Sun4.jpg (8555 bytes)

NLPWESSEX, natural law publishing

nlpwessex.org

"I don't think in the last two or three hundred years we've faced such a concatenation
of  problems all at the same time.... If we are to solve the issues that are ahead of us,

we are going to need to think in completely different ways."

  Paddy Ashdown, High Representative for Bosnia and Herzegovina 2002 - 2006


PEAK OIL AND ENERGY CRISIS NEWS

Resources

News - News - News
**
To Go Direct To Current Energy Crisis News Reports - Click Here **

Home

Peak Oil and Energy Crisis News Reports

Current

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

Former Shell Scientist M. King Hubbert Speaks On Peak Oil in 1976
Click Here

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

The Future

"New data from Wood Mackenzie show after years of only single-digit returns, big oil and gas players such as Royal Dutch Shell, Eni and Total will generate an internal rate of return of more than 10 per cent in 2017 from exploration. This is the energy consultancy’s threshold of profitability. “Exploration costs have halved and development costs are also much reduced,” said Andrew Latham, vice-president of exploration at Wood Mackenzie. “Meanwhile, smaller budgets are focused on exploration plays with easier routes to commercialisation.” That has led to a dramatic fall in exploration spending, from $95bn in 2014 to $40bn this year, according to Wood Mackenzie. A further slide is expected in 2017, to $37bn — the lowest in 12 years. A push towards a smaller, more efficient industry has led to a big drop in exploration’s share of upstream capital expenditure, from 13 per cent in 2014 to 9 per cent this year. A new low of 8 per cent is forecast for 2017. Aside from an earnings boost, a return to profitability reduces reliance on alternative ways of securing supply, such as through mergers and acquisitions. But like other global energy groups, Wood Mackenzie believes a pullback in exploration and a drop in investment in future production is storing up problems, namely a supply shortage and a price spike from 2019 onwards. Fatih Birol, executive director of the International Energy Agency, said last month a third consecutive annual decline in capital expenditure by oil producers in 2017 would be the longest investment downturn in industry history. “We are entering a period of great oil price volatility,” Mr Birol said. The equivalent of Iraq’s annual oil production needs to be added to global supplies every two years simply to replace the decline in existing reserves."
Boost in exploration returns for oil majors predicted
Financial Times, 9 December 2016


The Energy Challenge Of The Post 9/11 Period

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



MORE ENERGY INFORMATION
SOLAR ENERGY NEWS



Contact

'We Need A New Way Of Thinking' - Consciousness-Based Education


       
PEAK OIL AND ENERGY CRISIS NEWSBITES

2017 2016 - 2015 - 2014 - 2013 - 2012 - 2011 - 2010 - 2009 - 2008 - 2007


2017
"The global outlook for oil markets in 2018 could put a dampener on hopes for higher prices, according to the latest monthly report from the International Energy Agency (IEA). Global stock builds, rising non-OPEC production and sluggish growth in demand could weigh on the oil price, the IEA said in its closely-watched report published Thursday. Looking into oil supply and demand balances in 2018, the IEA said that it saw that "three quarters out of four will be roughly balanced — again using an assumption of unchanged OPEC production, and based on normal weather conditions." "However, our current numbers for the first quarter of 2018 imply a stock build of up to 0.8 million barrels a day (mb/d). Taking 2018 as a whole, oil demand and non-OPEC production will grow by roughly the same volume and it is this current outlook that might act as the ceiling for aspirations of higher oil prices," it added."
Three factors could crush hopes for a higher oil price, IEA says

CNBC, 12 October 2017

"China’s moves to slash reliance on the internal combustion engine signal tough times for the country’s oil majors. A push into new energy vehicles (NEVs) – including battery-powered and hybrid cars – could curb demand for black gold. Sinopec and PetroChina will be hardest hit. The policy will also add to downward pressure on global crude prices. The People’s Republic is ultimately hoping to outlaw traditional gasoline-fueled cars entirely, cleaning up the air and relieving it of dependence on oil imports. There is no official deadline for the move, but Wang Chuanfu, founder of Chinese electric vehicle maker BYD, reckons the ban could come as early as 2030. As a battery maker poised to profit from the shift, Wang’s guesstimate is certainly self-interested, and probably wishful thinking. Electric cars accounted for less than 2 percent of China’s market share in 2016, and a bottleneck in battery production will hamper the transition. But there is no doubting China’s determination to push the pace. The Ministry of Industry and Information Technology says NEVS should account for a fifth of auto sales by 2025. As soon as 2019, regulators want automakers to make NEVs at least 10 percent of total sales. That means China’s $440 billion retail fuel market is in for a bumpy ride."
China’s oil giants brace for electric car crash
Reuters, 9 October 2017

"Forget the sun and wind — evaporating water could be the next big source of renewable energy, said James Temple at Technology Review​. So-called evaporation-driven engines "generate power from the motion of bacterial spores that expand and contract as they absorb and release air moisture." Evaporation continues 24/7, so the engines, which sit on the water's surface, could provide power nonstop — unlike solar panels. The technology is still in a prototype phase, but a new study in the journal Nature Communications notes that the power available from natural evaporation in lakes and reservoirs in the continental U.S. could meet 70 percent of the nation's needs. If even a small amount of that energy were tapped, says study co-author Ozgur Sahin of Columbia University, evaporation-driven engines "could make a significant contribution to clean-energy and climate goals."
Is evaporating water the future of renewable energy?
The Week, 8 October 2017

"Saudi Arabia and Russia reaffirmed a pledge to shrink a global oil glut as the leaders of the two energy superpowers met in Moscow on Thursday, helping to send crude prices higher by more than $1 a barrel. The countries that produce roughly a fifth of global oil supplies made the strongest indication yet that Opec-led production cuts could be extended at least until the end of 2018 if deemed necessary. On the first ever visit by a Saudi monarch to Russia, King Salman bin Abdulaziz said that he sought to “strengthen” the relationship between both countries that has become increasingly bound by economics, trade and geopolitics. He met with Vladimir Putin, Russian president, at the Kremlin with bilateral talks also attended by the energy and foreign ministers of both nations. Sergei Lavrov, Russia’s foreign minister, said that both leaders had declared their commitment to the oil cut deal... Agreement between heads of states of both countries led to the deal between Opec and non-Opec countries to cut global supplies by 1.8m barrels a day, which has allowed for prices to rebound above $50 a barrel this year.....  Opec countries are targeting $60 a barrel after a collapse in prices since 2014 battered their economies that are heavily dependent on revenues from crude sales. Brent crude, the international benchmark, rose $1.31 a barrel to $57.12 a barrel in afternoon trading in London. West Texas Intermediate, the US marker, increased $1.11 to $51.09 a barrel."
Russia and Saudi reaffirm Opec oil supply cut pledge
Financial Times, 5 October 2017

"Shale drillers and oil sands producers have posted some healthy profits so far this year, but it’ll take oil consistently above US$50 a barrel for their investments to pay off in the long run. That’s the conclusion of a Moody’s Investors Service study of 37 exploration and production companies in the U.S. and Canada released Thursday. It’s also why legendary hedge fund manager Jim Chanos, who’s shorting shale driller Continental Resources Inc., says independent explorers have been a bad deal for shareholders. Shale oil producers “are creatures of the capital markets,” Chanos told Bloomberg TV’s Julia Chatterley, Joe Weisenthal and Scarlet Fu. “Because the wells deplete so quickly, they constantly need to raise money to replace the assets.” Producers in the U.S. and Canada have made dramatic efforts to cut costs since the collapse of oil prices three years ago, with many delivering higher dividends to investors this year. But with limited wiggle room to reduce costs further, any improvement in their ability to sustain healthy returns will have to come from commodity prices, Moody’s analysts Sreedhar Kona and Steven Wood said in the report.... returns will have to come from commodity prices, Moody’s analysts Sreedhar Kona and Steven Wood said in the report.The two analysts used a measure of how efficiently cash is generated to cover the costs of leasing drilling rights and boring wells, and still have enough left over to invest in future projects. “Companies will be able to demonstrate meaningful capital efficiency, measured by the leveraged full cycle ratio, only if the West Texas Intermediate oil price is above $50 per barrel and the Henry Hub natural gas price is at least $3 per million British thermal units,” they said. With a few notable exceptions, such as Appalachian explorers Antero Resources Corp. and Range Resources Corp., as well as Canadian shale gas producer Seven Generations Energy Ltd., the ratio for the vast majority was way below a level Moody’s considers healthy. Interestingly, the three best performers are focused on liquids-rich gas plays — the Marcellus and Utica formations in the northeastern U.S. and the Montney shale in Alberta. Antero and Seven Generations have seen their cash flow from operations surge over the past few years, according to data compiled by Bloomberg. Producers’ leveraged full cycle ratio needs to be significantly above 1 for explorers to earn a meaningful return on their investment, the Moody’s analysts said. The average for the 37 explorers was 0.59 last year, according to the study. The ratios for the top three performers were above 1.5. Antero’s 2.19 ratio tops the list. Among the lowest ranking were Apache Corp. and Devon Energy Corp., with ratios below 0.05, according to the report."
Shale boom, oilsands will pay off only if oil goes above US$50: study
Financial Post, 29 September 2017

"Energy firm Ovo is launching a battery storage system in conjunction with Nissan which it says can save households an average of £590 a year on energy bills. The system allows consumers to store more of the electricity created from their solar panels which would otherwise be wasted. With energy bills rising and all of the Big Six providers hiking prices already this year, we've taken a look at just how much difference having a battery system could make. The energy firm claims the battery system, called OVO SolarStore (Beta), could shave hundreds off energy bills. This saving is made up of two parts: The first is £240 which would be a saving on the amount of energy used per year - as more will be self-generated and stored via the battery pack. While the second of £350 is the average amount Ovo estimates households can make by selling excess energy back to the national grid.  But in order to make these savings, you'll need to have both the battery pack from Ovo and a set of solar panels installed. The price of the battery is £4,800 upfront with a £500 installation cost and £50 initial survey price. If you don't have solar panels already the cost of these (without installation) could be up to £6,000 for a 21 square meter roof.  But with such a significant amount to pay out, is it ever worth investing in a system such as this?"
Are solar panels with a battery storage system the answer to rising energy bills?
This Is Money, 4 October 2017

"UK drivers could be paid to own an electric car under a pioneering new partnership between Ovo Energy and Nissan. The companies hope that the offer - the first of its kind in the UK - will speed up the adoption of greener vehicles. The “vehicle to grid” technology allows owners of Nissan’s electric cars to connect their batteries to the grid during low-demand, cheap tariff periods.  They can then use the electricity stored in the vehicle’s battery at home and at work when costs are higher, or even sell surplus electricity back to the grid and make a profit, the companies said in a statement. If all of the UK’s cars were connected to the grid they could supply up to 200GW, more than double the current peak requirement, Nissan and Ovo said. The first installations are set for January 2018. The ability to store electricity in thousands of batteries across the country will help maximise the use of renewables which are produced only when conditions are right, the companies said. It could also reduce the need for new power stations and upgrades to the grid, according to Ovo chief executive, Stephen Fitzpatrick....Ovo also plans to launch its first home storage battery for customers with solar panels. The system will cost £4,800 but customers will get also benefit from a £350 annual credit and estimated average £240 savings on their energy bills."
UK drivers could get paid for owning an electric car under new plans from Nissan and Ovo Energy
Independent, 3 October 2017

"Last November, Opec announced that members had agreed to cut oil production by 1.2m barrels a day. On top of that Russia, which is not a member of Opec, also agreed to cut production by a further 600,000 barrels a day. In total, that is about 2 per cent of total global oil production. There was a fair bit of scepticism when the deal was announced. Few doubted that Saudi Arabia would cut production, but plenty of pundits wondered whether the smaller Opec countries would keep their promises (not to mention Russia). However, promises have been kept and production has fallen. What’s more, the deal was extended for a further nine months in May. At the same time, demand for oil has risen as global economic growth strengthened this year. There is plenty of chatter that production cuts will be extended, and the global economy still looks pretty buoyant. That suggests further price rises. On the other hand, US shale production is expected to rise in 2018, so that could crimp further gains. The rise of US shale oil is a crucial part of this story. New techniques emerged over the past 20 years which meant that substantial oil reserves in the US could now be extracted at a reasonable cost. It was the resulting rise in production that triggered Saudi’s move to lower the oil price in 2014.... Demand is clearly still there, and new oil reserves continue to be discovered. So we are probably not at peak oil yet. When a terminal decline in production does start, it may not be down to a lack of oil reserves. More likely, we will hit peak oil when renewable energy sources have become a major part of the global energy mix worldwide."
Why has the price of oil risen this year?
Financial Times, 29 September 2017

"It's quite the leap from cordless vacuums to electric cars - but Dyson is in a good position to attempt the jump. The vacuum cleaner manufacturer's announcement of an electric vehicle is about one thing: batteries. Dyson has been working on battery technology for a while now, to make its vacuum cleaners last longer on a charge. Most of its products are now cordless. Last March, the company announced it was investing £1bn in battery research and development. Batteries are, of course, what electric cars run on. But more than that, they're the competitive edge for the entire industry. Every auto manufacturer, from Tesla to Jaguar Land Rover, is working on the next breakthrough. That's because, with the internal combustion engine and drivetrain removed, electric cars are radically simpler to make than traditional vehicles. Analysts at JP Morgan say that the average electric vehicle has only 20 moving parts, compared to 2,000 in an internal combustion vehicle. So battery know-how becomes relatively more important than the traditional expertise of a car maker. That opens the car market to a whole host of new competitors - now including Dyson."
Dyson's electric car plan all about one thing: batteries
Sky News, 27 September 2017

"EasyJet - the budget carrier better known for its low-cost fares and early-morning flights to sunny destinations in southern Europe - could be operating electric aircraft within the next decade, according to a pioneering firm the carrier is working with. US-based company Wright Electric is developing battery-powered planes which could be used for flights of under two hours' duration. This would make them suitable for some of EasyJet's short-haul connections - such as services between London and Paris, or Edinburgh and Bristol. With the absence of traditional fuel engines, the electric planes would be more environmentally friendly, cutting both aviation emissions and noise levels. Wright Electric has released images on its website of how a battery-powered EasyJet plane might look, although it is working with other airlines as it moves towards its goal. It believes that electric planes could be up to 50 per cent quieter than traditional aircraft, and 10 per cent cheaper for airlines to buy and operate. This saving could be passed on to passengers through lower fares. It has built a two-seater prototype, and is working towards a fully electric plane - able to hold 120 passengers and up - that could be commercially operational within a decade. It also believes that every short-haul flight could be battery-powered and emissions-free within the next 20 years, and envisages an aviation landscape where electricity could come from solar sources or wind power."
EasyJet could be flying battery-powered electric planes within the next 10 years
Telegraph, 27 September 2017

"China's technologically recoverable shale gas reserves dropped by 6 percent in 2016, the Ministry of Land and Resources said on Saturday, with no new volumes of the unconventional resource added last year. Reserves stood at 122.41 billion cubic meters at the end of 2016, down from 130.18 billion cubic meters a year earlier, according to a report released by the ministry.  Shale gas was the only one of 22 major minerals listed to add zero newly discovered reserves in 2016, although potash was assigned a negative figure, indicating that some previous reserves were written off. China has been trying to replicate the North American shale gas revolution and reduce a hefty reliance on energy imports.  China imported 33.98 million tons of crude oil in August, or 8 million barrels per day (bpd), up 3.4 percent from a year earlier, but this is a slide to the lowest monthly level since January, data from the Chinese General Administration of Customs showed. That compared with 8.18 million bpd in July.  Natural gas imports rose 69.5 percent year-on-year in August to 5.66 million tons, a level down from July's 5.75 million tons. Almost all of the country's shale output comes from Sinopec's Fuling project near Southwest China's Chongqing Municipality. Sinopec said in March that it plans to boost Fuling's annual production capacity to 10 billion cubic meters from 7 billion cubic meters. A gas field containing shale gas in Southwest China's Guizhou Province was reported to harbor an estimated 100 billion cubic meters of accessible gas when its discovery was announced in July last year, but no new volumes were included into the ministry's latest shale figures."
China’s recoverable shale gas reserves fell by 6% in 2016
Global Times, 24 September 2017

"Some of the world’s top oil forecasters are starting to map out scenarios for what is billed as one of the biggest threats to future demand: China and India eyeing a ban of petrol and diesel cars. The two countries, which comprise more than a third of the world’s population, were long seen as the main drivers of growing oil consumption as more people take to the road in their fast-developing economies. In the past month, however, Chinese officials have floated the possibility of phasing out the production and sale of fossil-fuelled vehicles, following the UK and France which have said they aim to ban diesel and petrol cars by 2040. India indicated this year it wanted all cars to be powered by electricity by 2030. While doubts remain about the feasibility of such timelines, Pira Energy and Wood Mackenzie, the consultancies that advise some of the biggest energy companies and investors, have flagged in reports the rising risk to oil consumption. Pira, a unit of S&P Global, said that while they remain “sceptical” fossil fuel cars will be phased out in the timescales under discussion, they can paint a realistic path where global oil demand peaks much sooner if China and India push towards a fully electric motor car fleet. Mark Schwartz, head of Pira’s scenario planning group, said “in a scenario where EVs approach 40 per cent of the on-road vehicles in the world by 2040, compared to our reference case of 20 per cent, global oil demand would essentially plateau in the early 2030s”. Oil demand, Pira argues, would be 10.8m barrels a day lower by 2040, removing the equivalent of more than 10 per cent of global consumption — a move it forecasts would cut crude prices by as much as $20 a barrel. Wood Mackenzie, based in Edinburgh, said recent comments by Chinese officials “reinforce the government’s ambition to promote EV growth” that already targets 20 per cent of new car sales being electric by 2025. If this rate were raised to 50 per cent by 2030, Wood Mackenzie said, as part of a phase out of conventional engines by 2035, almost 2m barrels of Chinese fuel demand would be “at risk”. This would require China to do much more at the policy level to support EV sales, however, as it plans to cut direct subsidies for such cars by 2020. “As government subsidies still play an important role in supporting EV sales, we believe the market response will lag five to 10 years behind any government target without further policies to fill the gap,” Wood Mackenzie analysts said. “Given the lack of clarity . . . about the timeline and the definition of cars being targeted, the viability of any ban on combustion-engine cars remains to be seen.”"
Electric car push signals cap on endless rise in oil demand
Financial Times, 24 September 2017

"Britain will need to boost its generation of electricity by about a quarter, Scottish Power has estimated. The energy firm said electric cars and a shift to electric heating could send demand for power soaring. Its chief executive also said there would have to be a major investment in the wiring necessary to handle rapid charging of car batteries. Keith Anderson was speaking as the firm reached the milestone of 2,000 megawatts of wind power capacity.That equates to about an eighth of the British total... Once the price of electric cars falls to that of petrol or diesel, which it is thought will happen between 2022 and 2025, there could be a rapid shift in buying patterns and electricity usage. Earlier this month, First Minister Nicola Sturgeon announced a target of shifting from petrol and diesel-fuelled cars to battery power by 2032, while the UK government intends to make that shift by 2040... Mr Anderson said: "The worst position for this country to be in and the worst position for customers is that we get huge enthusiasm, people rushing out to buy electric cars because the price has come down, and then we can't allow people to plug them in because we haven't invested in the infrastructure. "So one of the things we're looking at now is how we plan what has to happen to the distribution system." The estimate of a 20%-30% increase in demand for electricity comes after years of gradually declining power use, much of that due to growing energy efficiency and the closure of older, energy-intensive industries.... The added challenge of cars is the change in technology from an eight-hour overnight charge to a rapid charge of 15 to 20 minutes. If several car owners on a residential street plug those in at the same time, the system could not cope. Mr Anderson said: "The system that takes the wires into the house, down the street, to local businesses - how do we make sure it can cope with that level of demand? It'll take a long time to plan and deliver.".... Heating is the next frontier in the energy revolution, which has barely begun. In place of gas and oil-fired boilers in each home, electric central heating can be powered by renewable generation. However, it is likely to require not only removal of a boiler, but the replacement of radiators and hot water heating pipes throughout a home."
Scottish Power says UK will need to boost capacity
BBC, 23 September 2017

"By 2021, oil production could peak in Permian Basin, as rapid drilling and fracking exhaust underground pressure in the most prolific areas of the West Texas play, according to one scenario outlined by energy research firm Wood Mackenzie. In five years, the firm said, oil companies could be drilling wells that pump as much as 30 percent less crude than the ones that kicked off the region's oil boom. "We're drilling so many wells and with such tight spacing, should we really expect well No. 5,000 to perform like well No. 5 did?" Robert Clarke, a research director at energy consultancy Wood Mackenzie in Dallas. It's impossible to predict exactly when drillers will reach the limits of the Permian Basin. Some believe that day is still far off. But it wouldn't be the first major U.S. oil field to slow down after a few go-go years. In South Texas, oil companies discovered the sweet spots of the Eagle Ford Shale were much smaller than anticipated. The industry had expected the Haynesville Shale, primarily in northwestern Louisiana, to thrive for years. But development there slowed dramatically after natural gas prices tumbled. North Dakota's Bakken Shale also has not yet lived up to early projections, Clarke said. In a few years, the problem in the Permian could be so-called child wells, the offspring of the region's first horizontal wells. They produce less oil than so-called parent wells because some amount of reservoir pressure depletes as drillers exploit an oil field. Wood Mac believes oil production in the Permian Basin could peak around 3.5 million barrels a day in 2021 unless drillers can continue to develop technologies to boost production. Roughly half a decade in the life of several major U.S. shale plays, "something happens, and the growth slows," he said. That's not to say the Permian Basin's oil production will drop dramatically after reaching its peak. The firm expects the region's output to continue to pump a little less than 3 million barrels a day out to 2030. And Wood Mac also laid out another scenario, in which drilling and fracking technology outpaced the Permian's geological constraints. In that scenario, the region's output would peak at 5 million barrels a day in 2025."
Permian could top out in 2021 unless tech overcomes geology, Wood Mac says
Houston Chronicle, 20 September 2017

"The North Sea oil industry is entering its final decade of production, according to new academic research that rejects Alex Salmond’s claims during the 2014 Scottish independence referendum campaign of an impending second boom. An Edinburgh University study of output from offshore fields estimated that only around 10 per cent of the UK's original recoverable oil and gas remains untapped. It also concluded that fracking will be barely economically feasible in the UK, especially in Scotland, because of a lack of sites with suitable geology. The researchers warned that the UK will soon have to import all the oil and gas it needs. Official figures published last week found that oil production increased by 2.9 per cent last year following a recovery in the price..... The study, published by the Edinburgh Geological Society, took into account the long-term downward trends of oil and gas field size and lifespan, alongside the break-even costs for fracking. Analysis of hydrocarbon reserves shows that discoveries have consistently lagged behind output since the point of peak oil recovery in the late 1990s. The research predicted that both oil and gas reserves will run out within a decade....Deirdre Michie, chief executive of industry body Oil & Gas UK, said: “There are up to 20 billion barrels of oil and gas resources still to be recovered on the UK Continental Shelf, based on production forecasts provided by the Oil and Gas Authority. Production has increased over the last two years and we expect that to continue to rise.”
UK's oil industry 'entering final decade of production'
Telegraph, 19 September 2017

"A study of output from offshore fields estimates that close to 10 per cent of the UK’s original recoverable oil and gas remains – about 11 per cent of oil and nine per cent of gas resources.The analysis also finds that fracking will be barely economically feasible in the UK, especially in Scotland, because of a lack of sites with suitable geology. If the study’s predictions are correct, the UK will soon have to import all the oil and gas it needs, researchers warn. Instead, they recommend a move towards greater use of renewable energy sources, particularly offshore wind and advanced solar energy technologies. It is strongly urged that the UK Government’s ongoing energy cost report – the high-profile Helm Review – should take stock of the projected shortfall in resource availability and how this might be addressed. Scientists from the University of Edinburgh examined the UK’s likely potential for fracking and carried out a fresh analysis of the country’s oil and gas production. Their findings take into account the long-term downward trends of oil and gas field size and lifespan, alongside the break-even costs for fracking. They found that the UK has only minimal potential for fracking. Many possible sites are in densely populated areas, have low quality source rocks and complex geological histories. Fracking is likely to be too restricted to become an effective industry, which would require thousands of wells, scientists say.  Analysis of hydrocarbon reserves shows that discoveries have consistently lagged behind output since the point of peak oil recovery in the late 1990s. The research predicts that both oil and gas reserves will run out within a decade."
UK oil and gas reserves may last only a decade
University of Edinburgh, 19 September 2017

"The worst impacts of climate change can still be avoided, senior scientists have said after revising their previous predictions. The world has warmed more slowly than had been forecast by computer models, which were “on the hot side” and overstated the impact of emissions, a new study has found. Its projections suggest that the world has a better chance than previously claimed of meeting the goal set by the Paris agreement on climate change to limit warming to 1.5C above pre-industrial levels. The study, published in the journal Nature Geoscience, makes clear that rapid reductions in emissions will still be required but suggests that the world has more time to make the changes."
We were wrong — worst effects of climate change can be avoided, say experts
Times, 19 September 2017

"Speaking at a green energy conference in London, Leonhard Birnbaum, chief operating officer for renewables at Eon of Germany ... said wind and solar power could prosper without handouts. Research published by Bloomberg New Energy Finance at the conference projected further sharp drops in the cost of renewable power as the industry matures. Renewables were forecast to receive almost three-quarters of the $10.2tn of global investment in new power generating technology between now and 2040. During that time, the cost of solar power is expected to fall by a further 66 per cent and onshore wind by 47 per cent, undercutting the majority of existing fossil fuel power stations by 2030."
Energy executives confident over renewables future
Financial Times, 18 September 2017

"Russian oil major Rosneft (ROSN.MM) will invest in gas pipelines in Iraq’s autonomous Kurdistan, expanding its commitment to the region ahead of an independence referendum to help it become a major exporter of gas to Turkey and Europe. Kurdistan’s parliament approved a plan on Friday to hold a referendum on independence on Sept. 25, ignoring opposition from Baghdad and the wider region as well as Western concerns that the vote could heighten tensions in the region."
Russia's Rosneft clinches gas pipeline deal with Iraq's Kurdistan
Reuters, 18 September 2017

"Shale crude-oil production from seven major U.S. oil plays is expected to see a monthly climb of 79,000 barrels a day in October to 6.083 million barrels a day, according to a monthly report from the Energy Information Administration released Monday. The report has forecast increases in shale-oil output every month so far this year. Oil output from the Permian Basin, which covers parts of western Texas and southeastern New Mexico, is expected to see the largest climb among the big shale plays, with an increase of 55,000 barrels a day. Oil output at the Eagle Ford shale play in South Texas, however, is expected to decline by 9,000 barrels a day. October West Texas Intermediate oil CLV7, +0.22% was up 7 cents, or 0.2%, for the session at $49.96 a barrel, a few minutes before the settlement on the New York Mercantile Exchange."
U.S. shale oil output expected to rise by 79,000 barrels a day in October: EIA
Market Watch, 18 September 2017

"The benchmark North American oil futures contract moved above $50 US a barrel on Thursday, buoyed by predictions of growing demand worldwide. It's the first time since the beginning of August that WTI crude has traded above $50. It hit $50.30 a barrel at midday in New York, before sinking back to $49.89 at the close, a rise of 59 cents. Brent crude, the main international contract, rose to $55.80 US a barrel. A report from the U.S. Energy Information Administration released Thursday has projected world energy consumption will grow by 28 per cent to 2040. And while renewables are projected to be the fastest-growing energy source, fossil fuels will continue to be important and demand will grow, even though prices are also projected to rise, the report said. The EIA report dovetails with a report from the Paris-based International Energy Agency, issued Wednesday, that raised its estimate of 2017 world oil demand growth to 1.6 million barrels per day from 1.5 million bpd.  "OECD demand growth continues to be stronger than expected, particularly in Europe and the U.S.," the report said, noting a rebound in economic growth in both areas. Total Canadian oil supply is also growing as oilsands production comes onstream despite plunging oil prices and could near 4.95 million barrels per day in 2018, the EIA forecasts.... The U.S. EIA predicts natural gas will be the fastest-growing fossil fuel in the years to 2040, with global natural gas consumption increasing by 1.4 per cent annually.  The lower carbon intensity of gas will make it preferable to coal and petroleum as countries shift their energy mix because of climate change, but gas is also attractive because of abundant resources and rising production. In the long term, the share of oil in the world's energy mix will be reduced, to about 31 per cent in 2040, the EIA report predicts. It predicts oil prices will rise and make it more likely energy users will adopt more energy-efficient technologies and to switch away from liquid fuels when feasible. While OECD demand may be rising this year, the report says China and India will lead the growth in demand for world energy to 2040."
Oil punches through $50 US a barrel as world demands more crude
CBC News, 14 September 2017

"Merrill Lynch energy analyst Doug Leggate published a very bullish report on North American oil stocks, "The EIA lowered expectations for 2018 oil production for the 4th consecutive month ... We see prospective US oil [production] growth below most commentator expectations and improving demand as incrementally positive for the timing of a rebalanced oil market, particularly absent significant new large scale black oil investment ex shale. This is starting to look like an oil cycle!"
Merrill Lynch getting bullish: ‘This is starting to look like an oil cycle!’
Globe & Mail, 14 September 2017

"When Jaguar Land Rover followed in the tracks of Volvo last week with its shift to an electric-powered future, the car maker didn’t just talk about hybrids and batteries. Its chief executive also showed that his company, like governments and oil firms, is finally waking up to the global shockwaves electric cars will bring about. They are far more profound than whether drivers top up via a pump or a plug. Ralf Speth cited the impact battery-powered cars will have on oil demand, and the “considerable stress” that could have for major oil-producing countries’ budgets....  Carmakers have queued up to pledge that soon all their new models will be either hybrids or electric. Elon Musk’s Tesla delivered the first production versions of its mass market Model 3. The UK and France said sales of petrol and diesel cars would be banned from 2040, while a bank predicted all new car sales in Europe would be electric five years before that. On Friday, the ride-hailing behemoth Uber said all its cars in London would be fully electric or a plug-in hybrid by 2025. And with the Frankfurt motor show this week, we are guaranteed more commitments and more competition between carmakers over who is electrifying fastest. Sceptics will say there is a need for a reality check on the high-voltage hype about battery cars. They will point to the fact there are just 2 million of them in a world of more than 1 billion cars. Or that, even with subsidies they are still more expensive than petrol and diesel alternatives. Like Jaguar Land Rover, they will also question whether there are enough charging points or electricity generation.... Experts such as Bloomberg and Aston University’s David Bailey predict a tipping point in the 2020s in some parts of the world, when electric cars simply make more financial sense for drivers than those powered by a combustion engine. And while the oil companies are right that increasingly affluent Chinese and Indians will want cars, they seem to ignore the fact that electric ones offer a fix for those countries’ air pollution problems, which their citizens are pushing further up the political agenda. So the world is driving towards the destination of profound change that Speth touched on. It’s just a question of when – and the answer increasingly looks sooner than anyone thought."
Global shockwaves from electric cars will be here sooner rather than later
Guardian, 10 September 2017

"A closely-held Chinese oil company agreed to buy a minority stake in Rosneft PJSC for about $9 billion, deepening energy and political ties with Russia amid increasing tensions with the U.S. The deal sees Glencore Plc and Qatar’s sovereign wealth fund selling most of their holding in Russia’s biggest crude producer, which they acquired to much fanfare in December. The commodities giant run by Ivan Glasenberg is making way for CEFC China Energy Co. -- little known even within the energy industry -- while retaining its prized access to millions of barrels of Russian oil exports.... Russia has muscled its way into the prized Chinese energy market over the last five years, elbowing aside traditional stalwarts Saudi Arabia and Angola. Moscow has been the top crude supplier to China for most of the year and now plans to start supplying natural gas by pipeline in 2019. "This deal intensifies the energy relationship between Russia and China," Christian Boermel, a senior analyst with oil consultant Wood Mackenzie Ltd. in London, said by email. “Rosneft keeps its customers close to its heart -- buy a stake, get an oil supply agreement.”
With Russia in $9 Billion Rosneft Deal
Bloomberg, 8 September 2017

"North Sea oil and gas producers have pulled out of the “death spiral” that had threatened to send the basin into precipitous decline, according to industry leaders. However, exploration activity remains at its lowest level since the 1970s and the UK faces a continued battle to compete against lower-cost oil and gas elsewhere in the world. The chief executives of Royal Dutch Shell and BP, the UK’s largest oil groups and pioneers of the North Sea industry, both said they were optimistic about the region after deep cost cuts since crude prices crashed in 2014. Addressing an industry conference in Aberdeen, Bob Dudley of BP said the group was “back to growth” in the North Sea, which remained “one of the crown jewels” in its portfolio. He said BP had halved average production costs in the region from $30 a barrel in 2014 to less than $15 a barrel today and was aiming to reach $12 a barrel by 2020. Similar gains have been made by companies across the UK industry. Ben van Beurden, chief executive of Shell, said the cost savings meant that certain North Sea assets that were losing money when oil prices were above $100 a barrel were now profitable at current prices of about $50. Speaking to the Financial Times on the sidelines of the Offshore Europe event, Mr van Beurden said the risk of a “death spiral” had been real if companies had decommissioned uncompetitive infrastructure, putting undeveloped oil and gas out of reach. “That big risk . . . looks to have been averted,” he said. However, even after recent improvements, the UK remains one of the most expensive places in the world to produce offshore oil and gas, with average costs above those of rival basins such as the Gulf of Mexico, Brazil and neighbouring Norway. North Sea production has been rising since 2015 — reversing a 15-year slump — as several new projects approved during the era of $100-a-barrel oil have come on stream. This growth is expected to continue until at least 2019, aided by the completion this year of BP’s £4.4bn Quad 204 project west of the Shetland Islands and the expected start-up next year of its £4.5bn Clair Ridge expansion. These projects are set to double BP’s UK production to 200,000 barrels a day by 2020. However, Catherine MacGregor, president of drilling for Schlumberger, the US-listed oilfield services group, said the UK “faces a big cut in production post-2020” unless more new projects are developed."
North Sea oil and gas producers say they have left ‘death spiral’
Financial Times, 6 September 2017

"Britain’s North Sea energy sector is still shedding thousands of jobs despite the recovery in the oil price, according to new figures. The industry had already been hollowed out by the 2014-16 oil price slump, falling from a peak of nearly 500,000 employed in 2014 to 315,000 at the end of last year. But data from the Oil & Gas UK, the trade body, shows a further 13,000 jobs linked to the sector were lost in the first half of 2017. The bulk of the employment is indirect jobs, in the supply chain and services such as hotels and restaurants. Oil & Gas UK said this year’s contraction, which has continued despite the price of a barrel of oil costing a third more than a year before, was the result not just of cost-cutting, but nearly $6bn worth of mergers and acquisitions.  Several major oil firms have sold stakes to smaller, independent players in the region this year in search of more profitable reserves elsewhere, raising fears over further job losses. One industry expert cited Total’s recent acquisition of Maersk’s North Sea operations, saying head office functions would be duplicated and therefore liable to restructuring and job cuts. Steve Todd, national secretary of the RMT union, said: “I’ve been involved in this industry for 45 years and it’s the worst I’ve ever seen it. I don’t see any light at the end of the tunnel. “If anything it’s getting worse, in my view. I’m yet to be convinced there are any green shoots.”... Just 14 exploration wells and 8 appraisal wells – the step after exploration but before production – were drilled in 2016, the trade body’s economic report found. A lack of capital investment also remains a serious concern, with only three new oilfields approved since 2016. The only area where expenditure is increasing involves the decommissioning of old oil rigs, such as Shell’s removal of a platform in the Brent field earlier this year. The government has proposed changing tax relief rules around decommissioning to support the sector, with a final decision expected at the autumn budget....  The price of oil continues to hover around $50 a barrel despite a deal agreed in May by major oil-producing countries to extend production curbs and prop up prices. Oil & Gas UK said the market’s reaction to the agreement suggested “it may be more difficult to overcome the global oversupply [of oil] than previously anticipated” and that the market was likely to remain volatile until 2019."
North Sea oil and gas sector losing thousands of jobs, survey show
Guardian, 6 September 2017

"The U.K. North Sea is on track for the biggest year of oil and gas field startups in a decade, continuing the aging province’s surprising resilience to the crude-market slump. Fourteen projects with combined peak production of 230,000 barrels of oil equivalent a day will start in the region this year, according to data from consultant Wood Mackenzie Ltd. That’s the most since 2007, reflecting the payoff from multi-year investments begun when oil prices were still over $100 a barrel.... Still, the lack of investment since prices plunged weighs on the outlook beyond 2018. “Really 2017 is the last year of that tranche of projects” started when prices were high, said Evans. Wood Mackenzie expects the U.K. continental shelf to pump about 1.9 million barrels equivalent a day of oil and gas on average in 2018, with production from the new fields this year accounting for as much as 12 percent of that total. The International Energy Agency, which advises industrialized countries on energy policy, sees U.K. oil output declining every year from 2019 to 2022."
U.K. North Sea Oil Field Startups Surge to 10-Year High
Bloomberg, 4 September 2017

"The dominance of Big Oil will be usurped in less than two decades by the dawn of a golden age for natural gas lasting at least until the middle of the century. One of the world’s biggest risk assurance experts in the global energy ­industry has predicted that gas will emerge as the world’s most important source of energy by the mid 2030s ­after a slow descent for oil which will peak within ten years and the ongoing decline of coal. Remi Eriksen, the boss of Norway’s DNV GL, said the group’s first conservative prediction for the future of the global energy industry has revealed a boom in renewable energy which will meet around half the world’s needs – but gas will be the largest single source of energy for decades to come. “Gas will overtake oil as the world’s biggest source of energy by 2034. By 2050 it will be the single biggest source at 27pc of demand,” he said. He added that the demand for gas will tower over the use of individual renewable energy sources such as wind, hydro and solar power, although when totalled ­together renewable energy will make up 50pc of energy use. ... Mr Eriksen said Big Oil will continue to move towards gas on economic grounds due to its low cost compared to oil, and high demand for gas from electricity generators looking for a fuel which is less polluting than burning oil and coal. 'There will be oil and gas in the future, and there will need to be further exploration of our resources because the depletion of existing ­reserves will be faster than the drop in demand,' he said.... Nonetheless Mr Eriksen predicts that the world is still falling short of goals to limit global warming to within two degrees Celsius, the point at which climate change is predicted to wrought catastrophic consequences on the ­environment. He said the gloomy prognosis could still be avoided if programmes to use hydrogen for heat, together with carbon capture technology move ahead. But the findings should serve as “a wake-up call to all stakeholders in the energy system”."
Big Oil to be usurped by gas in little more than a decade, experts warn
Telegraph, 4 September 2017

"Global oil demand could peak in only five years, according to forecasts suggesting that oil companies are underestimating the rise of electric vehicles. Most oil majors do not expect oil usage to start to decline until the late 2030s, with Shell forecasting that it could peak in the late 2020s only under the “most aggressive” and unlikely scenario for electric car growth. However, in a report being published today, DNV GL, a Norwegian risk management company that works with both oil and gas and renewables companies, predicts that the peak could come as early as 2022. According to Remi Eriksen, its chief executive, there will be “a more rapid uptake of electrical vehicles — personal cars but also into trucks and buses — from 2020 onwards”."
Oil demand ‘to peak in only five years’
London Times, 4 September 2017

"If humans can kick fossil-fuels, they will benefit from massive efficiency increases in every sector—a net savings of 42 percent of world energy use that will both derive from and ease the transition to clean energy, a Stanford University professor says in a video released this week. The video followed the release of a roadmap in which Stanford's Mark Z. Jacobson and 26 colleagues from Stanford, Berkeley, Berlin and Denmark demonstrate how 139 countries could rely on 100 percent wind, water and solar renewables by 2050. In the video, Jacobson rebuts the common notion that renewables are not up to the task of meeting world energy demand. 'We find that by electrifying everything in these countries and by providing that electricity with clean renewable energy, power demand goes down about 42 percent without really changing much habit," says Jacobson, a professor of civil and environmental engineering and director of Stanford's Atmosphere/Energy Program."
Electrification Alone Will Save 42 Percent Of World Energy Demand, Stanford Prof Says
Forbes, 31 August 2017

"California lawmakers are considering a future without the use of fossil fuels to generate electricity, a step that would boost the renewable energy industry and expand the scope of the state’s battle against global warming. If approved at the end of the legislative session next month, the proposal would eventually ensure only clean energy moves through the state’s electricity grid, a goal nearly unmatched anywhere in the world. It would accelerate the adoption of renewable energy by requiring utilities and other electricity providers to obtain 60% of their power from resources such as the sun and wind by 2030. Then it would task regulators with phasing out fossil fuels for the remaining 40% by 2045."
California's goal: an electricity grid moving only clean energy
Los Angeles Times, 31 August 2017

"Libya's Sharara oil field, the country's largest, was gradually restarting on Tuesday after a shutdown, although instability in the country means that output there could be volatile, traders said.  Sharara recently reached output of 280,000 barrels per day (bpd), but closed earlier this week due to a pipeline blockade. Its production is key to Libya's oil output, which surged above 1 million bpd in late June, about four times its level last summer.  Libya's rising output is a headache for the Organization of the Petroleum Exporting Countries (Opec), which together with non-Opec producers including Russia has pledged to hold back around 1.8 million bpd of supplies between January this year and March 2018 to tighten supplies.  However, Opec has so far fallen short of its pledge, in part due to Libya's strong output. The Opec-member has been exempt from cuts."
Oil prices fall on concerns of oversupply as Libyan output recovers
Reuters, 23 August 2017

"Microgrids have become increasingly popular across the U.S. in recent years, embraced by everyone from community developers to military officials. They have been installed as part of a 40-solar-panel infrastructure project atop a peak in North Carolina's Great Smoky Mountains; used as a way to deliver power to the 2,800 residents of Borrego Springs, Calif.; and implemented at the U.S. Army's Fort Carson in Colorado. The reason is as simple as the bottom line: the technology offers a way for communities to collect, store and use their own energy, rather than pay for it to be shipped from miles away. In the U.S., microgrids often include batteries, a localized renewable energy source like solar panels, and sophisticated software to determine when to buy energy from utility companies and when to sell any excess power back. The rise of microgrids comes as part of a broader shift in the ways Americans think about electricity storage and delivery. The grid, long associated with large infrastructure such as transmission lines, power plants and substations, also functions at the community and neighborhood levels. Indeed, microgrid capacity is expected to double by 2020, totaling 4.3 gigawatts in microgrid potential, according to GTM Research, an industry analyst.This rapid growth would likely have surprised early advocates of the technology, which grew to help power places in the developing world that could not easily link to a primary electric grid. In remote parts of Africa and South America, where hundreds of millions of people live without reliable electricity, energy companies have turned to solar panels, battery storage and the software to run them as a way to deliver power to detached communities."Microgrids that can isolate from the grid when needed have value in both developing worlds and developed worlds," says Gregg Patterson, CEO of Demand Energy, a company that builds microgrids. "We installed a microgrid in Brooklyn and Queens because it was in the most challenged network" in the region, he says.The promise of both resiliency and frugality has made the U.S. military one of the biggest boosters of microgrids. According to GTM, the armed forces are expected to operate nearly one-third of U.S. microgrid capacity by 2020. The technology will allow the military to reduce reliance on expensive and high-polluting diesel as its backup generation. The savings are expected to total up to $20 million annually for a large military installation, according to a report from the Pew Charitable Trusts."

A Small-Scale Power Solution Could Pay Big Dividends Across the U.S.

TIME, 21 August 2017
"Royal Dutch Shell Plc, the world’s largest oil trader, is said to have loaded its first crude from Libya in five years over the weekend, adding to evidence of the OPEC nation’s comeback. The cargo on Saturday is for 600,000 barrels of crude from the Zueitina port, according to two people familiar with the matter who asked not to be identified because the information is private. A Shell spokesperson declined to comment on the shipment, but said the company’s Shell International Trading & Shipping “has a history marketing Libyan crudes. We welcome new business opportunities with Libya’s National Oil Corp.”... Libya this year attracted Germany-based Wintershall AG and Russia’s Rosneft PJSC as investors amid signs of stability in the oil industry after years of civil war and political division. The nation is exempt from the supply cuts agreed to by the Organization of Petroleum Exporting Countries and allied producers. Crude output was 1.02 million barrels a day in July, a four-year high, according to data compiled by Bloomberg. Libya isn’t planning to join any agreement to curb output until it reaches its target of 1.25 million barrels a day by December and can maintain that level, two people familiar said in July. In 2005, Shell signed an exploration deal in Libya and five years later said gas found wasn’t in commercial quantities. Output and exports collapsed after the 2011 revolt against former leader Moammar Al Qaddafi. The country with Africa’s largest crude reserves pumped as much as 1.78 million barrels a day in 2008 and by 2011 it was down to as low as 45,000 barrels a day, Bloomberg data show."
Shell Loads Oil in Libya for the First Time in Five Years

"Fracking for gas will not work in the UK, according to research carried out at Heriot-Watt university. Prof John Underhill said the geology of the British Isles will not support it. The fracking debate, he has claimed, is 55 million years too late. Prof Underhill is Heriot-Watt's chief scientist and professor of exploration geoscience. He said the rocks containing shale deposits in the UK are riddled with fractures. They are "like a pane of shattered glass" and will make large scale fracking unviable. The energy industry has been fracking for decades. Hydraulic fracturing, to give it its proper name, involves pumping a fluid - usually water plus additives - into rocks containing hard to reach energy deposits. The water pressure fractures the rocks, the additives keep the fractures open just enough for the oil or gas to emerge and be captured. It's a commonplace procedure offshore in the North Sea oil industry....  Successful gas extraction requires shale to be underground at just the right temperature and pressure. That's how it happens in the US. A drill digs deep, then turns to push and frack horizontally along the shale deposit. And that, according to Prof Underhill, is what can't happen here. Because Britain is broken, geologically speaking.... A tracery of black lines show where fault lines shatter some of the UK's biggest shale deposits: West Lothian, Bowland Shale in Lancashire, the Weald Basin. "For extraction to occur," he says, "you need a simple geology in the subsurface. "So you can drill and then drill horizontally for long distances with confidence. Not go up, down, around. "If you've got a fractured subsurface and something that's uplifted, you've switched off the kitchen in which oil and gas is generated - and you've broken the rock so it's not continuous." Prof Underhill's assessment is unlikely to kill the fracking debate here. But energy prices could make smaller scale extraction viable in some cases. It could mean the debate shatters into more localised controversies. But it raises another important question: where are our future energy supplies to come from? The UK ceased to be self-sufficient in gas earlier this century. Now we depend on imports to keep us topped up."
UK fracking not viable, claims Edinburgh geologist
BBC Online, 17 August 2017

"Green taxes which are blamed for adding up to £150 to every power bill will not be cut as the result of a government review of rising energy bills announced today. Dieter Helm, an Oxford academic and critic of wind and solar power, has been hired to lead the official review of energy bills - but has been told he cannot suggest any “detailed” changes to green taxes. Last week British Gas blamed the taxes for a huge rise in electricity bills for three million of its customers. Electricity prices will increase by 12.5 per cent, adding £76 to the typical annual bill, from next month for British Gas's customers. The company said the cost of green subsidies levied on bills has created "significant pressures" and suggested that it had no choice but to respond by raising prices. The UK is legally obliged to reduce greenhouse gas emissions by at least 80 per cent from 1990 levels by 2050. Green levies on bills are used to pay for loft insulation schemes and subsidies for renewable energy projects. The Tories have repeatedly threatened to take action to curb the costs of these environmental taxes, which were  reportedly branded "green cr*p" by former Prime Minister David Cameron in 2013. Theresa May, the Prime Minister, pledged to cap energy price rises for 17 million households during the election. The Government said the review “will deliver on Government’s commitment to consider how to keep energy costs as low as possible”.... Prof Helm, an economist at Oxford University, defended the review saying: “The cost of energy always matters to households and companies, and especially now in these exceptional times, with huge investment requirements to meet the decarbonisation and security challenges ahead over the next decade and beyond.  "Digitalisation, electric transport and smart and decentralised systems offer great opportunities. It is imperative to do all this efficiently, to minimise the burdens... Prof Helm has previously been highly sceptical that green energy can do enough to cut emissions. He wrote in the Spectator magazine: "Current renewables like wind turbines, rooftop solar and biomass stand no serious chance of making much difference to decarbonisation. It’s simply a matter of scale.""
New Government review into soaring energy bills, but green taxes will stay
Telegraph, 16 August 2017

"Supplies of renewable energy, such as solar and wind power, have outstripped fossil fuels this summer. On 26 May, solar panels produced more than a quarter of all electricity needed in the country, with windy and bright conditions helping renewable energy generation to smash records. And for the first time on 7 June, wind, nuclear and solar were all generating more than gas and coal combined. The falling cost of wind and solar technology makes it increasingly attractive and energy firms have installed tens of thousands of solar panels in recent years. The home roof market has also boomed with an estimated 900,000 systems now online, despite generous government subsidies all but drying up in the last two years."
Record-breaking summer for renewable power generation
Sky News, 12 August 2017

"The International Energy Agency (IEA) cut estimates for the amount of crude needed from Opec this year and in 2018 after lowering its historical assessments of consumption in some emerging nations... The agency lowered projections for the amount of crude required from Opec this year and next by about 400,000 barrels a day. About 32.6 million barrels a day will be needed from the group this year, less than the 32.84 million it pumped in July. There are also growing doubts that all the countries involved in the accord to reduce supply are fully committed, the IEA said.... Opec’s rate of compliance with the cutbacks slipped last month to 75 per cent, the lowest since the accord started in January. Iraq’s implementation was just 34 percent, Venezuela’s 28 percent and the U.A.E.’s 53 percent. Adherence among the non-members coordinating with Opec was at 67 per cent. Despite the reduction in total demand estimates, the rate of growth for this year is stronger than previously thought, at 1.5 million barrels a day.... With a lower demand outlook and higher Opec output, “stock draws later in the year are likely to be lower than first thought,” it said.  Oil had its worst week in a month as compliance with Opec’s deal falters and the outlook for demand worsens.... Oil just hasn’t been able to stick to the US$50 mark in New York even though US crude inventories are at their lowest since October, in part because recent declines are seen mostly as the result of summer demand that’s soon to fade. Opec’s rate of compliance with output cuts slid to 75 percent in July, the lowest since the accord started in January, the IEA said. Opec said its output is increasing on supplies from Libya, which is exempt from the deal. If Opec’s compliance to the deal continues to slow, “the rebalancing is going to take a longer time,” said Mark Watkins, a Park City, Utah-based regional investment manager at US Bank Wealth Management, which oversees $142 billion in assets. Meanwhile, in the US the number of rigs drilling for crude rose to 768, the highest level since April 2015, as production is set to reach nearly 10 million barrels next year. Amid all the doubt that supply and demand are coming to balance, futures have been stuck in a tight range of about $2.50 this month."
IEA says world oil markets re-balancing
Bloomberg, 12 August 2017

"European gas suppliers must take a more proactive role in tapping into diverse supply sources in view of U.S. attempts to sell its liquefied natural gas (LNG) into Europe, the CEO of German utility Uniper said on Tuesday. Uniper is one of five Western firms that have invested in Nord Stream 2, a Russian gas export pipeline to Europe, which the latest U.S. sanctions related to Russia's activities in Crimea may make harder to realize. While some U.S. measures remain discretionary, they may take aim at the planned twin pipeline to the existing Nord Stream 1 link connecting Russia's gas fields with Germany via the Baltic Sea, which could keep future U.S. shale gas deliveries away. "The core reason (for the sanctions) are strategic economic interests, meaning the targeted dominance of the U.S. in energy markets," Uniper CEO Klaus Schaefer said in a call with journalists on its first-half earnings. "Uniper's readiness to finance the Nord Stream 2 project with other European partners arises from the conviction that this additional gas link makes economic sense and that our contribution to its financing will be profitable." Nord Stream 2 is due to be completed in 2019 with a likelihood of helping Moscow boost its oil and gas revenue and market share in Europe, where gas resources are dwindling. Schaefer said that European buyers could compete with those in Asia for LNG if they wanted to secure supply from the world market, where U.S. cargoes were some 50 percent more expensive compared with European references prices."
Uniper says Europe needs to find new gas sources, fend off U.S.
Reuters, 8 August 2017

"Fresh US sanctions against Russia signed into law by Mr Trump on Wednesday over alleged meddling in the US presidential election could directly target energy export pipelines that Washington fears will increase Moscow’s influence over Europe’s gas supplies. Jason Bordoff, a one-time adviser to former US President Barack Obama who runs Columbia University’s Centre on Global Energy Policy, suggests that while LNG is normally more expensive, Gazprom will still face painful choices as supplies from rivals make their way to Europe. The Russian group has to pick between “competing on price and defending market share” or “cutting back on supply to keep prices high”, he says. If Gazprom decides to opt for the former, which Mr Bordoff thinks the evidence points to, then the Russian company will need to accept it is entering a price war that may hit its revenues even if it can keep raising sales in a region hungry for energy. The US president’s overture to countries such as Poland chimes with the mood among pro-Nato politicians in central Europe, who resent Moscow’s leverage over their gas supply with their web of import pipelines. Some might happily rely more on the US for their gas, even if it means paying more. Sanctions are also complicating the battle, particularly if they hit Gazprom’s Nord Stream 2 pipeline to Germany, which is under construction. That has rattled Russian politicians who are keen to talk up their ability as a cheap supplier of gas to Europe. “The attempts to derail Nord Stream 2 are part of unfair competition practices by potential suppliers of LNG, which is more expensive compared with natural gas delivered by pipelines,” Russia’s energy minister, Alexander Novak, told the Financial Times before Mr Trump signed the sanctions. “These politically motivated economic restrictions will ultimately make the energy resources on the market more expensive.”  Mr Novak’s comments highlight the risks for some European countries, with analysts saying the EU will need to increase gas imports in the short term at least. This is due to falling domestic production in countries such as the Netherlands and the UK. Nord Stream 2 is part of Gazprom’s response to that forecasted jump in demand. It has inked an agreement with European energy majors including Royal Dutch Shell, Austria’s OMV, France’s Engie and Germany’s Uniper and Wintershall to finance half the €9.5bn to build the pipeline, which will add 55bn cubic meters of annual capacity to its European flows, delivered under the Baltic Sea. Last month, it also began work on doubling the capacity on its under-construction Turkish Stream pipeline, raising capacity to 30bn cubic metres in annual shipments for Turkey and southern Europe. The Russian group has already increased exports to Europe by an annual 12.3 per cent in the first six months of 2017, following a 12.5 per cent annual increase in 2016. In the eyes of Gazprom’s chief executive Alexei Miller, there is no contest in the demand stakes. “Our gas is enjoying increasing demand in Europe,” he says. “Our gas demand growth will continue.”  Gazprom officials argue that countries such as Poland will have to pay more for ships of US LNG if they decide to reduce their imports of politically unpalatable piped Russian gas. However, the rise of LNG is linking up markets. Its growth from the US and producers such as Australia and Qatar is joining up regional markets that were previously separate, allowing more gas to flow where it is most needed. Supplies of the super-cooled fuel are expected to grow almost 50 per cent between 2015 and 2020. This has already had the effect of partially transferring low US prices, depressed by shale gas production, through to Europe and Asia. Gazprom believes it still has advantages on price, particularly as it has started to loosen pricing controls to many of its main European customers. Currently, the US gas price is about $2.85 per MMBTU, a measure of energy content in fuel. This rises above $6 after factoring all the associated fees for shipping, liquefication and gasification, according to Gazprom estimates. This compares with about $5 per MMBTU in much of the European market, where Gazprom accounts for about a third of supply.....  But, despite the price advantages, countries such as Lithuania and Poland are embracing LNG to let Russia know they have alternatives. They complain that Gazprom prices are still too high and also resent relying on Russia. Some European countries would like to break the Russian stranglehold over the market. “LNG is a point of leverage,” says Ira Joseph at energy consultancy Pira, a unit of S&P Global Platts, the energy data provider. Charif Souki, head of energy group Tellurian, points out that LNG was not meant to be a full-blown replacement for pipeline supplies as it could not meet the demands of the European market on its own. Instead, he thinks LNG provides flexibility to the market. “Gas can now move where you need it in the world. That’s the biggest challenge for a company like Gazprom.” ... The US enjoys some of the cheapest market-rate gas prices in the world due to the glut created by the shale boom, but once the additional costs of liquefaction and shipping and regasification are added, the total cost still starts to creep above those in Europe. However, the structure of many LNG deals often involve a fixed “take or pay” portion that long-term buyers such as Centrica, which is due to start lifting enough LNG from the US Gulf Coast in 2019 to supply 1.8m UK homes, will still have to pay for whether they need the gas or not. These so-called sunk costs mean it will often make more economic sense to lift the gas and sell it on to customers or rival traders even if the pipeline gas from Russia or other suppliers is cheaper. That can make US LNG shipments to Europe viable, with the continent seen as the main destination for excess cargoes as it has surplus regasifaction capacity. Centrica has LNG import capacity at the National Grid’s Isle of Grain facility in Kent."
US and Russia step up fight to supply Europe’s gas
Financial Times, 3 August 2017

"New U.S. sanctions will make it harder for Russia to build two gas export pipelines to Europe but the projects are unlikely to be stopped. U.S. President Donald Trump has reluctantly signed into law further sanctions on Russia but some of the measures are discretionary and most White House watchers believe he will not take action against Russia's energy infrastructure. This would allow Gazprom's two big pipeline projects to go ahead, although at a higher price and with some delays. The Kremlin, dependent on oil and gas revenues, sees the pipelines to Germany and Turkey - Nord Stream 2 and TurkStream - as crucial to increasing its market share in Europe. It also fears that Western partners - needed to develop the deepwater, shale and Arctic gas deposits that will fill the pipelines - will be scared off by sanctions. Gazprom warned investors last month that the sanctions "may result in delays, or otherwise impair or prevent the completion of the projects by the group." With all that in mind, the Russian gas giant is taking steps to reduce the impact of sanctions. It has accelerated pipe-laying by Swiss contractor Allseas Group under the Black Sea for TurkStream - even though there is no final agreement on where the pipeline will make landfall in Turkey. It is also hurriedly building a second TurkStream line to export gas to Europe. "The construction of the second line is underway just in case the sanctions hit," a senior Gazprom source told Reuters.... The biggest cost of any delays to the new lines could come from increased transit fees paid to Ukraine, the route by which Russian gas has traditionally reached Europe. Nord Stream 2 and TurkStream bypass Ukraine, but if they are brought into use late, Gazprom will have to continue using the Ukrainian route and may have to pay more for the privilege. The European Union, fearing sanctions will hurt oil and gas projects on which it depends, said it was ready to retaliate unless it obtained U.S. guarantees that European firms would not be targeted."
Russian gas pipelines to go ahead despite U.S. sanctions
Reuters, 3 August 2017

"BP has slashed its forecasts for the stuttering oil market as it braces for a price of around $50 a barrel to last for the next five years. The admission is a major revision from the oil major which less than one year ago said that it expected the oil price to return to $60 a barrel in 2017. The oil market peaked above $56 a barrel earlier this year but the healthy prices reignited the US shale industry which dampened the recovery with a fresh flow of oil to drag the price back below the $50 mark. Bob Dudley, BP’s chief executive, said the market price is likely to remain caught in a rut between $45 a barrel and $55 for the next five years – but the group will continue to increase its cash flows by cutting its costs to break-even at a $30 market price. “We’re on the path to being in the $30s within 5 years. At an oil price of $50 a barrel and a break-even price of $30 the company will be generating a lot of cash,” he told The Daily Telegraph."
BP braces for $50 oil to spill into the 2020s
Telegraph, 1 August 2017

"In a major blow to the future of nuclear power in the United States, two South Carolina utilities said on Monday that they would abandon two unfinished nuclear reactors in the state, putting an end to a project that was once expected to showcase advanced nuclear technology but has since been plagued by delays and cost overruns. The two reactors, which have cost the utilities roughly $9 billion, remain less than 40 percent built. The cancellation means there are just two new nuclear units being built in the country — both in Georgia — while more than a dozen older nuclear plants are being retired in the face of low natural gas prices. Originally scheduled to come online by 2018, the V.C. Summer nuclear project in South Carolina had been plagued by disputes with regulators and numerous construction problems. This year, utility officials estimated that the reactors would not begin generating electricity before 2021 and could cost as much as $25 billion — more than twice the initial $11.5 billion estimate.  The utilities also struggled with an energy landscape that had changed dramatically since the large reactors were proposed in 2007. Demand for electricity has plateaued nationwide as a result of major improvements in energy efficiency, weakening the case for massive new power plants. And a glut of cheap natural gas from the hydraulic fracturing boom has given states a low-cost energy alternative. Facing those pressures, the two owners of the project, South Carolina Electric & Gas and Santee Cooper, announced they would halt construction rather than saddle customers with additional costs."
U.S. Nuclear Comeback Stalls as Two Reactors Are Abandoned
New York Times, 31 July 2017

"U.S. coal exports have jumped more than 60 percent this year due to soaring demand from Europe and Asia, according to a Reuters review of government data, allowing President Donald Trump's administration to claim that efforts to revive the battered industry are working. The increased shipments came as the European Union and other U.S. allies heaped criticism on the Trump administration for its rejection of the Paris Climate Accord, a deal agreed by nearly 200 countries to cut carbon emissions from the burning of fossil fuels like coal. The previously unpublished figures provided to Reuters by the U.S. Energy Information Administration showed exports of the fuel from January through May totaled 36.79 million tons, up 60.3 percent from 22.94 million tons in the same period in 2016. While reflecting a bounce from 2016, the shipments remained well-below volumes recorded in equivalent periods the previous five years. They included a surge to several European countries during the 2017 period, including a 175 percent increase in shipments to the United Kingdom, and a doubling to France - which had suffered a series of nuclear power plant outages that required it and regional neighbors to rely more heavily on coal...Overall exports to European nations totaled 16 million tons in the first five months of this year, up from 10.5 million in the same period last year, according to the figures. Exports to Asia meanwhile, totaled 12.3 million tons, compared to 6.2 million tons in the year-earlier period."
U.S. coal exports soar, in boost to Trump energy agenda, data shows
Reuters, 28 July 2017

"Royal Dutch Shell is planning for the day when demand for oil starts fading as major economies move away from oil and increasingly turn to electric-powered cars, Chief Executive Ben van Beurden said Thursday. Van Beurden welcomed recent proposals to phase out passenger vehicles powered by fossil fuels in Britain and France, saying they are needed to combat global warming. Shell is looking at "very aggressive scenarios" as it makes plans to remain competitive in a world that gets more of its energy from renewable sources and less from crude oil, or "liquids," he said. "The most aggressive scenario - much more aggressive than what we are seeing at the moment, by the way - with maximum policy effect, with maximum innovation effect, can see us peaking in liquids consumption somewhere in the early thirties," he said as Shell reported second-quarter earnings. "If there are a lot of biofuels in the mix, that may mean that oil will peak in the late twenties, but then everything has to work up." Britain this week pledged to ban the sale of new cars and vans using diesel and gasoline starting in 2040 as part of a sweeping plan to tackle air pollution. France announced a similar initiative earlier this month. Car makers are also moving in this direction. Volvo says that by 2019 all of its cars will be powered by electricity or hybrid engines. "It's not a surprise that the international super-majors are starting to accept a future with the question of just how much oil and gas is needed," said David Elmes, an energy industry expert at Warwick Business School. "They realize that is now in their planning horizons and therefore needs to be discussed with shareholders because it is influencing the decisions today, and one might argue that has been prompted by shareholder activism." Shell has already begun to respond to changing energy demand by increasing its focus on natural gas, van Beurden said. But the company also needs to get involved in electricity and renewable energy and expand its petrochemicals business, he said.  Van Beurden also stressed that while developed nations are moving away from gasoline- and diesel-powered passenger vehicles, the world will continue to depend on these fuels for many years. Developing nations don't yet have the money or electricity networks needed to shift away from fossil fuels, and aviation, shipping and trucking can't easily shift to non-hydrocarbon energy sources, he said. "As far as oil and gas are concerned, and certainly as far as oil is concerned, you have to bear in mind that if we have a peak and then go into decline, this doesn't mean that it is game over straight away," van Beurden said. Van Beurden's comments come amid increased focus on the future of the industry after the Paris climate agreement saw governments commit to tougher action on emissions and shareholders push for more long-term plans."
Shell preparing for world economy that shifts away from oil
Associated Press, 27 July 2017

"Major international players are warning the United States against imposing further sanctions on Russia, saying that doing so could further isolate America from the world community. Most recently, Germany and the European Union joined France and Russia in delivering a stern warning to the US. European Union President Jean-Claude Juncker said that the bloc would act “within days” if it doesn’t get assurances that new sanctions wouldn’t significantly impact European interests. The US House of Representatives voted this week to impose further sanctions Russia, Iran, and North Korea, while limiting Donald Trump from weakening current sanctions that were imposed after it was determined that Russia had meddled in the 2016 US presidential election. The measure — a bipartisan effort that saw just three “no” votes — provoked Russia, which warned that the new sanctions risked worsening the already sour relations between the two world superpowers. The United States has previously worked in tandem with the EU to develop sanctions responses to Russian aggression over the annexation of Crimea from Ukraine. The economic bloc worries that American sanctions developed without their input could jeopardise the continent’s energy security. That includes hurting companies financing a contentious new pipeline — the Nord Stream 2 — that would carry natural gas from Russia to Germany. There are five western firms partnering with Russia’s Gazprom to build that pipeline, including Germany’s Wintershall and Uniper, the Anglo-Dutch company Royal Dutch Shell, Austria’s OMV, and France’s Engie. “The U.S. bill could have unintended unilateral effects that impact the EU's energy security interests,” Mr Juncker said in a statement following a meeting with fellow European commissioners. “If our concerns are not taken into account sufficiently, we stand ready to act appropriately within a matter of days. 'America First' cannot mean that Europe's interests come last.”...In addition to hurting Nord Stream 2 efforts, EU regulators worry that the sanctions could impact upkeep of pipeline networks in Russia that feed into Ukraine and provide more than a quarter of the EU natural gas needs. It may also hurt diversification goals the EU has, like the Baltic Liquefied Natural Gas project."
Europe 'stands ready to act' if US sanctions on Russia affect its oil and gas supplies
Independent, 26 July 2017

"Britain will ban the sale of new petrol and diesel cars from 2040 in an attempt to reduce air pollution that could herald the end of over a century of reliance on the internal combustion engine. Britain's step, which follows France, amounts to a victory for electric cars that if copied globally could hit the wealth of oil producers, as well as transform car industry jobs and one of the icons of 20th Century capitalism: the automobile itself. The mayors of Paris, Madrid, Mexico City and Athens have said they plan to ban diesel vehicles from city centres by 2025, while the French government also aims to end the sale of new gasoline and diesel vehicles by 2040. The British government has been under pressure to take steps to reduce air pollution after losing legal cases brought by campaign groups. Prime Minister Theresa May's Conservatives had pledged to make "almost every car and van" zero-emission by 2050. "There should be no new diesel or petrol vehicles by 2040," environment minister Michael Gove told BBC Radio. The ban would only apply to conventional rather than hybrid vehicles that have both an electric and combustion engine, Gove's ministry said. There is a mountain to climb, however. Electric cars currently account for less than 5 percent of new car registrations in Britain, with drivers concerned about the cost and limited availability of charging points and manufacturers worried about making expensive investments before the demand is there.  While many automakers may find it hard to countenance the end of the combustion engine, some have embraced a future where electric vehicles, or perhaps even driverless ones, prevail. This month, Volvo became the first major traditional automaker to set a date for phasing out vehicles powered solely by the internal combustion engine by saying all its car models launched after 2019 would be electric or hybrids. Renault-Nissan in 2009 announced plans to spend 4 billion euros on electric car development. But until Volkswagen (VW) admitted in 2015 to cheating on U.S. diesel emissions tests, most mainstream auto manufacturers had been slow to sink serious investment into battery cars. The backlash against diesel, without which carmakers would struggle to meet CO2 targets, has since refocused minds and produced a flurry of new commitments. VW itself unveiled ambitious plans last year to roll out 30 new battery-powered models that it expects to account for 2-3 million annual sales by 2025 - or as much as 25 percent of its vehicle production. "Even though modern combustion engines will be relevant for at least another 20 years, it is clear that the future will be ruled by electric drives," VW chief executive Matthias Mueller said earlier this year. PSA Group boss Carlos Tavares, in the past a vocal defender of diesel technologies, said on Wednesday the French company was ready to embrace mass electrification, provided the required consumer demand and government support were there. "The rise of the electric vehicle is very much dependent on the subsidies and the support governments will be able to give to this technology," Tavares told analysts during the company's first-half results presentation. PSA is planning to roll out new pure-electric and plug-in hybrid models from 2019. Toyota, which pioneered hybrids but long resisted battery-only cars, changed tack last year and has since unveiled plans for a new range of pure-electric models. In Europe, so called 'green cars' benefit from subsidies, tax breaks and other perks, while combustion engines face mounting penalties including driving and parking restrictions. China, struggling with catastrophic pollution levels in major cities, is pushing plug-in vehicles, though in the United States there is much less appetite so far. Germany, the home of major carmakers such as VW, Daimler and BMW, should soon start phasing out petrol and diesel too, said Oliver Wittke, a transport expert in Chancellor Angela Merkel's Christian Democrats. But there is likely to be resistance in Europe's biggest car market. More than 600,000 jobs could be at risk in Germany from a potential ban on combustion engine cars by 2030, the Ifo economic institute said this month in a study commissioned by Germany's VDA car industry lobby.Germany's major carmakers have invested heavily in diesel technology, which offers more efficient fuel burn and lower carbon dioxide emissions than gasoline-powered cars. ..... Britain's move will accelerate the decline of diesel cars, whose nitrogen oxide emissions have been blamed for causing respiratory diseases, in Europe's second biggest market. The government will provide more than 250 million pounds to local authorities for schemes to restrict diesel vehicles' access to polluted roads but said other options should be exhausted before charging users of polluting vehicles. Any restrictions or charges for polluting vehicles to use affected roads should be time-limited and lifted as soon as air pollution is within legal limits, it added. Gove said he favoured road-by-road restrictions for diesel vehicles rather than outright bans from town centres or costly vehicle scrappage schemes, but did not rule them out entirely if they were local authorities' preferred options.... Turning away from oil will add to discussions about whether the world is reaching peak oil demand and how additional electric power can be generated. Some companies, including Royal Dutch Shell, expect demand to peak as early as by the end of the next decade. Demand for diesel cars fell 10 percent in the first half of the year in Britain while sales of petrol vehicles rose 5 percent, according to industry data. Sales of electric and hybrid models rose by nearly 30 percent, the fastest growing section of the market albeit from a low base."
Electric Cars Win? Britain to Ban New Petrol and Diesel Cars From 2040

"Global oil demand could peak as early as 2024 if there are more efficiency gains in vehicles, greater market penetration by electric cars, lower economic growth and higher fuel prices, Goldman Sachs said in a research note on refining on Monday. Economic expansion in emerging markets - led by India - may stave off reaching a peak until 2030, although demand growth will still slow over the next decade given improving mileage in cars and trucks and the greater use of electric vehicles, research analysts from the investment bank said. The global electric fleet, for instance, is expected to grow more than 40-fold to 83 million vehicles by 2030, from 2 million in 2016, the researchers said in the note. "In our extreme case, we project peak oil demand in 2024," the Goldman analysts said. Goldman Sachs projects annual oil demand growth between 2017 and 2022 at 1.2 percent, slowing to 0.7 percent by 2025 and to 0.4 percent in 2030. Oil demand grew by an annual average rate of 1.6 percent over 2011 to 2016. Over the period to 2030, the transport sector will contribute less to oil demand growth. Petrochemicals will instead become more central, although with more feedstock coming from outside the refining system, such as from natural gas liquids, refiners' share in oil demand will fall, they said."
World oil demand could peak in 2024 on higher vehicle efficiency: Goldman Sachs
Reuters, 25 July 2017


"Oil and natural gas producers flooded back to U.S. shale plays after oil prices returned to healthier levels. Energy firms have also managed to cut costs associated with the expensive process of hydraulic fracturing. Schlumberger noted that all of its U.S. land businesses were profitable in the second quarter, citing improved efficiency and higher pricing. Crude oil averaged $48.15 per barrel during the quarter, up 5% percent year-over-year."

U.S. shale makes 'rapid' return, global oil market on the mend: Schlumberger

Reuters, 21 July 2017

"About 57% of gas-fired power plants in India are lying idle due to non-availability of domestic gas, Power Minister Piyush Goyal told lawmakers on Thursday. “Domestic natural gas supply to power sector can improve only in case production levels increase in future,” Goyal said. India, which has an installed gas-powered capacity of over 25 GW, is suffering from natural gas shortages that have required power plants to shut down or run at lower rates. India has asked Qatar, the world’s biggest LNG exporter, to consider investing in some of its stranded gas based power plants."
More than half of India’s gas-based power plants idle: Piyush Goyal
Hindustan Times, 20 July 2017

"As about one-half of the global oil market is road transportation (and about two-thirds in the US), the exclusive role of oil in fuelling transportation could vanish for good. In the aftermath, oil would become a widely available energy source competing with coal, natural gas, nuclear and renewables for electricity generation. Many still argue that it will take a long time for EVs to displace motor vehicles. Bloomberg New Energy Finance projects about 25 per cent of cars would be EVs by 2040. Opec increased its projection of the EV share globally from 6 to 22 per cent by 2040 in its 2016 World Oil Outlook. A report by Carbon Tracker and the Grantham Institute at Imperial College London forecasts that EVs would comprise more than half of the global stock of cars by 2040. Given the recent acceleration in adoption and cost declines, EV adoption is likely to accelerate in the years ahead and EVs will dominate the car fleet by 2040. Using a parallel of the horse displacement by cars over about 25 years in the US in the early 20th century, an IMF working paper “Riding the Energy Transition” shows that the share of EVs could reach 90 per cent by 2040 in this fast-adoption scenario. This may seem far-fetched but many issues hindering adoption such as high cost, lack of infrastructure and the short range of the vehicles are rapidly improving. The IEA and others project that the oil displacement in the advanced world will be more than compensated by the growing demand for oil in emerging markets. Although this could be the case in the next 10 years, patterns of technology adoption suggest that emerging countries would follow suit quickly. The rapid adoption of smartphones in the world displacing regular mobile phones despite much higher prices is a great example of what could happen."
The oil price is living on borrowed time
Financial Times, 19 July 2017

"Global demand for oil will be slightly higher than expected this year, driven by increased consumption in India, the US and Germany, the International Energy Agency (IEA) predicted Thursday. "Estimates of global oil product demand growth in 2017 have been revised up... to 1.4 million barrels per day, on surprisingly robust preliminary second quarter demand numbers," the IEA wrote in its latest monthly oil market report. After "lacklustre" oil demand growth in the first quarter, "there was a dramatic acceleration" in the second quarter, "due to a combination of expected increases in India, and some surprise additions in the US and Germany," it said. In total, global oil demand was projected to reach 98 million barrels per day this year. And it was set to increase at around the same pace again next year to 99.4 million barrels per day, the IEA said. In a bid to reduce the glut of oil and shore up prices, OPEC countries agreed to cut production from the start of the year, with non-cartel producers led by Russia partially matching the cuts. But some observers feel that the so-called "rebalancing" of the market and the resulting rise in prices is taking too long to materialise....  The IEA noted that compliance from the 10 non-OPEC producers who volunteered to cut production improved in June, "higher than the rate achieved by OPEC." OPEC output increased to 32.61 million bpd in June from 32.21 million bpd in May. Producers are now set to meet in Saint Petersburg in Russia on July 24 to review the output situation."
IEA raises forecast for global oil demand this year
Bloomberg, 13 July 2017

"Global gas demand is expected to grow by 1.6 percent a year for the next five years, with consumption reaching almost 4,000 billion cubic meters (bcm) by 2022, up from 3,630 bcm in 2016, the International Energy Agency (IEA) said in its Gas 2017 report. The global natural gas market is undergoing a major transformation driven by new supplies coming from the United States to meet growing demand in developing economies and as industry surpasses the power sector as the largest source of gas demand growth, according to the IEA. The report said that demand from the industrial sector becomes the main engine of gas consumption growth, replacing power generation, where gas is being squeezed by growing renewables and competition from coal. “The United States – the world’s largest gas consumer and producer – will account for 40 percent of the world’s extra gas production to 2022 thanks to the remarkable growth in its domestic shale industry,” said the IEA. “By 2022, US production will be 890 bcm, or more than a fifth of global gas output.” By 2022, the IEA estimates that the United States will be on course to challenge Australia and Qatar for global leadership among LNG exporters. “The US shale revolution shows no sign of running out of steam and its effects are now amplified by a second revolution of rising LNG supplies,” said Fatih Birol, the IEA’s Executive Director. “Also, the rising number of LNG consuming countries, from 15 in 2005 to 39 this year, shows that LNG attracts many new customers, especially in the emerging world. However, whether these countries remain long-term consumers or opportunistic buyers will depend on price competition.'”
IEA: Global gas demand to rise to 2022
Azer News, 13 July 2017

"Three years into the biggest oil downturn in a generation, industry bosses see the recovery slipping further from view. It could easily take until the end of the decade for better times to return to an industry that’s already endured a longer slump than most people expected, according to Total SA Chief Executive Officer Patrick Pouyanne and Weatherford International Plc head Mark McCollum. Executives gathering at the World Petroleum Congress in Istanbul said they’re still focused on repairing battered finances and resetting their operations to withstand low prices.  “In terms of the magnitude of damage this is by far the worst” industry downturn, McCollum said. It may take until 2020 for demand growth to accelerate enough, or for a supply gap to emerge that U.S. producers can’t fill. “That’s when pricing will begin to rise. Until then it feels very tenuous.” That’s an enormous turnaround from the last World Petroleum Congress in Moscow in 2014, when people were speculating oil could rise as high as $125 after the precursor to Islamic State seized parts of northern Iraq. Three years on, Iraq has driven the Islamist extremists out of the city of Mosul, but the U.S. shale industry that triggered the slump to below $30 has survived and thrived. Even as OPEC curbs production, banks including Goldman Sachs Group Inc and BNP Paribas SA are cutting their price forecasts for the years ahead.....  Sooner or later the market will catch up with the decline in spending, said Mark Richard, senior vice president of global business development and marketing at oil-services giant Halliburton Co. “You can’t have sustainable business without investment,” Richard said. “You’ll see some kind of spike in the price of oil, maybe somewhere around 2020, 2021.""
Oil Bosses See More Pain as Price Recovery Slips to 2020
Bloomberg, 13 July 2017

"The U.S. shale industry has already added almost a half million barrels per day since the end of last year, taking production up to 9.3 million barrels per day (mb/d). But production is expected to continue to grow rapidly, with projections putting output at a record-high 10 mb/d by next year. The coming wave of new supply will only be possible with the generous help of Wall Street. According to the Wall Street Journal, major banks and investors have showered the industry with credit and equity, pouring an estimated $57 billion into the sector over the past 18 months. All of that money is being translated into a sharp rise in drilling even as oil prices slump. But while individual companies hope to attract investors and boost profits by ratcheting up production, the industry as a whole is shooting itself in the foot. Some less efficient drillers are increasing production but losing money on every barrel produced...Investors hungry for yield are throwing money into companies who then drill more, and the surge in production is hurting the industry as a whole. Despite efficiency improvements, the shale industry is expected to be cash flow negative by a combined $20 billion this year as oil prices sink.... Investors are slowly waking up to the idea that they may not be able to make juicy profits by betting on a sharp rebound in oil prices. There is some early evidence that Big Finance is pulling back, with new equity issuance down recently. Even if Wall Street starts to cut back on its investments in shale, it will take time for that spending contraction to show up in the production data. There is a roughly six-month lag time between the decision to begin drilling and oil showing up in the market, so the rush of new drilling that began in the first half of 2017 will ensure that production likely continues on its upward trajectory for the rest of the year. But lower prices will ultimately cut into U.S. production, even if that doesn’t occur until 2018. According to Bank of America Merrill Lynch, a $1 per barrel increase or decrease translates into the addition or subtraction of 100,000 bpd of supply. As a result, “[w]ithin a $20 band, you get an almost 2m b/d swing,” said Francisco Blanch, Bank of America’s global head of commodities research, according to the FT. So while 2017 production will probably continue to increase, the outlook for 2018 is still sensitive to prices. Nevertheless, the current oversupply woes have forced investment banks and other oil analysts far and wide to downgrade their oil price forecasts. For example, Bernstein Research slashed its price forecast for 2017 and 2018 from $60 and $70 per barrel, respectively, down to just $50. Bernstein doesn’t see oil averaging $60 per barrel before 2019. Drastic cuts to oil price forecasts are spreading. BNP Paribas just axed its 2018 forecast for Brent by $15 per barrel to a lowly $48. If those depressed price levels stick around, Wall Street will likely grow tired of shale drilling and start taking its money elsewhere."
Is Wall St Funding A Shale Failure?

Oilprice.com, 12 July 2017

"Electric vehicles could create as much as 18 gigawatts of extra demand for electricity — the equivalent of the capacity of nearly six Hinkley Point nuclear power stations — at peak times by 2050, according to National Grid. The operator of Britain’s electricity system has analysed the potential impact on demand at busy times of the day, such as after working hours, if forecasts for rapid growth in electric vehicles by 2050 are realised. Its analysis follows several developments that suggest the growth in electric vehicles might accelerate dramatically over the coming decades, with Volvo Cars announcing last week that every model it makes from 2019 onwards would have an electric motor. France has also set an example to other governments by saying it would ban the sale of petrol and diesel cars by 2040. National Grid is assuming electric vehicle sales could account for more than 90 per cent of all cars in the UK by 2050, with 1m on Britain’s roads by the early 2020s and as many as 9m by 2030. However, the company stressed that 18GW of additional demand at peak times would be the most extreme scenario and the burden on Britain’s electricity system could be reduced significantly through technology such as “smart charging”. Smart chargers power up car batteries at times when electricity networks can cope. Industry experts and operators of local electricity networks, to which the majority of vehicle chargers will be connected, have warned that to avoid costly upgrades to grid infrastructure, drivers will have to become used to the idea they may not always be able to power up their cars immediately. Dustin Benton, acting policy director at the Green Alliance, a think-tank, said to keep costs down consumers may have to “accept some control over when and how they charge their cars”.... According to National Grid’s “future energy scenarios” report published on Thursday, smart charging could substantially decrease the pressure on the system at peak times, reducing additional demand from electric vehicles to 3.5GW by 2030 from a potential scenario of 8GW of additional demand without the technology. Marcus Stewart, head of energy insights at National Grid, insisted the report should not cause alarm over potential electricity shortages, however. “The scenarios are not predictions, but they aim to be a catalyst for debate, decision making and change, and provide transparency to the wider industry,” he said."
Electric cars forecast to create extra 18GW demand for power in UK
Financial Times, 12 July 2017

"When Bob Dudley, chief executive officer of British oil giant BP Plc, was asked at a recent conference when oil demand will peak, he had a precise answer: June 2, 2042. The audience at the annual St. Petersburg International Economic Forum burst into laughter, knowing it’s impossible to predict such an event down to the day. But the American executive wasn’t speaking entirely in jest: The most recent edition of BP’s widely scrutinized Energy Outlook has global demand for crude maxing out in 2½ decades, give or take a year. That projection casts a shadow over one of the world’s largest industries, which until recently was far more concerned with boosting supply. The advent of electric cars, the fight against climate change, and slowing economic growth in China is dampening the world’s once boundless appetite for crude. Carmaker Volvo AB announced on July 5 that it will manufacture only electric or hybrid models from 2019 onward. Three days later, France said it would ban sales of cars with diesel and gasoline engines starting in 2040. Patrick Pouyanne, CEO of Total SA, says demand will peak at some point in the 2040s, which is why the French energy giant he runs has been investing in solar power. Ben van Beurden, CEO of Royal Dutch Shell Plc, has said the zenith could arrive a lot sooner, in the next 15 years or so, if electric cars became really popular. “The energy transition is unstoppable,” Van Beurden told the St. Petersburg forum in early June. “In the most aggressive scenario, you can see oil already peaking in late 2020s or early 2030s.” In the time scale of the oil industry, where multibillion-dollar projects often take a decade or longer to come to fruition, that’s as close as it gets to saying “the day after tomorrow.”... BP’s Dudley and his counterparts at Total and Shell acknowledge that their forecasts hinge on many variables and could easily turn out to be wrong. And even if they’re right, oil consumption wouldn’t suddenly plunge; it might plateau for several years or begin a slow decline. This view isn’t universal inside the industry. The International Energy Agency, which advises rich countries on policy, sees consumption growing steadily at least through 2040, the cutoff date for its long-term outlook. That’s also the view at Exxon. And Saudi Arabia and Russia, the world’s two largest oil exporters, don’t see a peak until 2050 at the earliest. Others point out that a few years ago all the talk was of a peak in supply. Then new technologies unlocked fresh production, notably from shale formations in the U.S. “I’m very skeptical about peak oil demand,” says Bob McNally, a former White House energy expert and founder of Rapidan Group, a consulting firm. “The next big surprise is when we reach the peak of  ‘peak demand’ talk and people realize that consumption continues to rise.” Short-term trends back the view that peak oil consumption is a long way off. Last year global demand growth was 1.6 million barrels a day, above the 10-year average of 1.1 million."
Remember Peak Oil? Demand May Top Out Before Supply Does
Bloomberg, 11 July 2017

"We will have to wait until the second half of the century for fusion reactors to start generating electricity, experts have announced. A new version of a European "road map" lays out the technological hurdles to be overcome if the processes powering the Sun are to be harnessed on Earth. The road map has been drawn up by scientists and engineers at EUROfusion. This is a consortium of European laboratories and universities that funds research on fusion energy. The original version of the road map, published in 2012, forecast that a demonstration fusion power plant known as DEMO could be operating in the early 2040s, in order to supply electricity to the grid by 2050. But in the updated version, yet to be released, DEMO would not start running until "early in the second half of the century". A related document that provides more detail on DEMO's design says that operations would start after 2054. The setback has been caused largely by delays to ITER, a 20bn-euro reactor that is currently being built in the south of France to prove that fusion energy is scientifically and technically feasible. In fact, according to EUROfusion's programme manager, nuclear physicist Tony Donné, DEMO's schedule could slip further, depending on progress both with ITER and a facility to test materials for fusion power plants that has yet to be built. "2054 is optimistic," he says. "It is doable but we need to align political decision makers and get industry involved.".... The person who coordinates this work, EUROfusion nuclear engineer Gianfranco Federici, describes the revised road map as "realistic but very ambitious".... Federici agrees that engineering is now key to building working fusion plants. But he is sceptical that the newer, cut-price proposals will do the job, arguing that they face daunting design challenges."
Fusion energy pushed back beyond 2050

"Investments in electricity surpassed those in oil and gas for the first time ever in 2016 on a spending splurge on renewable energy and power grids as the fall in crude prices led to deep cuts, the International Energy Agency (IEA) said on Tuesday. Total energy investment fell for the second straight year by 12 percent to $1.7 trillion compared with 2015, the IEA said. Oil and gas investments plunged 26 percent to $650 billion, down by over a quarter in 2016, and electricity generation slipped 5 percent.. Oil and gas investment is expected to rebound modestly by 3 percent in 2017, driven by a 53 percent upswing in U.S. shale, and spending in Russia and the Middle East, the IEA said in a report. "The rapid ramp up of U.S. shale activities has triggered an increase of U.S. shale costs of 16 percent in 2017 after having almost halved from 2014-16," the report said. The global electricity sector, however, was the largest recipient of energy investment in 2016 for the first time ever, overtaking oil, gas and coal combined, the report said. "Robust investments in renewable energy and increased spending in electricity networks, made electricity the biggest area of capital investments," Varro said.... The IEA report said energy efficiency investments continued to expand in 2016, reaching $231 billion, with most of it going to the building sector globally. Electric vehicles sales rose 38 percent in 2016 to 750,000 vehicles at $6 billion, and represented 10 percent of all transport efficiency spending. Some $6 billion was spent globally on electronic vehicle charging stations, the IEA said."
Electricity investment overtakes oil, gas for first time ever in 2016: IEA
Reuters, 11 July 2017

"Just 100 companies are responsible for more than 70 per cent of global greenhouse gas emissions over the last three decades, new research has revealed. The Carbon Majors Report, from the Carbon Disclosure Project, found that just 25 of those companies are the source of more than half of greenhouse gas emissions since 1988 – the year the Intergovernmental Panel on Climate Change was established. The most polluting investor-owned companies on the list are ExxonMobil, Shell, BP and Chevron, while state-backed Saudi Aramco, China’s coal industry and Russia’s Gazprom have been the top three greenhouse gas emitters overall. China’s coal industry, which is dominated by a collection of state-owned or managed firms, has emitted an estimated 14.3 per cent of the world’s industrial greenhouse gases since 1988. The report takes entities these together, making them by far the biggest contributor to man-made climate change. Saudi Aramco is next on the list, having contributed 4.5 per cent, followed by Gazprom with 3.9 per cent."
Just 100 companies responsible for 71% of greenhouse gas emissions, report says
Independent, 10 July 2017

"The world might be heading for an oil supply shortage following a steep drop in investments and a lack of fresh conventional discoveries, Saudi Aramco's chief executive said on Monday. Unconventional shale oil and alternative energy resources are an important factor to help meet future demand but it is premature to assume that they can be developed quickly to replace oil and gas, Amin Nasser told a conference in Istanbul. "If we look at the long-term situation of oil supplies, for example, the picture is becoming increasingly worrying," Nasser said. "Financial investors are shying away from making much needed large investments in oil exploration, long-term development and the related infrastructure.  Investments in smaller increments such as shale oil will just not cut it," Nasser said. About $1 trillion in investments have already been lost since a decline in oil prices from 2014. Studies show that 20 million barrels per day of new production will be needed to meet demand growth and offset natural decline of developed fields over the next five years, he said. "New discoveries are also on a major downward trend. The volume of conventional oil discovered around the world over the past four years has more than halved compared with the previous four," Nasser said. "A lack of investment is definitely not helping, so if that continues over the next couple of years there will be an inflection point where what we see today will have an impact on consumers at the end and supply will be impacted for the next couple of years," Nasser told CNBC. "What we need to see is more investments from various sectors to make sure there is an adequate supply over the long term," he said to CNBC. State oil giant Aramco, which is preparing to sell around 5 percent in itself next year in an initial public offering, is continuing to invest in maintaining its oil production capacity of 12 million barrels per day."
Aramco CEO sees oil supply shortage as investments, discoveries drop
Reuters, 10 July 2017

"Building an electric car generates considerably more carbon dioxide than creating a comparable petrol model because so much energy is required for the mining and processing of lithium, nickel and other materials for the battery. The battery accounts for more than half the cradle-to-grave emissions created by an electric car. Fuelling that car from a coal-fired grid like China's or India's makes the emissions even worse. With Europe's mix of generating capacity - less coal, more gas, more wind and more nuclear - an electric vehicle does emit less carbon dioxide over its lifetime than a comparable petrol or diesel vehicle, but not by a large margin. As one study concluded: 'We find that electric vehicles powered by the European electricity mix reduce [global warming potential] by 26 per cent to 30 per cent relative to gasoline... and 17 per cent to 21 per cent relative to diesel.' Then there is the question of where the extra electricity is to come from. In recent years we have struggled to build enough power stations for existing users, let alone adding all cars and heating too, for that is the plan. Britain's cars travel about 250 billion miles a year. Assuming the use of very small Nissan Leaf-style vehicles, that mileage would add an extra 16 per cent of demand to our existing electricity grid... Finally, remember that - globally at least - 40 per cent of road transport fuel is used by lorries, not cars, so electrifying all cars still leaves a big chunk to tackle. "
How the electric car revolution could backfire

Times, 10 July 2017, Print Edition, P25

"Iran’s oil exports in 2016 reached 1.921 million barrels per day (bpd), a 77.6 percent rise compared to 2015, according to OPEC’s latest Annual Statistical Bulletin report. The country’s crude exports stood at 1.081 million bpd in 2015 which indicates that the 2016 figure is 840,000 bpd more than that of the 2015 average. In the meantime, Iran boosted exports of oil products by 74.5 percent to 897,900 bpd year on year. The country sent 514,300 bpd of oil products to its target markets in 2015. In 2015, Iran exported 1.423 million bpd of oil to its Asian buyers compared to 969,700 bpd in 2015. Meanwhile, 497,300 barrels of oil was sent to the European markets on a daily basis while the figure was 111,400 bpd in 2015.  Iran was exempted from OPEC agreement to reduce output by 1.2 million bpd that began this year, as Tehran needs to regain the market share it lost under Western sanctions over its nuclear program. The country is planning to increase its production to five million bpd by 2021."
Iran’s 2016 oil exports up over 77%: OPEC
Tehran Times, 8 July 2017

"US independent oil and gas producers came close to breaking even during the first quarter of 2017 thanks to aggressive cost cutting and improvements in well productivity. Some shale producers claim they can drill wells profitably at prices well below $50 per barrel and in some cases below $40. But Harold Hamm, chief executive of Continental Resources, a major producer in North Dakota and Oklahoma, has said oil prices need to be above $50 to be sustainable. Prices below $40 would force producers to idle rigs again, he said in a recent interview. The renewed drop in oil prices, unless quickly reversed, looks set to put these conflicting claims to the test. Fifteen independent producers with operations focused on the United States reported a combined net loss of $3.7 billion in the first three months of 2017. But most of the losses were attributable to Marathon Oil, which reported a net loss of $4.9 billion, mostly as a result of an impairment charge linked to its Canadian oil sands businesses."
Renewed slide in oil price will test us shale profits

Reuters, 8 July 2017

"Visiting Poland this week, U.S. President Donald Trump pledged to boost exports of American liquefied natural gas (LNG) to Central Europe and take on Russia’s stranglehold on energy supplies. “America stands ready to help Poland and other European nations diversify their energy supplies so that you can never be held hostage to a single supplier,” Trump told reporters after talks with his Polish counterpart Thursday. Up to now, that supplier has been Russia. It supplied around a third of Europe’s gas demand in 2016, with an even greater share in many of the former Soviet states in Central and Eastern Europe.... The first shipment of American liquefied natural gas arrived at the port of Swinoujscie on Poland’s Baltic coast last month. The port facility and liquefaction plant were finished in 2015, aimed at diversifying the country’s energy sources and enabling Poland to become a hub supplying imported gas across Central and Eastern Europe. With that in mind, the Three Seas Initiative Summit in Warsaw Thursday brought together leaders from a dozen Eastern European nations, plus Trump. He pledged the United States will never use energy as a political tool.....  Russia has plans of its own to boost exports. Initially scheduled to open in 2019, the Nord Stream 2 pipeline would double its capacity to export gas directly to Germany beneath the Baltic Sea, bypassing Ukraine. Eastern European states want the project blocked. “If we want to have United States’ LNG supplies in Central Europe, we also want to see the United States getting tough on Nord Stream 2, which means getting tough on Russia,” Matraszek said. American LNG and the Nord Stream 2 project are on a collision course, with Poland stuck in the middle, Malecki said. “It’s hard to hide the fact that these two projects compete with each other. The odds are that there will be a clash of these energy giants in Europe,” he said."
US, Russia on Collision Course Vying for Europe Gas Market
Voice of America, 8 July 2017

"Easy Wall Street cash is leading U.S. shale companies to expand drilling, even as most lose money on every barrel of oil they bring to the surface. Despite a 17% plunge in prices since April, drillers are on pace to break the all-time U.S. oil production record, topping 10 million barrels a day by early next year if not sooner, according to government officials and analysts."
Wall Street Cash Pumps Up Oil Production Even as Prices Sag
Wall St Journal, 7 July 2017

"Hungary sees a new pipeline for Russian gas as the “only realistic” step toward energy diversification now, Foreign Minister Peter Szijjarto said on the same day Poland used a visit by U.S. President Donald Trump to announce plans to wean itself off fuel supplies from its Soviet-era master. Hungary signed an agreement this week with Russian energy giant OAO Gazprom, which is building the Turkish Stream pipeline to carry gas to central Europe via Turkey, Bulgaria and Romania. With the first shipments expected by end-2019, the project offers an alternative to a pipeline that cuts through Ukraine, even if it won’t reduce Hungary’s reliance on Russia....Hungary’s decision contrasts with Poland, an ally on most issues except Russia. Budapest sees Moscow as a partner, including on energy, while Warsaw views it as a threat. Poland, which has been dependent on Russian gas via links transiting through neighboring Ukraine and Belarus, will sign a long-term agreement with U.S. companies “soon” to import liquefied natural gas, or LNG, President Andrzej Duda said at a briefing with Trump in Warsaw on Thursday. That’s part of a plan for Poland to be able to forgo a new contract with Gazprom when an existing one expires in 2022. Other countries are also diversifying. Trump welcomed Croatia’s plans for an LNG terminal on the Adriatic island of Krk, while Lithuania introduced an off-shore vessel to convert the fuel at its port in Klaipeda to replace the 2.7 billion cubic meters it was receiving from Russia every year. Polish gas distributor Gaz-System called for the “full integration” of gas markets across central and eastern Europe via the expansion of north-south pipelines, after signing a cooperation agreement with Plinacro, Croatia’s transmissions system operator, on Friday in Warsaw....During his visit to Warsaw, Trump encouraged eastern European leaders worried about their dependence on Russian supplies to buy U.S. gas instead, saying that his country would never use energy to blackmail them. Eastern Europe suffered shortages in 2006 and 2009 after Russia cut off supplies to Ukraine, eastern Europe’s key transit state. Kiev also stopped buying Russian gas at the end of 2015 after Putin annexed the Crimean peninsula and stoked unrest in the country’s east. Hungary has pushed for the European Union to open debate into the bloc’s sanctions against Russia over Ukraine but has refrained from vetoing them. The country of less than 10 million people isn’t alone in trying to expand energy ties with Russia, Szijjarto said, pointing to a project planned by Russia and Germany to build Nord Stream 2, a gas pipeline linking the two countries via the Baltic Sea and circumventing Poland. Warsaw opposes the project out of concern that Russia can cut supplies without affecting deliveries further west. Most central and eastern European nations relied on Russia for more than 75 percent of their gas consumption last year, according to Eurostat."
Hungary Commits to Russia Gas Route as Poland Looks to U.S.
Bloomberg, 7 July 2017

"France is being pulled head-on into a future where the country will hopefully become "carbon neutral." French Ecology Minister, Nicolas Hulot announced today that France is set to ban the sale of any car that uses petrol or diesel fuel by 2040. Hulot's announcement came on the heels of Volvo's announcement a day earlier that from 2019 onwards all their vehicles will be partially or completely battery-powered, in what the company called a “historic end” to the internal-combustion engine. Mr. Hulot, an environmentalist and former television star before he joined Macron's cabinet, unveiled a series of measures in addition to the announced ban on gas and diesel powered vehicle sales, citing President Emmanuel Macron's plans to make the country "carbon neutral" by 2050."
France takes bold step — banning all gas and diesel cars by 2040
Digital Journal, 6 July 2017

"France is joining a growing movement to force the extinction of vehicles that run on fossil fuels, saying on Thursday that it would aim to end the sale of gasoline and diesel cars by 2040. The target is less ambitious than ones set by countries like Norway and India. Still, coming from a major car-producing country, France’s declaration gave additional momentum to efforts to fight climate change and urban smog by promoting the use of electric cars. The timing of the announcement was also significant, a day after the automaker Volvo said it would phase out the internal combustion engine, and during a visit to Europe by President Trump. The announcement by Nicolas Hulot, the French environment minister, was an expression of European leaders’ determination to pursue an environmental agenda despite Mr. Trump’s repudiation of the Paris agreement on climate change. “It’s a very difficult objective,” Mr. Hulot said Thursday. “But the solutions are there.” The plan to phase out gasoline and diesel cars is part of a broader effort by France to limit global warming, which Mr. Hulot outlined Thursday. The country will also stop issuing new oil and gas exploration permits this year, and stop using coal to produce electricity by 2022, he said. ..... France faced some criticism that its plan was not ambitious enough. Norway plans to sell only electric cars starting in 2025, and India plans to do so in 2030. Since cars usually last about 15 years, France’s target means that gasoline and diesel cars would be on the road until 2055. That is too long to meet France’s own climate change goals, said Greg Archer, director of clean vehicles at Transport & Environment, an advocacy group in Brussels. But Mr. Archer added that France’s move “is absolutely the right direction to be taking.” Such an expression of government resolve can prompt companies to devote more resources to developing electric vehicles, and encourage investors to put money into clean transportation start-ups. France’s move could also put pressure on Germany and other European countries to promote electric vehicles."
France Plans to End Sales of Gas and Diesel Cars by 2040
New York Times, 6 July 2017

"The UK is set to receive its first big US liquefied natural gas shipment this week, as growing US supplies of the super-cooled fuel find new buyers in Europe. The LNG cargo from the Sabine Pass facility in the Gulf of Mexico will arrive at the Isle of Grain terminal around July 8, according to industry sources. The cargo has been loaded on to the Maran Gas Mystras tanker, chartered by France’s Total. As European countries seek to reduce their reliance on Russian pipeline gas, US LNG supplies could provide one alternative in the coming years amid greater focus on energy security. After decades of being a big importer of natural gas, the US is to be a net exporter because of the country’s bumper production caused by the development of previously uncommercial shale reserves. Cheniere Energy’s Sabine Pass export terminal is the only one in operation, with five others that are under construction expected to come online by 2020. Global supplies of LNG are set to expand by almost 50 per cent between 2015 and 2020, keeping pressure on prices and making it more competitive against coal and other power sources. As the US turns into a big exporter of LNG alongside Australia as well as Russia, flows into Europe are expected to grow in the coming years. LNG supplies into Europe have risen 10 per cent in the first six months of this year, industry data show, compared with the same period in 2016. The continent has ample import facilities and infrastructure to convert LNG back into natural gas.....  Isle of Grain in the south-east of England has almost 15m metric tonnes a year — or almost 21bn cubic metres — of regasification capacity. This is the process through which LNG is converted back into natural gas for use in power plants. There are several big capacity holders at the Isle of Grain. BP and Centrica in the UK, alongside mainland European companies such as Iberdrola and Engie as well as Algeria’s state-owned Sonatrach. Isle of Grain has received seven LNG cargoes so far this year, according to the LNG Edge analytics platform, from countries including Qatar, Algeria, Peru and the Dominican Republic. While the US exported LNG in small volumes to Canvey Island in the 1960s, this is the first from the new US Gulf production.. The Britain-Belgium Interconnector pipeline has been exporting record volumes to mainland Europe as countries such as Germany and the Netherlands replenish gas stockpiles. The price of natural gas trading in Europe, as measured by the UK National Balancing Point (NBP) front month hub price for August, hit $4.80 per million British thermal units. This is the lowest of any regional hub, implying the demand for exports from the UK will continue, analysts said."
UK gets first big shipment of US liquefied natural gas

"The UK’s first nuclear power station for more than two decades is at least £1.5bn over budget and could be completed 15 months behind schedule, its developer has admitted. French state-owned EDF said the cost overrun for two new reactors at Hinkley in Somerset could hit £2.2bn, taking the total spend to £20.3bn, up from £18bn previously. EDF confirmed the first reactor – originally due to become operational by the end of 2025 – risked being 15 months late and might not start generating electricity until 2027. The second unit is estimated to face a nine-month delay. Experts said the UK faced significant challenges to electricity supply and the prospect of further delay at Hinkley meant ageing power stations may need to be kept open longer. In a review of costs for Hinkley, EDF said £1.5bn of the increase was due to a “better understanding” of the construction work needed and UK regulatory requirements. The estimated delay on completing the reactors – which are meant to set a new standard for nuclear safety – would add a further £0.7bn in cost. But the company insisted it was still aiming for a delivery date of the end of 2025, and said it was on track to pour the concrete for the first reactor in 2019.... The two other major nuclear power stations using the same design, in France and Finland, are years behind schedule and significantly over budget. De Rivaz told the House of Lords last year that the company had “dramatically” changed its approach for Hinkley, compared with Flamanville 3 in north-west France, which was originally due to be finished in 2012 but was not expected to be complete until late 2018.... EDF said if the £2.2bn cost increase came to pass, its rate of return on the project would drop from 9% to 8.2%. The company’s share price fell 0.3% to €9.45 on Monday after the announcement. Some analysts have factored in a delay to the plant. Dr Paul Dorfan, a vocal Hinkley critic at University College London’s Energy Institute, said the admission showed that lessons had not been learned from the same reactor design being built at Flamanville in France and Olkiluoto in Finland. “On top of the National Audit Office [report], on top of the fiasco of Flamanville and Olkiluoto, on top of the [UK subsidy] deal itself, which has been universally slated by every financial expert, now we see another £2bn on the top,” he said. Dorfman said the estimated delay also called into question new-build nuclear’s ability to keep the lights on during the next decade. Jenifer Baxter, head of energy at the Institution of Mechanical Engineers, said any delay to Hinkley “means that it’s possible that some existing power stations will require further life extensions”. Any gap in electricity generation would need to be filled with gas and other technologies, she said."
Hinkley Point C is £1.5bn over budget and a year behind schedule, EDF admits
Guardian, 3 July 2017

"Norway is set to become the first country in the entire world to ban the use of gas to heat buildings. The Scandinavian country, which is the world's largest producer of oil and natural gas outside the Middle East, will wholly stop the use of both oil and paraffin to warm buildings from 2020 onwards. The country, which hopes to ban the sale of all fossil fuel-based cars by 2025, has made a concerted effort to introduce policies which shrink domestic emission of greenhouse gases.  Vidar Helgesenlaid, the nation’s Environment Minister, laid out the plans in a statement, saying: “Those using fossil oil for heating must find other options by 2020.” The country advises its citizens to research alternatives to oil such as heat pumps, hydroelectricity, and even special stoves that burn wood chips. By some stage, the legislation could be widened to include restrictions on using natural gas to heat buildings. The Ministry of Climate and Environment said the ban would apply to both new and old buildings and cover both private homes and the public space of businesses and state-owned facilities."
Norway to ban the use of oil for heating buildings by 2020
Independent, 2 July 2017

"Russia's Rosneft, the world's top listed oil producer, wants to supply gas in parts of Europe where Gazprom is not present to avoid the risk of losing those markets to U.S. liquefied natural gas (LNG), a Rosneft executive said. Gazprom, the leading global gas producer, enjoys monopoly rights on gas pipeline exports from Russia. It has lost its exclusive rights to ship seaborne LNG overseas to Rosneft and Novatek, Russia's largest non-state gas producer. Rosneft, headed by Igor Sechin, an ally of President Vladimir Putin, has long been vying for pipeline gas exports as it strives to grow globally. It has a memorandum with BP, which owns a 19.75 stake in the Russian company, to trade up to 20 billion cubic meters (bcm) of gas annually in Europe. Rosneft Vice President Vlada Rusakova, a former Gazprom executive, said the company wants to conduct "an experiment" in supplying gas to new markets in coordination with Gazprom. "We are not counting on a total lifting of export restrictions. This would be harmful for Gazprom, especially against the background of a difficult financial and economic situation at the company," she said in emailed comments. She said as part of the experiment, Rosneft could supply gas to markets where Gazprom is not present and where U.S. LNG could be imported. Rusakova did not identify any such European countries. "Of course, this should be done in close coordination with Gazprom, in order to avoid competition between Russian gas suppliers." Gazprom is targeting $32 billion to $34 billion in revenue from exporting more than 180 bcm to Europe and Turkey this year. Rosneft produced almost 70 bcm of gas last year, earning 208 billion roubles ($3.5 billion) from gas sales at home."
Russia's Rosneft set for global gas tussle with Gazprom
Reuters, 30 June 2017

"U.S. crude production fell for the first time this year in April, reining in exuberance over rapidly growing domestic output. April output fell slightly to 9.08 million barrels a day, the Energy Information Administration said Friday, and was 190,000 barrels lower than the agency’s preliminary weekly estimates. Earlier in June, the EIA also lowered its Permian oil production estimates for every month in 2017.... The biggest drop was in the Gulf of Mexico, where output fell 5.8 percent to the lowest since October. Onshore production increased, with Texas and North Dakota adding 1.1 percent and 2.2 percent, respectively."
U.S. Crude Oil Production May Not Be Growing Quite So Fast
Bloomberg, 30 June 2017

"The White House is making a bid to overturn the Obama administration’s five-year plan forbidding oil and gas exploration in the Arctic and Atlantic oceans and will examine opportunities to drill almost anywhere off the U.S. coast. Interior Department officials said Thursday that opening most of the outer continental shelf to leasing is part of President Trump’s strategy to make the United States a global leader in energy production, stimulate coastal activity and create thousands of jobs. But as onshore oil and natural gas production has surged from horizontal drilling, helping to lower the price of petroleum, interest in offshore drilling has fallen."
Trump says the Atlantic, Arctic could soon be open to oil drilling

Washington Post, 29 June 2017

"A Chinese province with a population of 5.8 million has run entirely on renewable energy for seven days in a row as part of a test to show if the electricity grid can cope without fossil fuels. Hydro-electric schemes provided more than 72 per cent of the electricity in Qinghai between 17 and 23 June, with wind and solar supplying most of the rest, according to Climate Action, a group which works with the United Nations Environment Programme to share knowledge about new technologies that can help combat climate change. Quan Shenming, general manager of the Qinghai Electric Power Corporation, said: “Being the first trial of this kind in the country and a major step in the transformation of energy supply, it will be of great importance in promoting the use of clean energy in China in a sustainable and effective way.” The company said 1.1 billion kilowatt hours of electricity was used during the period; about 535,000 tonnes of coal would be needed to generate the same amount. In May, nearly 83 per cent of the province’s electricity came from solar, wind and hydro power.  The province’s power grid has a total installed capacity of about 23 million kilowatts, but there are plans to increase the combined solar and wind capacity to 35 million kilowatts by 2020."
Chinese province runs on 100% renewable energy for a week to test whether grid can cope
Independent, 27 June 2017

"The UK’s ambitious target of slashing carbon emissions by more than half within 13 years is at risk because of government dithering on energy policy, industry professionals have warned. A survey by the Energy Institute, the professional body for the energy sector, has found that four fifths of its members believe the UK is currently on track to miss the 2030 goal. “The mood among our members is that energy policy is on pause and ministers need to hit the play button,” said Louise Kingham, chief executive of the Energy Institute. Among the list of stalled government decisions are the fate of a multimillion-pound competition to build mini nuclear power plants and whether to strike a subsidy deal for a pioneering tidal lagoon at Swansea. A flagship plan on how to meet the UK’s 2030 target of cutting emissions by 57% compared to 1990 levels, originally expected last year, is now “long overdue,” Kingham added. Jim Skea, the president of the institute, said of the delayed Clean Power Plan: “If we’re going to keep on track [with binding carbon targets] there is an urgent need to get that published.... The group’s members oppose an energy price cap which many thought would hurt investment. But they favoured stronger action on energy efficiency – such as better building standards – as the best way to meet carbon targets and restore trust in the industry. The institute’s leaders also highlighted the need to begin decarbonising heat for homes and business. They said the government had been slow to look at alternatives to natural gas, because alternatives such as hydrogen or electrification were seen as harder than ways for cutting emissions from power, such as windfarms. As a result, the group’s members thought the contribution from gas for heating would only decline modestly by 2030.
UK on track to miss carbon emissions target due to stalled energy policy
Guardian, 26 June 2017

"A bipartisan group of mayors from across the country has unanimously backed an ambitious commitment for US cities to run entirely on renewable sources such as wind and solar by 2035.As the US Conference of Mayors wrapped up in Miami Beach on Monday, leaders from more than 250 cities voted on symbolic resolutions pushing back against Donald Trump on climate change and immigration. Steve Benjamin, the Democratic mayor of Columbia, South Carolina, proposed the resolution with three other mayors. Mayors had been on the frontline of climate and energy issues for a long time, he said, adding that the president’s actions had ignited the excitement of mayors and citizens who want to do more. The clean energy resolution is one of the many measures that will be sent to Congress and the White House, hoping to influence legislation under an administration that has pulled the US out of the Paris climate accord. It was proposed by Democratic mayors in Republican-dominated states: South Carolina, Texas, Utah and Iowa."
Hundreds of US mayors endorse switch to 100% renewable energy by 2035

Guardian, 26 June 2017

"The largest coal mining company in the world has announced it will close 37 mines because they are no longer economically viable. Coal India, which produces around 82 per cent of India's coal, said the mines would be decommissioned by March 2018. The closures, of around 9 per cent of the state-run firm's sites, will reportedly save around 8,000,000,000 rupees (£98m). India's solar sector has received heavy international investment, and the plummeting price of solar electricity has increased pressure on fossil fuel companies in the country. The government has announced it will not build any more coal plants after 2022 and predicts renewables will generate 57 per cent of its power by 2027 – a pledge far outstripping its commitment in the Paris climate change agreement. Plans for nearly 14 gigawatts of coal-fired power stations – about the same as the total amount in the UK – were scrapped in May, signalling a seismic shift in the India's energy market.... A report in February by Delhi-based research group, The Energy and Resources Institute (TERI), found that if the cost of renewable energy continued to fall at the same rate, India could phase out coal completely by 2050."
World's biggest coal company closes 37 mines as solar power's influence grows
Independent, 21 June 2017

"The UK’s largest storage site for natural gas is to permanently close due to safety fears, raising concerns about the country’s growing reliance on gas imports and vulnerability to volatile prices. Centrica, the owner of British Gas, said it had had to close its Rough storage site in the North Sea after a safety review found failures in its ageing wells. The move will rob the UK of around 70pc of its natural gas storage capacity, likely leading to a need for more imports from countries such as Norway and Qatar. The 32 year-old site off the coast of Yorkshire had capacity to meet a tenth of the UK’s peak winter gas needs. Gas was injected into Rough’s permeable undersea rock at times of surplus and then drawn out when demand was high. But Centrica said today Rough - which has been partially closed for the past year - had failed a number of safety tests and would have to be closed down. The wells and facilities for gas injection and storage were “at the end of their design life” and could not be returned to service, Centrica said, adding it would be too expensive to refurbish or rebuild the facility. Centrica will apply for permission to close Rough and to recover the estimated 183 billion cubic feet of gas in the field. The news will add to concerns about Britain’s energy security, as North Sea gas reserves fall and archaic nuclear and coal power plants are closed down. Onshore gas and oil trade body Ukoog leapt on news of the closure to say it strengthened the case for fracking."
Giant gas well closure fuels UK energy security fears
Telegraph, 20 June 2017

"Britain is set to lose its largest natural gas storage site, increasing the country's reliance on imported energy, after British Gas owner Centrica (CNA.L), said it would close its ageing Rough facility. Wholesale gas prices will become more volatile and more vulnerable to price spikes, analysts and traders said. Britain already imports around half of its gas from Norway, continental Europe, and from Qatar in the form of liquefied natural gas (LNG). This figure is expected to rise as its own supplies from the UK Continental Shelf decline. And if Britain cannot call on stored reserves when demand rises in winter, it will need to import even more. Rough covered a tenth of Britain's peak winter demand. "The loss of Rough will create uncertainty, volatility and leave (Britain) exposed," said Wayne Bryan, an analyst at consultancy Alfa Energy. "If we experience a 2-3 week cold snap, the loss of Rough will see us reliant on imports, namely LNG," Bryan said. Storage provides security and flexibility of supply. Gas injected in the summer at times of low demand and low prices is there to meet demand when consumption rises in the winter. With the closure of Rough, Britain loses about 70 percent of its storage capacity. "The market will be more exposed to international price fluctuations as more imports will be required to balance Britain's gas market when cold," said Katrina Oldham, an energy trader at Inenco. Reflecting the British market's vulnerability to imports, prices for July gas jumped earlier this month after doubts were raised about delivery of two Qatari LNG cargoes. The two tankers eventually declared they would come to Britain, but via a different route, sending prices back down."
Britain's reliance on imported gas to jump as giant storage site axed
Reuters, 20 June 2017

"Russia's largest oil producer Rosneft (ROSN.MM) said on Sunday it had found its first oilfield in the Laptev Sea in the eastern Arctic, making a breakthrough in the search for hydrocarbons in the harsh and far-flung region despite Western sanctions. Rosneft and its partners plan to invest 480 billion roubles (6.57 billion pounds) in developing Russia's offshore energy industry in the next five years, part of a drive to boost output from new areas."
Russia's Rosneft finds first oilfield offshore eastern Arctic

Reuters, 18 June 2017

"For a brief period, a record 70% of the electricity for the UK’s homes and businesses was low-carbon, as nuclear, solar and wind crowded out coal and even gas power stations. That afternoon was a glimpse into the future, of how energy provision will look in 13 years’ time because of binding carbon targets. On what one grid manager called “stunning Sunday”, the carbon intensity of producing power – a key measure of progress towards climate goals – dropped below the “magic number” of 100g of CO2 per kilowatt hour for the first time. That’s the level that must be the norm by 2030, according to the government’s climate advisers. Yet last Sunday was just one of a run of striking records for renewable power in Britain that pose profound questions for conventional generators and the companies which manage power grids. On one Friday in May, solar power briefly eclipsed the UK’s eight nuclear power stations. The grid recently went without coal for an entire day for the first time, and the dirty fuel is now regularly absent from power supply for hours at a time. These milestones are having tangible effects. Solar cuts power demand for National Grid, reducing prices, while wind power also lowers prices. That led to another first last week, when high wind output pushed down the wholesale price and resulted in negative power prices, which means some conventional power plants had to pay household suppliers like British Gas to take their electricity. “This has surprised people,” said John Feddersen, chief executive of analysts Aurora Energy Research, referring to the speed at which negative prices had arrived in the UK. In Germany, lower power prices driven by the country’s green energy boom have wiped billions off the share prices of energy giants E.ON and RWE. But will the likes of EDF and British Gas owner Centrica, which own nuclear and gas plants, face the same fate in the UK? Feddersen argues that there are two reasons why this will not happen. One is the UK’s “capacity market”, which has been set to cope with power shortages as coal plants have closed and renewables have made supplies more intermittent. A new scheme will pay conventional power station owners £378m in subsidies this winter to be on standby and ensure the lights stay on. The other is the payments from National Grid to fossil fuel plants for services that are vital to national power supply, such as “blackstart” – the ability to restart the nation’s power grid in the event of a catastrophic, widespread loss of energy supplies. Odd as it may sound, power station owners no longer make money out of power, but from these other mechanisms. “This is the new world for how the system’s meant to work in the UK. Generators know you’re not going to get your investment back in the energy market,” said Feddersen. “We won’t actually see the share-price impacts in the UK that we’ve seen in Germany,” he said. The capacity market is the main reason why.  Rob Lalor, senior analyst at EnAppSys, which monitors energy supply, said: “The big difference between the UK and Germany is they’ve [conventional operators] been given the opportunity to make money [through the capacity market].” So far, the low prices seen in the UK during renewable output surges were relatively infrequent and had had limited impact, he said. But that will change as such events become more common – records will continue to be broken because of a pipeline of offshore windfarms being plugged into the grid. However, it is clear that the growth of renewables has made prices a lot spikier than they used to be. As well as low or negative prices during high wind and solar periods, prices can leap very high when wind doesn’t materialise as forecast. Day-ahead power prices in May averaged £41 per megawatt hour, but dipped just below zero early on 7 June during a period of high wind output. Prices also rose as high as nearly £83 in May. “What you see with more wind and solar in the market is a lot more volatility of prices in the day,” said Hervé Touati of the Rocky Mountain Institute, a US energy research body. He has seen the same phenomenon in California, where the two technologies now play a key role in determining price. In the UK, the rise of renewables is also creating new challenges for the people who manage local and national power grids. Robert Gross, director of the centre for energy policy and technology at Imperial College, said fossil fuel plants were having to ramp up and down more quickly to adjust to wind and solar output.“My understanding is that’s not causing any insurmountable problems [for the grid]. The way I heard it characterised is the National Grid control room now finds summer to be more worrisome than January nights. Now it’s the [challenge of] solar and low demand on very sunny days [rather than high demand days in winter].” His research shows that costs for managing the grid – balancing supply and demand as the energy supply becomes more variable – will not rise prohibitively until the UK has at least twice as much wind and solar power as it does now. But for some observers, such as credit agency Moody’s, wind and solar presents a long-term risk to Europe’s energy networks. “The growing share of electricity from renewables has already had adverse effects on incumbent generators and energy networks are not immune,” it said in a report this week. But Duncan Burt, who oversees daily operations at the National Grid, is sanguine about the renewable records. “It’s one of these things where we’ve tipped through a threshold. But the work we’ve done to get ready for this has paid off,” he said, citing a grid-run scheme that encourages large energy users to increase their demand during summer periods of low demand and high wind and solar output.... renewable power stations across the country are producing power in such abundance that conventional providers relying on coal and gas are being squeezed out of the market, and the state has to pay some renewable energy companies to switch off their turbines to stop congesting the power grid. On one particularly sunny but windy day, on 8 May 2016, a record 87.6% of Germany’s energy needs were met by renewables: an inspirational achievement, were it not for conventional power stations continuing to produce energy at their usual rate. As a knock-on effect of the oversupply, energy market prices collapsed, adding further volatility to a rapidly changing the environment for energy companies. E.ON, Germany’s biggest utility, reported a record loss of €16bn (£14bn) for 2016 and said it would have to cut around 1,300 jobs, 3% of its total workforce. The previous year, E.ON had already posted a loss of almost €7bn. Both E.ON and RWE, Germany’s second-largest electricity provider, have reacted by radically restructuring their companies, splitting their renewable business from their fossil-fuel operations and selling stakes in the new operations to investors. E.ON hived off its gas and coal power stations into an entity called Uniper at the start of 2016. RWE moved its renewables business into “RWE International” on 1 April 2016. Cries of woe from lobbyists haven’t gone unnoticed, and the future of Germany’s big energy giants could feature in the upcoming federal elections in September. Some politicians from the pro-business wing of Merkel’s Christian Democrats have called for an end to state subsidies for green energy by 2021. Providers of green energy don’t receive “subsidies” in the sense of direct payments from the state, but are guaranteed a fixed price at which they can sell energy into the grid."
Record levels of green energy in UK create strange new world for generators
Observer, 17 June 2017

"The return of oil and gas initial public offerings was nice while it lasted. Energy companies aiming to go public are staying on the sidelines as crude prices struggle to keep above $50 a barrel, analysts and investment professionals say. The price weakness has halted a recovery in stock debuts in the energy sector, which typically accounts for one-tenth of the overall IPO market. .. oilfield services firms can't be certain drillers will pay more for the services they sell, like well design and hydraulic fracturing, with oil prices below $50. The firms offered deep discounts during a nearly three-year downturn, and are now trying to raise prices by 10 to 20 percent."
Crude oil's plunge below $50 a barrel is killing the oil and gas IPO market
CNBC, 16 June 2017

"Long-term oil futures have collapsed by almost half and are anchored around $55 a barrel. Why that level? The likeliest explanation is that it appears to be the trigger point for U.S. shale producers to boost drilling and fracking, raising supply relatively quickly and thereby keeping a lid on prices. Meanwhile, the rest of the industry has had to squeeze costs to remain competitive with these Texas upstarts. The previous spell of cost inflation behind that "$100 is the new $20" comment now works the other way. And because shale's productivity owes more to inputs of capital, technology and innovation -- like manufacturing, in other words -- than traditional advantages of political access to territory, it represents a sea change in oil's economics (see this and this), upending the old paradigm centered on OPEC."
The Long-Term Price of Oil Is ...
Bloomberg, 15 June 2017

"China’s domination of energy markets -- long the driver of soaring fossil-fuel consumption and rising carbon pollution -- is now turning the planet in a cleaner direction. The biggest energy consumer is moving toward the end of an era after it burned the least coal in six years, became the number one producer of renewable energy and even lowered its emissions of climate-warming gases, according to data from BP Plc. “China matters in a big way to the energy market,” said Giovanni Staunovo, an analyst at UBS Group AG. “There is an aim to move away from coal consumption towards cleaner energy sources.”  China developed a voracious appetite for energy since the turn of the century as its expanding economy burned up huge amounts of fossil fuels to keep factories humming and cars rolling. In the process it helped drive up prices of oil, natural gas and coal, while also becoming the biggest emitter of the greenhouse gas carbon dioxide. China’s natural gas production growth has outpaced that of dirtier coal through the first five months of the year. The country’s coal output through May rose 4.3 percent from a year earlier to about 1.4 billion tons, according to data Wednesday from the National Bureau of Statistics. Natural gas production over the same period expanded by 6.8 percent to 62.9 billion cubic meters. About one in five people lives in China and its growing middle class means the country is using more energy than ever, but patterns of consumption are changing. Money is pouring in to cleaner energy, while coal is discouraged in the fight to improve the air quality in some of the most polluted cities in the world. The Asian giant’s economy is also evolving toward services, which are less energy intensive than heavy manufacturing.  The numbers are striking. China still accounted for about half of the coal burned in the world last year, but consumption of the fuel fell 1.6 percent, according to BP’s annual Statistical Review of World Energy. That compares with an average 3.7 percent annual expansion in the 11 preceding years. Government policy changes resulted in production of the fuel dropping 7.9 percent, compared with a 3.9 percent average gain in the previous decade. At the same time it dominated renewables, accounting for 40 percent of global growth and surpassing the U.S. to become the largest producer of power from wind, solar, hydro and other forms of clean energy, BP data show. “Chinese hunger for energy is being tempered by moves to a more sustainable growth pathway and the rapid expansion of renewables,” Jonathan Marshall, an analyst at the London-based Energy and Climate Intelligence Unit, said by email. Those trends spell “further trouble for coal in the years to come.”...  Increasing prosperity means people are driving their cars further and flying more often, driving demand for gasoline and jet fuel, Dale said. Total consumption of oil products rose 3.3 percent last year, compared with an average annual expansion of 5.7 percent in the previous decade. Even at that slower rate, China’s additional 400,000 barrels a day of demand was the largest contribution to global growth in 2016, the BP data show. The slowdown in China is reflected in the world’s carbon emissions, which saw little or no growth for a third consecutive year in BP’s data. Global emissions grew at an annual average rate of about 2.5 percent in the 10 years to 2013. China has alone helped eliminate most of that growth. The country’s emissions have dropped in the past two years after growing by almost 75 percent in the previous decade, Dale said."
Coal No Longer King as China Spurs Shift to Cleaner Energy
Bloomberg, 14 June 2017

"UK-based oil giant BP says, that despite the Trump administration’s soundings about reviving coal, its analysis suggests the fossil fuel’s decline is decisive.  The company published its energy data on Tuesday showing that global coal production plunged by 6.2 per cent last year, the largest annual fall on record. Global coal consumption also dropped as the US, China and especially the UK cut their use of coal-fired power. “The fortunes of coal appear to have taken a decisive break from the past,” said Spencer Dale, BP’s chief economist, explaining its decline was due to a number of “structural, long-term factors”. Increasingly competitive renewables, and governmental and societal pressure towards clean energy were continuing to have an impact. The status of gas in the US also militates against a coal revival. “Unless you do something to stop shale gas, which doesn’t appear to be what the administration would be keen to do, I find it hard to see how that trend would change,” Dale said. Meanwhile Bob Dudley, BP chief executive, said the 66th edition of BP’s annual statistical review of global energy use underlined the transition facing all energy companies. “The longer-term trends we can see in this data are changing the patterns of demand and the mix of supply as the world works to meet the challenge of supplying the energy it needs while also reducing carbon emissions,” he said. Other highlights from the report include: * Global primary energy consumption increased by just 1 per cent in 2016, following growth of 0.9 per cent in 2015 and 1 per cent in 2014. This compares with the 10-year average of 1.8 per cent a year. * As was the case in 2015, growth was below average in all regions except Europe & Eurasia. All fuels except oil and nuclear power grew at below-average rates. * Energy consumption in China grew by just 1.3 per cent in 2016. Growth during 2015 and 2016 was the lowest over a two-year period since 1997-98. Despite this, China remained the world’s largest growth market for energy for a 16th consecutive year.* Emissions of CO2 from energy consumption increased by only 0.1 per cent in 2016. During 2014-16, average emissions growth has been the lowest over any three-year period since 1981-83. * Renewable power (excluding hydro) grew by 14.1 per cent in 2016, below the 10-year average, but the largest increment on record (53 mtoe). * Wind provided more than half of renewables growth, while solar energy contributed almost a third despite accounting for only 18 per cent of the total. * Asia Pacific overtook Europe & Eurasia as the largest producing region of renewable power. China overtook the US to be the largest single renewables producer. * Global nuclear power generation increased by 1.3 per cent in 2016, or 9.3 mtoe. China accounted for all of the net growth, expanding by 24.5 per cent. China’s increment (9.6 mtoe) was the largest of any country since 2004. * Hydroelectric power generation rose by 2.8 per cent in 2016, (27.1 mtoe). China (10.9 mtoe) and the US (3.5 mtoe) provided the largest increments. * Venezuela experienced the largest decline (-3.2 mtoe). According to Mr  Dale, China is showing global leadership in both nuclear and hydropower development."
BP analysis suggests shift away from coal ‘decisive’
Power Engineering International, 14 June 2017

"Global demand for coal has fallen for the second consecutive year, according to a BP study, helped by the US and China burning less of the dirtiest fossil fuel. The UK was described as the “most extreme example” of the trend away from coal, which has resulted in use of the fuel returning to levels not seen since the start of the industrial revolution. The 1.7% fall in worldwide consumption in 2016 marks a striking reversal of fortune for coal, which was the largest source of energy demand growth until four years ago, BP said. Presenting the 66th edition of BP’s annual statistical review of energy, the oil company’s chief economist, Spencer Dale, said: “It feels to me like we’re seeing a decisive break with coal, relative to the past. I think the big story here is coal getting squeezed.” In the US, coal has been crowded out in power generation by cheaper, cleaner gas from the fracking boom and even US coal executives believe Donald Trump’s promise to bring back jobs in the industry cannot succeed. Coal consumption has now been declining for three years in China, as its economic boom and output has tailed off in energy-intensive sectors such as iron, steel and cement. The country’s decreasing reliance on the fuel, large population and enormous investment in renewables mean it is increasingly being seen as a global leader on climate change, after the US withdrew from the Paris agreement earlier this month. In the UK, three major coal power stations were wound up last year after a carbon tax was introduced and the last three underground coal mines closed. British coal consumption fell by 52.5% in 2016 and the trend away from the fuel has continued this year, with the first coal-free day since the 19th century. Dale said: “UK coal has gone through a complete cycle from the 1800s to now. I know it’s popular to criticise the UK [on energy policy] but part of this [decline in coal] is the rise in the carbon floor price introduced in 2015 and continued in 2016. The message from that is prices work.” Dr Jonathan Marshall, an analyst at the Energy and Climate Intelligence, a UK-based thinktank, said the shift away from coal was striking. “The US saw an astonishing 9% fall in demand, while Chinese hunger for energy is being tempered by moves to a more sustainable growth pathway and the rapid expansion of renewables, which spells even further trouble for coal in the years to come,” he said. Coal has also been squeezed globally in recent years by the rapid growth of renewable power generation, which BP found had continued apace last year. Wind, solar and and other renewable power sources grew faster than any other fuel at more than 14% in 2016, slightly below the 10-year average. However, energy demand growth globally was weak, at only 1%, almost half the 10-year average. Nearly all the growth came from developing countries, with China and India accounting for around half of new demand. As a result, global carbon emissions flatlined for the third year in a row. BP called the stalled emissions “a very significant break from the past”, but acknowledged that they would need to fall if countries are to meet the Paris deal’s goal of keeping temperature rises in check. Worldwide, oil consumption grew by 1.5%, driven by stronger-than-usual growth in rich countries, but production growth was weak in the face of low oil prices. As a result, oil supply and demand came closer into balance last year. The economist said he believed the recent deal by members of the oil cartel Opec to continue cutting output would begin to make inroads into global oil stocks towards the end of 2017. However, a new report by the major oil producers admitted that the rebalancing of supply and demand had happened at “a slower pace” because the US was producing more oil on the back of higher prices."
Global demand for coal falls in 2016 for second year in a row
Guardian, 13 June 2017

"Qatar’s diplomatic showdown with its Arab neighbours has highlighted the risks associated with growing UK dependence on imported gas — and intensified calls from fracking supporters for Britain’s shale resources to be developed. Almost 30 per cent of UK gas imports come from the small Gulf state of Qatar, which is facing disruption to trade and transportation after Saudi Arabia, the United Arab Emirates, Egypt and others severed diplomatic relations. The dispute — centred on Qatar’s alleged support for extremist groups — is not seen as an immediate threat to UK gas supplies as Britain heads into the summer months, when energy demand is lowest. However, analysts say instability in the Middle East adds to factors which, taken together, raise long-term questions over UK energy security. For decades, Britain has been amply supplied with gas from its own North Sea resources, topped up by pipelines from Norway and the rest of Europe. However, the gradual decline of North Sea supplies promises to make Britain increasingly dependent on liquefied natural gas (LNG) imported by ship from places such as Qatar, the world’s biggest exporter of the super-cooled liquid gas. Niall Trimble, managing director of the Energy Contract Company, a consultancy, said other risks included the uncertain impact of Brexit on European imports, and long-running structural problems at Britain’s largest storage site for natural gas. The Rough storage facility — where 390m cubic metres of gas are stored in a reservoir beneath the seabed off the Yorkshire coast — has been closed to new supplies until at least next May because of concerns about the integrity of wells. Mr Trimble doubts the facility will reopen — an outcome that would remove an important source of back-up gas during cold winters when supplies can be tight. “On its own, Qatar is not a huge worry but there are a few things stacking up, such as Brexit and the problems at Rough, which could cause vulnerability in future,” he said. About 17 per cent of UK gas supplies come from LNG, and Qatar is the biggest source of these supplies. A further 38 per cent is piped from Norway and continental Europe. National Grid, which operates Britain’s gas transmission system, has estimated that by 2030 more than 60 per cent of UK gas will be imported.  Ken Cronin, chief executive of UK Onshore Oil & Gas, which represents the nascent UK shale industry, said political tensions over Qatar showed why Britain needed “to urgently get on with developing extensive gas resources beneath our feet”. Geological surveys suggest Britain has significant quantities of gas trapped in “tight” reservoirs similar to those that have been unlocked by fracking in the US. Recent governments have been supportive of fracking, but progress has been slow because of planning obstacles and local opposition.  The Conservative party manifesto ahead of last week’s general election included proposals to streamline the planning process but the failure of Theresa May, prime minister, to win a parliamentary majority will make it hard to push through such measures. The opposition Labour and Liberal Democrat parties oppose fracking. Gas accounted for more than 42 per cent of electricity generated in Britain last year and the proportion has been growing as dirtier coal-fired power stations are phased out. Record output from wind farms and solar panels this year has highlighted rapid expansion in renewable power, which for the first time accounted for over half of UK electricity generation during part of Wednesday last week. But the rise of renewables is only increasing the importance of gas to energy security, because of the need for gas to fill the gap when the wind is not blowing or the sun is not shining. Since the dispute escalated last week, Qatar’s exports of LNG have continued largely as normal, despite logistical obstacles created by a ban on Qatari-linked vessels calling at neighbouring ports. Frank Harris, head of global LNG consulting at Wood Mackenzie, the energy research group, said that even if disruptions arose, UK exposure was limited. “There is little risk of a gas shortage in the UK without multiple outages happening at once,” he said. LNG imports to Britain from Qatar have more than halved since 2011, to 7.2m tonnes last year, according to Wood Mackenzie, owing in part to increasing demand from Asia. So far this year, Britain has taken just 2.2m tonnes of Qatari LNG. Britain has other LNG sources to turn to if Qatari supplies faltered. For example, soaring shale gas production has turned the US into an exporter, and the first two cargoes of US LNG to northwest Europe docked in the Netherlands and Poland last week. Global supplies of LNG are also set to increase by almost 50 per cent between 2015 and 2020, owing to rising output from the US and Australia. “There is plenty of gas available,” said Mr Harris."
Qatar diplomatic spat reignites UK gas supplies fears
Financial Times, 12 June 2017

"Shale oil production in the United States is expected to jump again in July, marking the fourth straight month the Department of Energy has forecast monthly growth above 100,000 barrels a day.  The department's U.S. Energy Information Administration on Monday projected crude oil output will rise by 127,000 barrels a day next month in several of the nation's shale basins, where producers use advanced drilling methods like hydraulic fracturing to squeeze oil and natural gas from rock formations. In July, total output from these resources is expected to reach nearly 5.5 million barrels a day, according to EIA. Output growth in the shale fields has driven a 10 percent recovery in the country's overall crude production since September. More drillers can break even or turn a profit on new production since oil prices rose above $50 a barrel last winter, when OPEC and 11 other exporters agreed to cut their output in order to balance the market. The biggest gains are once again expected to come from the Permian basin, the center of the U.S. oil recovery located primarily in western Texas and part of eastern New Mexico. EIA projects production in the Permian will rise by 65,000 barrels a day in July. The Eagle Ford area is forecast to be the second biggest contributor to July's gains, with output expected to rise by 43,000 barrels a day next month in the southern Texas oil basin. Production gains have been rising in the Permian as drillers become more efficient, squeezing more oil out of wells for each rig they deploy. But there are signs those efficiency gains may have reached their limit. Production from new oil wells per rig topped out at 704 barrels a day in August, and is expected to fall to 602 barrels per rig in July."
US shale oil output projected to rise by more than 100,000 barrels a day for a fourth straight month
CNBC, 12 June 2017

"Despite the meteoric rise of shale oil and the recent surge in U.S. oil rig counts there is a coming shale oil production peak. Not in the long run of course because the theory of peak oil or peak demand for that matter is never true in the long run but soon we will see shale production plateau. It is an event that is going to catch people by surprise that have got giddy with rinsing shale oil production expectations. The thought that shale oil can replace the historic OPEC/Non-OPEC production cuts and the trillions of dollars in capital spending cuts by big oil on traditional oil projects will soon be put to the test as shale hits its near- term limits. There are major reasons for this coming shale production peak. The steep production decline rates of shale oil wells and the lack of completions of shale wells despite the sharp increase in rig counts and rising costs per well.  Some people think that there is a linear correlation with rising rig count and increasing oil production but that is not the case. Shale oil wells are being drilled but not being completed as the drillers are running into a brick wall with logistics.  Well completions are falling off dramatically.  It’s getting harder to get sand for the drills and frack crews to do the work.  There is also the issue of the lack of infrastructure needed to move oil as pipelines get close to capacity. Industry sources say that the reason so many wells are going uncompleted is that you can’t hire a “frack job” or crew and there the backlog is building. If you drill a hole today you might not be able to get a crew from oil service giants like Schlumberger (SLB) or Haliburton (HAL) until next year at the earliest, delaying when you can get the oil flowing. That means that expectations of oil rising production levels are being overstated and the new wells that are being drilled might not yield as much oil. While shale oil production is likely to keep rising through the end of the year it won’t keep up with OPEC cuts, rising demand and falling U.S. oil supply that has begun to fail dramatically. The U.S. Department of Energy forecast that shale supply will grow by 122,000 barrels a day next month and predicts that U.S. shale will hit 5.4 million barrels a day by June but that is coming against what is the beginning of a historic drop in U.S. oil supply. That is leading to higher costs. Fracking well costs increased by 7% between November and March according to the Bureau of Labor Statistics. That is the first significant increase in drilling costs in three years and that should continue to rise. With the rapid increase in drilling rigs, oil service and labor costs will go higher.... The technology that is used in shale oil production is in its infancy and in the coming years there is the potential for even more production upside. Yet in the near term we are building in unrealistic expectations of ever rising supply as we get closer to the near-term shale oil production peak."
Shale production may soon hit a wall
Fox, 9 June 2017

"US shale producers, led by activity in the Permian Basin, have shown they can grow rapidly at $50 a barrel, with the number of rigs drilling for oil in the US rising for a record 20 straight weeks and more than doubling from the level of a year ago, according to energy services company Baker Hughes."
Opec’s self-inflicted wounds have made oil malaise worse
Financial Times, 8 June 2017

"Renewable sources of energy have generated more electricity than coal and gas in Great Britain for the first time. National Grid reported that, on Wednesday lunchtime, power from wind, solar, hydro and wood pellet burning supplied 50.7% of UK energy. Add in nuclear, and by 2pm low carbon sources were producing 72.1% of electricity in Great Britain. Wednesday lunchtime was perfect for renewables being both sunny and windy. Records for wind power are being set across Northern Europe. The National Grid, the body that owns and manages the power supply around the UK, said in a tweet: "For the first time ever this lunchtime wind, nuclear and solar were all generating more than both gas and coal combined." On Tuesday, a tenth of the UK's power was coming from offshore wind farms - a newcomer on the energy scene whose costs have plummeted far faster than expected. So much power was being generated by wind turbines, in fact, that prices fell to a tenth of their normal level. Environmentalists will salute this new record as a milestone towards the low carbon economy. Critics of renewable energy sources will point to the disruption renewables cause to the established energy system. At the time of Wednesday's record, 1% of demand was met by storage; this will have to increase hugely as Great Britain moves towards a low-carbon electricity system."
Renewables provide more than half UK electricity for first time
BBC, 8 June 2017

"blustery start to summer has helped the renewable energy industry to its highest ever output as wind turbines and solar panels help to meet more than half of the UK’s electricity demand. National Grid’s data at lunchtime on Wednesday showed that solar panels produced around 7.6GW of electricity while wind farms generated 9.5GW of power. In addition, the UK burnt 2GW of renewable biomass, made from waste wood, and produced a modest amount of hydro electricity to help squeeze traditional power plants off the system.The record 19.3GW output of renewable energy was enough to meet more than 50pc of midday power demand which reached 35.4GW. The National Grid control room added that this is the first time that renewable energy and nuclear power have together produced more power than gas and coal plants combined. Nuclear power made up 23.2pc of the energy mix at midday, while gas-fired power plants were lowered to 20.8pc to make room for the surge in renewable power.The renewables boom caused market prices to fall into negative territory in the early hours of this morning and prompted National Grid to make payments to major energy users to use more power so that the grid wasn’t overwhelmed by supply. This is the first summer in which National Grid will use the so-called ‘demand turn-up’ scheme to pay six successful businesses, who were selected through an auction, to use the grid’s excess supply rather than pay energy companies to stop generating. A National Grid spokesman said its figures show it will save consumers £500,000 over the summer. Emma Pinchbeck, who heads up renewable energy trade body RenewableUK, said: "National Grid is confirming that low-carbon sources are generating 70pc of our electricity - with wind power the star amongst these sources.""
UK sets new renewable energy record as wind and solar surge
Telegraph, 7 June 2017

"Renewable energy capacity around the world was boosted by a record amount in 2016 and delivered at a markedly lower cost, according to new global data – although the total financial investment in renewables actually fell. The greater “bang-for-buck” resulted from plummeting prices for solar and wind power and led to new power deals in countries including Denmark, Egypt, India, Mexico and the United Arab Emirates all being priced well below fossil fuel or nuclear options. Analysts warned that the US’s withdrawal from the Paris climate change agreement, announced last week by Donald Trump, risked the US being left behind in the fast-moving transition to a low-carbon economy. But they also warned that the green transition was still not happening fast enough to avoid the worst impacts of global warming, especially in the transport and heating sectors.  The new renewable energy capacity installed worldwide in 2016 was 161GW, a 10% rise on 2015 and a new record, according to REN21, a network of public and private sector groups covering 155 nations and 96% of the world’s population. The new record capacity cost $242bn, a 23% reduction in investment compared to 2015, and renewables investment remained larger than for all fossil fuels. Subsidies for green energy, however, are still much lower than those for coal, oil and gas. New solar power provided the biggest boost – half of all new capacity – followed by wind power at a third and hydropower at 15%. It is the first year that the new solar capacity added has been greater than any other electricity-producing technology. “A global energy transition [is] well under way, with record new additions of installed renewable energy capacity, rapidly falling costs and the decoupling of economic growth and energy-related carbon dioxide emissions for the third year running,” said Arthouros Zervos, chair of REN21....Vivien Foster, global lead for energy economics at the World Bank, said: “Over 2016 there has been a dramatic and sustained improvement in the competitiveness of renewable power generation technologies. The most spectacular renewable energy prices were revealed through auctions that are gaining in popularity in many countries.” Renewable energy capacity in 2016 rose 17% to 921GW, excluding hydropower, and rose 8.7% to 2,017GW when including hydropower. At the end of 2016, more than 24% of global electricity was produced by renewables, dominated by hydropower and with wind contributing 4.0% and solar 1.5%. For all energy, renewable energy – excluding traditional wood-burning – contributed 10%, overshadowed by the 80% coming from fossil fuels such as oil and gas. Lins said the switch to green energy needed to speed up and, crucially, start converting transport, heating and cooling to renewable sources. “The world is in a race against time,” she said."
'Spectacular' drop in renewable energy costs leads to record global boost
Guardian, 6 June 2017

"WWF Scotland’s analysis of renewables data provided
by WeatherEnergy found wind turbines alone provided 863,494.63 MWh of 
electricity to the National Grid during May. The figure, environmentalists say, is enough to supply the average electrical needs of 95 per cent of Scottish households. It is also an increase of almost 20 per cent compared with May 2016, when wind energy provided 692,896.1 MWh. Overall the data showed that wind generated enough output to supply 100 per cent or more of Scottish homes on 11 of the 31 days in May. Scotland’s total electricity consumption, including homes, business and industry, last month was 1,857,566 MWh. Wind power therefore generated the 
equivalent of 46 per cent of Scotland’s entire electricity needs for the month."
Wind power provided 95 per cent of Scottish homes’ energy needs in May
Scotsman, 5 June 2017

"Saudi Arabia’s excommunication of Qatar has been brewing since 1995, and the dispute’s long past and likely lingering future are best explained by natural gas. Not only was that the year when the father of the current emir, Sheikh Tamim bin Hamad Al Thani, toppled his own pro-Saudi father, it was also when the tiny desert peninsula was about to make its first shipment of liquid natural gas from the world’s largest reservoir. The offshore North Field, which provides virtually all of Qatar’s gas, is shared with Iran, Saudi Arabia’s hated rival. The wealth that followed turned Qatar into not just the world’s richest nation, with an annual per-capita income of $130,000, but also the world’s largest LNG exporter. The focus on gas set it apart from its oil producing neighbors in the Gulf Cooperation Council and allowed it to break from domination by Saudi Arabia, which in Monday’s statement of complaint described Qataris as an “extension of their brethren in the Kingdom” as it cut off diplomatic relations and closed the border. Instead, Qatar built its own ties with other powers including Iran, the U.S. -- Qatar hosts U.S. Central Command -- and more recently, Russia. Qatar’s sovereign wealth fund agreed last year to invest $2.7 billion in Russia’s state-run Rosneft Oil Co. PJSC. “Qatar used to be a kind of Saudi vassal state, but it used the autonomy that its gas wealth created to carve out an independent role for itself,” said Jim Krane, energy research fellow at Rice University’s Baker Institute, in Houston, Texas. “The rest of the region has been looking for an opportunity to clip Qatar’s wings.” That opportunity came with U.S. President Donald Trump’s recent visit to Saudi Arabia, when he called on “all nations of conscience” to isolate Iran. When Qatar disagreed publicly, in a statement the government later said was a product of hacking, the Saudi-led retribution followed.... Qatar gas wealth enabled it to develop foreign policies that came to irritate its neighbors. It backed the Muslim Brotherhood in Egypt, Hamas in the Gaza Strip and armed factions opposed by the UAE or Saudi Arabia in Libya and Syria. Gas also paid for a global television network, Al Jazeera, which at various times has embarrassed or angered most Middle Eastern governments....Above all, gas prompted Qatar to promote a regional policy of engagement with Shiite Iran to secure the source of its wealth.  ..... Adding to regional frustrations, in 2005, Qatar declared a moratorium on the further development of the North Field that could have provided more gas for local export. Qatar said it needed to test how the field was responding to its exploitation, denying that it was bending to sensitivities in Iran, which had been much slower to draw gas from its side of the shared field. That two-year moratorium was lifted in April, a decade late, after Iran for the first time caught up with Qatar’s extraction rates. “People here are scratching their heads as to exactly what the Saudis expect Qatar to do,” said Gerd Nonneman, professor of international relations and Gulf studies at Georgetown University’s Doha campus. “They seem to want Qatar to cave in completely, but it won’t call the Muslim Brotherhood a terrorist organization, because it isn’t. And it isn’t going to excommunicate Iran, because that would jeopardize a relationship that is just too fundamental to Qatar’s economic development.”"
Saudi Arabia's Feud With Qatar Has 22-Year History Rooted in Gas
Bloomberg, 5 June 2017

"Saudi Arabia's national oil company Saudi Aramco aims to invest globally in production of gas and liquefied natural gas after holding its initial public offering, Saudi Energy Minister Khalid al-Falih said on Friday."
Saudi's Falih - Aramco to invest globally in gas and LNG after IPO
Reuters, 2 June 2017

"Gas demand last year was the highest since 2011, according to latest government data. While households and businesses burnt more due to a colder winter, the power sector was the primary driver as coal economics tanked. In all, gas demand in 2016 was up 12.6 per cent on 2015 – the highest demand figure since 2011, according to the department for Business, Energy & Industrial Strategy (BEIS). The department said that was was driven by a 39 per cent rise in gas instead of coal used in electricity generation. Households also burnt a bit more, up 5.1 per cent. A colder than usual winter meant those increases were more marked, with households in the fourth quarter burning 24 per cent more gas than the previous year, and the power sector’s consumption up 48 per cent. The UK was also much more reliant on imported gas over winter, with net imports up 44 per cent on Q4 2015 as exports fell. A particularly cold Q4 2016 and the delayed restart of gas withdrawals from the Rough storage facility could also have affected the trade figures, said BEIS. Of the UK’s imported gas, Norway supplied around two thirds (64%). Imports from Belgium hit a three year high. Piped Dutch gas and Qatari LNG made up the remainder."
UK gas demand hits five year high as coal-fired power tanks
The Energyst, 1 June 2017

"Reports of deep-sea drilling’s demise in a world of sub-$100 oil may have been greatly exaggerated, much to OPEC’s dismay. Pumping crude from seabeds thousands of feet below water is turning cheaper as producers streamline operations and prioritize drilling in core wells, according to Wood Mackenzie Ltd. That means oil at $50 a barrel could sustain some of these projects by next year, down from an average break-even price of about $62 in the first quarter and $75 in 2014, the energy consultancy estimates.... “There is life in deep-water yet,” said Angus Rodger, director of upstream Asia-Pacific research at Wood Mackenzie in Singapore. “When oil prices fell, many projects were deferred, but the ones that were deferred first were deep-water because the overall break-evens were highest. Now in 2017, we’re seeing signs that the best ones are coming back.” The falling costs make it more likely that investors will approve pumping crude from such large deep-water projects, the process for which is more complex and risky than drilling traditional fields on land. That may compete with OPEC’s oil to meet future supply gaps that the group sees forming as demand increases and output from existing wells naturally declines.... Royal Dutch Shell Plc in February approved its Kaikias deep-water project in the U.S. Gulf of Mexico, saying it would break even with prices below $40 a barrel. That followed BP Plc’s decision in December to move forward with its Mad Dog Phase 2 project in the Gulf, with costs estimated at $9 billion compared to $20 billion as originally planned. Over the next three years, eight offshore projects may be approved with break-even prices below $50, according to a Transocean Ltd. presentation at the Scotia Howard Weil Energy Conference in New Orleans in March. Eni SpA could reach a final investment decision on a $10 billion Nigeria deep-water project by October.... Meanwhile in America’s shale country, companies quickly reduced costs and improved productivity, driving break-even costs in the best parts of fields from Texas to North Dakota into the $30s. The cost reductions have helped the number of drilling rigs in the U.S. more than double since last year. That increased activity is causing costs to rise again, though, said Jonathan Garrett, an upstream analyst at Wood Mackenzie. Prices for pressure-pumping equipment and sand, both of which are necessary for the hydraulic fracturing that makes shale production possible, have increased by more than 20 percent this year. While costs for shale production, known as tight oil, are edging higher now, expenses associated with deep-water drilling is finally coming down, Rodger said. Rental rates for drilling rigs have been cut in half since 2014, and companies are redesigning projects to be more cost efficient instead of to maximize output. Deep-water exploration will see “renewed momentum” over the rest of 2017 as large integrated oil companies look to capitalize on lower service costs and strengthening fiscal positions, Fitch Group’s BMI Research said in a May 3 note. In the U.S. Gulf of Mexico, a more cost-efficient design for deep-water projects has reduced the break-even cost at many wells to below $40 a barrel, it said. “The deep-water cost curve is much higher, but over time that deep-water cost curve is coming down and over time that tight oil cost curve is going up a bit,” Wood Mackenzie’s Rodger said. “So there’s still some clear water between the two but it’s now getting closer to each other.”"
Now There's Another Source of Oil That's Starting to Get Cheap

Bloomberg, 31 May 2017

"Russia’s state-backed gas company reported higher gas sales to Europe again last quarter as energy importers continue to deepen their reliance on the gas giant. Gazprom’s sales climbed by 4.4pc to R1.8tn ($31bn) in the first three months of the year as the appetite for gas grows within Europe and the former Soviet Union. Although the UK does not directly import gas from Russia, Gazprom’s largest European customers are in Germany and the Netherlands, which are closely connected to the UK gas grid through two major pipelines. Russian gas volumes sold by the Kremlin-controlled company to Europe and some neighbouring countries grew by 13pc in the first months of this year to 65.6 billion cubic meters. According to market specialists at Icis the amount of Russian gas that flowed into the European gas grid, excluding Baltic states, reached 42.3 billion cubic meters in the first quarter, well above the 37bcm in the same quarter last year and 25.8bcm in the first months of 2015. Gazprom’s strong quarter for exports began with an all-time daily high in the first week of the year. The gas giant pumped a record 615.5 million cubic meters of gas to countries outside the former Soviet Union on January 6 amid a cold snap across Europe. Demand for Russian gas is on the rise in part because North Sea supplies are dwindling and power generators are increasingly burning gas for electricity. In the UK, the steady shutdown of coal-fired power plants has allowed gas-fired power to become the dominant power source once again after a few years in which coal was in the ascendancy. France has also increased its use of gas power following the decision to shut down a string of nuclear reactors  after a fault was detected in a widely-used reactor design. The lower price for gas is also playing a role in Europe’s increasing reliance on Russian imports, according to Jake Horslen, a European gas market specialist at data provider Icis... Gazprom already delivers around a third of the EU's gas and plans to extend its influence with the construction of a second big gas pipeline. Gazprom plans to use the controversial Nord Stream 2 project to circumvent Ukraine by flowing gas via the Baltic Sea to Germany rather than negotiate gas transit terms with Kiev after years of deepening political tensions. Critics accuse Russia of using the new route to cut off a key source of national revenue for Ukraine, weakening its economy as well as its political leverage. However, Gazprom argues that it is an important step to securing reliable gas deliveries to Europe. The amount of gas sold to former Soviet Union countries rose by 13pc, or 12.5 billion cubic meters, in the first quarter and domestic sales rose 8pc to 81.7bcm."
Gazprom continues to grow dominance in European gas
Telegraph, 31 May 2017

"Swiss voters backed the government's plan to provide billions of dollars in subsidies for renewable energy, ban new nuclear plants and help bail out struggling utilities in a binding referendum on Sunday. Provisional final figures showed support at 58.2 percent under the Swiss system of direct democracy, which gives voters final say on major policy issues. The Swiss initiative mirrors efforts elsewhere in Europe to reduce dependence on nuclear power, partly sparked by Japan's Fukushima disaster in 2011. Germany aims to phase out nuclear power by 2022, while Austria banned it decades ago"
Swiss voters embrace shift to renewable energy
Reuters, 21 May 2017

"For the first time in more than three decades, natural gas traders, utilities and producers are preparing for a winter without the U.K.’s biggest storage facility. With Centrica Plc’s North Sea Rough storage site almost empty after wells deteriorated, the U.K. is set to lose a quarter of its daily supply capacity during the winter as well as its ability to quickly respond to short-term swings in demand. Britain will import more fuel, which may be costly and create opportunities for traders and producers, as well as boost business for smaller storage sites. The shutdown of Rough, a depleted North Sea field run as a storage site since 1985, will impact the U.K. economy through more volatile energy prices during the peak winter season and increase the reliance on imports via liquefied natural gas tankers that can take weeks to arrive. The halt also offers Russia an opportunity to strengthen its grip on deliveries to Europe, which faces declining local production and extraction caps at the region’s biggest field at Groningen in the Netherlands. “It definitely generates more risk in the winter and increases a bit dependence of Europe on LNG,” Didier Magne, head of European gas at commodity trader TrailStone U.K. Ltd., said in an interview. “We know that Rough is highly unlikely to return, we know that Groningen is going to reduce production by a further 10 percent.” Without Rough, more price volatility will benefit trading, David Isenegger, Centrica’s head of mergers and acquisitions, told an Amsterdam conference last week. Volatility jumped last year already amid a partial outage at Rough, which accounts for 70 percent of the U.K.’s total storage...Pipeline gas suppliers are also ready to help plug the gap. Russia shipped record volumes to Europe last year and aims to send even more this year. Norway, Europe’s second-biggest supplier, has excess pipeline capacity and can divert gas from the mainland to the U.K., Anfinnsen said...It may not only be U.K. facilities that benefit from the absence of Rough. Gas flows to the continent are at their highest level for this time of year since 2012, indicating that U.K. traders may be using continental caverns instead to hold gas they will send back to Britain in the winter....While Britain had relatively little storage even with Rough, with maximum capacity of just 7 percent of total annual demand versus about 30 percent in Germany, the rest of Europe will have too much until at least 2025, according to Cedigaz, a Paris-based industry research group. “We have some storage capacity and we luckily benefited from what happened to Rough,”  Magne said. “There is too much storage in Europe, in every country you have far more storage than needed. The only country in Europe that is different is the U.K., where you should have storage.”"
Traders Brace for First Winter Without U.K.'s Big Gas Store
Bloomberg, 19 May 2017

"China has for the first time extracted gas from an ice-like substance under the South China Sea considered key to future global energy supply. Chinese authorities have described the success as a major breakthrough. Methane hydrates, also called "flammable ice", hold vast reserves of natural gas. Many countries including the US and Japan are working on how to tap those reserves, but mining and extracting are extremely difficult... Officially known as methane clathrates or hydrates, they are formed at very low temperatures and under high pressure. They can be found in sediments under the ocean floor as well as underneath permafrost on land. Despite the low temperature, these hydrates are flammable. If you hold a lighter to them, the gas encapsulated in the ice will catch fire. Hence, they are also known as "fire ice" or "flammable ice". By lowering the pressure or raising the temperature, the hydrates break down into water and methane - a lot of methane. One cubic metre of the compound releases about 160 cubic metres of gas, making it a highly energy-intensive fuel.... Methane hydrates were discovered in Russia's north in the 1960s, but research into how to extract gas from them from maritime sediment only began in the last 10 to 15 years. As a country lacking any natural energy resources, Japan has been a pioneer in the field. Other leading countries are India or South Korea - who also don't have their own oil reserves. While the US and Canada are also active in the field, they have been focussing on hydrates under permafrost in the far north of Alaska and Canada..... Methane hydrates are thought to have the potential to be a revolutionary energy source that could be key to future energy needs - likely the world's last great source of carbon-based fuel. Vast deposits exist basically underneath all oceans around the the globe, especially on the edge of continental shelves. Countries are scrambling for a way to make the extraction safe and profitable. China describes its latest results as a breakthrough and Mr Linga agrees. "Compared with the results we have seen from Japanese research, the Chinese scientists have managed to extract much more gas in their efforts." "So in that sense it is indeed a major step towards making gas extraction from methane hydrates viable." It's thought that there is as much as 10 times the amount of gas in methane hydrates than in shale for instance. "And that's by conservative estimates," says Prof Linga..... While indeed a breakthrough, China's success is still only one step on a long journey, Prof Linga explains. "It is the first time that production rates actually seem promising," he says. "But it's thought that only by 2025 at the earliest we might be able to look at realistic commercial options." An average of 16,000 cubic meters of gas with high purity have been extracted per day in the Shenhu area of the South China Sea, according to Chinese media. But Mr Linga also cautions that any exploitation of the reserves must be done with the utmost care because of environmental concerns. The potential threat is that methane can escape, which would have serious consequences for global warming. It is a gas that has a much higher potential to impact climate change than carbon dioxide. So the trick is to extract the gas without any of it slipping out"
China claims breakthrough in mining 'flammable ice'
BBC, 19 May 2017

"Global renewable power generation capacity rose by 9 per cent last year — a fourfold increase from the start of this century — buoyed by the growth of newer sources such as solar power that shot up by more than 30 per cent. For the second year in a row, renewable energy accounted for more than half the new power generation capacity added worldwide. Sales of plug-in electric vehicles last year were 42 per cent higher than in 2015, growing eight times faster than the overall market. The storage capacity of big lithium ion battery systems more than doubled last year. These advances have become too significant for the oil and gas industry to ignore. In the first three months of this year, the heads of some of the world’s largest oil companies have spoken of a “global transformation” (Saudi Aramco) that is “unstoppable” (Royal Dutch Shell) and “reshaping the energy industry” (Statoil). Isabelle Kocher, chief executive of French power and gas group Engie, calls it a new “industrial revolution” that will “bring about a profound change in the way we behave”. None of this means the problem of climate change has been solved, or that fossil fuels will vanish in the near future. Oil, gas and coal still account for about 86 per cent of the energy keeping the world’s lights on, cars running and homes warm — a share that has barely changed in 25 years. Coal and gas-fired power plants are still being built, especially in the developing world where 1.2bn people lack electricity. Modern renewables, in contrast, are growing from a tiny base and are often less dependable than dirtier power generators that do not rely on the weather. Wind and solar power accounted for a puny 4.4 per cent of global electricity in 2015, and big battery systems can only store enough power to satisfy a few seconds of global electricity demand, says the International Energy Agency. Electric vehicle sales last year were just 0.9 per cent of all vehicles sold, according to the EV-Volumes consultancy.... When the definitive history of the energy transition is written, the taxpayers of Germany will deserve their own chapter. They bankrolled the green energy revolution known as the Energiewende, pioneering generous subsidies nearly 20 years ago that helped drive renewables up from 9 per cent of Germany’s electricity mix in 2004 to 32 per cent last year. As other European nations — and some US states — boarded the green power wagon, it kindled a wave of demand for wind turbines and solar panels that helped drive costs down worldwide. Solar’s price fall was especially steep after a Chinese manufacturing boom spurred global over-supply. The result was doubly miserable for conventional fossil fuel generating companies: renewables crowded them out while simultaneously driving down wholesale power prices, causing billions of euros in losses...The US solar industry employs more than twice as many workers as the coal sector, a report showed in February. Manhattan has more Tesla charging spots than petrol stations, though many are in fee-paying parking garages...Texas now has more installed wind power capacity than Canada and Australia combined. If it were a country, it would rank as the world’s sixth-largest wind power, after China, the US, Germany, India and Spain... China has more than a third of the world’s wind power capacity; a quarter of its solar power; six of the top 10 solar-panel makers; four of the top 10 wind turbine makers and more battery-only electric car sales last year than the rest of the world combined. India is eager to follow: it built one of the world’s largest solar photovoltaic farms last year; ranks fourth in the world for wind power capacity; and could become the world’s third-biggest solar market this year. It also wants to boost its use of electric cars. The world has been through energy transitions before, often shaping the course of human history. The age of wood gave way to coal in the 1800s. Coal was in turn squeezed by oil and natural gas, transforming the fortunes of Middle Eastern desert kingdoms. Such shifts usually take decades. But the growth of the latest one has prompted some to wonder if the age of fossil fuels might fade faster. Some mainstream thinkers are dubious. Their view is embodied by Professor Vaclav Smil, an energy scholar whose fans include Microsoft co-founder Bill Gates. (“There is no author whose books I look forward to more,” Mr Gates says.) Prof Smil says “naive” people who are “enchanted” by the idea of a rapid end to fossil fuels ignore the fact that it has typically taken 50 to 60 years for a widespread shift from one dominant fuel to another. As coal gradually displaced wood, for example, it reached 5 per cent of all fuel energy in 1840 but was still only about 50 per cent by 1900. “People want to be deceived,” he says in an interview. There is a dearth of green alternatives to the fossil fuels used to make steel, cement or plastics, he adds. And replacing a global fossil fuel energy system that took an estimated $25tn to create over the 20th century with today’s crop of renewables is a job that will occupy us “for generations”. Still, a much-discussed paper published last year by Professor Benjamin Sovacool of the University of Sussex suggests energy transitions in some places can be speedier. Nuclear power in France went from 4 per cent of the country’s electricity supply in 1970 to nearly 40 per cent in 1982, for instance.... Costs are expected to fall further as countries spurn expensive subsidies guaranteeing set prices for generators in favour of competitive auctions or tenders. The amount of auctioned renewable electricity last year was triple that in 2015, according to Bloomberg New Energy Finance, while the average global price of auctioned solar power has plummeted fivefold since 2010. One of the most striking auction results came in Germany in April when Denmark’s Dong Energy, the largest builder of costly offshore wind farms, said it would build two new schemes without subsidies, relying instead on market prices alone. Advances in wind technologies — including the prospect of much more powerful turbines — were one reason for Dong’s move, a step others are expected to follow. “Renewables have reached a tipping point globally,” says Simon Virley, head of power and utilities at KPMG. “A subsidy-free future is now in reach for a number of technologies and geographies.”... Even the experts have been caught out by the pace of the shift. In 2010, IEA projections suggested it could take 14 years before there was 180 gigawatts of installed solar capacity. It took less than seven years for the world to reach more than 290 gigawatts, nearly the entire generating capacity of Japan. Still, some predictions have proved overblown. Former US President Barack Obama said that by 2015, the US could be the first country with 1m electric cars. Only about 400,000 materialised....Storing clean power has long been a holy green grail but prohibitive costs have put it out of reach. This has begun to change as battery production has ramped up to meet an expected boom in electric cars. Lithium ion battery prices have halved since 2014, and many analysts think prices will fall further as a slew of large battery factories are built. The best known is Tesla and Panasonic’s huge Nevada “gigafactory”. Tesla claims that once it reaches full capacity next year, it will produce more lithium ion batteries annually than were made worldwide in 2013. It is only one of at least 14 megafactories being built or planned, says Benchmark Minerals, a research group. Nine are in China, where the government is backing electric cars with the zeal it has directed at the solar industry....Enel’s internal forecasts show battery costs falling by about 30 per cent between 2018 and 2021 and it is among the companies already pairing batteries with solar panels to produce electricity after dark in sunny places where power is expensive, such as the Chilean desert. Tesla finished a similar system in Hawaii in October and its chief executive, Elon Musk, made a characteristically flamboyant offer this year — via Twitter — to build a much larger one within 100 days to help fix power outages in southern Australia... For all the excitement about batteries, the technology is still not ready to let householders in any part of the world stick a solar panel on the roof, a battery in the garage and abandon grid power completely. It would cost hundreds of thousands of dollars in snowy places like Nebraska and probably require an extra garage to house all the batteries, the CLSA brokerage calculated last year. However, other analysts say investors need to pay attention to the disruption that even partial grid defection could cause in places where batteries make more financial sense. In Australia, where household electricity prices nearly doubled in the decade up to 2014 and rooftop solar levels are among the world’s highest, more than 6,700 battery systems were sold last year, up from 500 in 2015, says the solar consultancy SunWiz. By 2020, about 1m homes could have batteries, according to Morgan Stanley analysts...Battery companies flocking to Australia say it is only one example of a new breed of “prosumers”, people using renewables and batteries to produce and consume their own power.... In quake-prone Japan, a hotbed of battery technology, industry leaders say it is inevitable that home solar-storage systems will become commonplace. “In future we think all new houses will generate and consume their own electricity and grid power will only be used for industry,” says Hiroichi Yoshida, founder of Eliiy Power, a lithium ion battery-maker that specialises in solar storage systems.... None of this means the future of clean energy will be entirely smooth. Indeed, its very success poses a raft of questions for governments that some have barely contemplated. Chief among them: what to do with power markets that were never designed for millions of people turning their rooftops into mini power stations? How to pay for upgrading grids to cope with the influx of all this renewable power? What to do about incumbent companies calling for the brakes to be slammed on to protect them from green power incursions?"
The Big Green Bang: how renewable energy became unstoppable
Financial Times, 18 May 2017


"The U.S. should become Europe’s top gas supplier so American allies are no longer dependent on Russian energy, former CIA Director Michael Hayden told the Senate Thursday. Hayden, who is also a former NSA chief, made his suggestion in response to a question from Florida Democratic Sen. Bill Nelson regarding a potential U.S. response to Russia’s activities in the U.S. “I would respond across the board,” said Hayden. Specifically, he suggested a strategic solution would be to get Europe off its Russian energy dependence. “And I think I’d have the president fly up to Eerie, get in a motorcade, stand on top of Marcellus shale and [say] ‘this is going to Europe, this gas is going to wean our European friends off their dependence of Russian energy,'” said Hayden. ‘”And we’re going to do that in ten years.'” Marcellus shale refers the Marcellus formation in western Pennsylvania, West Virginia and southern New York, considered one of the largest available sources of natural gas in the U.S."

Ex-CIA Chief Hayden: U.S. Needs To ‘Wean’ Europe Off Russian Gas

The National Interest, 12 May 2017

"The recovery in rig counts has been outpacing the growth in completion activity since 2H 2016, resulting in a strong build-up of new high-quality inventory of drilled uncompleted wells (DUCs). Should the prices collapse to 40 or even US$30/bbl level, a major part of these DUCs can still be completed commercially given that drilling costs are sunk. Therefore, a drastic downward shift in the market conditions will not lead to a rapid collapse of the US oil production. No more than 500 000 bpd of December 2017 volumes are at risk in the US$30/bbl scenario. “If the prices go down to US$30/bbl and we assume that operators behave rationally, we should observe relatively quick adjustment of activity, which will result in a temporary contraction of output with stabilisation in 4Q at the level 100 000 bpd lower than the current output as base production gets more mature,” says Artem Abramov, Vice President Analysis at Rystad Energy. “In reality, history tells us that many operators will rely on hedging gains or simply outspend more, so short-term evolution of supply in the US$30/bbl world might end up much closer to the rational US$40 or even US$50/bbl scenarios.”"
Rystad Energy: US oil production has gained significant momentum – limited downside risk in the short-term
Oil Field Technology, 12 May 2017

"Japan's trade ministry on Monday reported success in producing gas last week by extracting methane gas from methane hydrate deposits offshore Japan's central coast. The tests being run at two different wells are the first since 2013, when Japan achieved the world's first-ever extraction of gas from offshore deposits of methane hydrate, a frozen gas known as "flammable ice". Japan's Ministry of Economy, Trade and Industry (METI) said the methane hydrate production tests will continue for a combined four to five weeks. Japan's first methane hydrate tests in 2013 ended abruptly after less than a week due to problems with sand flowing into the well. Japan, which imports nearly all of its energy sources, has been aiming to launch private sector commercial production of methane hydrates by between 2023 to 2027, but METI officials have said the goal will still be a challenge as many obstacles remain to be solved. Japan is the world's top importer of liquefied natural gas (LNG), and its need for domestic gas resources has become greater since the Fukushima nuclear crisis in 2011 shut down most of its nuclear power plants and sharply raised fossil fuel imports such as LNG and coal. Methane hydrate is formed from a mixture of methane and water under certain pressures and conditions. India, Canada, the United States and China are among the countries also looking at exploiting hydrate deposits as an alternative source of energy, the trade ministry said. A Japanese study has estimated that at least 40 trillion cubic feet (1.1 trillion cubic meters) of methane hydrates lie in the eastern Nankai Trough off the country's Pacific coast, equal to about 11 years of Japanese gas consumption."
Japan reports successful gas output test from methane hydrate
Reuters, 8 May 2017

"Gazprom will be ready to start laying pipes on the Turkish Stream offshore section in several days, the company’s CEO Alexei Miller told Russian President Vladimir Putin on May 4, as Russia’s TASS reported.  Putin has ordered Gazprom to start laying pipes on sea stretch of Turkish Stream pipeline. “We will be ready to start laying the Turkish Stream gas pipeline in several days,” Miller said, as quoted by the Russian news agency. The Turkish Stream natural gas pipeline project agreement between Turkey and Russia was signed on Oct. 10, 2016, and ratified by Russian President Vladimir Putin on Feb. 7.   The project, which was announced by Putin during a 2014 visit to Turkey, is set to carry gas from Russia under the Black Sea to Turkey’s Thrace region.  One line, with 15.75 billion cubic meters of capacity, is expected to supply the Turkish market, while a second line will carry gas to Europe."
Putin ‘orders Gazprom to start laying pipes along Turkish Stream’s sea route’
Hurriyet, 5 May 2017

"Germany has broken a new record for renewable energy, with low-carbon sources nearly obliterating coal and nuclear power last weekend. At one point on the sunny and breezy Sunday, sustainable energy from wind, solar, biomass and hydro power provided a record 85 per cent of the country’s total energy. Germany has been investing heavily in renewables, as part of the government's Energiewende initiative to transition away from fossil fuels and nuclear power to a low carbon, environmentally sound, reliable, and affordable energy supply by 2050.  Investment in sustainable energy has been so successful that for several hours on Sunday electricity prices fell into negative figures, as renewable sources fed so much power into the grid that supply exceeded demand. Coal use fell to an all-time low, with public broadcaster Deutsche Welle reporting that on 30 April coal-fired power stations were only operational between three and four in the afternoon and  produced less than eight gigawatts of energy, well below their maximum output of about 50 gigawatts. “Most of Germany's coal-fired power stations were not even operating on Sunday,” Patrick Graichen of Agora Energiewende told Australian news site RenewEconomy. “Nuclear power sources, which are planned to be completely phased out by 2022, were also severely reduced.” Mr Graichen added that days like Sunday would be “completely normal” by 2030 thanks to the government's continued investment in the Energiewende initiative. Germany announced in May 2011 that it plans to shut down all its nuclear power plants by 2022, in addition to nearly eliminating fossil fuel power. The country's ambitious energy transition aims for at least 80 per cent of all power to come from renewables by 2050, with intermediate targets of 35 to 40 percent share by 2025 and 55 to 60 percent by 2035."
Germany breaks renewables record with coal and nuclear power responsible for only 15% of country's total energy
Independent, 5 May 2017

"Under pressure from a collapse in oil prices, Deputy Crown Prince Mohammed bin Salman last April unveiled his Vision 2030 to transform the kingdom's economy. Progress has been made. Taxes are being introduced, and subsidies cut to plug a huge budget hole. And officials are preparing the center piece of bin Salman's strategy -- selling part of Aramco, the world's top oil producer. But much more work is needed to open the kingdom to foreign investors, develop other areas of the economy, and wean Saudis off lavish state support.Some observers questioned the government's commitment to kicking the oil habit when benefit cuts for officials were reversed last month. Bin Salman said the cuts were a temporary measure.... Rising oil revenues have helped ease the pressure on Saudi Arabia's budget deficit, which ballooned to 366 billion riyals ($98 billion) in 2015, and 297 billion riyals in 2016... Now the Saudi government is trying to find ways to spur a recovery -- and listing Aramco on the stock market next year is central to that goal. Many details of the IPO have yet to be confirmed. Saudi officials have said they expect an IPO to value Aramco at around $2 trillion. Independent analysts say it may be worth closer to $1.4 trillion. Either way, selling just 5% would raise $70-$100 billion to invest in other areas. Up to 70% of the proceeds from the IPO will be plowed into the domestic economy, with a focus on mining, retail and logistics, Bin Salman said"
Saudi Arabia pushes through pain of breaking oil habit

CNN, 3 May 2017

"Some green energy sources come with a built-in challenge: the wind and the sun can't be turned on and off at will. When it's windy and sunny, an abundance of energy may be harnessed—but any excesses go to waste. That's where batteries, the most common type of energy storage, come in. Batteries solve that problem by allowing utility companies to collect excess electricity and store it for times when the sun may not be shining or the wind not blowing. “Networks care about reliability,” says Logan Goldie-Scot, an energy-storage analyst at Bloomberg New Energy Finance. “Energy storage is being viewed by network operators as a potential tool in their toolbox, and that hasn’t been the case up until now." In 2013, California launched an aggressive effort to ramp up large-scale energy storage with an initial goal of building 1,325 megawatts of storage by 2020, the equivalent capacity of two average sized coal-fired power plants. Today, the state is already home to 36% of the country's battery storage capacity with projects continuing to open on a regular basis, according to a Climate Group report. Oregon and Massachusetts have since announced their own storage targets. Meanwhile, dozens of cities have made commitments to get 100% of their electricity from renewables....Batteries will also change the power sector as homeowners and businesses install their own products. Batteries at homes, offices and other commercial buildings allow customers to save electricity collected by their solar panels and use it at times when electricity prices are highest. One in four businesses with more than 250 employees has already deployed batteries to help with their electricity management, according to a Deloitte study. Regulatory changes that encourage battery owners to sell back stored electricity when it's in high demand could increase interest in batteries, analysts say. Batteries installed in electric vehicles, for instance, will also affect the electric grid as automakers continue to expand their offerings. Experts say the impact will both stress and help utilities manage their electricity supply. The stress comes as vehicles create a new demand for energy, but at the same time, batteries in those vehicles act as a storage unit of their own that may offer new flexibility. The largest battery in a Tesla, as one example, can store enough electricity to power the average American home for more than three days. Utilities have begun exploring programs to encourage electric vehicle owners to charge their cars when there is extra power on the grid. Perhaps the biggest open question for energy storage remains how much—and where—the market will grow in the coming years—whether lithium ion batteries will keep their place as the top way of storing electricity. Hydrogen storage, molten salt and other forms of batteries all offer alternatives that have received significant investment in recent years. But much like photovoltaic solar panels in recent years, the cost of lithium ion batteries has already come down so much that the market's continued growth seems almost inevitable."
How Batteries Could Revolutionize Renewable Energy
TIME, 1 May 2017

"China and the United States are the largest markets for electric and hybrid vehicles but they accounted for only 1.0 per cent and 0.7 per cent of total sales in 2015 (last data available from the International Energy Agency). So far, eight countries account for 90 per cent of global electric vehicles sales, leaving gasoline power the only option in most of the world. There are also infrastructure-related hurdles to replacing fossil fuel consumption. Electric power grids will need substantial upgrading – a study in the U.K. concluded that some neighbourhoods would see power shortages with only six cars charging – and replacing every gas station with powering centres is no small feat."
The peak oil farce, Rosenberg's new loonie prediction, and shorts target TSX bank
Globe and Mail, 28 April 2017

"Conventional crude discoveries plummeted to a record low last year, one of the world's top energy policy advisers said. And it likely won't get any better any time soon as energy companies gave the green light to the lowest number of new drilling projects in more than 70 years, according to the Paris-based International Energy Agency. The IEA has warned that insufficient investment could lead to a tightening of global oil supplies. While that might seem like a welcome change in today's oversupplied market, prices could spike sharply higher in the coming years if drillers do not tee up enough new production to satisfy global demand. Investment levels remain depressed, and exploration spending is poised to fall for a third straight year in 2017, IEA said in a new report. Energy companies have canceled or delayed $1 trillion in planned projects by one count, as oil prices remain mired in a slump going back to the summer of 2014. The price collapse was sparked by a boom in U.S. production and compounded by OPEC's refusal to cut output during the first two years of the downturn.  But now IEA says the pendulum could swing the other way, largely due to a drop in conventional oil projects, or those that don't require certain advanced drilling methods. IEA's analysis finds: * Oil discoveries totaled 2.4 billion barrels in 2016, versus the average of 9 billion barrels in the last 15 years. * Energy companies sanctioned 4.7 billion barrels of conventional oil resources for development, down 30 percent from 2015. * Firms reached a final investment decision on the lowest number of projects since the 1940s. Offshore drilling projects account for a big part of the pullback. Last year, just 13 percent of conventional oil projects that got the go-ahead were offshore. That compares to an average of 40 percent of projects between 2000 and 2015."
Global crude oil discoveries plunge to record low, and it's gonna get worse
CNBC, 27 April 2017

"Over 54 gigawatts (GW) of wind power were installed in 2016 and cumulative capacity grew by more than 12 percent to hit 486.8 GW, according to a new report from global trade association, the Global Wind Energy Council (GWEC). Released on Tuesday, the GWEC's Global Wind Report: Annual Market Update forecasts nearly 60 GW of wind installations this year, with cumulative installed capacity seen reaching more than 800 GW by the end of 2021.  The GWEC said that Asia would lead growth, with China – which installed 23 GW in 2016 – leading all markets.  The report further outlined that the 2016 market had not met expectations set by the GWEC in early 2016. This was due to several reasons, including China installing "only" 23 GW in 2016 and smaller-than-expected markets in Mexico, Brazil, Canada and Africa.  The majority of these issues were seen as cyclical, the GWEC said, and it expected the market to pick up this year. "Wind power is now successfully competing with heavily subsidized incumbents across the globe, building new industries, creating hundreds of thousands of jobs and leading the way towards a clean energy future," Steve Sawyer, GWEC secretary general, said in a statement.  "We are well into a period of disruptive change, moving away from power systems centered on a few large, polluting plants towards markets increasingly dominated by a range of widely distributed renewable energy sources," Sawyer added. Wind energy is becoming an increasingly important source of power, with the International Energy Agency stating it is "developing towards a mainstream, competitive and reliable power technology."
China continues to lead global wind energy market, says new report
CNBC, 26 April 2017

"Electric cars are coming fast -- and that’s not just the opinion of carmakers anymore. Total SA, one of the world’s biggest oil producers, is now saying EVs may constitute almost a third of new-car sales by the end of the next decade. The surge in battery powered vehicles will cause demand for oil-based fuels to peak in the 2030s, Total Chief Energy Economist Joel Couse said at Bloomberg New Energy Finance’s conference in New York on Tuesday. EVs will make up 15 percent to 30 percent of new vehicles by 2030, after which fuel “demand will flatten out,” Couse said. “Maybe even decline.” Couse’s projection for electric cars is the highest yet by a major oil company and exceeds BNEF’s own forecast, said Colin McKerracher, head of advanced transport analysis at Bloomberg New Energy Finance. Other oil companies have been trimming their long-term forecasts for oil demand. Royal Dutch Shell Plc Chief Executive Officer Ben van Beurden said in March that oil demand may peak in the late 2020s. It set up a business unit to identify the clean technologies where it could be most profitable. Electric cars are beginning to compete with gasoline models on both price and performance. The most expensive part of an electric car is the battery, which can make up half the total cost, according to BNEF. The first electric cars to be competitive on price have been in the luxury class, led by Tesla Inc.’s Model S, which is now the best-selling large luxury car in the U.S. But battery prices are dropping by about 20 percent a year, and automakers have been spending billions to electrify their fleets. Volkswagen AG is targeting 25 percent of its sales to be electric by 2025. Toyota Motor Corp. plans to phase out fossil fuels altogether by 2050. Electric cars currently make up about 1 percent of global vehicle sales, but traditional carmakers are preparing for transformation. In 2018, Volkswagen plows into electrification with an Audi SUV and the first high-speed U.S. charging network to rival Tesla’s Superchargers. Tata Motors Ltd.’s Jaguar and Volvo Cars both have promising cars on the way too, and by 2020, the avalanche really begins, with Mercedes-Benz, VW, General Motors Co. and others releasing dozens of new models. “By 2020 there will be over 120 different models of EV across the spectrum,” said Michael Liebreich, founder of Bloomberg New Energy Finance. “These are great cars. They will make the internal combustion equivalent look old fashioned.”
The Electric-Car Boom Is So Real Even Oil Companies Say It’s Coming
Bloomberg, 25 April 2017

"The UK’s first 24 hours without using coal as part of its energy mix has been hailed “a watershed” moment. For the first time since the industrial revolution, the country fulfilled all of its energy needs without using coal for a full day. It is bound to happen more frequently, the National Grid said.  Around half of energy came from natural gas and about a quarter came from nuclear plants, according to Grid Watch. Wind, biomass and imported energy made up the difference. A combination of factors, including warmer weather which led consumers to reduce their energy use, made it possible, a National Grid spokeswoman told The Independent. Last year the Government pledged to phase out all coal power plants by 2025. Older power plants have also closed in recent years and solar and wind energy are providing a growing proportion of electricity to homes and the industrial sector. According to an analysis by Carbon Brief, the UK generated more electricity from wind than from coal in 2016. It reported coal generation collapsed last year, contributing just 9.2 per cent of the energy mix, while wind made up 11.5 per cent. The National Grid’s energy control room said it had ran without coal for up to 19 hours on 20 April but Friday was the first time they managed a full 24 hours since the world’s first centralised public coal-fired generator opened in 1882 at Holborn Viaduct, in London."
Britain powered 24 hours without coal for first time in 135 years in 'watershed moment'
Independent, 22 April 2017

"Mechanical and electrical engineers at the University of California, Riverside, have now discovered that glass from waste can be turned into a material for lithium ion battery electrodes using a low-cost chemical process. Moreover, batteries using these electrodes significantly outperform conventional cells with graphite electrodes, they claim....Their latest effort, detailed in a paper in the Nature journal Scientific Reports, draws on previous research that found that nanostructured silicon anodes can store up to 10 times as much energy in a lithium-ion cell than conventional graphite anodes; the silicon is able to absorb large amounts of lithium and the nanostructured form prevents the material from swelling when this happens, protecting the mechanical integrity of the battery....“We started with a waste product that was headed for the landfill and created batteries that stored more energy, charged faster, and were more stable than commercial coin cell batteries. Hence, we have very promising candidates for next-generation lithium-ion batteries,” Li said. The batteries produced would be suited to challenging application such as electric vehicles and electronic devices, the researchers added."
Waste glass could hold key to high-performance battery materials
The Engineer, 21 April 2017

"Large natural gas discoveries in the eastern Mediterranean have raised hopes that the region could serve EU energy needs, helping it to fulfil its goals of energy diversification, security, and resilience. But there are commercial and political hurdles in the way. Cyprusʼs reserves are too small to be commercially viable and Israel needs a critical mass of buyers to begin full-scale production. Regional cooperation – either bilaterally or with Egypt – is the only way the two countries will be able to export. Egypt is the only country in the region that could export gas to Europe independently because of the size of its reserves and its existing export infrastructure. But energy sector reforms will be needed to secure investor confidence in this option. There are now two options for regional export: to build a pipeline that connects Israel and Cyprus to southern Europe, or to create a network of pipelines into Egypt, from which gas could be liquefied and exported."
Pipelines and Pipedreams: How the EU can support a regional gas hub in the Eastern Mediterranean
European Council on Foreign Relations, 21 April 2017

"Oil dropped below $50 a barrel as investors lost faith that an extension of OPEC-led supply cuts will overcome growing U.S. production and ease a global glut...Prices dropped 3.8 percent on Wednesday after government data showed U.S. production rose for a ninth straight week, even as stockpiles continued to decline from a record. U.S. explorers added 5 oil rigs this week to cap the longest stretch of gains since 2011, Baker Hughes Inc. data show."
Oil Falls Below $50 as Surging U.S. Output Undermines OPEC Cuts
Bloomberg, 20 April 2017

"The euphoria of rising U.S. oil production continues in the Mainstream media while troubling signs are now taking place at the Bakken.  Even though overall U.S. oil production has climbed due to an increase in drilling rig activity, supply from the Bakken has stalled. According to the most recently released Drill Productivity Report from the EIA – U.S. Energy Information Agency, oil production at the Bakken is forecasted to decline in Ma.The data from the Drilling Productivity Reports states the Bakken will add 43,000 barrels per day (bd) of new oil production in May, but its Legacy Decline will be 44,000 bd.  Thus, overall oil production at the Bakken will decline a modest 1,000 bd in May. Furthermore, the peak of Bakken oil production took place at the end of 2014 at 1.2+ million barrels per day (mbd), and is now a little more than 1 mbd.  You would think with an oil price now trading in the $50 range, much higher than the $30 range in the beginning of 2016, oil production would be growing once again at the Bakken.  However, it is not.  Actually, the Bakken was producing more oil in the beginning of 2016 when the price was in the $30’s than it is today with the price in the $50 range. Now, the reason for the increase in U.S. oil production is largely due to the growth in the Eagle Ford and Permian Region. The Eagle Ford in Texas is forecasted to increase its oil production by 38,000 bd in May, however its production has not increased all that much from its bottom at the end of 2016.  Furthermore, Eagle Ford’s oil production is still 500,000 bd lower than its peak set in the beginning of 2015.  Oil production growth at the Permian is estimated to increased 76,ooo bd in May.  However, for the Permian to increase its production in May, it will have to add 205,000 bd of new production as its Legacy decline will be 129,000 bd.  Which means, the Permian is now losing 129,000 bd of oil production each month (and this figure is growing). The Permian is the new place where a lot of drilling and capital expenditures are now taking place.  Some companies have stated they can produce oil in the Permian for $40… and even $20 a barrel in the future.... As Bakken oil production continued to grew each year, the steepness in its declines, also increased.  If we look at 2014 (in orange), we can see that production peaked at nearly 1.2 mbd.  However, 2014 production would have declined to 500,000 bd (follow it down to right side of chart), if no new production was added.  But, because there were new wells added in 2015, 2016 and part of 2017, production has been kept at 1 mbd. That being said, growth died in 2015 and then declined in 2016.  While it is true that the oil price was partly the blame for lower drilling rig activity in the Bakken, the steep annual decline in production was going to peak sooner or later.  It just happened to be sooner..... while U.S. oil production will likely increase as gains in the Permian and other areas continue, the Bakken is providing the market with a troubling sign.  And that is… it’s production has stalled due to high decline rates and lower drilling activity."
Troubling Signs At Bakken As Oil Production Growth Stalls
SRSrocco Report, 20 April 2017

"U.S. shale production in May is likely to post the biggest monthly gain in more than two years, government data showed on Monday, as producers step up the pace of drilling with oil prices holding above $50 a barrel. May output is expected to rise by 123,000 barrels per day to 5.19 million bpd, according to the U.S. Energy Information Administration's drilling productivity report. If that is right, May will have the biggest monthly increase since February 2015 and the highest monthly production level since November 2015. More barrels could be on their way to market from U.S. shale fields as financial companies are investing billions in production, a Reuters analysis shows. Any increase in output in the United States, now the world's third-biggest oil producer, will likely put pressure on the Organization of the Petroleum Exporting Countries (OPEC) - which agreed to curb output at the end of last year - to cut production further."
Oil prices fall on expected climb in U.S. production
Reuters, 18 April 2017

"Southern California Edison launched the world’s first hybrid battery and gas turbine power plants Monday that will provide cleaner stopgap power during hot summer months when electricity demand soars. Officials at an unveiling ceremony in Norwalk called the new plant “the world’s first” and said a second hybrid plant was built in Rancho Cucamonga. Both went online March 30 and Southern California Edison is planning three more plants. The two gas-turbine plants have been retrofitted with lithium ion battery technology that can power the plant instantaneously, reducing warm-up time to nearly zero seconds and dropping emissions by 60 percent. Ordinary gas-turbine plants that run only when needed can take up to 12 hours to ramp up, while spewing emissions that cause lung-damaging smog and greenhouse gases that exacerbate global climate change, air quality and energy, officials said. The schedule for retrofitting SCE’s three other “peaker” plants has not yet been released. “It is truly the first utility plant in the country that combines existing gas-turbine technology with battery storage,” said Jill Whynot, deputy executive officer with the South Coast Air Quality Management District..... With the sate approaching 50 percent of its electrical power from renewable energy such as wind and solar, GHG reductions occur during the day. But Cal-ISO needs to fill in with other, often more polluting power plants at night when solar drops off and when wind power decreases. The paradox — clean energy supplanted by fossil-fuel burning plants — is a problem. Cal-ISO Vice President Tom Doughty said battery storage and hybrid plants are a promising solution. “It is no longer enough to build capacity. The new coin of the realm is flexibility. That is exactly what this plant provides us,” Doughty said."
Edison builds world’s first battery-gas hybrid power plants in Norwalk, Rancho Cucamonga
San Gabriel Valley Tribune, 17 April 2017

"California met its goal to produce about half the state’s electricity from renewable sources for three hours on March 11, a new estimate from the U.S. government shows. The U.S. Department of Energy’s statistics division used data from the California Independent System Operator, which manages the electricity grid across 80 percent of California and part of Nevada, The San Francisco Chronicle reported. The record was set when almost 40 percent of the electricity flowing across the grid came from large-scale solar power plants. Factor in electricity produced by area homes and businesses, and solar met about half the overall electricity demand in the middle of the day. Although the surge in renewable power is a key part of California’s fight against climate change, it creates its own set of problems. California produces so much solar power on bright summer days that some is shunted off the grid, in a process known as curtailment. “We’re seeing the potential for more curtailment this summer,” Independent System Operator spokesman Steven Greenlee said."
California aims to have 50 percent of all electricity come from renewable sources by 2030
Associated Press, 11 April 2017

"Record amounts of new renewables were added to energy systems worldwide last year at a lower cost as clean technology prices fell, a report shows. Wind, solar, biomass, geothermal, small-scale hydropower, marine energy and waste-to-energy schemes added 138.5 gigawatts (GW) to global power capacity, equivalent to the total installed capacity of Canada. The figure, which excludes large hydroelectric dams, is up 8 per cent from 127.5GW in 2015. Despite the increase, global investment in new renewables was down almost a quarter to $241.6 billion as the costs of renewables such as solar and wind fell. The spending per unit of power capacity from solar and wind dropped by more than a tenth in 2016, the report by UN Environment, the Frankfurt School-UNEP Collaborating Centre and Bloomberg New Energy Finance found. Investment in new renewables was roughly double the amount going into fossil fuel plants and the clean technologies accounted for 55 per cent of capacity added worldwide in 2016. Electricity coming from renewables, excluding large hydroelectric dams, rose from 10.3 per cent of total generation in 2015 to 11.3 per cent in 2016, preventing an estimated 1.7 billion tonnes of carbon dioxide emissions."
Record amounts of renewable energy added to the mix in 2016
New Scientist, 6 April 2017

"Qatar has lifted a self-imposed ban on development of the world's biggest natural gas field, the chief executive of Qatar Petroleum said on Monday, as the world's top LNG exporter looks to see off an expected rise in competition. Qatar declared a moratorium in 2005 on the development of the North Field, which it shares with Iran, to give Doha time to study the impact on the reservoir from a rapid rise in output. The vast offshore gas field, which Doha calls the North Field and Iran calls South Pars, accounts for nearly all of Qatar's gas production and around 60 percent of its export revenue. "We have completed most of our projects and now is a good time to lift the moratorium," QP Chief Executive Saad al-Kaabi told reporters Monday at Qatar Petroleum's headquarters in Doha. "For oil there are people who see peak demand in 2030, others in 2042, but for gas, demand is always growing." The development in the southern section of the North Field will have a capacity of 2 billion cubic feet per day, or 400,000 barrels of oil equivalent, and increase production of the field by about 10 percent, when it starts production in five to seven years, he said. Qatar is expected to lose its top exporter position this year to Australia, where new production is due to come on line. The LNG market is undergoing huge changes as the biggest ever flood of new supply is hitting the market, with volumes coming mainly from the United States and Australia. President Vladimir Putin said last Thursday Russia aimed to become the world's largest LNG producer. The flurry of LNG production has resulted in global installed LNG capacity of over 300 million tonnes a year, while only around 268 million tonnes of LNG were traded in 2016, Thomson Reuters data shows. That has helped pull down Asian spot LNG prices LNG-AS by more than 70 percent from their 2014 peaks to $5.65 per million British thermal units (mmBtu). Qatar's decision to lift the moratorium, which came as a surprise to many, is seen as a sign the country will not sit by idly as others scoop up customers in a growing market.... Iran, which suffers from severe domestic gas shortages, has made a rapid increase in production from South Pars a top priority and signed a preliminary deal with France's Total in November to develop its South Pars II project. Iran's oil minister last week vowed to ramp up production of its part of the shared field."
Qatar restarts development of world's biggest gas field after 12-year freeze
Reuters, 4 April 2017

"Britain’s North Sea oil and gas industry was a net drain on the UK’s public finances for the first time last year, as the slump in the oil price hit company profits. The sector received £396m, net of tax payments, from the government in 2016 compared with a contribution to the exchequer of £381m the previous year, according to analysis by energy specialist Carbon Brief. As recently as 2011, the industry’s contribution to the government’s coffers amounted to more than £10bn. “The sector is no longer the cash cow chancellors have come to expect over the past several decades,” said Carbon Brief’s policy editor, Simon Evans.  The oil price, which was as high at $114 (£91) a barrel in 2014, fell to below $30 last year as a supply glut coincided with with falling demand as the global economy stuttered. Attempts by oil producers at Opec to curtail output have only had limited success, not helped by an upturn in US shale production, and Brent crude has only recovered to around $53. Evans said: “If [companies] are operating at a loss in the current year, they can claim a rebate on tax paid in previous years. This latter factor is likely to have been quite significant, given oil prices crashed to $30 by early 2016, only rising towards $50 by later in the year. [At these levels] they were probably operating at a loss and reclaiming tax.” Firms can also claim rebates on the cost of decommissioning rigs, pipelines and other infrastructure as some of the largest North Sea fields come to the end of their lives. Although these are probably not significant yet, with decommissioning of Brent only beginning this year, the Oil and Gas Authority has estimated that the clean-up could cost £47bn between now and 2050. Another study said the cost could be as high as £75bn. In total, the oil and gas sector has contributed about £190bn in tax revenues since the 1960s, not adjusted for inflation. But the future outlook is uncertain, given the costs of decommissioning and the fluctuations in the oil price. In March 2016 the Office for Budget Responsibility forecast that the sector would receive a net payment of £1bn a year for the next five years from UK taxpayers. However with the recovery in oil prices, last month, the OBR predicted the sector would in fact contribute £4.5bn over the five-year period."
North Sea oil and gas industry cost UK taxpayer £396m in 2016
Guardian, 4 April 2017

"European and Israeli governments gave their support on Monday to moving forward with a Mediterranean pipeline project to carry natural gas from Israel to Europe, setting a target date of 2025 for completion. The planned 2,000 km (1,248 mile) pipeline aims to link gas fields off the coasts of Israel and Cyprus with Greece and possibly Italy, at a cost of up to 6 billion euros ($6.4 billion). "This is an ambitious project, which as the Commission, we clearly support, as it will have a high value in terms of security of supply and diversification targets," said European Climate and Energy Commissioner Miguel Arias Canete. Israel has discovered more than 900 billion cubic metres (bcm) of gas offshore, with some studies pointing to another 2,200 bcm waiting to be tapped. Along with the European market, it is exploring options to export to Turkey, Egypt and Jordan. Cyprus' Aphrodite natural gas field holds an additional 128 bcm, and Cypriot waters are expected to hold more reserves. After a meeting in Tel Aviv between energy ministers from Israel, Cyprus, Greece and Italy, Canete told reporters he believed the project would "meet all relevant requirements" to make financial commitment possible. Israeli Energy Minister Yuval Steinitz said the pipeline could be completed in 2025. "But we will try to speed up and to shorten the timetable," he said."
Mediterranean gas pipeline could be built by 2025
Reuters, 3 April 2017

"Confirmation that the EU Commission has dropped its opposition to Nord Stream 2 – the giant gas pipeline Russia is building through the Baltic to supply natural gas directly to Germany – effectively ends whatever doubts previously existed about the project. More importantly, it also means Russia has won the energy war, which has been raging around the issue of Russian gas supplies to Europe over the last decade and a half. Nord Stream 2 is the second undersea gas pipeline directly linking Russia to Germany.  It comes after Nord Stream 1, which was laid down in the late 2000s and completed in 2011, coming on stream in 2012. The story of the export by Russia of gas to Europe is extraordinarily tangled and is scarcely ever discussed properly.  This is unfortunate because in my opinion it is the single most important reason for the collapse in relations between Russia and the West since Putin came to power in 1999. Following the collapse of the USSR in 1991 there was a general assumption in the West that Russia would become the major source of oil and gas for the European economy. This went together with an assumption that Russia’s vast oil and gas fields would be developed and exploited by Western energy companies in much the same way that those companies had developed oil and gas fields in other places. This was the period of the so-called “dash for gas”, with Europe’s coal industry – highly polluting and with a notoriously truculent and politicised workforce – being deliberately closed down in anticipation of a vast flow to Europe of cheap Russian gas. It never quite happened that way.  Even during the Yeltsin era resistance in Russia to the country ‘opening up’ its oil and gas fields to unrestricted development and exploitation by Western energy companies proved sufficiently strong to prevent it happening. Following the change of government in Russia in 1999, with Vladimir Putin emerging as Russia’s leader, first as Prime Minister and then as President, the possibility of Russia ‘opening up’ its oil and gas fields to unrestricted development and exploitation by Western energy companies was finally and conclusively ruled out. Putin at the time of his appointment was already known as someone who believed in the importance of Russia retaining control of its energy resources.  Indeed Putin had actually written a doctoral thesis on the subject (a partial translation can be found here), which since his emergence as Russia’s leader (and especially after the Yukos affair) has been the target of hostile commentary (see for example here).  Almost certainly the fact Putin was known to believe that Russia should retain control of its energy resources was one of the most important reasons so many people within the Russian leadership in 1999 backed him for Russia’s President. Though the bitter hostility of the West to Putin has many causes, the anger caused by his role in closing Russia’s vast oil and gas fields to unrestricted development and exploitation by Western energy companies is in my opinion unquestionably one of the most important, and one that consistently gets underestimated. Suffice to say that all the allegations that Putin is corrupt and a billionaire have their origins in stories which circulated in the early 2000s that the “real” reason Putin wanted to prevent Western energy companies from exploiting Russia’s energy wealth was because he wanted to keep this wealth for himself.  In this way action which Putin took for patriotic reasons could be misrepresented as done for selfish ones.  It is no coincidence that some of the very earliest claims made about Putin and his billions centred on false allegations that he owns hidden shares in Gazprom, Russia’s giant gas monopoly exporter, and that he is its actual owner. This is not to say that Putin opposes all investment by Western oil and gas companies in Russia’s energy sector.  On the contrary he not only wants such investment but he actively encourages it.  However Putin has always insisted that this investment be controlled and regulated by the Russian state, and his strong preference is that it happen through collaborative joint ventures with Russian companies, especially Rosneft. This was not what Western governments and Western energy companies had had in mind.  Their conception was for something closer to what happens in some countries in what was once called the Third World, where Western energy companies run the show, exploiting the energy wealth of these countries as they please in their own and the West’s interests.  Not for nothing were some calling Russia before Putin became its leader “Nigeria with snow”. Western oil and gas companies, as the hardheaded and pragmatic people that they are, have long since reconciled themselves to the new reality.  Companies like BP, Total and Exxon have long  shown a willingness to work with the Russians on Russia’s terms.  Indeed they have developed a genuine respect for the tough way the Russians negotiate to protect their interests and then stick by any agreements they make. The same however has not been true of the more ideological and geopolitically minded officials in the West’s governments.  The US and UK governments and the European Commission in Brussels in particular have been implacably hostile, doing everything they can to bring the Russians to heel so as to force them, in the euphemistic language they like to use, to liberalise Russia’s energy industry ‘upstream’ so as to match the liberalisation that supposedly already exists in the West’s energy market ‘downstream’. The result has been a festering energy war between the West and Russia which has gone on for years, with Gazprom – Russia’s majority state owned monopoly gas exporter – the primary target. Gazprom is regularly accused in the West of manipulating Russia’s gas exports in order to achieve Russia’s political objectives, and recently it has been the subject of legal action brought against it by the European Commission amidst allegations that it has abused its monopoly position to gain unfair commercial advantages in the European energy market. The agenda – obvious to all informed observers though never openly stated – is to force the Russians to privatise Gazprom and to break it up, ending its position as a monopoly exporter of Russian gas, and opening up Russia’s gas industry to exploitation and development by Western energy companies regulated by the European Commission in Brussels. In reality there is no evidence the Russians have ever used their energy exports to gain political advantages in Europe or anywhere else, and it would be completely counter-productive for them to try."
Russia wins energy war in Europe after EU surrenders on Nord Stream 2
The Duran, 3 April 2017

"Russia cut its crude production in March, moving closer to fulfilling its agreement with OPEC as the deadline approaches. Production of crude and condensate fell to 11.05 million barrels a day, down 1.6 percent from Russia’s post-Soviet high of 11.23 million barrels in October, according to data from the Energy Ministry’s CDU-TEK statistics unit. Russia has committed to reducing supply by as much as 300,000 barrels a day by the end of this month. Russia is the largest of the 11 non-OPEC producers cooperating with the Organization of Petroleum Exporting Countries to reduce oil supplies by a combined 1.8 million barrels a day to neutralize a global glut. Brent crude closed Friday at $52.83 a barrel, up 19 percent from its November low before the deal was announced. Five OPEC members have signaled their support for extending the six-month deal, along with non-member Oman, which also joined the agreement on output cuts reached in December. Russia needs more time to assess the market before committing to an extension, Energy Minister Alexander Novak said in an interview with Bloomberg television last week. Russia plans to hold an energy dialogue meeting with OPEC in Moscow on May 31."
OPEC Deal Pushes Russian Oil Output Down 1.6 Percent From Peak
Bloomberg, 2 April 2017

"A leaner and more cost-competitive deepwater industry is emerging from the downturn, with the most attractive projects now competing with U.S. tight oil plays. According to a recent Wood Mackenzie report, 2017 will see a noticeable pick-up in deepwater project sanctions, with three projects – Mad Dog Phase 2, Kaikias and Leviathan – already fully approved. Wood Mackenzie estimates that on average global deepwater project costs have fallen just over 20 percent since 2014. Assuming a 15 percent internal rate of return hurdle (NPV15), five billion barrels of pre-sanction deepwater reserves now breakeven at $50/boe or lower. By comparison, there are 15 billion barrels of tight oil resource in undrilled wells with breakevens of $50/boe or lower at a 15 percent hurdle rate in Wood Mackenzie's dataset. However, the playing field between tight oil and deepwater is about to get a lot more level. There is still considerable scope to drive deepwater breakevens lower through leaner development principles and improved well designs, but in tight oil cost inflation is back with a vengeance. Wood Mackenzie estimates that a further 20 percent cut in current deepwater costs would bring 15 billion barrels of pre-FID reserves into contention, on par with tight oil. The deepwater value proposition will strengthen as tight oil cost inflation returns. A 20 percent rise in tight oil costs would mean that the two resource themes effectively have the same opportunity set measured by volume in the money at $60/boe. Angus Rodger, Asia-Pacific upstream research director at Wood Mackenzie, said: "We are at last beginning to see the first signs of recovery in deepwater, driven primarily by cost reduction and portfolio high-grading. Projects in the U.S. Gulf of Mexico in particular have made significant strides, with many reducing NPV15 breakevens from above $70/boe to below $50/boe. “This is not just a result of cheaper rig day rates. Of far greater impact are the steps the industry in the Gulf of Mexico and elsewhere have taken to re-evaluate project designs and improve well performance. We are now seeing scaled-down projects emerge with less wells, more subsea tie-backs, and reduced facilities and capacities – and this all translates into lower breakevens.” The slowdown has also changed the structure of the deepwater industry. While it is slowly getting leaner, it is also getting smaller. Over 70 percent of the 45 pre-FID projects targeting sanction over the next few years are operated by just eight companies – Brazil's Petrobras and the seven majors (ExxonMobil, Chevron, Shell, BP, Total, Eni and Statoil). This is due to the exit of many independents from the sector because of either cost pressure or a re-allocation of capital to tight oil plays. In a capital-constrained world, fewer operators inevitably means less deepwater projects flowing through to sanction. Only the most cost-competitive projects and regions will attract new investment."
Deepwater Competes with Tight Oil
The Maritime Executive, 31 March 2017

"The transition from fossil fuels to renewable energy “now appears irreversible” as the cost of green power plunges, according to a new report. In The Transition Takes Hold, Clean Energy Canada said some 6.7 million people were working in the sector worldwide with one out of every 50 new jobs in the US being created by the solar industry alone. And it highlighted prediction that generation costs for large-scale solar power plants were expected to drop by a massive 57 per cent by 2025, with onshore and offshore wind expected to become 26 and 35 per cent respectively. In the report’s executive summary, Merran Smith, executive director of Clean Energy Canada, wrote: “Tipping points: those elusive moments when a technology goes mainstream. Much has been written in the debate over whether renewable energy has passed, is fast-approaching, or is still a ways from crossing that threshold. “The true tipping point will only become apparent in the rearview mirror, and it won’t be defined by a single moment or breakthrough. It will be crossed at different times, in different countries, driven by different forces.  “But the clean energy transition now appears irreversible.” She said three major electricity markets – China, India and the US – had “aggressively pursued renewable power”. “In both China and India, renewable energy offers a critical solution to the pollution choking fast-growing cities. Smog has become increasingly disruptive – socially, economically and politically –closing schools in Delhi, grounding airplanes in China and contributing to the premature deaths of millions of citizens,” Ms Smith said. “In the US, the renewable energy sector has become a major job creator: since 2009, the solar industry created one out of every 80 new jobs, and the country’s fastest-growing occupation is wind turbine technician.... The report said total investment in renewables had fallen in 2016 from a “record-setting” level in 2015. But it added that the actual amount of green electricity capacity added in 2016 had still come close to the 2015 level because it was cheaper to build."
Plunging price of renewable energy makes end of fossil fuels inevitable, says report
Independence, 30 March 2017

"Last weekend’s sunny weather was not only good for beers, barbecues and bees, but also drove solar power to break a new UK record. For the first time ever, the amount of electricity demanded by homes and businesses in the afternoon on Saturday was lower than it was in the night, because solar panels on rooftops and in fields cut demand so much. National Grid, which runs the transmission network, described the moment as a “huge milestone”. The company sees the solar power generated on the distribution networks – or local roads of the system – as reduced electricity demand. The sunshine meant that solar power produced six times more electricity than the country’s coal-fired power stations on Saturday. Continued good weather saw solar power generate significant amounts of power on Sunday and Monday too, when it was providing around 15% of electricity generation. Demand on Sunday afternoon was also lower than on Sunday night. Duncan Burt, who manages daily operations at National Grid, said: “Demand being lower in the afternoon than overnight really is turning the hard and fast rules of the past upside down. It’s another fascinating sign of the huge changes we are seeing in Britain’s energy scene.” Electricity demand usually peaks around 4pm to 6pm at this time of year, as people return home from work, with demand lower still at weekends. But the early hours of the morning are usually the quietest for the Berkshire control centre that monitors the grid, so a reversal is dramatic. Chris Goodall, the author of a recent book on how solar power is transforming energy systems, said that, counterintuitively, March is a good time for solar panels in the UK, due to the angle the sun is hitting them and because they operate better in lower temperatures. “A sunny day between the equinoxes can now produce a peak of around 9.5GW. At weekends, when demand is low, this will frequently mean solar is producing well over 25% of the UK power need. This drives coal almost completely out of the mix, as it did at the weekend, and depresses gas use,” he said. Goodall said that by weekends this summer, on windy and sunny days he expected fossil fuels could be providing as little as 15% of the UK’s power. That percentage could fall to zero in coming years as new offshore windfarms are completed, he said. The solar industry hailed the landmark last weekend, and said the government had repeatedly underestimated the technology’s potential. A spokeswoman for the Solar Trade Association said: “This milestone shows the balance of power is shifting, quite literally, away from the old centralised ‘coal-by-wire’ model into the hands of householders, businesses and communities all over the UK who want their own clean solar power.” Solar power installations grew dramatically in 2014 and 2015 (pdf), but new capacity largely collapsed in 2016 after the government axed and reduced subsidies. An independent report, commissioned by the STA, found the UK’s power network could handle four times more solar capacity than there was today without increasing costs for the grid. Other studies (pdf) have also concluded that even a significant expansion of renewable energy would impose only “relatively modest” costs to integrate into the electricity system."
UK breaks solar energy record on sunny March weekend
Guardian, 28 March 2017

"An oil exploration firm has found what is believed to be the largest undeveloped discovery on the UK Continental Shelf. Hurricane Energy said there could be one billion barrels of oil in the “Halifax” well in the Greater Lancaster Area, (GLA) 60 miles west of Shetland. The company found oil in two wells about 19 miles apart and believes they are part of the same extensive field. It hopes to begin production in 2019. Dr Robert Trice, Hurricane’s chief executive, said it was an exciting discovery, adding: “We believe that the GLA is a single hydrocarbon accumulation, making it the largest undeveloped discovery on the UK Continental Shelf. “Given the positive well results, the Halifax well has been suspended to provide the company the option to return to undertake further testing as well as provide the option to deepen the well and thereby establish a definitive oil water contact.” The discovery is significantly larger than the average find in recent years, which has been about 25 million barrels, but it is still a fifth of the size of the Forties field, which contains about five billion barrels, with around two billion already recovered."
Oil exploration firm in 'largest undeveloped discovery' on the UK Continental Shel
Telegraph, 27 March 2017

"The oil price may only be at $48, or half the level it was three years ago. But shale fracking—the business of getting oil and gas out of rocks by blasting them with water and sand—is booming once again after the crash of 2014-16. Exploration and production (E&P) companies are about to go on an investment spree. Demand is soaring for the industry’s raw materials: sand, other people’s money, roughnecks and ice-cold beer. Shale’s second coming is testament to Texan grit. But the industry’s never-say-die spirit may explain why it has done next to nothing about its dire finances. The business has burned up cash for 34 of the last 40 quarters, according to figures on the top 60 listed E&P firms collected by Bloomberg, a data provider. With the exception of airlines, Chinese state enterprises and Silicon Valley unicorns—private firms valued at more than $1bn—shale firms are on an unparalleled money-losing streak. About $11bn was torched in the latest quarter, as capital expenditures exceeded cashflows. The cash-burn rate may well rise again this year..... When oil prices halved in just 16 weeks starting in late 2014, panic hit Texas, followed—for a while—by grim austerity. The number of drilling rigs in America dropped by 68% from peak to trough. Companies slashed investment. Over 100 firms went bankrupt, defaulting on at least $70bn of debt. Shale’s retrenchment helped to stabilise the global oil price. Production in the lower 48 states (ie, excluding Alaska and Hawaii), and excluding federal waters in the Gulf of Mexico, has dropped by 15% over the past 21 months, equivalent to 1m bpd, or 1% of global output. The partial recovery in the oil price, which at one point fell as low as $26, is only one factor behind renewed enthusiasm for shale. Houston’s optimists also argue that the full geological potential of Texas’s Permian basin has only just become apparent. Some experts think it could in time produce more barrels each day than Saudi Arabia does. That has offset gloom about falling production from other shale basins, such as the Bakken formation in western North Dakota. The industry has also lifted productivity. Drilling is faster, more selective and more accurate, and leakage rates are lower. Wells are being designed to penetrate multiple layers of oil that are stacked on top of each other. But the fact that the industry makes huge accounting losses has not changed. It has burned up cash whether the oil price was at $100, as in 2014, or at about $50, as it was during the past three months. The biggest 60 firms in aggregate have used up $9bn per quarter on average for the past five years. As a result the industry has barely improved its finances despite raising $70bn of equity since 2014. Much of the new money got swallowed up by losses, so total debt remains high, at just over $200bn.... Oil bosses like to show off their newest wells in the Permian basin, which, they say, can now make internal rates of return of more than 50% over their working lives. But most firms have mediocre wells too, as well as corporate overheads, so their overall efficiency improvement has not been great. For the ten largest listed E&P firms, aggregate cash operating costs per barrel fell by $13 between 2014 and 2016; not enough to offset a $50 drop in the oil price. Because shale-energy fields run out far faster than traditional ones, firms must reinvest heavily to keep production flat....Low interest rates make it easy for shale firms to borrow, and fee-hungry banks cheer on the spectacle. But the only way that the mania will end well is if oil prices rise sharply, bailing out the industry, or if E&P firms are bought by bigger energy firms. That is possible, but companies such as Exxon and Shell are too seasoned to pay a lot for small, unprofitable firms.... The second explanation is oil executives’ belief in increased output from the Permian, and higher productivity. Most E&P firms reckon they can expand production at an annual rate of 10-20% over the next few years. But to justify their market values, and make an adequate return on their cumulative capital invested, listed E&P firms would over time need to make about $60bn of free cashflow each year. Assuming that both energy prices and capital spending stay flat, that would require them roughly to double production from current levels.... There is something heroic—and baffling—about America’s shale firms. They are the marginal producer in a cyclical industry, and that is usually an unpleasant place to be. The oil bulls of Houston have yet to prove that they can pump oil and create value at the same time."
America’s shale firms don’t give a frack about financial returns
Economist, 25 March 2017

"Trump and his new Interior Secretary Ryan Zinke, with some Senate allies, have reportedly begun exploring ways to open the U.S. Arctic to new oil and gas drilling projects. It’s part of the president’s so-called America First Energy Plan to unlock “vast untapped domestic energy reserves” from environmental protection and begin drilling. But in the Arctic, energy experts are throwing freakishly-warm-but-still-cold water on those plans. And it’s not regulations that are making Arctic drilling unappealing: It’s market forces themselves, especially crude oil prices that have spent the last two years in the doldrums.“We think there is almost no rationale for Arctic exploration,” Goldman Sachs commodity expert Michele Della Vigna said on CNBC’s Squawk BoxThursday. “Immensely complex, expensive projects like the Arctic we think can move too high on the cost curve to be economically doable,” he said.Part of the reason is the shale revolution in the United States, which undercut frontier projects like deepwater or the Arctic.“Shale is more accessible and is going to come ahead of the Arctic,” said Bud Coote of the Atlantic Council, formerly a CIA energy analyst. When oil companies like Shell did venture to the waters off Alaska several years ago, oil went for more than $100 a barrel. That made all the extra costs involved in drilling at the edge of the earth a bit more bearable. “I think it has to be back up in that range” for companies to head north again, he told Foreign Policy. Yet crude has hovered around $50 a barrel since late 2014. Big oil gave up on some $2.5 billion in drilling rights in the U.S. Arctic in 2016; expensive plays as oil prices dropped just weren’t worth the cost anymore. “High-cost frontiers,” like the Arctic “will be shunned,” energy intelligence firm Wood Mackenzie said in December last year.”
Oil Companies Cool on Arctic Drilling. Trump Wants It Anyway
Foreign Policy, 24 March 2017

"The popular claim that a surge in electric cars will hasten the arrival of peak oil demand is undermined by the data.The majority of the world’s cars will remain powered by petrol, also commonly known as gasoline, for at least the next two decades and this will drive oil demand, according to data from Facts Global Energy. With the number of passenger vehicles expected to grow to 1.8bn by 2040, the energy consultancy estimates only 10 per cent will be accounted for by electric cars and a further 20 per cent by hybrids. This might sound contentious given the hype around Tesla, the flag-bearer of electric vehicle producers, and many analysts forecasting a structural decline in oil consumption. But most research simplifies the matter, suggesting that falling battery prices are tightly correlated with electric car sales. The reality is more complex. The shift towards electric has to be supported by significant government incentives. Norway, for example, owes its success to the hundreds of millions of dollars in tax revenues diverted towards subsidies making it almost free to drive an electric car. Today it is normal for a Norwegian to buy an electric car in addition to a petrol vehicle for daily use to save money. Without such a subsidy, sales would fall, as demonstrated in Denmark last year. When the incentive was dropped in January 2016, electric car sales plunged 80 per cent from the previous year. Battery technology is improving but not as fast as necessary. Even at the $150/kWh — considered widely as the level to trigger mass production — a battery pack for an electric car with a comparable range to that of a petrol-powered car would cost tens of thousands of dollars. Cost aside, the improvement in battery effectiveness as measured by energy density is also slow. It is not possible to quickly increase the amount of distance travelled unless you add more batteries to a car, which means more weight and, in turn, a reduction in how far you can go. The love affair with the sport utility vehicles, partly driven by low oil prices, remains a problem. Last year, Ford sold six F-series light trucks in the US for every plug-in vehicle, providing solid petrol demand for the years to come. Even in China, one in every three cars sold is an SUV. With relatively low oil prices for at least the next decade, in FGE’s view, this trend will continue. Production capacity is another obstacle. Despite impressive annual growth rates, total electric car production was less than 500,000 in 2016, compared with global light vehicle production capacity of more than 70m. Tesla put just 80,000 cars on the road in 2016. Battery technology is improving but not as fast as necessary. Even at the $150/kWh — considered widely as the level to trigger mass production — a battery pack for an electric car with a comparable range to that of a petrol-powered car would cost tens of thousands of dollars. Cost aside, the improvement in battery effectiveness as measured by energy density is also slow. It is not possible to quickly increase the amount of distance travelled unless you add more batteries to a car, which means more weight and, in turn, a reduction in how far you can go."
Electric cars pose little threat to oil demand

Financial Times, 21 March 2017


"
The Permian Basin in West Texas and New Mexico is one of the hottest fields now since it’s economic to drill even in the $30 to $35 range."

In new boom, oil companies say they're not likely to go back to old ways
Dallas News, 17 March 2017

"Eleven non-OPEC oil producers that joined a global deal to reduce output to boost prices delivered 64 percent of promised cuts in February, an industry source said on Friday, still lagging the higher levels of OPEC itself. The Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers agreed to cut production by 1.8 million barrels per day (bpd) from Jan. 1 to boost prices and reduce a supply glut. On Thursday, Saudi Energy Minister Khalid Al-Falih urged better delivery from exporters that have vowed to reduce their oil supply."
Non-OPEC oil producers keep on pumping, deliver just 64% of pledged output cuts in Feb, source says
Reuters, 17 March 2017

An international power grid is gradually developing, using power interconnectors to trade surplus energy across national electricity networks, allowing big wind power producers in northern Europe, for example, to trade electricity with large solar energy generators in southern Europe.The UK has already plugged into the network through interconnectors to Ireland, Belgium, the Netherlands and France, and there is a proposal for a highly ambitious project to connect Britain to Iceland’s abundant supply of geothermal and hydroelectric power using a subsea cable around 1,000km long.This international power grid gives more reliable supplies, helping to smooth out the intermittent power produced from renewables such as wind and solar energy. It also gives Britain more secure power sources as old nuclear and out-of-favour coal plants are shut down.”
Europe's renewable energy revolution
Guardian, 16 March 2017

"The executive director of the International Energy Agency (IEA), Fatih Birol, urged upstream oil industry leaders at IHS CERAWeek on 7 March in Houston to invest now in finding and developing more oil supplies to prevent a shortage from arising after 2020. He appeared with Mohammed Barkindo, secretary general of OPEC, in an interview format in which they responded to questions by CERAWeek Chairman Daniel Yergin. Birol highlighted three points from the latest IEA global energy market report that was released the previous day. “Number one, no peak in oil demand,” he said. “Oil demand is growing in a strong, in a healthy way. Maybe the growth is slowing down, but we don’t see any peak. “Number two, we believe—since we are here in Houston, I have to say that—we are witnessing the start of a second wave of shale oil growth coming, we think, in the next five years at 1.4 million barrels per day. “But, number three,” he continued, “even that is not enough to make the IEA feel that we should be relaxed in the next two or three years because we see that there may be a strong supply gap as a result of lack of investments.” Shale oil production from the United States has again begun to increase, and new oil production from Canada and Brazil has added to global supplies. However, Birol said that much of the additional production has come from projects that were sanctioned before oil prices collapsed. Looking ahead, Birol said the industry will need to offset natural field declines while meeting growing worldwide demand in a global production system with diminishing spare capacity. “We are advocating that the investments need to be made and need to be made without delay,” he said. “If I had to underline one key word here, it would be investment for the upstream.” The market growth in electric cars is an important argument in recent reports by some organizations—including some oil companies—that have projected peak oil demand in the next couple of decades. Birol noted that a record number of more than 1 million electric cars were sold globally last year but that it was still less than 1% of new car sales.  "Global petroleum consumption will keep growing for the foreseeable future despite tougher legislation to control vehicle emissions, the International Energy Agency said Monday, lending its voice to a debate over when demand for oil might peak. The forecast of the IEA—a Paris-based energy adviser to industrialized countries—marked a change in tone from its prediction three years ago that oil-demand growth may slow as soon as the end of this decade.Even if the number were to jump to 50% of new car sales tomorrow and remain there for 20 years, “which is a very heroic assumption,” Birol said, “we will still see global oil demand increasing for the reason that the oil demand growth is driven by trucks, jets, and [the] petrochemical industry. The Asian trucks alone are responsible for one-third of the global oil demand growth, where you have barely any substitutes [for] oil products there. …. “With the decline in the existing fields,” he continued, “our message to the oil industry here in Houston is invest, invest, and invest.”"
CERAWeek: IEA Chief to Upstream Industry: ‘Invest, Invest, and Invest’
Journal of Petroleum Technology, 15 March 2017

"The world's fossil fuel industry has joined with environmentalists in an unholy alliance to push for carbon capture, demanding radical changes in public policy to kick-start the technology. Leaders of the largest oil, gas, and coal companies lined up at the IHS CERAWeek summit in Houston, pledging a muscular drive to slash the costs of extracting CO2 from hydro-carbon energy. The goal is some sort of 'Manhattan Project'  to safeguard the long-term survival of their companies. "We can't just keep our heads in the sand," said Bob Dudley from BP."
Big oil embraces 'green' carbon capture with zeal of the converted
Telegraph, 12 March 2017

"Some 1.2 billion barrels of oil have been discovered in Alaska, marking the biggest onshore discovery in the U.S. in three decades. The massive find of conventional oil on state land could bring relief to budget pains in Alaska brought on by slumping production in the state and the crash in oil prices. The new discovery was made in just the past few days in Alaska’s North Slope, which was previously viewed as an aging oil basin. Spanish oil giant Repsol and its privately-held U.S. partner Armstrong Energy announced the find on Thursday, predicting production could begin as soon as 2021 and lead to as much as 120,000 barrels of output per day. The oil resources lie in a well, called Horseshoe, that’s 75% owned by Denver-based Armstrong. Repsol owns the rest of this well."
Massive oil discovery in Alaska is biggest onshore find in 30 years
Fox, 12 March 2017

"Last week, photographs of wind turbines were once again juxtaposed with headlines about rising energy prices. The cause on this occasion was no less pre-eminent a body than a Lords committee, comprising former chancellor Norman Lamont and other heavyweight peers. “To reduce carbon emissions, governments have subsidised renewables, passing on the cost to consumers in their electricity bills. The average domestic electricity bill was 58% higher in 2016 than it was in 2003,” the economic affairs committee said in its report on energy policy. Anyone reading it would have been forgiven for directing their anger at windfarms when increases in their energy bills land, as half of the big six energy suppliers are planning. Yet the peers’ report admits that “rising international prices for fossil fuels” were the main driver for energy bills going up over the period. Renewable energy subsidies on bills – the “green crap”, as former PM David Cameron reportedly called them – do add a cost. But it’s small, at 10% of an average dual-fuel bill, as the peers themselves note."
Windfarms aren’t the real reason energy bills are rising. Blame the free market
Guardian, 26 February 2017

"Ex-Soviet Azerbaijan is on track to send gas to western Europe by the end of the decade, but is having to import supplies to use at home, compounding economic hardship that prompted protests last year. The country contains one of the world's biggest gas fields, Shah Deniz on the Caspian Sea, but it has presold the next stage of output, due by 2020, to Greece, Italy, Turkey and other states keen to reduce their dependence on Russian gas. At the end of last year, as construction of the pipeline to deliver the gas passed the halfway mark, Azerbaijan's state energy company SOCAR said it had begun importing gas from Iran. Two industry sources told Reuters the gas actually came from Turkmenistan, another ex-Soviet republic with prices more affordable for the Azeris, but that supplies had stalled due to a pricing dispute between Iran and Turkmenistan. Pricing had also stalled talks on possible imports of Russian gas to Azerbaijan to make up the shortfall, they said. Officials have expressed optimism that projected increases in production from other Azeri gas fields will fill the gap in due course, citing Umid, Bulla Deniz and Absheron, which will be developed under a deal with Total signed in November. In the meantime, the issue poses a dilemma for Azerbaijan's longtime president Ilham Aliyev, who faces a sharp slide in the manat currency due to the slump in global oil prices and a balancing act between Russia and the West.... Officials and experts declined to predict whether the country would face the same gas shortfall this year. Almost all the associated gas from Azeri-Chirag-Guneshli, the major oilfield operated by an international consortium led by BP, was reinjected to support declining oil production in 2016, SOCAR officials said. The second stage of Shah Deniz is set to produce 16 bcm per year from 2020 but Ilham Shaban, an independent energy analyst, said there was "no chance" Baku would try to renegotiate the deal under which it was presold. He saw the situation easing in 2018 with less gas used to support declining oil output and the reopening of a platform at Guneshli closed by an accident last year."
Azerbaijan, future gas supplier to Europe, faces shortfall at home
Reuters, 24 February 2017


"Using wood pellets to generate low-carbon electricity is a flawed policy that is speeding up not slowing down climate warming. That's according to a new study which says wood is not carbon neutral and emissions from pellets are higher than coal. Subsidies for biomass should be immediately reviewed, the author says. But the industry rejected the report saying that wood energy cuts carbon significantly compared to fossil fuels. While much of the discussion has focussed on wind and solar power, across Europe the biggest source of green energy is biomass. It supplies around 65% of renewable power - usually electricity generated from burning wood pellets. EU Governments, under pressure to meet tough carbon cutting targets, have been encouraging electricity producers to use more of this form of energy by providing substantial subsidies for biomass burning. However this new assessment from Chatham House suggests that this policy is deeply flawed when it comes to cutting CO2. According to the author, current regulations do not count the emissions from the burning of wood at all, assuming that they are balanced by the planting of new trees. Duncan Brack, the independent environmental policy analyst who wrote the report, says this idea is not credible. "It doesn't make sense," said Mr Brack, who is also a former special adviser at the UK Department of Energy and Climate Change. "The fact that forests have grown over the previous 20 or 100 years means they are storing large amounts of carbon, you can't pretend it doesn't make an impact on the atmosphere if you cut them down and burn them." "You could fix them in wood products or in furniture or you could burn them, but the impact on the climate is very different." Mr Brack says the assumption of carbon neutrality misses out on some crucial issues, including the fact that young trees planted as replacements absorb and store less carbon than the ones that have been burned. Another major problem is that under UN climate rules, emissions from trees are only counted when they are harvested."
Most wood energy schemes are a 'disaster' for climate change
BBC, 23 February 2017

"The Southern Gas Corridor will start pumping gas from the Caspian Sea to Europe by 2020, its backers said on Thursday, despite the risk of delays to this option for reducing dependence on Russia. Politicians and ministers meeting in Baku backed the $40 billion, 3,500-kilometer chain of pipelines, a step toward curbing Russia’s one-third share of Europe’s natural gas market. The Trans Adriatic Pipeline (TAP) is the project’s end piece, joining up with the Trans Anatolian Pipeline at the Turkish border, then crossing Greece and Albania to reach Italy. But the slow pace of work in Italy’s Puglia region and growing concern over Azerbaijan’s ability to honor its supply commitments – it faces domestic shortfalls – have knocked confidence in the project."
Azeri gas pipeline to start pumping gas by 2020
Reuters, 24 February 2017

"U.S. oil major Exxon Mobil Corp has revised down its proved crude reserves by 3.3 billion barrels of oil equivalent as a result of low oil prices throughout 2016, a company filing showed on Wednesday. The de-booking includes the entire 3.5 billion barrels of bitumen reserves at the Kearl oil sands project in northern Alberta, operated by Imperial Oil, a Calgary-based company in which Exxon has a majority share. It comes a day after ConocoPhillips Corp de-booked more than a billion barrels of its oil sands bitumen reserves, citing weak global crude prices. In total Exxon has 20 billion barrels of oil equivalent at year-end 2016, the Securities Exchange Commission filing said. The reduction reflects the number of barrels of oil equivalent that were now deemed uneconomic due to lower crude prices. In addition to the Kearl volumes, another 800 million barrels of oil equivalent in North America failed to qualify as proved reserves. However the reductions were partly offset by Exxon adding 1 billion barrels of new oil and gas reserves in the United States, Kazakhstan, Papua New Guinea, Indonesia and Norway."
Exxon revises down oil and gas reserves by 3.3 billion barrels
CNBC, 23 February 2017

"Russia has significantly boosted its involvement in Libya by signing a potentially major contract to help redevelop Libyan oilfields. The head of the Libyan national oil corporation (NOC) signed a cooperation agreement with Rosneft, the Russian oil giant, which NOC said on Tuesday “lays the groundwork for investment by Rosneft in Libya’s oil sector”. “The agreement envisages the establishment of a joint working committee of the two partners to evaluate opportunities in a variety of sectors, including exploration and production,” an NOC statement said. Russia had extensive investments in Libya before the fall of Muammar Gaddafi in 2011, and is eager to recover as many of them as possible in a country still plagued by violent conflict but keen to boost oil production with the help of foreign companies. In recent months Vladimir Putin has become increasingly embroiled in the country as western-backed efforts to end the long-running political impasse have failed to soothe disagreements between factions in the east and the UN-recognised government of national accord (GNA) in Tripoli. Russia is increasingly seen as a key player in persuading Khalifa Haftar, the head of the self-styled Libyan National Army based in the east of the country, to compromise over a future role in a new consensus government. Haftar’s forces control most of Libya’s oil resources. Efforts to secure a new political future for Libya have stalled after the failure of an Egyptian-led process, which saw Haftar travel to Cairo but refuse to meet the leader of the GNA, Fayez al-Sarraj. Despite the snub, Sarraj has agreed to changes in the composition of his government but, in a sign of the country’s fragility, he survived an assassination attempt on Monday in Tripoli along with two of his senior aides. Haftar has sought Moscow’s help to battle Islamic State, but European diplomats fear he could join what has been described as Putin’s axis of secular authoritarians in the Middle East alongside the Syrian president, Bashar al-Assad, and the Egyptian president, Abdel Fatah al-Sisi. Libya is one of a handful of Opec members who have been spared the need to reduce crude oil production in the first half of this year. Opec and 11 independent oil producers have agreed to cut output by a total of 1.2m barrels per day. However, Iran, Nigeria and Libya were permitted not to cap and even to increase oil production due to their complicated political environments. Italy’s Eni and France’s Total are working in Libya and Schlumberger , the world’s largest oilfield services company, resumed operations in the country about three months ago."
Russia increases involvement in Libya by signing oil deal
Guardian, 21 February 2017

"The race to bring  natural gas from America to Britain will not be won by US shale producers but by shipments from the Dominican Republic and Peru. The first cargoes of liquefied natural gas (LNG) from South America are due to arrive in the UK before the end of the month, beating the highly anticipated flood of US shale into British homes and power plants. The US shale boom has so far failed to bring forward a new source of gas for the UK which is increasingly reliant on imports as North Sea supplies decline and storage facilities continue to falter. To date the only US shale to cross the Atlantic into UK ports was imported by Ineos in the form of ethane, which is extracted from natural gas and used as a feedstock in petrochemicals plants rather than for heating or electricity generation. Ed Cox, an LNG specialist at ICIS, said the first natural gas from America will arrive this week from the Dominican Republic and will be followed shortly afterwards by a cargo from Peru towards the end of the month."
UK in line for American gas imports - but not from US shale
Telegraph, 19 February 2017

"Shale wildcatters pushed ahead on the biggest surge in U.S. oil drilling since 2012 as the explorers take advantage of prices above $50 for more than two months. Rigs targeting crude in the U.S. rose by 6 to 597 this week, the highest total since October 2015, according to Baker Hughes Inc. data reported Friday. Drillers have added 72 rigs since 2017 began, the best start in five years. The expansion is spreading in Texas and Oklahoma, with the Granite Wash play leading the increase this time around. Producers are cashing in on a more stable oil market, with prices swinging between $50 and $55 a barrel as the Organization of Petroleum Exporting Countries and 11 other nations cut back production to help reduce global supplies. Saudi Arabia told OPEC it reduced its oil output by the most in eight years, according to the group’s monthly report released Monday....Drilling is booming in a few shale plays -- led by the Permian Basin in West Texas and New Mexico and the Scoop and Stack formations in Oklahoma -- as they offer good returns at a $50 oil price. Producers including Diamondback Energy Inc. and Occidental Petroleum Corp. remain focused on the Permian, while Marathon Oil Corp. intends to double down on its assets in Oklahoma."
Shale Drilling Is on a Roll as OPEC Cuts Keep Oil Above $50

Bloomberg, 17 February 2017

"A financially viable nuclear power station looks increasingly like a mirage. Even the eye-watering guarantee from the UK taxpayer for Hinkley Point C is not enough to cover the risk that building it will bankrupt EDF. Toshiba’s woes have claimed the scalp of its chairman. Hitachi is signalling that its project in Anglesey needs government backing to proceed. It’s telling that after 60 years of mostly successful operation, commercial viability still eludes the nuclear power industry. Perhaps we have been lucky to have avoided serious accidents and the decommissioning costs were hugely underestimated — but the combination of ever-rising safety demands and cheap hydrocarbons has destroyed its economics. Appealing for fresh state aid looks like a desperate last throw of the nuclear dice. If an industry cannot finance its own projects after half a century of development, it may be time to try another industry. Fortunately, other industries are available. The cheapest and quickest fix is to build gas-fired power stations, to tap into worldwide abundance and increasingly diverse supply, even before domestic fracking gets going in the UK. Unfortunately, the artificial barriers imposed by today’s energy policy are preventing this subsidy-free solution. For the longer term, the price of solar energy continues to fall and smart meters that really are smart will start managing the demand side of the equation. Even offshore wind looks a better bet than nuclear as battery technology evolves."
Dash for gas — and move on from nuclear power folly
Financial Times, 17 February 2017

"Discoveries of new oil and gas fields have dropped to a fresh 60-year low, as companies put a brake on exploration and large fields have become harder to find. High quality global journalism requires investment. There were only 174 oil and gas discoveries worldwide last year, compared with an average of 400-500 a year up until 2013, according to IHS Markit, the research group. The slowdown in exploration success shows that the world is likely to become increasingly reliant on “unconventional” resources such as US shale oil and gas to meet demand for energy in future decades. The typical time from discovery to production is five to seven years, so a shortfall in oil and gas discoveries now implies tighter supplies in the next decade. Discoveries hit a six-decade low in 2015, and then dropped again last year to about 8.2bn barrels equivalent of oil and gas..... Most frontier exploration is now offshore, where a single well can cost $150m, and the success rate for “wildcat” wells has been about one in five. .... The discoveries of new fields compare to 190bn barrels equivalent of oil and gas that have been added to the estimated resource base of North America over the past 10 years, thanks to advances in technology that have made production possible from shale and other similarly challenging “tight” rocks. A shale well onshore can cost $4m-$10m and be brought into production in weeks, as opposed to five or more years for deepwater discoveries. Bob Fryklund of IHS Markit said: “We’re solving the problem through tight rocks.”"
Oil and gas discoveries dry up to lowest total for 60 years
Financial Times, 12 February 2017

"Half of Scotland's heat, transport and electricity energy needs will be met by renewables by 2030 under plans published by the Scottish government. The draft Scottish Energy Strategy sets out a vision for the transition away from oil and gas dependency and towards a low-carbon economy by 2050. Only 13% of Scotland's total final energy consumption came from renewable sources in 2013. Environmental groups had been campaigning for the 50% target. A public consultation on the proposals will run until the end of May."
Scotland sets 50% renewable energy target
BBC Online, 24 January 2017


"Renewable energy sources made up nearly nine-tenths of new power added to Europe’s electricity grids last year, in a sign of the continent’s rapid shift away from fossil fuels. But industry leaders said they were worried about the lack of political support beyond 2020, when binding EU renewable energy targets end. Of the 24.5GW of new capacity built across the EU in 2016, 21.1GW – or 86% – was from wind, solar, biomass and hydro, eclipsing the previous high-water mark of 79% in 2014. For the first time windfarms accounted for more than half of the capacity installed, the data from trade body WindEurope showed. Wind power overtook coal to become the EU’s second largest form of power capacity after gas, though due to the technology’s intermittent nature, coal still meets more of the bloc’s electricity demand."
Almost 90% of new power in Europe from renewable sources in 2016
Guardian, 9 February 2017

"Pulitzer prize–winning oil analyst Daniel Yergin appears to be feeling more confident that American drillers can boost output in 2017. "We're expecting this year to see U.S. production probably increase from beginning to end by more than 500,000 barrels a day," the vice chairman of IHS Markit told CNBC's "Squawk Box" on Thursday. As recently as December, Yergin said U.S. drillers could add 300,000 to 500,000 barrels a day if U.S. crude prices stay between $50 and $55 a barrel. "
Daniel Yergin expects US oil drillers to raise output by more than 500,000 barrels a day this year
CNBC,  9 February 2017

"The European Union is on track to meet its renewable energy targets but the UK is one of only three member states to become more dependent on imported energy in the last decade. A report from the European commission boasts of good progress towards the goal of using 20% of final energy consumption from renewable sources by 2020. As of 2014, the share of renewables reached 16% of the gross final energy consumption of the EU."
EU on track to meet renewable energy targets – but UK lags behind
Guardian, 1 February 2017

"Shell has sold a large part of its North Sea oil fields for $3.8bn (£3bn) to a company headed by Linda Cook, who left the Anglo-Dutch group more than seven years ago after missing out on the top job. American-born Cook, nicknamed the first lady of oil and gas by the City, had been at Shell for 29 years and was latterly in charge of the group’s gas and renewables businesses. She was a frontrunner to become chief executive, but instead Peter Voser was appointed to the post and Cook resigned.....The assets sold by Shell accounted for more than half of the company’s North Sea oil production last year and includes fields gained after Shell acquired gas giant BG Group for £47bn....Oil majors have been reducing their footprint in the relatively high cost North Sea in favour of lower cost production elsewhere. Earlier this month, BP sold a 25% stake in the Magnus field to Enquest, another UK independent oil and gas company."
Shell sells more than half of its North Sea oil and gas fields for $3.8b
Guardian, 31 January 2017

"More than a month after Russia announced one of its biggest privatizations since the 1990s, selling a 19.5 percent stake in its giant oil company Rosneft, it still isn't possible to determine from public records the full identities of those who bought it. The stake was sold for 10.2 billion euros to a Singapore investment vehicle that Rosneft said was a 50/50 joint venture between Qatar and the Swiss oil trading firm Glencore. Unveiling the deal at a televised meeting with Rosneft's boss Igor Sechin on Dec. 7, President Vladimir Putin called it a sign of international faith in Russia, despite U.S. and EU financial sanctions on Russian firms including Rosneft. "It is the largest privatization deal, the largest sale and acquisition in the global oil and gas sector in 2016," Putin said. It was also one of the biggest transfers of state property into private hands since the early post-Soviet years, when allies of President Boris Yeltsin took control of state firms and became billionaires overnight. But important facts about the deal either have not been disclosed, cannot be determined solely from public records, or appear to contradict the straightforward official account of the stake being split 50/50 by Glencore and the Qataris."
How Russia sold its oil jewel -- without saying who bought i
Reuters, 29 January 2017

"Saudi Arabia has kept its promise. It has cut oil output by 486,000 barrels a day, in line with the OPEC agreement the Kingdom pulled together last October, helping oil stabilize above $50 per barrel. That’s music in the ears of American frackers, who have been bringing oil rigs back to life at a feverish rate—111 in the last two weeks alone; countering Saudi oil cuts, and keeping oil prices in the $50 to $60 range, for now. Still, Saudi Arabia’s output cuts are just the beginning of a trend that is expected to last for months and years to come, irrespective of what American frackers do. There are good reasons for that.To begin with, the Kingdom has learned a lesson the hard way: it cannot end the American fracking revolution by engaging in a price war with American frackers -- which have demonstrated an exceptional ability to survive even at extremely low prices. Moreover, Riyadh’s leaders do not want to antagonize the new Washington administration by declaring another war on American frackers."
Saudi Arabia Will Continue To Cut Oil Output For Months And Years To Come
Forbes, 29 January 2017

"The market climbed from around $54 a barrel late last week to $56.42, almost 5.5pc higher than the price before Opec agreed the historic supply deal in November. By midday the oil price had retreated to $55.60 after new data showing the extent of the US shale industry recovery reignited market jitters. US oil and gas flows were decimated by the two year oil rout due to higher costs for rig operators in shale-rich pockets of the States than in major producers in the Middle East and Russia. As oil prices have doubled over the last year from lows of less than $28 a barrel to over $50 many shale producers have been able to restart flows, threatening the price rises which have allowed their revival in the first place....The deal to cut almost 3 million barrels of oil a day from the global market through a series of quotas for different oil producing nations has been agreed for the six months of the year, but could be extended for longer. Whether to continue to hold output at lower levels will be decided by oil ministers at a meeting of major producers in May."
US shale surge stalls weekly oil price gains
Telegraph, 27 January 2017

"There could by a shortage of oil supply by 2020 if investment flows continue at their current rate, Saudi Arabia's energy minister Khalid A. Al-Falih has warned.Al-Falih told CNBC that prices today are "comfortable" but he worries about future investment."I believe if the investment flows that we have seen the last two or three years continue in the next two or three years, we will have a shortage of oil supply by 2020."We know, from what we have seen in the last couple of years, that prices around the current level and below are not attracting enough investment. We know the level of decline, natural decline, that existing production is undergoing, and we know that demand is picking up at, you know, 1.2 to 1.5 million barrels a year."So between increase in demand and natural decline, we need millions of barrels every year to be brought to the market, which requires massive investment." Earlier this week, Al-Falih told reporters in the United Arab Emirates that oil prices would rebalance by the end of the first half of 2017, causing markets to trend upwards.However, speaking to CNBC today at the World Economic Forum, he said that, while a return to former highs of $100 per barrel is unlikely, prices are yet to reach the right "equilibrium".Saudi Arabia and other OPEC countries recently agreed a deal to better manage their supply and demand levels by reducing production by almost 4.5 percent"
Oil shortage could hit by 2020 if investment doesn't pick up: Saudi Energy Minister
CNBC, 20 January 2017

"US President Donald Trump has pledged to unlock a $US50 trillion ($66 trillion) shale oil and gas revolution and boost development of low emissions coal technology for electricity. The Energy First plan was outlined as the top priority in President Trump’s first action statement after being sworn into office. The statement committed Trump to scrapping the Obama government’s Climate Action Plan but did not mention renewable energy or whether the US would remain in the Paris agreement. It was a full endorsement of the future use of fossil fuels. The Trump plan mirrors debate in Australia over energy security. The federal government wants to overturn state moratoria on gas exploration. And Malcolm Turnbull has said Australia should be a world leader in the development and deployment of low emissions coal technology and carbon capture and storage. Trump’s ambitions are to break US reliance on supplies of oil from the Middle East. Over the weekend Mr Trump said boosting shale oil and gas production would increase wages by more than $30 billion over the next seven years. Mr Trump’s White House team will begin the rollback of Barack Obama’s climate action plan by striking down a controversial climate metric called the Social Cost of Carbon. The social cost formula was used to justify the cost of the Obama administration’s environmental regulations. But the formula has been criticised as opaque and open to manipulation. Mr Trump is also expected to move soon on issuing the executive order to end the carbon metric, while issuing a second order to remove regulatory roadblocks for approving trans-border pipeline projects such as the Keystone XL project to connect Canada’s oil sands to US refiners in the Gulf of Mexico. The Energy First statement said energy was an essential part of American life and a staple of the world economy. “The Trump administration is committed to energy policies that lower costs for hardworking Americans and maximise the use of American resources, freeing us from dependence on foreign oil,” the statement said. “President Trump is committed to eliminating harmful and unnecessary policies such as the Climate Action Plan and the Waters of the US rule,” the statement said."
Donald Trump vows to unlock $66 trillion shale oil and gas revolution
Australian, 23 January 2017

"A two-year downturn in oil prices pushed companies to begin exploring in lower cost oil fields, which became even cheaper to investigate as service companies slashed their own costs. Oil prices are now expected to rise from around $55 a barrel to between $60-$65 by the end of the year, if a global agreement to limit supply struck at the end of last year holds firm."
North Sea explorers focus on African fields in quest for low-cost oi
Telegraph, 17 January 2017

"BP is bracing for a revolution in electric car use that could halve the demand for oil from vehicles, helping to fan the flames of a fresh battle for market share among the world’s oil producers. The oil major has downplayed the potential of electric cars in dampening demand in the past, but admitted for the first time in its annual report on future energy trends that the effect will be amplified by a boom in car sharing and pooling options, offered by firms such as Uber. BP has almost doubled the number of electric vehicles it expects on the world’s roads in 2035 from 57m in last year’s report to 100m. In addition to the soaring popularity of low-cost electric taxis and falling costs of electric battery storage more people in emerging economies are expected to become car-owners for the first time, and will be buying electric or high efficiency vehicles. The electric car boom could cut projected oil demand from vehicles from almost 25m barrels of oil a day to 15m barrels and a quicker than expected uptake of new, energy efficient technologies due to government support could spur an even greater shift away from oil use, BP's chief economist Spencer Dale said. He added that BP is also preparing to study the future impact of artificial technology and 3D printing which could dramatically reduce the energy used in manufacturing and shipping parts. Oil demand is still expected to continue to grow over the coming decades, but BP’s economists have warned that demand growth is slowing and by 2035 will be dwarfed by an abundance of available supply. The amount oil which can be recovered has doubled over the past 35 years, meaning that for every barrel of oil consumed two more are discovered. BP estimates that shift to cleaner energy means that by 2050 demand will be less than half of the oil which is available.As a result large swathes of the world’s oil will remain untouched, meaning large-scale producers are less likely to ration their production out over the coming years in favour of a race to ensure their assets aren’t left stranded.... BP is increasingly shifting its activities away from oil production towards its interests in gas in response to the changes. Typically BP’s focus is 60pc oil and 40pc gas but this trend flipped last year as the major focused more on gas for the first time. BP boss Bob Dudley warned that the energy industry “more than ever” needs to adapt to changing energy needs."
BP braces for electric car revolution as oil demand growth slows
Telegraph, 25 January 2017

"Half of Scotland's heat, transport and electricity energy needs will be met by renewables by 2030 under plans published by the Scottish government.The draft Scottish Energy Strategy sets out a vision for the transition away from oil and gas dependency and towards a low-carbon economy by 2050.Only 13% of Scotland's total final energy consumption came from renewable sources in 2013. Environmental groups had been campaigning for the 50% target. A public consultation on the proposals will run until the end of May"Scotland sets 50% renewable energy target."
Scotland sets 50% renewable energy target
BBC, 24 January 2017

"Long-term gas demand in Europe means immediate investment decisions are needed to build new infrastructure, Alexander Medvedev, a deputy chief executive officer at Russian gas giant Gazprom, said on Tuesday. Last year, Russia supplied Europe and Turkey with a record 179.3 billion cubic metres (bcm) of gas as consumers capitalised on low gas prices, which follow the prices of oil with a lag of six to nine months. Its share of the EU gas market rose to an all-time high of 34 percent from 31 percent in 2015. Russia plans to boost supplies further and remain the dominant player on the European gas market. "In order to cater for the growth (in Europe's gas demand) tomorrow, large-scale investment decisions are required already today. This is a stimulus for us to invest in new fields and gas pipelines," Medvedev told a European Gas conference in Vienna. "According to a consensus forecast of the world's leading energy agencies, thanks to new spheres of growth, Europe will need some additional 90 bcm of gas by 2025 from the current level of supply and more than 120 bcm by 2035," he said. Gazprom has been pushing for the Nord Stream-2 underwater gas pipeline project, which would double the existing annual capacity of the current two pipelines from 55 bcm. The project has faced resistance from some European countries, notably from Poland, which want to cut their reliance on energy supplies from Moscow amid political tensions."
Russia's Gazprom calls for urgent gas investment decisions in Europe
Reuters, 24 January 2017

"The Permian Basin of western Texas and eastern New Mexico has become the hottest region in the US shale oil industry, for drilling, for production and for dealmaking....The best parts of the Permian are now among the lowest-cost sources of new oil anywhere in the world, according to Wood Mackenzie, the research company. There are some large packages of drilling rights available, and companies with the financial strength to make acquisitions have been taking full advantage. In 2012 there were 21 merger and acquisition deals involving Permian assets. Last year there were 66, representing about a third of the total number of transactions in the US onshore oil and gas sector.The Permian region has weathered the downturn the best. Since April 2015, oil production has dropped 19 per cent and 37 per cent respectively in the shale areas of Bakken in North Dakota and Eagle Ford in south Texas, according to the US Energy Information Administration. However, in the Permian it has risen 14 per cent....One of the motives for acquisitions has been for producers to secure larger patches of contiguous acreage, so they can drill more efficiently. From a single “pad”, horizontal wells can be drilled like the spokes of a wheel, cutting down the time spent moving rigs. Companies have also been experimenting with tighter spacing of the clusters of perforations punched through the steel well casing and into the shale rock to crack it. Pioneer Natural Resources, one of the leading producers in the Permian, said last year that it had gone from spacing perforation clusters 60ft apart to having them 30ft apart, and was experimenting with 15ft.  The value of Permian assets has been transformed by advances in production technology. Following the initial breakthroughs in hydraulic fracturing, horizontal drilling and seismic surveying that first made oil production from shale viable in 2009-10, companies have continued to innovate to boost output and cut costs."
Wood Mackenzie thinks that on average the Permian deals announced in 2016 need oil at $67 per barrel to break even
‘Permania’ grips the US shale oil industry
Financial Times, 19 January 2017

"An embryonic industry trying to harness the UK’s waves to generate clean electricity has been dealt a significant blow by a warning that the technology is too costly. Wave power devices being tested in Cornwall and at Orkney are 10 times more expensive than other sources of low carbon power and need a radical rethink, the Energy Technologies Institute (ETI) said. The energy research body added that even if costs were cut aggressively, wave power would be unlikely to make a significant contribution to the UK’s energy demands in coming decades."
UK wave power far too costly, warns energy research body
Guardian, 16 January 2017

"Russia's Gazprom (GAZP.MM) has acknowledged for the first time a threat to its dominant position in European gas market from an expected influx of liquefied natural (LNG) gas produced in the United States under Donald Trump's administration. Gazprom, which supplies a third of Europe's needs, had previously dismissed possible rivalry from the LNG exports from the United States, saying the costs of transportation via the Atlantic Ocean make it unfeasible. Trump has picked former Texas Governor Rick Perry to head the Department of Energy. The country's oil and gas industry welcomed his appointment and called on him to make increasing exports of U.S. natural gas a "top priority". Trump, who takes office on Jan. 20, has made energy a central part of his agenda, has promised to revive oil and gas drilling and coal mining as president by cutting back on federal regulation. "We see the main source of rivalry from the United States, this is obvious. We don't know what the first steps of the new American administration will be, be judging from its previous statements, it is possible that they will boost their production," Gazprom's Deputy Chief Executive Valery Golubev told a conference in Moscow. Analysts have speculated the Kremlin-controlled company could retain its dominance in Europe as U.S. gas shippers take advantage of shortages in Asia and Latin America to plug those gaps, but Golubev conceded U.S. plans may have an impact."
Russia acknowledges threat from Trump's energy policy on EU gas market
Reuters, 13 January 2017

"While the overall recovery in the global oil and gas industry is still sluggish, capital spending in North America will rise 27 per cent this year, according to Barclays, based on a survey of more than 200 companies. The projections suggest that the larger US exploration and production companies will raise spending on drilling and completing wells most sharply, while spending by the biggest international oil groups will increase more slowly. Barclays’ research shows how US shale oil producers, which were the fastest to react by cutting activity when crude prices began to tumble in 2014, are also likely to be the quickest to recover...Higher crude prices, and steep falls in costs, mean some will be able to drill and complete more wells even without additional debt and equity financing. Allen Gilmer of Drillinginfo, an oil and gas data and analysis company, said the industry’s lower cost base pointed to structurally lower prices than before the crash of 2014. “We always thought about $70 per barrel was the global clearing price of oil. That’s still the case in a lot of places, but not in the US,” he said. “As painful as this has been for US producers, the industry is emerging stronger for it.”"
US oil and gas industry spending set to surge
Financial Times, 10 January 2017

"A record number of oil and gas companies became insolvent last year, according to a new study which environmentalists said highlighted the need for the UK to prepare for the move to a low-carbon economy. They warned that the loss of jobs in the sector when it becomes clear that fossil fuels can no longer be burned because of the effect on global warming would lead to “desolate communities” unless people were retrained to work in the “new industries of the 21st century”. The study by accountancy firm Moore Stephens found 16 oil and gas companies went insolvent last year, compared to none at all in 2012. After oil prices fell from about $120 a barrel to under $50 for most of the past year, smaller firms in the sector were unable to cope, Moore Stephens found."
Record number of oil and gas firms go bust as renewable energy revolution begins to bite
Independent, 3 January 2017








".... 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