing trade with the Chinese. Someday conventional wisdom will conclude that oil at circa $100+ a barrel was simply too much to sustain high rates of economic growth and so the growth fell taking oil demand along with it. "
The Peak Oil Crisis
Falls Church News-Press, 31 December 2014

2013

"The critical measure here is EROEI (the Energy Return On Energy Invested). The days of 100:1 energy returns are long gone. The ratio for new oil projects has declined from 30:1 to barely 10:1 since the 1970s. For global energy overall, the EROEI has declined from about 37:1 in 1990 to less than 14:1 now. The flip-side of EROEI is the real cost of energy. The cost ratio at an EROEI of 37:1 in 1990 was 2.6 per cent, but this has risen to 6.8 per cent today. The global EROEI may fall to 10:1 by 2020, increasing the energy cost 'levy' on the economy to 9 per cent. In blithe ignorance of this increasing levy, we have continued to grow the claims value of the financial system on the assumption of perpetual growth. These 'excess claims' show up as unsustainable debt, undeliverable welfare commitments, and unrealisable expectations for returns on investment. My calculations suggest that the system now owes $90 trillion (£55 trillion) more than it can deliver. For individuals, this is being manifested in the escalating real costs of fuel, power, food, water and physical infrastructure. Globally, it is visible in 'energy sprawl', as the energy-delivering infrastructure expands (both in scale and in cost) in response to the weakening in efficiency resulting from a deteriorating EROEI. As well as crimping disposable incomes and destroying returns on investment, this process is curbing our ability to invest in other things. The essential point is that the economy is not a monetary system governed by the theoretical 'laws' of economics, but an energy dynamic determined by the all-too-real laws of thermodynamics. Once we understand this, the squeeze on household prosperity becomes far less of a mystery."
Tim Morgan - The global economy sinks under its debts as the real cost of energy rises
City.AM, 24 October 2013

2012

"The most common misconception about peak oil is that it means the world is running out of oil. Many articles that seek to debunk the notion of peak oil start with that premise, and then they proceed to tear down that straw man. Peak oil is about flow rates, and the overall flow rate will begin to decline while there is still a lot of oil left in the ground. Another misconception is that peak oil beliefs are homogeneous. The beliefs among people who are concerned about the impacts of peak oil cover a wide span. There are those who believe that a peak is imminent, to be followed by a catastrophic decline....... A more mainstream peak oil position is that the real threat is much higher oil prices, leading to stagnant economies.... The points of contention are the timing, the steepness of the decline, the impact on the global economy and the ability of other energy sources to fill the supply gap. Some believe we will smoothly transition to alternatives, and some people believe peak oil will be catastrophic."
Peak Oil: Misconceptions and Realities
Investing Daily, 26 November 2012

2011

"...we are entering an era of scarce resources. Apart from the atomic bomb, this is the most dangerous development in two centuries..... New powers such as China and India are rising, not yet risen, mixing emphasis on their 'developing' status with assertiveness."
David Miliband, British Foreign Secretary, 2007-10
'It was not bin Laden who defined this decade'
London Times, 7 September 2011, Print Edition, P28

2010

"Bankers and the financial sector may have displaced energy from the front pages of the newspapers right now, but Energy Security remains at the top of the global political and economic agenda....The need to balance energy security, jobs and economic development while addressing the problem of climate change all contributed to the challenge politicians faced in Copenhagen. And that challenge means that energy security will dominate politics and policy for the next 12 months and considerably beyond.... Reliable and affordable supplies of hydrocarbon energy were taken for granted through much of the 20th century and laid the foundation for the world’s extraordinary economic progress. When concerns arose, it tended to be at times of war or turbulence, notably in the Middle East, or, closer to home, with industrial action. What’s different now is that energy security has become a defining issue for the 21st century, as one element in a complex energy challenge with strategic, economic and environmental dimensions.... Opening access to a range of potential operators encourages the most efficient solutions, and often involves partnerships that provide new combinations of skills. Iraq is a very good example. BP is teaming up there with CNPC of China and Iraq’s South Oil Company to drive a major investment programme that will nearly triple production from the super-giant Rumaila field. With this and the other agreements concluded with national and international oil companies in the last six months, Iraq has the potential to contribute 10mmb/d to global supplies in the next 10-15 years. That’s a big piece of the additional resource we need....The current debate about Copenhagen and sustainability add new urgency and importance to the broader discussion of energy security.  The challenge of creating a low-carbon economy is far from easy, requiring the wholesale re-engineering of the global economy over time."
Tony Hayard, Chief Executive of BP
The Challenge of Energy Security
Speech at London School of Economics, 4 February 2010

2009

"The most important contributors to the world’s total oil production are the giant oil fields....The evolution of decline rates over past decades includes the impact of new technologies and production techniques and clearly shows that the average decline rate for individual giant fields is increasing with time. These factors have significant implications for the future, since the most important world oil production base – giantfields –will decline more rapidly in the future, according to our findings.... By 2030 the production from fields currently on stream could have decreased by over 50% in agreement with IEA (2008) . The struggle to maintain production and compensate for the decline in existing production will become harder and harder. Our conclusion is that the world will face an increasing oil supply challenge, as the decline in existing production is not only high but also increasing."
Giant oil field decline rates and their influence on world oil production
Energy Policy Volume 37, Issue 6, June 2009

2008

"The global economy is tanking, U.S. forces remain tied up in Iraq, Afghanistan is on a downward spiral -- one might wonder why anyone would want to be U.S. president during these trying times. Recently, the nation's chief intelligence officer weighed in, painting an even more somber picture of a far more complicated world. National Intelligence Director Mike McConnell looked beyond the immediate future, focusing on what his analysts are telling him about the challenges the world community is likely to face by 2025. It isn't pretty. Speaking to an annual conference of intelligence officials and contractors, McConnell said demographics, competition for natural resources and climate change will increase the potential for conflict. President-elect Barack Obama may get a glimpse of some of those challenges on Thursday. McConnell is expected to lead Obama's first top-secret intelligence briefing, according to U.S. officials familiar with the process. According to McConnell's outlook, economic and population growth will strain resources. 'Demand is projected to outstrip the easily available supplies over the next decade,' he said at the annual conference. The intelligence community's forecast indicates oil and gas supplies will continue to dwindle and production will be concentrated in unstable areas, he said. And there appears to be no relief at hand. McConnell said studies have shown that new energy technologies -- such as biofuels, clean coal and hydrogen -- generally take 25 years to become commercially viable and widespread."
New president faces increased risk of conflict, intel chief says
CNN, 5 November 2008

2007

"If you speak to people in the industry, they will conceed that whatever my company may say publicly, we understand that we are facing decline in our own production and worldwide, we are not going to be able to produce more fuel liquids or crude oil in the near future... I was recently at a conference in New Mexico, sitting next to one of the recent CEOs of a major oil company and he, in response to a question from the audience, said 'of course I am a peakist, it is just a question of when it is coming' and I think that that is illustrative of once one is retired as a CEO, one is freer than one was in position to say I am a peakist. And what you hear privately from almost all people is we are coming to it.... I think that many of these politicians will ultimately find that the public blames them for its failure to warn them. Of course in a sense the public is responsible because it is the present public attitude to which politicians play up, and tell them what they want to hear but when the view of the world changes, what the public wanted to hear some time ago is no longer what they want to hear in the future."
James Schlesinger, former US Energy Secretary
Interview with David Strahan, ASPO 6, September 2007

2006

"The scarcity of energy supplies and the energy imbalance between nations is a threat to our prosperity and national security. As resources contract, oil-hungry economies will compete for dwindling supplies of hydrocarbons. Competition for fossil fuels will increase.... Energy resources have long been a major strategic concern: access to secure sources, control over supply lines: these are issues of national security.... The energy challenge is now more pressing than ever.... Global oil production is apparently nearing its peak.... current estimates seem to be converging on some point between 2010 and 2020.... [there] are five factors which are changing the energy landscape: rising demand; dwindling supply; greater concentration of resource in the hands of a few; limited spare capacity; and the environmental impacts of energy use.....This is not a problem that can wait ten years."
Sir David Manning, British Ambassador To The United States Of America
Speech at Stanford University, 13 March 2006

2005

".... a series of crises in oil supply is likely over the coming decades. The first, related to the peak and decline of non-OPEC production, is practically upon us and underpins the currently high oil prices...... The imminent inability of non-OPEC production to meet incremental demand and its decline after 2010 precipitates the second crisis as OPEC’s diminishing spare capacity (even with Iraq’s production back to preinvasion levels) becomes less and less able to accommodate short-term fluctuations.....The third crisis, due to OPEC’s incremental supply being unable to meet incremental demand, follows in the first half of the next decade. This assumes that OPEC’s reserves are as published. .....These crises will have global economic and geopolitical significance: The oil price will be high and volatile, and demand growth will have to be curtailed..."
Oil Supply Challenges - 2: What Can OPEC Deliver?
Oil and Gas Journal, 7 March 2005



The Energy Challenge Of The Post 9/11 Period

"The U.S. needs energy — lots and lots of energy — and 37.1% of it is currently supplied by oil. As the population expands and the policy decisions and technological innovations needed to make the switch to green, renewable energy sources lag, thirst for the stuff is only going to grow. Critics have long lamented that when it comes to energy policy, 9/11 was an opportunity for the country to have an honest debate about the choices it needs to make if it's ever going to break its addiction to oil. 'We need to address the underlying issue,' says Lisa Margonelli, director of the New America Foundation's Energy Policy Initiative, 'and that's our dependence on oil.' Having a national conversation now — an adult one — is the only way forward."
The Far-Ranging Costs of the Mess in the Gulf
TIME, 6 May 2010



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PEAK OIL AND ENERGY CRISIS NEWSBITES

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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

"The world is now pumping and consuming more oil than it ever has, with output from big producers such as the United States and Saudi Arabia at or near record levels. But oil prices are still stubbornly high, and lots of barrels from Iran and Venezuela are all but certain to disappear from the market in the weeks to come. That means the world needs to find a way to keep the economy supplied with oil or risk even higher prices right as global economic headwinds are intensifying. In August, for the first time in history, the world pumped more than 100 million barrels a day, according to a new report from the International Energy Agency (IEA). That was fueled by a continuing gusher from the U.S. shale oil patch—which has apparently turned the United States into the world’s largest oil producer, with the country pumping almost 11 million barrels a day—and a rebound from OPEC, which is pumping more than it has all year. But the record production is barely enough to keep up with the world’s thirst for oil. Demand from developing economies, especially in Asia, is still strong and is expected to grow at the same pace next year. Refineries are churning out record amounts of gasoline, diesel, and other products, and even tapping already-low crude stocks to do so. For that reason, crude oil prices remain quite high: Brent crude in London is about $80 a barrel, and U.S. crude is about $70 a barrel, both about 45 percent higher than this time last year. “A few years ago, people were saying, the era of easy and cheap oil is over. Then the shale boom changed the market,” said Antoine Halff, formerly the chief oil analyst at the IEA and now a senior research scholar at Columbia University’s Center on Global Energy Policy. But global thirst for oil has continued unabated, and prices have steadily crept back up. “We do have a market where shale is the biggest source of growth, but nevertheless we’re still facing the possibility of significant price increases next year,” he said. It could happen even sooner. A lot of oil is about to disappear from the market, and it’s not clear how easy it will be to replace it, which could push crude prices higher, increase pain at the pump, and act as a brake on global economic growth. While OPEC has re-opened the taps this year, two of its members are set to lose ground as big suppliers. Venezuela’s oil industry, wracked by political interference, mismanagement, and under-investment, has gone from dismal to catastrophic. Production was at 1.5 million barrels a day this spring but is expected to drop to 1 million barrels a day by the end of the year. Iran’s oil exports are set to decline for a different reason: U.S. sanctions will go into effect in November. The Trump administration wants buyers of Iranian oil to quit cold turkey, and fearing punishment from Washington, many in Europe and Asia (except China) are sharply cutting their imports of Iranian oil. The IEA estimates Iranian exports have already fallen by 500,000 barrels a day and could fall sharply by November as other customers comply with the U.S. request. One big wildcard is whether China and India—Iran’s top two customers—scale back purchases or keep snapping up Iranian oil to meet their own needs. Which country can make up that shortfall of more than 1 million barrels a day for the global market? It’s not entirely clear, according to the IEA. Infrastructure constraints are starting to limit the United States’ ability to keep growing. Brazil’s promised output increases have yet to materialize. Russia says it can pump as much as 300,000 more barrels a day, but likely not until next year. Many OPEC members, such as Iraq, Nigeria, and Libya, have already nearly maxed out their production. That likely leaves Saudi Arabia and a handful of other traditional suppliers. The IEA estimates that OPEC, especially Saudi Arabia, has potential spare capacity of 2.7 million barrels a day, representing the amount of production countries could theoretically bring on line within a few months to ease the market. But the IEA doubts all that can be brought to market quickly, and at any rate, that oil is not a perfect replacement for the heavier Iranian and Venezuelan barrels that are disappearing. “We are entering a very crucial period for the oil market,” the IEA concluded in its monthly oil report. “Things are tightening up.”"
Oil Production Is at Record Levels. So Why Are Oil Prices Heading Higher
Foreign Policy, 13 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

"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

"OPEC oil output has risen this month to a 2018 high as Gulf members pumped more after a deal to ease supply curbs and Congo Republic joined the group, a Reuters survey found, although losses from Iran and Libya limited the increase. OPEC and allies agreed last month to boost supply as U.S. President Donald Trump urged producers to offset losses caused by new U.S. sanctions on Iran and to dampen prices LCOc1, which this year hit $80 a barrel for the first time since 2014. On June 22-23, OPEC, Russia and other non-members agreed to return to 100 percent compliance with oil output cuts that began in January 2017, after months of underproduction in Venezuela and elsewhere pushed adherence above 160 percent. Saudi Arabia said the decision would translate into an output rise of about 1 million bpd. OPEC’s collective adherence with supply targets has slipped to 111 percent in July from a revised 116 percent in June, the survey found, meaning it is still cutting more than agreed. Following the OPEC decision, Kuwait and the United Arab Emirates raised output by 80,000 bpd and 40,000 bpd respectively in July, the survey found. The bulk of the Saudi supply boost appears to have been delivered in June as Riyadh tapped storage tanks to push supply to 10.60 million bpd, near a record high. The increase infuriated Iran and surprised other OPEC members with its scale. Riyadh has boosted supply in July by a further 50,000 bpd from June’s revised level, the survey found, because domestic crude use in refineries and power plants has risen while exports have held close to June’s rate. Supply in Nigeria, often curbed by unplanned outages, rose by 50,000 bpd. Royal Dutch Shell’s Nigerian venture lifted force majeure on Bonny Light crude exports. Nigeria and Libya were exempt from the original supply-cutting deal. Iraq also increased supply as exports rose from the country’s southern terminals. Among countries with lower output, the biggest drop of 100,000 bpd was in Iran. Exports fell as returning U.S. sanctions discouraged companies from buying the country’s oil. Output in Libya, which remains volatile due to unrest, edged down. Fields in eastern Libya resumed production after a standoff at export terminals ended, but output was cut mid-month at the largest oilfield, Sharara. Production also slipped in Venezuela, where the oil industry is starved of funds because of economic crisis, and in Angola due to lower exports in July against a backdrop of natural decline at oilfields. The addition of Congo Republic to OPEC in June has added about 320,000 bpd to production and, coupled with the increases by existing members, has lifted OPEC output in July to the highest since October 2017 according to Reuters surveys. Before Congo joined, OPEC had an implied production target for 2018 of 32.78 million bpd, based on cutbacks detailed in late 2016 and Nigeria and Libya’s expectations of 2018 output. According to the survey, OPEC excluding Congo pumped about 460,000 bpd below this implied target in July."
OPEC July oil output hits 2018 peak, but outages weigh: Reuters survey
Reuters, 30 July 2018

"In a remote harbour just north of Inverness, contractors are busy working on a giant metal structure whose bright colours stand out against the horizon. The Maersk Innovator offshore oil rig is getting ready to leave Cromarty Firth to drill at least three development wells in the North Sea.It was a very different scene two years ago when the Cromarty Firth was full of idle rigs....“From where we’ve been, it’s encouraging to see this,” said Bob Buskie, chief executive of the Cromarty Firth port authority..... Mr Buskie singled out two factors that have helped “give oxygen to the industry”: the higher oil price — Brent crude has traded at more than $60 a barrel since January — and the success of two recent licensing rounds in the UK North Sea... Investment is starting to flow back into the basin, with companies preparing to plough £5bn into new capital projects this year, said Oil & Gas UK, the industry trade body, in March. Wood Mackenzie, the consultancy, said it expected production from the North Sea to average close to 2m barrels of oil equivalent a day this year — the highest level since 2010. The increased output, coupled with lower operating costs, has also helped boost oil and gas receipts to the UK government. Last year, the industry failed to generate any revenues for the Treasury, with tax receipts on production falling below zero. For 2017-18, however, returns to the Treasury were £1.1bn."
Rising tide of recovery for North Sea oil and gas
Financial Times, 29 July 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

"Oil producers are ordering more equipment and lining up drilling rigs for later this year, according to top industry executives, indications that international activity is picking up. The chief executives of Schlumberger Ltd. and Baker Hughes, owned in part by General Electric Co., said customers are moving forward with large projects and even preparing to increase exploration for future ones."
Global Oil Industry Prepares for a Revival
Wall St Journal, 20 July 2018

"Never let it be said President Donald Trump doesn’t understand his voters. Back in April, he started tweeting angrily at OPEC about high oil and gasoline prices. Last month, he pushed Saudi Arabia to raise production. It’s hard to say how effective he’s been – oil is more expensive than when his jawboning started, though it’s fallen a bit since his Saudi pitch. National gas prices have stabilized just below $2.90 a gallon, up about 60 cents from a year ago. There’s still talk Trump might tap the Strategic Petroleum Reserve. The truth is, neither he nor OPEC can fully control the market, which has been squeezed by his threat to bottle up Iranian oil. Still, it’s politically important for Trump to be seen doing something, anything, about gas prices. To understand why, just look at a series of charts put together by Liam Denning and Elaine He showing just how much rising gas prices are especially painful for Trump voters."
So This Is Why Trump Tweets About Oil
Bloomberg, 19 July 2018

"Around 5 million British households are set for lower energy bills this winter after parliament approved a law on gas and electricity tariff price caps, energy regulator Ofgem said on Thursday.
Britain set for energy price caps after new law approved - regulator
Reuters, 19 July 2018

"Meat and dairy companies are on track to be the world’s biggest contributors to climate change, outpacing even the fossil fuel industry, according to a new report. To arrive at this conclusion, non-profit organisations the Institute for Agriculture and Trade Policy and GRAIN conducted an analysis of the planet’s 35 largest meat and dairy companies.  They found that broadly speaking the companies were being secretive about their emissions data and few had set hard targets intended to deal with their pollution. Irish government using wrong data to downplay emissions from cows. If these industries continue down their current path, the authors of the report warned that the livestock sector could be responsible for 80 per cent of the allowable greenhouse gas budget by 2050.... Meat and dairy consumption is concentrated in a small number of countries, and the top livestock companies mirror this trend. China, the US, the EU, Canada, Brazil, Argentina, Australia and New Zealand are collectively responsible for over 60 per cent of global meat and dairy emissions – about twice the rest of the world on a per capita basis. As part of their analysis, the authors looked at efforts being taken to reduce emissions and found that only six had set targets that included their entire supply chain, despite this portion counting for up to 90 per cent of total emissions....A paper published in the journal Science in June found that if everyone stopped eating meat and dairy products, global farmland use could be reduced by three quarters.... This led the study’s lead author to describe a vegan diet as “the single biggest way to reduce your impact on planet Earth”.  The authors of the new report said this analysis was evidence of the far-reaching impact of the livestock industry and the need for food systems that meet the needs of farmers, consumers and the planet."
Meat and dairy companies to surpass oil industry as world’s biggest polluters, report finds

Independent, 19 July 2018

"Crude oil and natural gas production hit a new record in June with the highest production ever in the U.S. Production of crude topped 10.7 million barrels per day with production of natural gas hitting 4 million barrels per day, according to an analysis released by the American Petroleum Institute (API) Thursday. API praised the major energy milestone as a sign of the country's "energy renaissance." “U.S. oil production has supplied all of the growth in global oil demand so far this year and helped compensate for production losses in some OPEC nations," the group said. "With continued increases in drilling activity, the U.S. is poised for further production increases in natural gas and oil." The analysis also found that petroleum demand with the U.S. is at its strongest since 2007. The news comes as the United States aims to position itself as an international oil and gas provider. President Trump last week heavily promoted U.S. oil and natural gas exports during his NATO meetings in Brussels, strongly criticizing a planned Russia-Germany natural gas pipeline...."
US crude oil production hit record level in June
The Hill, 19 July 2018

"As petroleum companies continue to flood the global market, a new study by oil industry consultancy Wood Mackenzie predicts that the demand for oil will start to decline as early as 2036, when autonomous cars become more popular. Wood Mackenzie's new Macro Oils Long-term Outlook includes their expectations of prices, supply, and demand as well as a series of themes that address the complexity of the oil market to 2040. The U.K. energy consultancy's expectations of peak oil demand coming sooner than expected are based on the increasingly important role electric and autonomous vehicles will play in the global transportation sector. The report suggests autonomous cars will greatly increase our reliance on electricity while decreasing our dependence on gasoline. “Autonomous electric vehicles or robo-taxis will really change the face of transport in the coming decades,” Ed Rawle, Wood Mackenzie’s head of crude oil research, told the Financial Times."
Wood Mackenzie: Global peak oil demand expected in 2036
Digital Journal, 18 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

"President Donald Trump is reportedly considering tapping the nation's stockpile of emergency oil supplies as prices at the pump remain stubbornly elevated. The administration is actively considering selling 5 million to 30 million barrels from the Strategic Petroleum Reserve into the market, two sources with knowledge of the situation told Bloomberg News. The administration is also mulling a larger release that would be coordinated with other nations, the sources said. Crude futures pared gains by about $1 a barrel following the report. The Wall Street Journal later reported that some members of the Trump administration oppose the plan. However, Fatih Birol, director of the International Energy Agency, recently told attendees at a private dinner that his organization was considering a strategic release, the Journal reported, citing people who attended the event. The IEA advises developed nations on energy policy. Trump has lately expressed frustration at oil and gas prices, blaming OPEC on Twitter and demanding that the 15-member producer group hike output to stop crude costs from bubbling up...Oil prices, which account for about half the cost of the gasoline price, have recently hit 3½-year highs above $80 a barrel.  OPEC has propped up prices since January 2017 by limiting its supply, but the slow-and-steady rally accelerated earlier this year when Trump restored sanctions on Iran, the world's fifth largest oil producer. Prices have also risen on production declines in major producing nations like Venezuela and Angola and supply disruptions in Libya and Canada. The State Department sent oil prices soaring two weeks ago when a senior official revealed the administration is pushing oil buyers to cut their imports from Iran to zero by November. The announcement came just days after OPEC, Russia and several other producers agreed to start pumping more. However, many analysts are skeptical top OPEC producer Saudi Arabia can offset potential the looming drop in Iran's exports and disruptions elsewhere. Trump's aggressive bid to remove Iranian barrels from the market could boost gasoline prices into the fall, depriving Americans of the fuel price relief they usually get, just as they head to the polls, analysts recently told CNBC."
Trump reportedly considers tapping emergency oil supplies to tame crude prices
CNBC, 13 July 2018

"Around 2015, though, just five years into gas’s rise to power, complications for this narrative began to appear. First, wind and solar costs fell so far, so fast that they are now undercutting the cost of new gas in a growing number of regions. And then batteries — which can “firm up” variable renewables, diminishing the need for natural gas’s flexibility — also started getting cheap faster than anyone expected. It happened so fast that, in certain limited circumstances, solar+storage or wind+storage is already cheaper than new natural gas plants and able to play all the same roles (and more). The cost of natural gas power is tethered to the commodity price of natural gas, which is inherently volatile. The price of controllable, storable renewable energy is tethered only to technology costs, which are going down, down, down. Recent forecasts suggest that it may be cheaper to build new renewables+storage than to continue operating existing natural gas plants by 2035. That means natural gas plants built today could be rendered uncompetitive well before their rated lifespan. They could become “stranded assets,” saddling utility ratepayers and investors with the costs of premature decommissioning. Meanwhile, gas’s environmental reputation has suffered from a series of reports, most recently a study in Science, showing that gas’s lifecycle methane emissions are much higher than previously estimated and could virtually erase any climate advantage gas has over coal, rendering it a bridge to nowhere. Even if methane emissions are reduced, they can’t be reduced to nothing. And the US needs to completely decarbonize — get to net-zero carbon emissions — by mid-century. Natural gas simply isn’t compatible with a net-zero-carbon future unless a massive infrastructure is built to capture and bury its carbon emissions. Until and unless that happens, natural gas must eventually be eliminated....According to the consultancy Lazard, the all-in, “levelized cost of energy” (LCOE) from some renewables is already lower than the LCOE of a lot of fossil fuels in many cases, even without subsidies and without environmental benefits factored in. Wind is the cheapest energy of all, and utility-scale solar is competitive with the cheapest natural gas."
Clean energy is catching up to natural gas
Vox, 13 July 2018

"Britain has been powered for more than a thousand hours without coal this year, in a new milestone underscoring how the polluting fuel’s decline is accelerating. The UK’s last eight coal power plants staged a brief revival when the “beast from the east” pushed up gas prices earlier this year, causing coal plants to fire up. However, the blip proved short-lived and immaterial, figures compiled by MyGridGB show. The country passed the threshold of 1,000 coal-free hours in the early hours of Friday. The pace of coal power’s demise is speeding up. Throughout the whole of 2017 there were 624 coal-free hours, up from 210 hours in 2016.... For the first time since the industrial revolution, the UK went a day without coal last year, followed this year by three days in a row.... Higher wind speeds than last year helped but new wind turbines coming online also played a big role. Electricity generation from offshore windfarms was up dramatically, by 53%. The recent weeks of sunny weather have also created a series of solar records. The most recent was a new high for solar output over a month, with 1.94 terawatt hours of power generated between 10 June and 9 July, beating the previous record of 1.77TWh. Alastair Buckley, a solar expert at the University of Sheffield, said: “Some of this increase is due to more solar having been installed since 2017 but most of the increase is climatic, with summer 2018 being the fifth sunniest on record so far."
UK passes 1,000 hours without coal as energy shift accelerate
Guardian, 12 July 2018

"Oil prices could double again if the sector is hit by any serious disruption, as America’s bid to exclude Venezuelan and Iranian exports from the world market means the globe has very little spare capacity, a top analyst has warned. Brent crude prices have jumped from a low of less than $30 per barrel in early 2016 to almost $80 now, but could rise to between $100 and $150 if geopolitical events turn out badly, according to David Donora, head of commodities at Columbia Threadneedle.  The upper limit of that range would beat the record high of more than $140 per barrel that was reached briefly in 2008. “The phrase has been used, and I’d like to find a better one, that the US is ‘weaponising’ its energy independence. That means it can take a very aggressive approach in foreign policy,” he said. “Under the previous administration sanctions against Iran were able to take about 1m barrels of Iranian crude off the market. A couple of months ago the current administration was aiming to take 2m barrels of Iranian crude off the market. President Donald Trump has tried to push the rest of OPEC to ramp up production further in recent weeks to replace Iran’s oil, but Mr Donora fears this lost output cannot be easily replaced. “They don’t really have 2m barrels that they can just switch on and run on a sustained basis." Historically OPEC had far bigger buffers. "So in a world where we are consuming 100m barrels of crude oil per day, if all we think we have is the 2m barrels we expect the Saudis and Gulf Cooperation Council countries to be able to turn on as spare capacity, that is a very thin veneer of spare capacity as a buffer,” Mr Donora said. “The risk is that you have a geopolitical event or some sort of supply disruption or you try to take 2m barrels of Iranian crude off the market, and all of a sudden you are extremely short on production," he said."
Oil price could hit $150 as Donald Trump ‘weaponises’ US industry, warns analyst
Telegraph, 11 July 2018

" ... the German chancellor, Angela Merkel, has tried to maintain that the construction of Nord Stream 2 pipeline is a common sense economic project, with no political consequence. For many, her refusal to see the geopolitical implications of making Europe so dependent on Russian energy shows the reach that Gazprom, the majority shareholder in the project, has into Germany. The presence of the former German chancellor Gerhard Schröder on its board and his friendship with Putin seems only to symbolise the triumph of Russian interests. The aim of a second double-pipeline – which was once scheduled for completion by the end of 2019, but is now likely to be delayed – is to act as a decades-long substitute for the decreasing production of the Netherlands, Denmark and Britain. For Merkel it is also politically essential to get Germany out of nuclear energy by 2022, but still reduce her country’s carbon emissions....One of the curiosities of the controversy is that attitudes to the pipeline are thought to be a litmus test of how someone perceives Russia. Trump, famously well disposed to Putin, is, not for the first time, the exception that proves the rule. By opposing the pipeline, perhaps for an amalgam of US commercial and security reasons, he seems to set himself against Putin’s largest geoeconomic project. But it is possible that Trump’s target is not Moscow, but Berlin, and the Russian president is merely the victim of a wider trial of strength between the two great western economies. There are also questions over whether Germany needs Nord Stream 2. The pipeline will deliver at least 55bn cubic metres (bcm) of natural gas from Russia to Germany annually, just like the first-double pipeline, representing 110 bcm together. At present, German natural gas consumption amounts to about 80 bcm a year, of which just over a third is covered by Russia. Many energy experts say efficiency measures will result in reduced demand, leaving a gas surplus..... The biggest fear is that the pipeline allows Russia a boot on the throat of Europe. It had not been afraid to cut off supplies faced by price disputes with Ukraine. Nord Stream’s defenders, however, see the US protests purely through the prism of US commercial self-interest. Trump’s outburst is regarded simply as an effort to promote the sales of American liquified national gas. The question now is whether the US Congress would follow through in its threat to sanction European companies involved in the pipeline. The US treasury has shown through secondary sanctions on firms trading with Iran that it possesses an overwhelming economic power to force EU firms to divest from commercially profitable projects. For all the talk in Europe about establishing a European economic sovereignty, the reality is that the US under Trump can expose that ambition as a fiction. The question is whether it is in the US’s self-interest to wield its power over its supposed allies and partners quite so nakedly."
Germany and Russia gas links: Trump is not only one to ask questions
Guardian, 11 July 2018

"Britain should not back more than one new nuclear plant after Hinkley Point C is built before 2025 because renewable energy is the lowest cost for consumers, an independent advisory group to the government said on Tuesday. Britain plans to build a new fleet of nuclear plants to replace ageing coal and nuclear reactors set to close in the 2020s as well as to help cut the country’s carbon emissions. However, private investors have proved reluctant to take on the huge costs of new nuclear plants, and the government has come under fire for agreeing to pay a price for electricity from EDF’s (EDF.PA) Hinkley Point C plant - due to come online by the end of 2025 - which is way above rival power projects. Last month, the government said it might invest directly in another new nuclear plant planned by a unit of Japan’s Hitachi. (6501.T) However, the National Infrastructure Commission said moving to an electricity system powered by renewable energy sources could be the “safest bet” in the long term and be the lowest cost outcome for consumers. According to its calculations, the cost of an electricity generation mix with a high quantity of renewables would be comparable to building further nuclear plants after Hinkley Point C and cheaper than implementing carbon capture and storage on fossil fuel plants. Established in 2015, the commission is an independent body to provide advice to the government on how best to meet the country’s long-term infrastructure needs. In its first ever assessment for the government, which it is required to produce once every Parliament, the commission recommended steps should be taken to ensure renewables account for 50 percent of electricity generation by 2030. Currently, around 30 percent of Britain’s electricity comes from renewables such as wind and solar power, up from 12 percent five years ago."
Curb new nuclear plants and back renewables, government advisers say
Reuters, 10 July 2018

"Faced with rapidly rising prices and sanctions on Iran, Saudi Arabia agreed to raise production to a record level. Russia is chipping in, too. But even Saudi Arabia, the world's largest oil exporter, can only pump so much. Unleashing output now leaves the kindgom with less firepower to respond to future shortages. "There's very little room for error," said Matt Sallee, portfolio manager at the energy investment firm Tortoise. How much additional oil countries can quickly and sustainably produce is known in the industry as spare capacity. When spare capacity is high, such as during the oil price crash that began in late 2014, it acts as a shock absorber. Prices barely respond to threats to oil supply, like war in the Middle East, because countries can easily pump more crude. But that cushion has shrunk considerably in recent months because of a slew of outages in Libya, Canada and especially crisis-riddled Venezuela. And now OPEC and Russia are pumping more to respond to President Donald Trump's tough sanctions on Iran, the world's fifth-largest oil producer. "After replacing Iranian volumes, there will be essentially no spare capacity left," Michael Wittner, global head of oil research at Société Générale, wrote in a report on Monday."
The oil market's shock absorbers are nearly gone
CNN, 10 July 2018

"The UK must seize a “golden opportunity” to make the move away from fossil fuels and towards greener energy without increasing consumer bills, the government’s independent advisers on infrastructure have said. The move to renewable energy has long been thought to be an expensive one. But a major report by the National Infrastructure Commission says if the transition begins now, changes to the energy system could tackle greenhouse gas pollution without hitting consumers’ pockets. “Ten years ago, it seemed almost impossible that the UK would be able to be powered mainly by renewable energy in an affordable and reliable way,” the report says. “But there has been a quiet revolution going on in this area.” The authors say 50 per cent of the UK’s power generation should come from renewable sources by 2030, up from 30 per cent today, and from accounting for just 12 per cent five years ago.... This will mean investing in low cost renewable technologies, such as wind and solar, so that these provide at least half the country’s generating capacity by 2030, as well as ramping up efforts to improve the energy efficiency of the UK’s buildings. The report calls for 21,000 energy efficient improvements from loft insulation to double glazing going into UK homes every week over the next two years. And between now and 2030, the assessment calls for £3.8bn to be invested in improving the UK’s social housing stock to improve efficiency, while it recommends a clear plan for tightening regulations to improve energy efficiency in private rented homes.The report also calls for the government not to support more than one more nuclear power plant after Hinkley Point C in Somerset. “This would give flexibility to move towards newer low-carbon energy sources in future, while at the same time maintaining the UK’s nuclear supply chain and skills base,” the commission said. But even with emissions almost eliminated from power generation, the UK cannot achieve its emissions targets while relying on natural gas, a fossil fuel, for heating, the report says, adding that the delivery of a low cost, low carbon heating system is “the major outstanding challenge”. The government should push forward with a trial to supply at least 10,000 homes with hydrogen gas by 2023, the report says. But it says moving to an electricity system mainly powered by renewable energy sources could be the “safest bet” in the long term, and would likely become the lowest cost outcome for consumers. By 2050, road transport will be “unrecognisable”, the report says, as more vehicles will be electric and increasingly autonomous. The authors note that 80 per cent of UK air pollution breaches currently come from vehicles, and that they also account for 34 per cent of greenhouse gas emissions. The government should prepare for 100 per cent electric vehicle sales by 2030, instead of its current ambition for just half of new cars to be “ultra low emission” by that date, the commission said. In addition to being less polluting and a lot quieter than conventional cars, technological improvements and the proliferation of charging points mean the range they have will soon equal those of petrol and diesel vehicles....The report also calls for legislation that requires local authorities to free up 5 per cent of their parking spaces for electric vehicle charge points by 2020, and 25 per cent by 2025."
UK government must seize ‘golden opportunity’ for cheap switch to green energy, advisers urge
Independent, 10 July 2018

"Germany produced enough renewable energy in the first half of 2018 to power every household in the country for a year. The nation’s combined wind, solar, biomass and hydroelectric power output hit a record 104 billion kilowatt hours (kWh) between January and the end of June, according to energy firm E.On. The figure is 9.5 per cent more than the same period of 2017 and a third more than three years ago, the company said, citing in-house analysts who supply data to its sales teams... Wind power accounted for 55 billion kWh of Germany’s renewables output, with 21 billion kWh of generated by solar, 20 billion kWh from biomass energy and eight billion kWh from hydroelectric plants. E.On said the supply would be enough to power every household in the country consuming an average of 2,500 kWh. It is the first time the country’s renewable energy supply has topped 100 billion kWh in six months. The increases reflect the expansion of wind and solar power installations under Germany’s long-term drive towards a low-carbon economy, as well as the exploitation of storms....Renewables accounted for 36 per cent of Germany’s electricity consumption in 2017, according to government figures. Twenty-nine per cent of the UK’s electricity was sourced from renewables last year. Germany is aiming to phase out its nuclear power plants by 2022. Its renewable energy has been rising steadily over the last two decades thanks in part to the Renewable Energy Act (EEG), which was reformed last year to cut costs for consumers. But Germany still relies heavily on coal, gas and lignite - a coal-like substance formed from peat - for its energy needs."
Germany produces enough renewable energy in six months to power country's households for an entire year
Independent, 2 July 2018

"U.S. President Donald Trump said he persuaded Saudi Arabia to effectively boost oil production to its maximum capacity to cool down prices, a move that threatens to blow up a fragile truce agreed by OPEC last week and inflame the Saudi-Iran rivalry. “Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference...Prices to high! He has agreed!,” Trump said on Twitter Saturday. Saudi King Salman bin Abdulaziz and Trump, in a phone call Saturday, discussed efforts by the oil-producing countries to compensate potential shortages in oil supply, the state-run Saudi Press Agency reported. The two leaders stressed the importance of maintaining oil-market stability, according to the report. The agency didn’t say the leaders agreed or make any reference to 2 million barrels. The telephone exchange is another sign of how U.S.-Saudi ties have improved under Trump compared with the Obama administration, which alienated the kingdom by seeking a nuclear deal with Iran. Trump last year chose Saudi Arabia for his first foreign trip. Since then, the two governments have announced hundreds of billions of dollars worth of contracts, with Trump openly bragging about how many U.S. jobs the Saudis were helping to create. If the Saudis agree to Trump’s request, “that means he is calling on them to walk out from OPEC,” Iran’s OPEC governor Hossein Kazempour Ardebili, said in an interview. “There is no way one country could go 2 million barrels a day above their production allocation unless they are walking out of OPEC.” At a meeting of the Organization of Petroleum Exporting Countries in Vienna last weekend, Saudi Arabia -- the group’s largest producer -- joined other members in agreeing to scale back its over-compliance with output cuts that have been in place since the beginning of 2017. Saudi Energy Minister Khalid Al-Falih indicated the group’s action would add nearly 1 million barrels a day to the market.... If Saudi Arabia were to respond to Trump’s request, it would stretch spare production capacity to the limit, meaning that any supply outage could have an out-sized effect on oil prices. It would also likely aggravate other OPEC members, such as Iran and Venezuela, which initially sought to prevent any increase as OPEC, along with allies led by Russia, headed into their Vienna meetings earlier this month.... Saudi Arabia has the capacity to pump a maximum of 12.04 million barrels a day, according to the International Energy Agency. The kingdom pumped slightly more than 10 million barrels a day in May, leaving exactly the 2 million barrels a day gap Trump asked the Saudi king to use now. Oil analysts and consultants nonetheless think the kingdom can produce more than 12 million barrels a day in an emergency through a so-called surge, in which oil fields are depleted beyond what engineers consider a reasonable rate. In addition, Saudi Arabia shares with Kuwait a so-called neutral zone that hasn’t been used for the past couple of years and can pump as much as as additional 500,000 barrels a day."
Trump Says Saudis Persuaded to Act to Help Lower Oil Prices
Bloomberg, 30 June 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 201
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"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 energy giant BP’s annual Statistical Review of World Energy is a compendium of facts, figures, charts, and graphs on global energy use. ... In 1998, coal represented 38 percent of global power generation. In 2017, it represented ... 38 percent of global power generation. In electricity, a sector that absorbs 40 percent of the world’s primary energy and produces more than a third of its emissions, the past 20 years have been running to stay still. No net decarbonization progress has been made. Coal grew like crazy starting in 2000, so all the progress in renewable energy over the past decade has just scarcely served to bring coal back to where it was in 1998. And speaking of “non-fossil” power, it didn’t help that even as renewable energy was growing, nuclear power was declining, a climate disaster activists have done too little to forestall.... Nuclear has declined, renewables have risen, and the overall proportion of global electricity coming from non-fossil sources has remained roughly the same. That’s not going to cut it to avoid catastrophic climate change. Scenarios that show us hitting the climate targets agreed to in Paris involve OECD countries completely decarbonizing the electricity sector by 2030 or so, and other countries not long after."
The most depressing energy chart of the year
Vox, 16 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

"A new report by research firm IHS Markit says oil production from the Permian Basin of West Texas and New Mexico could more than double by 2023. The report predicts “stunning” growth, saying about 41,000 new wells could increase production from the nation’s top oilfield by almost three million barrels per day in the years ahead. As U.S. oil imports have declined since a peak in 2006, and with refiners preferring a different type of oil than what’s coming out of the Permian boom, Texas is poised to increasingly fuel other countries. “Basically you can take it as a given that every new drop of oil that’s produced has to be exported,” said Raoul LeBlanc, a top energy analyst at IHS Markit. Oil companies are rushing to build more pipelines to move all the new oil to the Gulf Coast, where it will be increasingly exported to growing economies like China, already the second-largest customer for U.S. oil behind Canada. “It’s going to make us the third or fourth largest exporter [of oil] in the world within a few years,” LeBlanc said."
Permian Oil Production To More Than Double By 2023, Report Says
Houston Public Media, 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

"In euro terms, the oil price has risen from €50 a barrel in February to €68 in May: bleak news for Europe’s drivers, but also a headache for the eurozone as a whole. It presents, in particular, a stiff challenge for the European Central Bank’s top officials, who meet in Sintra for their annual conference this month. Despite the turmoil in Italy and elsewhere in the eurozone, “the surge in oil prices since the beginning of the year is probably the single biggest problem for the ECB,” said Carsten Brzeski, economist at ING-DiBa. A rise in oil prices generally creates problems for central banks because it both weakens growth and raises inflation. But the eurozone is particularly affected because imports account for 98 per cent of the region’s oil consumption, and because the single currency has been performing poorly against the dollar, sliding from $1.24 in mid April to $1.17 on Friday. This is a twofold blow: the dollar often weakens when oil prices are high but in this instance the euro’s fall has magnified the impact of rising fuel prices. With the eurozone economy already showing signs of slowing down after strong growth last year, the oil price rise could make matters still worse. According to figures released last week, regional gross domestic product grew by just 0.4 per cent in the first three months of this year, compared with 0.7 per cent in each of the previous five quarters. Factory orders in Germany, the eurozone’s powerhouse, fell in April, for the fourth month in a row. Business surveys indicate higher oil prices are already beginning to have a knock-on impact on companies’ costs around the region, with initial figures for May showing input costs at a three-month high, “buoyed in part by higher fuel and energy costs”. “There are large chunks of the eurozone which still aren’t so strong and where consumers and businesses are really going to feel the impact,” said Chris Williamson, chief business economist at IHS Markit, the data firm that compiles the figures....Mr Williamson argues that historically a 50 per cent increase in oil prices — less than the most recent rise in euro terms — has led to a fall in eurozone GDP of about 0.6 percentage points over two years. “It will knock the ECB back a quarter on when they will raise interest rates to the latter part of 2019,” he adds of the recent rise. “Policymakers can look through the impact of the oil price on inflation, but not on growth.”"
Rising oil prices put eurozone economy under strain
Financial Times, 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

"Russia’s oil production increased to 11.1 million barrels per day (bpd) in the first week of June, far exceeding production limits outlined in a global oil deal, Interfax news agency cited a source as saying on Saturday. Russia agreed to cut its production by 300,000 bpd from 11.247 million bpd as part of a global pact. The Russian Energy Ministry did not immediately respond to a request for comment. Interfax said Russian oil production stood on average at 1.513 million tonnes per day in the first week of the month and never got below 1.511 million tonnes. The Organization of the Petroleum Exporting Countries (OPEC) and other leading oil producers including Russia will meet in Vienna on June 22-23 to discuss the future of the deal, which is valid until the end of the year. Russia and OPEC leader Saudi Arabia have signaled there could be a need to gradually boost production to prevent any supply shortages. Most Russian oil majors have supported the increase in oil production as prices have reached $80 per barrel last month. Currently, oil LCOc1 is trading at more than $76 per barrel. Vladimir Putin has said a price of $60 “suits” Russia. Russian oil output was stagnant at 10.97 million barrels per day (bpd) for a third month in a row in May."
Russia's oil output at 11.1 million bpd in early June, above quota: Ifax
Reuters, 9 June 2018

"Peak oil demand could come around 2030 at 111 million bpd in the current market as road transport electrification and efficiency gains in all sectors offsets increasing petrochemical and aviation growth, Norway’s Equinor said in its Energy Perspectives report on Thursday. That assumption is one of Equinor’s scenarios for energy transition, Reform, which suggests that oil demand will grow robustly through the early 2020s, level out in the second half of the decade, peak at 111 million bpd around 2030, and then fall to 105 million bpd by 2050. Equinor—which dropped the name Statoil last month to reflect a “broad energy” company rather than being associated only with oil—is discussing two other scenarios in its Energy Perspectives—the Renewal scenario and the Rivalry scenario. Renewal assumes global cooperation, fast energy transition, and the achieving the Paris Agreement’s target to limit global warming to well below 2°C. In Renewal, peak oil demand could come in the early 2020s, if faster battery technology development, continued policy pushes, and larger efficiency improvements occur soon. In that case, oil demand could be just below 60 million bpd in 2050, according to Equinor. The company’s third scenario, Rivalry, assumes that geopolitical volatility, boom and bust cycles, destructive market rule, and lack of cooperation will lead to continued oil demand growth all the way through 2050, at 122 million bpd in 2050. In the Rivalry scenario, geopolitical conflict and other political events take priority over climate change. “Unfortunately, we currently see too many signs of the Rivalry-scenario. If continuing, they will negatively impact necessary global collaborative efforts and economic growth which are keys to drive the world in a sustainable direction,” Equinor’s Chief Economist Eirik Wærness said. Yet, in all three scenarios, large investments in new oil discoveries will still be needed—although significantly less in the Renewal scenario—to offset the decline from existing fields, said Equinor. “The transition to a more sustainable energy system is too slow. A sustainable development path, consistent with the 2-degree target, does not allow for further delays in policy, industry and consumer action to reduce emissions,” the company said.""
Equinor Sees Peak Oil Demand Around 2030
Oilprice.com, 8 June 2018

"Global oil demand will peak around 2030 at 111 million b/d as a sharp rise in electric vehicles and energy efficiency gains offset growing demand from the aviation and petrochemical sectors, Norwegian producer Equinor said in its long-term energy outlook. A widespread electrification of vehicles, mostly cars, will see oil demand from light-duty vehicles in the transport sector fall by 9 million b/d from 2030 to 16.2 million b/d in 2050, according to Equinor's central Reform scenario. The decline in total oil demand after peaking will be slow, however, with demand dropping by about 5% by 2050 to just under 105 million b/d, according to the outlook. Equinor's energy outlook painted a more pessimistic picture for oil than the International Energy Agency and BP, which estimate, respectively, that oil demand could peak after 2040 or in the late 2030s. Equinor, formerly known as Statoil, also expressed concerned the global transition to lower carbon energy sources was being slowed by the geopolitical climate. Under a Rivalry scenario, the oil and gas producer said it saw the pace of change dictated by geopolitical conflict and other political priorities other than climate change. "Unfortunately, we currently see too many signs of the Rivalry-scenario. If continuing, they will negatively impact necessary global collaborative efforts and economic growth which are keys to drive the world in a sustainable direction," Equinor's chief economist, Eirik Waerness, said. Under the Rivalry scenario, despite lower average economic growth than in the Reform-scenario, energy demand and GHG emissions will be higher caused by "the volatility and lack of coordination across borders, resulting in slower improvement in energy efficiency and coal keeping most of its position as an energy source"."
Oil demand set to peak around 2030 as more cars go electric: Equinor
Platts, 7 June 2018

"...despite around twenty years of commercial shale gas extraction in the US, very little is known about the flow of gas through the ultra-tight porous environment of shale formations, according to Dr Lei Wu at Strathclyde University. Now Wu is leading an EPSRC-funded project to investigate this process, with the aim of using CO2 to enhance the recovery of shale gas from geological reservoirs. After around 10-20 years of shale extraction, when the tail production cannot cover the operational costs, the conventional procedure is to seal the wells forever. However, in a recent field experiment in Tennessee in the US, carbon dioxide was used in a shale reservoir to further increase the production of methane, said Wu. “They injected CO2 into the depleted formation, and then closed the well for a few months, allowing CO2 to diffuse into the shale matrix. They then reopened the well,” he said. The researchers found that not only did the CO2 enhance the methane production, but some of the greenhouse gas had been absorbed by the shale matrix, allowing it to be sealed and permanently captured, he said. “The shale formation prefers CO2 to methane, so the CO2 is absorbed and the methane is desorbed,” he said. To better understand this process, Wu and his colleagues will be developing gas kinetic theory, in which the dynamics of the gas is mimicked by a limited number of “particles” moving from site to site and colliding with each other, to investigate the flow of gas through the shale formation."
Carbon dioxide could be locked underground in hunt for natural gas
The Engineer, 7 June 2018

"Privately funded UK venture Tokamak Energy has hit plasma temperatures hotter than the sun’s core for the first time, reaching 15 million degrees Celsius. The milestone was achieved using the ST40 device, the latest in a line of tokamaks the company has built in pursuit of commercial fusion. Using a technique known as merging compression, the ST40 releases energy as rings of plasma that crash together and magnetic fields in the plasma reconfigure – a process known as magnetic reconnection.  Merging compression involves high electric currents running through the internal coils of the ST40, requiring power supplies to deliver thousands of amps in seconds. According to Tokamak Energy, it combines intricate electrical engineering processes that also place high demands on the mechanical engineering of the whole system. Though 15 million degrees may be an important landmark on the journey, it is a long way from the 100 million degrees required for thermonuclear fusion on Earth. The ST40 is the third machine in a five-stage plan that Tokamak Energy believes will lead to commercial fusion energy by the end of the next decade. Though it won’t be capable of energy gain – the holy grail of fusion – the ST40 is designed to reach the magic 100 million degree mark. Tokamak Energy will now be working towards that goal in a new facility with upgraded equipment."
Tokamak Energy hits 15 million degree fusion milestone
The Engineer, 6 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

"Oil prices have had a spectacular run, rising by nearly 50% since last July, thanks to a potent mix of OPEC discipline, geopolitical risk and strong demand. The rally has moderated in the past couple of weeks, thanks to concerns OPEC’s resolve on supply cuts is weakening just as U.S. oil production is showing renewed signs of vigor. What investors may not appreciate is that demand growth is also poised to slow in the world’s largest net oil importer last year, China."
The Next Threat to Oil Prices: China
Wall St Journal, 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

"....oil prices at three-year highs and spending under control means that the shale patch -- which has notoriously burnt more cash than it makes as investors bankroll their expansion -- got closer to a milestone in the first-quarter: Positive free cash flow."
Shale's Big Boost Comes With Newfound Thrift as Oil Hits $70
Bloomberg, 10 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

"The end of Russian gas transit via the territory of Ukraine will increase the possibility of a conflict between Russia and Ukraine and entail futher geopolitical consequences, the commercial director of Ukraine’s oil and gas company Naftogaz said. "If there is no transit via the territory of Ukraine, the possibility of a full-fledged conflict between Ukraine and Russia also increases, which will have geopolitical consequences. This is the idea that we are trying to convey, first of all to European partners, who need to understand not only economic consequences for Ukraine, but also geopolitical consequences for the entire world," Yuri Vitrenko was quoted as saying by the 112 Ukraine TV channel on Tuesday. Gazprom Deputy CEO Alexander Medvedev said on Tuesday that the contract with Ukraine after 2019 will not be renewed under any circumstances but this does not mean that the transit of gas will be stopped. He said Gazprom was waiting for Ukraine’s "appropriate proposals," including on economic terms of the transit. Gazprom CEO Alexei Miller told reporters that the company is ready to hold negotiations with Naftogaz of Ukraine on gas transit after the expiration of the current contract. But Ukraine should ground economic feasibility of the transit, he added. Miller also said that if Ukraine proves the economic feasibility of the new contract Gazprom may maintain the volume of gas transit via Ukraine at 10-15 bcm a year."
End of gas transit via Ukraine to have ‘geopolitical consequences’ — Naftogaz
TASS, 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

"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. If successful, it could also trigger shifting other product payments to the yuan, including metals and mining raw materials.All three sources, who spoke to Reuters on the condition that they not be named, said the plans were at early stages. Officials at some of China’s state oil companies said they had not heard of such plans. The plans coincide with this week’s launch of the first Chinese crude oil futures in Shanghai, which many expect to become a third global price benchmark alongside Brent and West Texas Intermediate crude."
China taking first steps to pay for oil in yuan this year - sources
Reuters, 29 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

"and are set to contribute nearly 50 per cent to the increase in the for oil over the next five years, the (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 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 slows down to 2023, compared with the 2010-17 period. By comparison, the pace of growth will pick up slightly in India,” it says. The report says that though there is no peak 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.... 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-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 said in its comments on the report. It added that there would still be a continued reliance on 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 International Energy Agency (IEA) doesn’t see crude oil production in the U.S. peaking before 2020, and output declines aren’t expected in the next four to five years, executive director Fatih Birol said Tuesday. Speaking to reporters in Tokyo, Birol said U.S. shale growth is moving at a very strong pace, which will lead the country to overtake Russia as the largest crude producer in the world, if not this year, “definitely next year.” Earlier this month, the IEA forecast the U.S. would overtake Saudi Arabia “soon” and Russia by year-end. That’s because all the indicators that suggest continued fast growth in the U.S. are in “perfect alignment,” with rising prices leading to more drilling, more completions, more production and more hedging, Kallanish Energy learns. “The growth in (oil) production is unprecedented, exceeding all historical records, even Saudi Arabia after production from the mega Ghawar field or Soviet gas production from the super Siberian fields,” Birol said last November. The U.S. Energy Information Administration estimates U.S. oil output will exceed 11 million barrels per day (MMBPD) by late 2018. Last November, volumes rose above 10 MMBPD for the first time since 1970."
U.S. oil production won’t peak before 2020: Birol
Kallanish Energy, 1 March 2018


"A novel approach to an energy storage device run on an aqueous electrolyte can go from flat to fully-charged in just 20 seconds, making it perfect for portable electronics that frequently need a quick boost.While the concept isn't new, previous attempts have resulted in devices that suffer from low power and short working lives.We ask a lot of power storage tech these days. Not only must it be compact, powerful, long-lasting, and quick to recharge, it also has to be environmentally friendly. Oh, and preferably not blow up if you happen to chew on it.For those and other reasons, aqueous storage devices – those that contain water-based solutions rather than a mush of toxic or flammable organic paste – have gained some serious attention as safe and reliable options.Although less flammable than modern lithium batteries and potentially a whole lot cheaper, the way the solution carries electrons introduces a serious problem.The cells that make up a battery work by transferring electrons between two materials. Aqueous solutions limit the voltage range between the two points more than other solutions, resulting in the anode being eaten away faster.That makes for a poor life span and low amounts of power – not exactly great for reliably pushing your latest smart device through the day.So researchers at Korea Advanced Institute of Science and Technology (KAIST) have put a new spin on the system, modifying the way a device called an aqueous hybrid capacitor (AHC) is constructed.Hybrid capacitors such as these are essentially a mix of battery and capacitor – with electrodes that store their power electrochemically as an electrostatic charge. Adding an aqueous solution of ions inbetween can help carry the current.By using graphene-based polymers instead of more traditional metallic conductors on the anode, and making the cathode with a scattering of metaloxide nanoparticles, the researchers were able to overcome the shortfalls of previous AHCs.The web of tiny carbon fibres on the anode turns out to be far more efficient at transferring electrons into the aqueous solution, allowing for batteries with more than 100 times the power density than previous devices while still sustaining capacity for over 100,000 charges.Better yet, the new anodes coupled with liquid electrolytes mean the whole thing can go from zero to 100 perfect with just 20 seconds of charging.All of this is at no cost to its safety or economics."This eco-friendly technology can be easily manufactured and is highly applicable," says chemist Jeung Ku Kang."In particular, its high capacity and high stability, compared to existing technologies, could contribute to the commercialization of aqueous capacitors."Since the power source doesn't need to be a strong one, its rapid rate of charging might see it couple up neatly with photovoltaic cells or other micro-generating power sources.It'll be a while before we see these kinds of devices outcompete the likes of lithium ion batteries, but cheap cells that can handle extreme conditions without catching fire will no doubt find a place in future portable technology.The low charge time is just an added bonus, though we've been promised charge-while-you-wait batteries for years now.The wonder-material graphene is keeping our hopes alive, with Samsung exploring its potential in materials that might see a smart phone being fully loaded with power in about 12 minutes.
This New Kind of Battery Can Be Fully Charged in Less Than 30 Seconds
ScienceAlert, 1 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

"Global demand for crude is likely to "plateau" during the late 2030s, mostly because of the rise of electric cars and trucks, BP predicted Tuesday in its annual outlook. BP thinks 320 million electric vehicles will be on the road by 2040, compared with about 2 million in 2016. The company thinks electrics will hit a tipping point and really take off after 2035. The prediction is more evidence of a dramatic shift in appetite for oil. And talk of peak oil demand — from one of the world's largest oil producers, no less — shows how the thinking in the energy market has been upended. A decade ago, people were worried about the opposite problem — a peak in how much oil could be pumped out of the ground. Those fears briefly sent prices skyrocketing as high as $147 a barrel.....  "BP's forecast for "plateauing" oil demand by 2040 differs from OPEC's view of the future. In November, the oil cartel led by Saudi Arabia predicted that the global appetite for crude would keep growing through 2040. But even OPEC conceded that oil demand would "decelerate steadily" due to slower economic growth, higher oil prices, energy efficiency and "strong competition from other energy sources." Another oil giant, Royal Dutch Shell (RDSA), has predicted peak oil demand could come within 15 years. "The key takeaway is no one has any idea. It's impossible to pin down when we're going to reach peak oil demand," said Matt Smith, director of commodity research at ClipperData. A major factor will be the transformation of the auto industry, oil's No. 1 customer. Electric vehicle sales, led by the likes of Tesla (TSLA) and the Chevrolet Bolt, have soared in recent years. But electrics still make up just 0.2% of the total number of passenger vehicles, according to the International Energy Agency. Still, automakers like Ford (F), Volkswagen (VLKAF) and Honda (HMC) have announced ambitious electric vehicle sales goals. That push has been aided by a crackdown in Europe on the internal combustion engine. Norway, France, Germany and the U.K. have all announced efforts to phase out vehicles powered solely by fossil fuels. BP has become much more bullish on electric cars over the past year. The oil company now expects 190 million electric vehicles will be on the road by 2035, compared with about 2 million today. Last year's BP annual outlook called for a much more modest 100 million electric vehicles in 2035.By 2040, BP expects oil to contribute to 85% of total transportation fuel demand, compared with 94% today. BP anticipates alternative fuels will "penetrate the transport system" and traditional vehicles will become vastly more efficient, meaning they will guzzle much less gasoline. BP acknowledged that future electric vehicle popularity is "hard to predict with any certainty" because it depends on factors like government policy, technology and social preferences. Unlike their American counterparts, big European oil companies are increasingly putting their money where their mouths are by betting on electric cars. Last year, Shell purchased NewMotion, one of Europe's largest electric vehicle charging providers. The acquisition is a "form of diversification," Shell's vice president of new fuels told CNNMoney at the time. More recently, BP placed a $5 million wager on FreeWire, a maker of mobile rapid charging systems for electric vehicles. BP even said it would roll out FreeWire's charger units at certain gas stations in Europe during 2018."
BP: Demand for oil could peak by late 2030s
CNN, 20 February 2018

"Germany regards the Nord Stream 2 gas pipeline as an economic project that does not threaten the European Union, said German Chancellor Angela Merkel. "We are also for energy diversification. We also want Ukraine to continue to have transit gas traffic, but we believe Nord Stream poses no danger to diversification," Merkel said at a joint news conference after meeting with Polish Prime Minister Mateusz Morawiecki. The Polish Prime Minister objected to Merkel, stating " I do not agree…that Nord Stream 2 means diversification because the gas comes from the same source, just through a different route." According to Morawiecki, he spoke in favor of extending the regulations of the EU's Third Energy Package to Nord Stream 2 at the meeting with Merkel. Merkel said that Poland and Germany are continuing negotiations on this issue. In late January, Germany allowed Nord Stream 2 AG (the project operator company) to begin construction of the offshore section of the gas pipeline in the country’s territorial waters. Germany also approved the construction of a receiving terminal. Nord Stream 2 AG has said that procedures for obtaining permits in the other countries along the pipeline route - Russia, Finland, Sweden and Denmark - are on schedule."
Merkel: Nord Stream 2 pipeline does not threaten EU energy security
UAWire, 17 February 2018

"A rise in energy efficiency led to the biggest drop in UK electricity consumption in three years for EDF, the French state-backed energy giant said today. Both domestic and commercial customers cut their electricity usage in 2017, leading to an overall drop of 1.9pc, while gas consumption fell 2.6pc as milder weather meant customers used their central heating less.  Domestic energy use has been in decline nationally since 2010, despite a growing population and consumers using an increasing number of electrical appliances. Successive regulations in recent years, such as the phasing out of incandescent light bulbs, have forced appliance manufacturers to make their products less wasteful.Iain Miller of Northern Powergrid, the electricity network that supplies homes and businesses in the North East and Yorkshire, said: “Things are becoming more efficient. The modern TV will use less power when it’s running than a cathode ray tube did on standby.” Average energy consumption by fridges and freezers plunged by more than half between 1990 and 2016, according to official statistics, while “wet appliances” such as washing machines and dishwashers have improved more moderately.  Mr Miller suggested an increase in people eating out was also likely to have knocked domestic use."
UK energy consumption falling, says EDF as profits slip
Telegraph, 16 February 2018

"Russia’s oil production in the Arctic will reach peak levels in the 2020s, head of the state commission on natural resources Igor Shpurov said. Over 2017, he said, Russia produced in the Arctic about 76 million tonnes of oil, and the production would be growing to 2026 hitting a record of 122 million tonnes a year. “We forecast that by the mid-2020s, oil production [a year] in the Arctic zone will reach about 120 million tonnes,” he told a plenary session of the international Arctic summit in St. Petersburg. The oil production will grow due to Gazprom Neft’s developing of the Messoyakha field (Russia’s northernmost field in the Yamalo-Nenets Region – TASS) and also due to Gazprom’s growing production at the Prirazlomnaya pad – Russia’s first project on the Arctic shelf; as well as due to other projects, he explained. About 24% of the Arctic deposits have been explored and developed, he continued. “Thus we have remaining 76% of oil, which may be produced in future.”"
Russia’s oil production in Arctic may hit peak in 2020s
Hellenic Shipping News, 16 February 2018

"The rise in global oil production, led by the United States, is likely to outpace growth in demand this year, the International Energy Agency said on Tuesday. The Paris-based IEA raised its forecast for oil demand growth in 2018 to 1.4 million barrels per day, from a previous projection of 1.3 million bpd, after the International Monetary Fund upped its estimate of global economic growth for this year and next. Oil demand grew at a rate of 1.6 million bpd in 2017, the IEA said in its monthly market report.  However, the rapid rise in output, particularly in the United States, could well outweigh any pick-up in demand and begin to push up global oil inventories, which are now within sight of their five-year average. "Today, having cut costs dramatically, U.S. producers are enjoying a second wave of growth so extraordinary that in 2018 their increase in liquids production could equal global demand growth," the IEA said. "In just three months to November, (U.S.) crude output increased by a colossal 846,000 bpd and will soon overtake that of Saudi Arabia. By the end of this year, it might also overtake Russia to become the global leader." U.S. crude output could reach 11 million bpd by the end of this year, according to estimates from the U.S. Energy Information Administration.The Organization of the Petroleum Exporting Countries, along with other exporters such as Russia, have agreed to maintain a joint restriction on crude supply for a second year running in 2018, to force inventories to drain and support prices. Oil inventories across the world's richest nations fell by 55.6 million barrels in December to 2.851 billion barrels, their steepest one-month drop since February 2011, the IEA said. For 2017 as a whole, inventories fell by 154 million barrels, or at a rate of 420,000 bpd. By the year-end they were only 52 million barrels above the five-year average, with stocks of oil products below that benchmark, the IEA said. "With the surplus having shrunk so dramatically, the success of the output agreement might be close to hand. This, however, is not necessarily the case: oil price rises have come to a halt and gone into reverse, and, according to our supply/demand balance, so might the decline in oil stocks, at least in the early part of this year." Oil production outside OPEC nations fell by 175,000 bpd in January to 58.6 million bpd, but was still 1.3 million bpd higher than January last year, predominantly because of the 1.3-million-bpd year-on-year increase in U.S. output. OPEC output was largely steady at 32.16 million bpd in January and compliance with the supply deal reached 137 percent, due in part to declines in Venezuela, where economic crisis has paralysed much of the country's oil production capacity. The IEA estimates demand for OPEC's crude in 2018 will average 32.3 million bpd, after dropping to 32.0 million in the first quarter of the year. The IEA said oil prices, which briefly touched a high of $71 a barrel in January, could be supported even if U.S. production rises, provided global growth remains strong, or if unplanned supply outages persist."
IEA: Surge In Global Oil Supply May Overtake Demand In 2018
Reuters, 13 February 2018

"Venezuela is increasingly turning to its ally Russia for crude oil, as a dramatic fall in its crude output is pushing the country to import crudes for its refineries. State-owned PDVSA is resorting to importing Russian Urals crude for its 335,000 b/d Isla refinery in the Caribbean island of Curacao as the country's production has fallen to its lowest in almost two decades...Russia has been a strong ally to the Latin American country through these difficult times by continuing to bailing out PDVSA. This comes as the OPEC member finds itself in a crumbling financial state as falling oil production plunges the country into economic chaos. The country which relies heavily on crude oil export revenues has seen its domestic refining runs falls sharply due to underinvestment amid a lack of crude to process. Despite being a significant crude oil producer and the holder of the world's largest crude reserves, the country has been increasingly importing crude oil in the past few years. This imported crude is either used as a diluent in its extra heavy oil fields in the Orinoco Basin or used by its refineries which have been struggling to operate at normal rates due to the ongoing economic situation....Venezuela has observed a staggering decline in its crude oil production in the past 12 months as its oil sector has been plagued by spiraling debt, mismanagement, corruption, crumbling infrastructure and a lack of investment, Venezuela's output fell to 1.64 million b/d, a fall of 370,000 b/d since January last year, according to S&P Global Platts OPEC Survey data. This is a low not seen since its oil industry was hit by a major strike from December 2002 to February 2003. Not counting strike-affected months, Venezuela's production was last this low in June 1988, almost 30 years ago. Venezuela's output has fallen for six straight months, and analysts say more declines are likely unless the financial environment in the country improves drastically."
Venezuela turns to ally Russia for crude oil imports
Platts, 12 February 2018

"Over a half of university students are turning off their heating in a bid to save money – a new report by the National Union of Students has found.The ‘Homes Fit for Study 2018’ report looked at students in rented housing and found that 59% of students are limiting the amount of time they have the heating on to save money. The study also revealed that 49% of students reported feeling uncomfortably cold in their home, and that 38% of students have damp or mould in their property. The report comes in the wake of rising fuel bills – including a recent increase from British Gas which raised electricity prices by 12.5%, pushing the average annual dual fuel bill up by 7.3%."
More than 50% of students limit their energy usage to save money, report finds
The Linc, 9 February 2018

"A pilot project to turn 10 homes in Nottingham into net-zero emission properties without residents even moving out is nearing completion. Developer Melius Homes and social landlord Nottingham City Homes have worked together on the scheme, with UK solar manufacturer Viridian Solar providing photovoltaic roofing. The upgrades also include better insulated outside walls and upgraded heating systems. After the refurbishment, tenants will pay an energy services fee instead of paying for gas and electricity. With this guaranteed additional income, to which savings on planned maintenance costs are added, the landlord can borrow enough money to fund the upfront costs."
Net-zero Nottingham homes near completion
Energy Live News, 9 February 2018

"The EIA published its latest Short-Term Energy Outlook, in which it drastically revised its forecast for U.S. oil production, predicting the country will hit 11 mb/d by the end of 2018, a year earlier than it previously thought. In fact, the latest weekly survey estimates that U.S. oil production already jumped to 10.25 mb/d in the first week of February. Surging output threatens to push down oil prices further. The EIA sees Brent averaging $62 per barrel in 2018, and WTI to average $58."
Oil Prices Fall Below $60 On Renewed Shale Threat
Oilprice.com, 9 February 2018

"A total of 74.24GW entered the Capacity Market auction – which pays power plant operators to make backup electricity available at short notice – out of which 67.9% were successful.....  Last week, operators of the Eggborough coal-fired power station in Yorkshire announced the plant will be shut down after failing to secure new supply contracts for delivery in 2018/19, which cleared at £6/kW.Gas power plants accounted for the lion’s share of the agreements at 29.6GW, followed by nuclear at 7.9GW and interconnectors, which were included in the auction for the first time, at 4.6GW. Coal took a hit, with only 2.56GW of the total share, pumped storage stood at 2.5GW while battery storage accounted for only 153MW. The auction closed at £8.40/kW per year. The results will remain provisional until confirmed by Energy Secretary Greg Clark. Energy and Clean Growth Minister Claire Perry said: “Getting the best deal for energy billpayers is central to our Industrial Strategy and the Capacity Market is helping to drive competition, protect customers and ensure security of supply. “Today’s record low cost of £8.40/kW ensures that we have enough energy to provide homes and businesBritain has secured 50.41GW of backup electricity capacity for delivery in 2021/22."
Gas and nuclear lead in UK power capacity auction
Energy Live News, 9 February 2018

"With China having overtaken the US to become the world's largest oil importer in 2017, experts forecast a marginal increase in 2018 with a cyclical peak possible in 2020 or shortly thereafter. China surpassed the US, the former No.1 crude importer, in annual gross crude oil imports in 2017, importing 8.4 million barrels per day (bpd) compared with 7.9 million bpd for the US, according to a report by the US Energy Information Administration (EIA) published on Monday.  The EIA said that the increase in imports was mainly due to added refinery capacity and strategic stockpiling, coupled with shrinking domestic oil production.  Given the expected decline in China's crude oil output, the EIA report forecast China's crude imports will likely continue to rise over at least the next two years. Jin Lei, an associate professor at the China University of Petroleum, said last year's 10 percent increase was the result of relatively stable global crude prices. Customs data showed that 2017 crude oil imports stood at 420 million tons. "With global crude prices likely to move up to about $60 per barrel, the rise in China's crude imports will be held to less than 10 percent but the overall trend of growing will not change this year," Jin told the Global Times on Tuesday. As to when China's crude imports will peak, Jin said "soon." "Probably [a peak will appear] at sometime after 2020, due to the possible mass use of new-energy cars and hybrids, rising consumption of natural gas and expanded use of other alternative energy sources such as renewables," Jin said. Jin said it is difficult to predict at this time whether China's crude oil imports will remain at a plateau after 2020 or increase again. "In the long run, if alternative sources don't materialize as predicted, and demand continues to rise, crude imports will keep growing," Jin said. However, Chen Ruibi, chief energy analyst at Shanghai-based Hicend Futures Co, said that there is "no way" China's oil imports will peak in the short or medium term. "Despite some successes, China's economic restructuring could not be done overnight. The near-term needs of development mean that China can't escape its reliance on traditional energy sources, of which crude oil plays a major role," Chen told the Global Times.... China's reliance on imported crude in 2017 represented 67.4 percent of its demand, the report said. It also said the net import crude volume will be 423 million tons in 2018, up 6.7 percent from 2017. "
China becomes world’s largest oil importer
Global Times, 6 February 2018

"The UK installed more than half of the new offshore wind power capacity in Europe last year. The region built 13 new offshore wind farms in 2017, a total of 3.1GW, out of which the UK installed 1.7GW. It was followed by Germany, with capacity totalling 1.3GW, according to latest statistics from WindEurope. The total capacity in Europe now stands at 15.8GW, with a further 11 projects in the UK and Germany expected to boost capacity to 18.7GW. Offshore wind is projected to grow to a total installed capacity of 25GW by the end of the decade. The average size of new turbines also increased to 5.9MW – a 23% rise on 2016. CEO Giles Dickson said: “A 25% increase in one year is spectacular. Offshore wind is now a mainstream part of the power system and the costs have fallen rapidly. Investing in offshore wind today costs no more than in conventional power generation. “It just shows Europe’s ready to embrace a much higher renewables target for 2030. 35% is easily achievable. Not least now that floating offshore wind farms are also coming on line.”"
UK installed more than half of Europe’s offshore wind last year
Energy Live News, 6 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

"BP has announced the discovery of two new oil and gas fields in the North Sea, which should enable the company to double production within the next two years. The company also believes the discoveries should mean that North Sea production will be able to continue beyond 2050. The discoveries of the Capercaillie field in the central North Sea, which contains light oil and gas condensate, and the Achmelvich field, west of Shetland, which contains oil only, were made last summer and BP is now evaluating the results amid reports that one of the fields is the largest ever found in the North Sea. BP said it believed the finds should enable production from the area to double to 200,000 barrels a day by 2020. The company BP has spent billions in recent years developing new fields while selling off mature assets on the UK Continental Shelf amid falling oil prices. Mark Thomas, BP North Sea regional president, said, “These are exciting times for BP in the North Sea as we lay the foundations of a refreshed and revitalised business that we expect to double production to 200,000 barrels a day by 2020 and keep producing beyond 2050."
BP North Sea finds ‘set to double oil production’
Relocate Magazine, 31 January 2018

"Peak oil demand may be just 12 years away. That’s according to Bank of America Merrill Lynch analysts including Peter Helles, who predict that 40 percent of all car sales will be electric vehicles by 2030, reducing the need for oil as a fuel for transport. “Electric vehicles will likely start to erode this last major bastion of oil demand growth in the early 2020s and cause global oil demand to peak by 2030,” the analysts wrote in an emailed report. Despite strong global oil consumption helping to push crude prices higher, the rise of electric vehicles is seen as one of the biggest long-term threats to demand. Most oil companies see demand peaking around 2040, while Royal Dutch Shell Plc has said it expects to see demand peak in the early 2030s. Consultancy Wood Mackenzie said late last year that it expects oil demand growth to crawl, but not peak, by 2035, forcing major energy companies to shift from oil to natural gas and chemicals."
BofA Sees Oil Demand Peaking by 2030 as Electric Vehicles Boom
Bloomberg, 22 January 2018

"The U.S. is well-placed to overtake the likes of Saudi Arabia and Russia as the world's leading energy producer over the next 12 months, according to the latest monthly report from the International Energy Agency (IEA). 'This year promises to be a record-setting one for the U.S.,' the IEA said in its closely-watched report published Friday. 'Relentless growth should see the U.S. hit historic highs above 10 million barrels a day (in production), overtaking Saudi Arabia and rivaling Russia during the course of 2018 — provided OPEC and non-OPEC restraints remain in place,' the Paris-based organization added. The latest monthly report from the IEA comes at a time when crude futures have climbed to highs not seen since the early days of a slump in December 2014. Brent crude futures hit a peak of $70.37 a barrel on Monday, with the global benchmark since paring some of its recent gains to trade at $68.69 on Friday morning. "What we are trying to understand is the responsiveness of the U.S. shale producers. And because of the dynamism of the industry, the innovation and the vast number of players in that space … to some extent, we are in unchartered waters," Neil Atkinson, head of the oil industry and markets division at the IEA, told CNBC on Friday. Atkinson said that given the recent rally in oil prices, the IEA was expecting a "wave of new production" from the U.S. in the coming months. He added OPEC would then need to "accommodate" for that and make its own judgment at its next meeting in June as to what its response should be. The main price driver has been a supply cut from major oil producing group OPEC and Russia, who started to withhold output in January last year. The production cuts by OPEC and 10 other allied producers, which are scheduled to last throughout 2018, are aimed at clearing a supply overhang and propping up prices. One of the main beneficiaries of these cuts is the producers' major competitor, U.S. shale oil. U.S. oil producers are staging a dramatic comeback amid a recovering oil price that has allowed many of them to restart operations.  U.S. crude production stands at 9.9 million barrels a day, according to the IEA, which is the country's highest level in almost 50 years. That level of supply puts the U.S. neck-and-neck with OPEC kingpin Saudi Arabia — the world's second-largest producer after Russia. "The stage was set for a strong expansion last year, when non-OPEC supply, led by the U.S., returned to growth of 0.7 million barrels a day and pushed up world production despite OPEC and non-OPEC cuts," the IEA said. "U.S. growth of 0.6 million barrels a day in 2017 beat all expectations, even with a moderate price response to the output deal as the shale industry bounced back — profiting from cost cuts, stepped up drilling activity and efficiency measures enforced during the downturn," the group said. In recent years, America's unprecedented oil and gas boom has been driven by one factor above all others — and that's shale. The so-called shale revolution could help to alleviate Washington's reliance on foreign oil, including from turbulent Middle Eastern states, while also supporting a bid to export to more countries around the world. The IEA's estimates of global oil product demand in 2017 and 2018 were left roughly unchanged at 97.8 million barrels a day and 99.1 million barrels a day, respectively."
‘Relentless’ growth could see the US topple Russia, Saudi Arabia as world’s largest oil producer, IEA says
CNBC, 19 January 2018

"UK house-holders can slash their domestic energy bills by up to 66 per cent by turning their homes into mini-power stations, claims Japanese car giant Nissan.  Excess energy collected via solar panels on sunny days and stored in a fridge-sized home-battery during off-peak times could be sold back to the national grid at peak times when demand for it is at its highest.  The system would also make it cheaper for green householders to charge up their electric cars, the manufacturer said.The firm unveiled its move into the wider energy market during the international launch of is new second-generation all-electric battery-powered Leaf car in Tenerife.The Japanese car giant is also pioneering a system that use the energy stored in an electric car's battery – while it is parked up unused at home – to help power homes and domestic appliances, or be sold back to the grid when the vehicle is not in use. It is also using reconditioned electric car batteries to store power for villages in Africa. ...The Nissan Energy Solar system starts from £3,881 which includes the supply and installation of a six-panel solar system. The Leaf is priced from £21,990 to £27,490."
Home energy bills can be slashed by up to two thirds by adapting electric car battery technology for houses, claims Nissan
This Is Money, 19 January 2018

"American crude oil output is set to rise by 1.8 million barrels per day from the nation’s largest shale producing areas over the next year, according to new forecasts by the U.S. Energy Information Administration (EIA). Just next month, national output will climb up 111,000 bpd. The Drilling Productivity Report, which tracks production from the seven most prolific basins in the US, also said production in January should touch 6.438 million barrels per day, which is 24,000 bpd higher than December levels. The 1.8 million-jump equals the volume of production cuts sustained by the Organization of Petroleum Exporting Countries and several allied nations, including Russia, who have agreed to contribute to the global market rebalancing plan. So far, prices have risen steadily through 2017 after a year of indecision in 2016, but the international plan is set to expire in December 2018, with members conducting an official review of the deal in June."
EIA: Shale Oil Output To Rise By 1.8 Million Bpd Through Q1 2019
OilPrice.com, 17 January 2018

"Investment in clean energy plunged further in Britain than in any other country last year because of government policy changes, new figures show. The amount companies spent on green energy in the UK rose during the years of the coalition government (2010-2015) but has now fallen for two years in a row under the Conservatives, according to analysis by Bloomberg New Energy Finance (BNEF). While investment in wind, solar and other renewable sources slumped by 56% to $10.3bn (£7.5bn) in the UK, worldwide spending climbed 3% to $333.5bn (£242.4bn), the second-highest level on record. Alan Whitehead, shadow energy minister, said: “The government’s green rhetoric is nothing more than empty promises. Their ideologically-driven policy lurches away from clean solar power and onshore wind has spooked investors. “Whilst saying they have ambitions to be a green government their actions point in the opposite direction with renewables support slashed at the same time that fracking has been given the go ahead.”  Caroline Lucas, Green party co-leader, said the UK figures were damning.China led the global charge, with investment jumping by nearly a quarter to $132.6bn, a new high. The amount of solar installed in China increased by more than three-quarters on the year before as costs fell. Worldwide, solar took the lion’s share of spending on renewables, at $160.8bn, followed by windfarms. Jon Moore, chief executive of BNEF, said: “The 2017 total is all the more remarkable when you consider that capital costs for the leading technology – solar – continue to fall sharply.”  Investment increased by 1% to $56.9bn in the US, the second-biggest market for clean technologies, despite the Trump administration’s efforts to favour coal and nuclear power. However, spending also fell in Germany, Japan, India, Norway, Turkey and Taiwan. The fall of 56% in the UK was the steepest decline, far out-stripping the decrease of 26% for Europe as a whole. Around half of the UK spend, $4.8bn, was a final investment decision by Ørsted of Denmark on a single huge offshore windfarm, the Hornsea 2 project off the Yorkshire coast...“What’s needed when we hear from investors and developers is more transparency from the government. When you compare the Netherlands and Germany there’s more transparency up to 2030 on [wind power] capacity through competitive auctions,” said Keegan Kruger, wind analyst at BNEF. Kruger added that he expected the trend in UK investment to continue downwards until around 2020, when it would likely stabilise because of new investments in offshore windfarms."
UK green energy investment halves after policy changes
Guardian, 16 January 2018

"According to a forecast from the U.S. Energy Information Administration (EIA), oil production in the U.S. should average 10.3 million BPD this year, an increase of 1 million BPD from just last year. The International Energy Administration (IEA), likewise, sees U.S. oil output rising to about 10 million BPD this year. That forecast makes it "possible that very soon US crude production could overtake that of Saudi Arabia and also rival Russia's," according to the IEA, assuming both countries hold to their current agreement to keep a lid on output in support of higher oil prices. Much of this oil is already on its way, according to the EIA, which expects U.S. drillers to increase production from the top shale plays by 1.5% this month and another 1.7% in February. That's a big-time uptick considering that output from these regions has been mainly flat for the past several months due to lower oil prices last summer. However, with crude roaring higher since then, and recently in the $60s, producers in the country have the cash to drill more wells."
America First: The Country Is About to Become the Leader in Global Oil Production

Motley Fool, 20 January 2018

"The United States is afraid of fair competition in the energy sector, and is hampering the implementation of the Russian Nord Stream 2 gas pipeline project, according to Russian Foreign Minister Sergey Lavrov.“There is reprisal in the energy sector against North Stream 2. It is the US which is calling it politicized, leading to a split in Europe, and the strangling of Ukraine,” he said at a press conference on Monday. “Washington clearly forces Europeans to abandon Nord Stream 2, despite the fact that gas deliveries to Germany via the pipeline could be 2,000km shorter than through Ukraine, and the cost of transit could be halved,” said the Russian diplomat. Europeans “are being forced to buy much more expensive liquefied gas from the United States instead of Russian gas,” Lavrov added. He also said that the US could not withstand fair competition from Russia in the gas-export sector. Russia plans to build the Nord Stream 2 natural gas pipeline under the Baltic Sea to Germany, and to double the existing pipeline's capacity of 55 billion cubic meters per year. The project has faced fierce resistance from some EU members, especially from the Baltic states and Poland. They say the pipeline will cut gas transit through Ukraine and will result in a Russian monopoly in the EU gas market. Other countries like Austria, Hungary and Germany are in favor of buying Russian gas."
US forcing Europe to abandon Russian gas & buy more expensive American LNG - Lavrov
RT, 15 January 2017

"In its final editorial of peak oil demand series, Wood Mackenzie looks at the consequences of peak oil demand on gas, noting that it sees a growth to 2035. As explained, many oil majors are talking about reshaping their supply portfolio towards gas, in response to concerns about peak oil demand. As countries succeed in achieving the nationally determined contributions (NDCs) they pledged at Paris COP21, global gas demand will grow at an average rate of 1.6% through to 2035, according to Massimo Di Odoardo, Vice President, Gas Research. In North America, low gas prices are enabling displacement of coal in the power sector. In Europe, government and utilities are announcing plans to retire coal fired plants. In China, plans are in place to more than double the share of gas in the energy mix. And with the price of liquefied natural gas (LNG) increasingly cheaper than that of oil, emerging markets are looking at LNG as a way to switch to gas"
Global gas demand to grow at 1.6% rate through to 2035s
Green4sea, 13 January 2017

"America’s trade imbalance just got a wee bit smaller. The U.S. has now become a net exporter of natural gas on an annual basis for the first time since at least 1957. Net exports averaged about 0.4 billion cubic feet per day last year, flipping from net inflows of 1.8 billion in 2016, according to Victoria Zaretskaya, a Washington-based analyst for the U.S. Energy Information Administration. The numbers will be officially released by the agency in a report Thursday, she said.  A “significant projected increase” in natural gas sent by pipeline to Mexico and a growing number of liquefied natural gas shipments to the rest of the world should guarantee the trend moving forward, Zaretskaya said by email on Wednesday. Now the U.S. has a single LNG export facility operating, Cheniere Energy Inc.’s Sabine Pass terminal in Louisiana. Two others are slated to start this year.  “Never before has the global LNG market had such significant flexible LNG volumes as the volumes coming online in the next three years, mostly from the U.S., which will lead to a fundamental shift in how LNG is marketed and traded globally,” Zaretskaya said."
US Becomes a Net Gas Exporter for the First Time in 60 Years
Bloomberg, 11 January 2017

"WTI for February delivery was at $61.59 a barrel on the New York Mercantile Exchange, up 15 cents, as of 2pm in Seoul. Total volume traded was about 37 per cent below the 100-day average. Prices lost 57 cents to $61.44 on Friday. Brent for March settlement added 13 cents, or 0.2 per cent, to $67.75 a barrel on the London-based ICE Futures Europe exchange. Front-month prices rose about 1.1 per cent last week. The global benchmark crude traded at a premium of $6.19 to March WTI. US explorers spent the final six weeks of 2017 in a virtual standstill, adding just as many rigs as they laid off. Bowing to heightened investor pressure, drillers are seeking to do more with less in a bid to boost profits. Their money-saving moves include opening already-drilled wells by fracking them rather than deploying more rigs to start new ones."
Oil trades above $61 amid optimism that surplus is abating
Irish Times, 8 January 2018

"With characteristic flamboyance, the Trump administration has set in motion a grand scheme to lure energy companies to explore for oil and gas across virtually all of America's outer continental shelf, a deep marine domain encompassing billions of acres of ocean bottom. Drawing a distinction from the Obama administration's concerns about climate change and restricting offshore fossil energy development, Interior Secretary Ryan Zinke cast President Donald Trump's offshore drilling campaign as a study in American strength. "We're embarking on a new path for energy dominance in America," Zinke said. "We are going to become the strongest energy superpower. Yet like other marquee directives Trump has issued in the past year to empower the domestic fossil fuel industry, the offshore plan may not bear out its grand ambitions. Many energy analysts already are predicting that exorbitant costs, flat prices, civic opposition, climate concerns and new transportation technology make major new offshore drilling enterprises, at least outside the Gulf of Mexico, unlikely. Even in the Gulf, which produces 1.5 million barrels of oil daily, or 15 percent of U.S. production, the cost of exploration, permitting and operations in deep water is well over $1 billion per well, according to the American Petroleum Institute. Energy analysts also say it will take at least 10 years for a new well to begin producing in the Gulf, and twice that anywhere else on the outer continental shelf. By that time, according to industry forecasts, demand for oil will be well past its peak and dropping due to the advent of electric vehicles, more efficient engines for planes and ships and new materials that are not made with oil or natural gas."
Trump has big plans for offshore oil development; but will it ever happen?
Los Angeles Times, 8 January 2018

"Australia is expected to become the world's biggest natural gas exporter by next year as huge projects near completion. According to the latest quarterly resources outlook from the chief economist at the federal department of industry, innovation and science, the title is likely to be somewhat short-lived, however, as US exports ramp up over the following years. The report said Australia was likely to overtake Qatar as the biggest gas exporter, before the US assumes the mantle in the mid-2020's.... "Australia’s LNG export volumes are forecast to reach 77 million tonnes in 2018–19, up from 52 million tonnes in 2016–17," the report said. "Higher export volumes will be driven by increased production at Gorgon, as well as the completion of the three remaining LNG projects under construction — Wheatstone, Ichthys and Prelude." Qatar -- currently the world's largest exporter of natural gas -- exported 74 million tonnes in 2016, and volumes are expected to remain little-changed over the forecast period to 2019. Rising export volumes mean natural gas is set to become the second biggest Australian resources export by dollar value 2019, overtaking metallurgical coal. That increase will help pick up the slack from a projected $10 billion decline in iron ore -- Australia's biggest export -- based on reduced Chinese demand."
Australia is set to become the world's biggest exporter of natural gas by 2019
Business Insider, 7 January 2018

"The milestone means that, between them, nuclear and renewables generated more electricity in 2017 than all fossil fuels combined. Within this total, wind alone generated more than twice as much electricity as coal, supplying more power in every month except January. The UK electricity sector passed a string of other symbolic markers in 2017, from its first coal-free day since 1882 to new records for wind and solar generation. This lead NGO WWF to dub the year the “greenest ever” for electricity – with prime minister Theresa May tweeting her support. Nevertheless, power sector emissions remain far above what will be needed to meet legally-binding UK carbon targets, while progress in decarbonising the rest of the economy is limited. Last year, Carbon Brief’s analysis revealed that windfarms had generated more electricity than coal in 2016. This year’s analysis is based on a combination of data sources, chiefly half-hourly electricity generation data compiled by Dr Iain Staffell, lecturer in sustainable energy systems at Imperial College London, for the Electric Insights website. See the notes at the end for more on how the analysis was done. The most striking finding is that low-carbon sources, for the first time, supplied more than half the total. The share from nuclear and renewables has doubled between 2009 and 2017, to reach just a shade over 50.0%. Fossil fuels supplied 47.5% of generation in 2017, down from 75.4% in 2010. The lion’s share of today’s fossil supply is from gas, with coal generation having plummeted over the past five years (see below for more on this). The rise of low-carbon electricity supplies has been rapid, driven by subsidies for renewables. At the same time, electricity demand has been falling steadily, down another 1.7% last year. The government recently ruled out additional low-carbon subsidies in the medium term, beyond those already agreed or promised. However, rapid cost declines for renewables mean subsidy-free deployment might become increasingly possible, even if long-term contracts might still be needed. Over the past year, the largest increase in generation for a single source came from wind, which was up 31% to 49 terawatt hours (TWh) in 2017. The was due to capacity increasing by a fifth, but also due to more favourable wind speeds, up 7% in the first 11 months of the year.  However, nuclear remains the single largest source of low-carbon electricity in the UK – and the second largest source overall. It generated 70TWh in 2017, a figure that is virtually unchanged since the early 2000s, when a number of old reactors were closed down. The government hopes to secure new nuclear capacity to replace the remaining fleet, which is mostly due to close in the 2020s. However, progress has been slowed by financial problems at several of the firms hoping to build this new capacity and protracted talks over subsidies, or even more direct financial support from government. Meanwhile, plans to usher in a new generation of “mini nuclear” small modular reactors were recently set back after ministers deferred a decision on further funding and published a report suggesting such reactors would – at least initially – be more costly than their larger cousins. The other renewables also generated more in 2017 than in 2016. Solar rose 11%, on rising capacity, while biomass increased 4%. This is despite a fuel supply problem at Drax, the UK’s largest power station, which has converted half its capacity to burn wood pellets. It’s worth adding that the 31TWh of biomass electricity comes from a wide range of sources. Large sites burning wood, such as Drax, have become controversial, due to uncertainty over how long it will take for new, growing trees to offset raised carbon emissions at the power plant, particularly if trees are harvested exclusively to generate electricity. In a recent guest article for Carbon Brief, Prof Sir John Beddington, the UK government’s chief scientific adviser between 2008 and 2013, wrote: “A reasonable estimate [for this case] might be that every kilowatt hour of wood at least doubles the emissions over a period of 30 years that might otherwise occur even if the alternative were fossil fuels.” However, the likes of Drax supply only around three-fifths of the biomass electricity generated in the UK. The remainder is from smaller sites burning poultry litter, landfill gas or gas from anaerobic digesters, among other things. Notably, coal generation fell by a further 25% in 2017 to 23TWh, discussed in more detail below. Meanwhile, gas generation also fell, down 7% to 134TWh, well below its 175TWh output in 2010 . Nevertheless, gas was the single largest fuel by far, supplying some 40% of generation in 2017. Gas-fired electricity has direct emissions roughly half those from coal. Along with falling demand – down around 10% since 2010 – and the rise of renewables, gas-to-coal switching helps explain recent rapid reductions in the carbon intensity of UK electricity (grammes of CO2 per kilowatt hour). According to Electric Insight’s estimates, the carbon intensity of UK power fell by 10% to 237gCO2/kWh in 2017, half the 508gCO2/kWh in 2012. (Note that this estimate covers all electricity supplied in the UK, including imported power from France and the Netherlands. In 2017, the UK sourced 15TWh from imports, up from zero in 2010. Last year saw a slight decrease on 2016, after a raft of nuclear plants were taken offline in France for repairs.)  Despite having contributed to the recent decline in emissions from electricity generation, gas is still a fossil fuel, with direct emissions at the power plant of around 400gCO2/kWh. Indeed, given an overall intensity that is now well below that of gas, the UK power sector would become more carbon intensive if gas meets a larger share of the mix. Gas emissions are also some four times larger than the 100gCO2/kWh which the Committee on Climate Change (CCC) suggests will be needed by 2030, in order to help meet the UK’s legally-binding carbon targets. By implication, and combined with the government’s pledge to phase out coal power by 2025, the UK must generate no more than 25% of its electricity from gas by 2030. Indirect emissions in the gas supply chain, such as from leaking wellheads or pipes, impose additional constraints on the extent to which gas can continue to be part of the UK electricity mix – and the wider UK energy systemThe latest decline in coal-fired electricity generation in the UK completes an 84% fall over the space of just five years, between 2012 and 2017. The fall has been so dramatic that solar generated more electricity than coal on 182 of 365 days last year, with wind exceeding coal on 302 days. There were also 1,226 half-hour periods with zero coal generation, the equivalent of 25.5 days. There were 3 full days with zero coal, including the well-publicised first coal-free day since the industrial revolution, on 21 April, but also the 1st and 29th of October. Coal’s share of UK monthly generation  fell to a record low of below 2% in April, averaging 2% across the five months from April through August (see next section).  The leading protagonist in coal’s demise has been the UK’s top-up carbon tax, the carbon price floor. This has raised the carbon price for the power sector to around £23 per tonne of CO2 in 2017, increasing the cost of coal generation, relative to lower-carbon gas. At the latest budget, the government committed to maintain a steady carbon price for the power sector until coal has been phased out. The government has yet to set out how it will ensure its phaseout plans are guaranteed, if the carbon price and market conditions fail to do the job. It also remains committed to the capacity market, which keeping coal plants open as an insurance policy against insufficient electricity supplies. Other major factors in coal’s demise include EU air pollution rules, shifting wholesale prices for coal and gas, and the closure of three large coal plants in 2016. The 84% coal reduction over the past five years accounts for around 80% of the fall in overall UK carbon emissions over the same period. This highlights how little has been achieved in other parts of the economy, with transport emissions essentially unchanged since 1990, for example. While power sector emissions must fall furthest, CCC analysis suggests the UK will only meet its legally-binding carbon budgets with emissions cuts across the whole economy....Solar, obviously, generates the bulk of its annual output during the summer, while wind and hydro are more productive in the stormier winter months. These annual cycles are complementary, as the lower chart below shows. It’s worth adding that these seasonal variations remain relatively muted compared to the seasonal cycle of electricity demand, which rises in the winter months due to the need for extra heat and light. This cycle is clear in the output from coal, which rises in winter to match demand."
For the first time in 2017, more than half of the electricity generated in the UK came from low-carbon sources, Carbon Brief analysis shows
Carbon Brief, 3 January 2018

"The US oil rig count rose by 42 percent during 2017 compared to the corresponding period last year, as energy companies boosted spending. Drillers held the number of oil rigs steady for a second straight week at 747 in the week to Dec. 29. That was 222 more than the 525 rigs at the end of 2016.  There is much optimism across Texas regarding the prospects for the industry in the coming year.  The Permian Basin pumped an estimated 815 million barrels of crude in 2017, beating its previous record of 790 million barrels, achieved back in 1973. Over the past decade, the Permian has added almost 2 million b/d to US production, and by the end of this year, it could be producing 2.75 million barrels daily which will boost total U.S. oil production to more than 10.5 million barrels by the end of this year. There are some dark clouds on the horizon which could be a harbinger of trouble ahead and even the beginning of the end for the decade-long shale oil boom.  There is evidence that points to falling production in the Eagle Ford from some of the recently drilled shale wells. In the last few years, drillers have been able to increase the initial production from recently drilled wells by using “new technologies” such as longer laterals, using more sand during fracking, and more sophisticated staging. The success of these new practices gave the appearance that the shale oil industry had found ways to get more oil out of fracked wells. As the months of production ticked by, however, it is becoming apparent that the burst of higher production only lasts a few months and down the road two or three years, these “new technology” wells may not produce any more oil than it the pre-new technologies era. Moreover, the “new technology” wells cost more to drill and frack, leaving the industry back where it was. If this trend continues and the oil being extracted from a very limited number of “sweet spots” is ever exhausted, we could be facing declining US shale oil production within a few years. A recent Federal Reserve survey of 134 companies involved with shale oil production in the US southwest says that nearly all companies are saying that oil prices must stay above $60 a barrel for a substantial increase in drilling to occur. Even if US shale oil production continues to climb, it may not be enough to meet rising global demand for oil because of the large cutback in expensive conventional oil projects – mostly offshore.  Offshore megaprojects will take many years to come online. Some believe we could see output deficits and much higher prices as soon as 2019.... Only Americans have gotten shale right so far, but the Kremlin is taking the first steps to unlock Russia’s potential. Companies like Gazprom Neft are leading Moscow’s drive to replicate the US shale boom, experimenting with a uniquely Russian, state-controlled approach to fracking that contrasts with the free-for-all among independent producers in Texas and North Dakota."
Peak Oil Review
Resilience, 1 January 2018







".... if you look around and see what the world is now facing I don't think  in the last two or three hundred years we've faced such a concatenation of  problems all at the same time.....[including] the inevitability, it seems to me, of resource wars....  if we are to solve the issues that are ahead of us, we are going to need to think in completely different ways. And the probability, it seems to me, is that the next 20 or 30 years are going to see a period of great instability... I fear the [current] era of small wars is merely the precursor, the pre-shock, for something rather larger to come... we need to find new ways to be able to live together on an overcrowded earth."

Paddy Ashdown, High Representative for Bosnia and Herzegovina 2002 -2006
BBC Radio 4, 'Start The Week', 30 April 2007

"Individual peace is the unit of world peace. By offering Consciousness-Based Education to the coming generation, we can promote a strong foundation for a healthy, harmonious, and peaceful world.... Consciousness-Based education is not a luxury. For our children who are growing up in a stressful, often frightening, crisis-ridden world, it is a necessity."
Academy Award Winning Film Producer David Lynch (Elephant Man, Blue Velvet, etc)
David Lynch Foundation






NLPWESSEX, natural law publishing
nlpwessex.org