The UK Could Give Up Russian Gas Sooner Than Thought (28 April 2022): By Irina Slav - In the week when Gazprom finally did what Europe was afraid it would do and started cutting off gas supplies to countries unwilling to pay for them in rubles, Russian gas reliance has really hit the spotlight. And at least one country in Europe believes it can eliminate its dependence on it sooner than previously believed. Bloomberg reported earlier this week that the UK could stop importing Russian natural gas before this year’s end. Citing an unnamed source familiar with the government’s plans, the report noted that Russian gas exports to the UK were already a slim enough portion of total gas imports to make the phase-out possible. (Source: Oil Price)
Carbon Capture Capacity Is Soaring But We Still Need More (27 April 2022): By Rystad Energy - As the energy transition quickens, global carbon capture, utilization, and storage (CCUS) projects are on track to pull more than 550 million tonnes of CO2 out of the atmosphere every year by 2030, Rystad Energy research shows. This capacity growth represents a more than tenfold increase over today’s 45 million tonnes per annum (tpa) of CO2 captured, as the drive to decarbonize gathers pace. Project announcements surged in 2021, with the current pipeline containing more than 200 developments, three times more than are currently in operation globally. The snowball effect is only set to build in the coming years as countries and companies rush to meet 2030 net-zero targets by reducing and offsetting their carbon footprint. (Source: Oil Price)
Russia Could Lose Half Of Its Revenue If EU Agrees On A Full Oil Embargo (26 April 2022): By Irina Slav - The oil embargo that the European Union is planning to impose on Russia has become the news of the month. And it has not been finalized yet, with little likelihood that it will be finalized anytime soon—at least in the form Ukraine wants it. Because the EU gets a quarter of its oil from Russia. The European Union, along with the United States, unleashed a barrage of sanctions against Russia following its invasion of Ukraine. While Russia's oil and gas industry has been an obvious target for sanctions, just as it was in Iran and Venezuela, so far, the only action taken was by the U.S. and the UK, which both announced bans on Russian oil imports—neither of which was to take effect immediately. (Source: Oil Price)
Is Global Oil Production Growing Fast Enough? (25 April 2022): By Gail Tverberg - Media outlets tend to make it sound as if all our economic problems are temporary problems, related to Russia’s invasion of Ukraine. In fact, world crude oil production has been falling behind needed levels since 2019. This problem, by itself, encourages the world economy to contract in unexpected ways, including in the form of economic lockdowns and aggression between countries. This crude oil shortfall seems likely to become greater in the years ahead, pushing the world economy toward conflict and the elimination of inefficient players. (Source: Oil Price)
High LNG Prices Are Here To Stay (24 April 2022): By Tsvetana Paraskova - In just one year, the global market of liquefied natural gas (LNG) turned from a buyer’s market to a seller’s market, with LNG suppliers commanding a tight market as buyers scramble to secure gas from providers other than Russia. The European Union’s target to diversify gas supplies, speed up the roll-out of renewable gases, and replace gas in heating and power generation in hopes of cutting EU demand for Russian gas by two-thirds before the end of the year has created a global race for spot LNG supply. In this race for LNG supplies, Europe is currently winning over Asia, the traditional outlet for most of the global spot supply. (Source: Oil Price)
China Is Choosing Energy Security Over Its Climate Goals (21 April 2022): By Haley Zaremba - In 2020, China alone was responsible for more than a third of the world’s wind and solar capacity installations. In terms of volume, Beijing is blowing away the competition when it comes to the green energy transition. China has also tried to position itself at the cutting edge of the global clean energy sector and decarbonization effort through extremely ambitious climate goals, including pledging to hit peak carbon emissions by 2030 and complete carbon neutrality by 2060. Despite these hugely ambitious targets and China’s prodigious buildout of renewable energy capacity and infrastructure, however, China has been unable to let go of what is by far its biggest obstacle to achieving these climate pledges – its massive consumption of and dependence upon coal. Not only has China been unable to wean itself off of coal, the country’s production and consumption of the dirtiest fossil fuel has only increased. In fact, just last month, China’s daily coal output hit an all-time high. (Source: Oil Price)
New Tech Is Accelerating The Wind Energy Revolution (20 April 2022): By Felicity Bradstock - Wind energy production is steadily increasing, with several innovative projects being established around the world. While some countries continue to invest in traditional wind developments others look for innovative new projects, as wind energy and other renewables appear set to overtake fossil fuels in several parts of the world within the next decade. Wind energy production overtook coal and nuclear output in the U.S. in March, according to the Energy Information Administration. It was the first time that wind energy output surpassed both that of coal and nuclear power on the same day. Although natural gas continues to be the main electricity generation source. (Source: Oil Price)
Saudi Economic Growth To Double This Year On High Oil Prices (19 April 2022): By Charles Kennedy - High oil prices will push Saudi Arabia’s economy into high-growth mode, more than doubling this year, according to the International Monetary Fund (IMF), which raised its growth forecast for the Kingdom on Tuesday. The IMF is targeting 7.6% growth for the Saudi economy this year, raising its forecast by 2.8%. While much of this was attributed to multi-year-high oil prices, the IMF has also noted growth and expected further growth in non-oil revenues. “We raised our estimates of the growth rate of the Saudi economy by 2.8 percentage points, which reflects the increase in oil production in accordance with the OPEC+ agreement, in conjunction with the more non-oil output growth exceeding expectations,” the IMF said in its World Economic Outlook report. (Source: Oil Price)
Putin, Saudi Prince Vow To Continue OPEC+ Cooperation (18 April 2022): By Tsvetana Paraskova - Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman discussed this weekend their countries’ cooperation in the OPEC+ oil production pact in their second telephone call since Russia’s invasion of Ukraine. Russia is a key partner to OPEC’s largest producer and de facto leader, Saudi Arabia, in the OPEC+ alliance, which has been working for years to manage oil supply to the market. And it looks like Russia will continue to be such, despite Putin’s invasion of Ukraine. Since the start of the war in Ukraine, OPEC and the OPEC+ group have not publicly commented on the invasion, limiting themselves to saying that the market is currently run by “geopolitical events” or “the geopolitical tensions in Eastern Europe,” not by fundamentals. (Source: Oil Price)
“Invisible Energy Highways” Could Usher In A New Era Of Shared Power (16 April 2022): By Felicity Bradstock - Undersea electricity cables could become increasingly common as governments drive their energy strategies towards renewables. As countries develop their wind and solar power industries, there will be a greater incentive to build undersea cables that can promote power-sharing across regions. The first of many new major cables is set to be built between the U.K. and Germany at an anticipated cost of $1.95 billion. The NeuConnect project will allow for 1.4 GW of electricity to go to and from the two countries through subsea cables covering a distance of over 450 miles. The project has been dubbed an “invisible energy highway”, allowing for power-sharing across the U.K. and Germany. The cable will run from the Isle of Grain in Kent in England with the German region of Wilhelmshaven, crossing British, Dutch, and German waters. Once constructed, it could provide power for up to 1.5 million homes. (Source: Oil Price)
Will We See Another Oil Price Breakout Soon? (14 April 2022): By Alex Kimani - With Russia's invasion of Ukraine looking likely to transition into an extended war of attrition in the east of Ukraine, oil supply jitters in the market have cooled off considerably. Also, it appears that recent SPR releases--casually dismissed by many experts as a mere band-aid--are having the desired effect. The oil price bull run has hit the skids after President Biden announced that the U.S. would release 180M barrels from the Strategic Petroleum Reserve over the next six months in the largest release in SPR history, while threatening to impose penalties on domestic drillers for failing to use federal oil permits. The International Energy Agency's 31 member nations plan to release 120 million barrels from their emergency oil reserves, including 60 million barrels from a previously announced drawdown from U.S. stockpiles, marking the second coordinated release of emergency oil from the IEA in just over a month. (Source: Oil Price)
Major Oil Traders Cut Russian Crude Purchases Starting Next Month (13 April 2022): By Julianne Geiger - Major crude trading houses are set to slash their purchases of Russian crude oil and crude products starting mid-May, anonymous Reuters sources said on Thursday. The move that will see a curtailment of Russian crude purchases comes as traders steer clear of any actions that would violate European sanctions against Russia that go into effect on May 15, although a ban on Russian crude oil does not currently exist. Still, traders are planning to cut their purchases of the pariah-spawned crude as they try to follow EU sanctions that restrict Russia’s financial activities. (Source: Oil Price)
America’s Hydrogen Hubs Could Mint New Billionaires (12 April 2022): By Alex Kimani - After years of failed efforts in Washington to overhaul physical infrastructure, last year, President Joe Biden signed the more than $1 trillion bipartisan infrastructure bill into law, unlocking funds for transportation, broadband, and utilities. Buried deep into the historic plan was a provision for $9.5 billion in funding to build at least four hydrogen hubs--places where the gas can be produced and used in a self-reinforcing cycle. A hydrogen economy that runs factories and power plants on the fuel may be years away; however, that has not stopped multiple U.S. states from scrambling for Biden's hydrogen bonanza, never mind the fact that many have not even worked out the details of how they intend to realize their hydrogen dream. (Source: Oil Price)
The Biggest Hurdle In Nuclear Power Adoption (11 April 2022): By Felicity Bradstock - As countries look for alternative energy production for greater energy security, concerns remain around the disposal of nuclear waste as governments establish new nuclear energy strategies for the coming decades. At present, there is no one accepted ideal nuclear waste disposal method, meaning that different countries have varying levels of success in getting rid of their waste safely, with scientists and governments around the world continuing to look for the best long-term solution. Around 350,000 tonnes of nuclear waste from decades past is sitting in temporary storage containers, some of which are gradually eroding, while politicians continue to discuss a longer-term solution. In the U.S., the government has long talked about storing this waste below the Yucca Mountain in Nevada. But, due to strong opposition from the state, this plan has never come to fruition. Various other plans have come and gone, bringing the U.S. government back to square one each time. (Source: Oil Price)
OPEC+ Alliance Put To The Test Amid Ukraine War (10 April 2022): By ZeroHedge - Earlier this month, Syrian President Bashar al-Assad was welcomed in Dubai, in the United Arab Emirates. To the dismay of the United States, the red carpet was rolled out for him, on the anniversary of the uprising against Assad, amid war mongering by his Russian ally in Ukraine. Just before, British PM Boris Johnson has been on a visit himself to both the United Arab Emirates and Saudi Arabia, not only to promote Global Britain, but also in a bid to convince both Gulf states to increase oil production. Johnson was acting as an emissary from the West, after the Gulf countries’ leaders declined to take a call from U.S. President Joe Biden to build international support for Ukraine and contain a surge in oil prices, signaling their unhappiness with the perceived Western lack of support for their security. (Source: Oil Price)
Charge Over Exit From Russia (7 April 2022): By ZeroHedge - Western oil majors have quit Russia altogether, taking billions of dollars in vague impairment charges on Russian energy assets, and now comes the hard math. This morning energy giant Shell Plc said that it will write off between $4 and $5 billion in assets in a first-quarter 2022 outlook. Thursday's announcement provides investors with an early glimpse at the costs of fracturing global supply chains for oil majors following Shell's decision to exit Russia after the invasion of Ukraine. "For the first quarter 2022 results, the post-tax impact from impairment of non-current assets and additional charges (e.g. write-downs of receivable, expected credit losses, and onerous contracts) relating to Russia activities are expected to be $4 to $5 billion," Shell said. (Source: Oil Price)
UK Has “All Options On The Table” In Push For Energy Independence (6 April 2022): By Tsvetana Paraskova - The UK could reconsider its 2019 moratorium on fracking as it is leaving “all options on the table” to boost its domestic oil and gas supply and reduce dependence on foreign energy in the wake of Russia’s invasion of Ukraine. At the end of 2019, the UK government ended its support for fracking following a report from the authority supervising the oil and gas industry that “it is not possible with current technology to accurately predict the probability of tremors associated with fracking.” Cuadrilla Resources, the company operating Britain’s only two shale gas wells at Preston New Road near Blackpool in Lancashire, had to stop drilling after the government announced the moratorium on fracking “until compelling new evidence is provided.” (Source: Oil Price)
What’s Next For America’s Strategic Petroleum Reserve? (5 April 2022): By Robert Rapier - I have often noted that presidents have few ways to impact gasoline prices in the short term. However, one of the ways they can make a short-term impact is to release oil from the nation’s Strategic Petroleum Reserve (SPR). The U.S. created the SPR in 1975 following the 1973–1974 oil embargo, to protect against future oil supply disruptions. Although it is supposed to be used for severe supply disruptions, politicians have historically used it to try to stem rising gasoline prices — especially in election years. Thus, in this election year — and with gasoline prices on the rise — one of my 2022 predictions was “The Biden Administration will announce additional releases of oil from the SPR ahead of the midterm elections.” (Source: Oil Price)
Energy Affordability: The Issue Everyone Is Ignoring (4 April 2020): By Irina Slav - The U.S.-EU deal for the import of an additional 15 billion cubic meters of liquefied natural gas this year made headlines earlier this month, with both sides praising their own political prowess and quick action. What nobody talked about was how much this LNG would cost. Meanwhile, another piece of news that grabbed headlines was the House hearing of half a dozen U.S. and international oil executives on allegations of price-gouging and not helping regular Americans "to relieve pain at the pump, instead lining their pockets with one hand while sitting on the other," according to two legislators. These two events are indicative of something that no politician in power would want to admit openly but is nevertheless happening: the cost of living in Europe and the United States is rising. And the root cause of this is not the war in Ukraine. It's high energy costs. (Source: Oil Price)
High Natural Gas Prices Could Lift Green Hydrogen Investment (3 April 2022): By Tsvetana Paraskova - As the price of natural gas is soaring globally amid a scarcity of supply and Russian threats to cut off flows to Europe unless buyers start paying in rubles, the economics of the so-called blue hydrogen have deteriorated. Green hydrogen made of electrolysis from renewable energy is now the preferred choice of future hydrogen supply as governments target net-zero emissions and a reduction of reliance on Russian gas. Scalability and costs are still issues to be overcome in green hydrogen production. Yet, Europe’s dependence on natural gas supply from Russia and Putin’s war in Ukraine have prompted the European Union and many of its member states to embrace green hydrogen development, preferring it to the so-called blue variant made of natural gas with carbon capture and storage (CCS). (Source: Oil Price)