Europe’s Unforeseen Renewables Problem (31 January 2021): By Irina Slav - Earlier this month, something happened in Europe. It didn’t get as much media attention as the EU’s massive funding plans for its energy transition, but it was arguably as important, if not more. A fault occurred at a substation in Croatia and caused an overload in parts of the grid, which spread beyond the country’s borders. This created a domino effect that caused a blackout and prompted electricity supply reductions as far as France and Italy. The problem was dealt with, but it’s only a matter of time before more problems like this occur—the reason: the rise of renewables in the energy mix. Bloomberg reported on the incident citing several sources from Europe’s utility sector. While no one would directly blame the blackout and the increased risk of more blackouts on renewables, it is evident that Europe’s change in the energy mix is raising this risk. (Source: Oil Price)
Electricity Market Set For A Major Rebound (30 January 2021): By Leonard Hyman & William Tilles - It’s hard to believe, but electricity stocks used to be revered by investors the way FANGMAN stocks are today. To be more precise, they were bid up to lofty valuations, as were the Nifty Fifty group of US equities which included industrial giants such as the Generals— Motors and Electric, IBM, Kodak and Westinghouse. During this period, as the US’s industrial hegemony was ending, domestic electricity output grew twice as fast as the economy. But the Middle East Oil Embargo in 1973 slammed the brakes on that growth, slowing it to the same rate as GDP. Then, in the past decade, US electricity growth flattened to zero. From 2000 to 2020 real GDP grew 40% while electricity generation increased only 7%. Starting from 2008’s Great Recession real GDP rose 22% while electricity output was virtually flat. Electric utilities were once considered part of a flashy group of growth stocks by investors. They carried an unusual combination of relatively high dividend yields coupled with high earnings growth rates. We believe this relatively boring, out of favor group of stocks may surprise investors again with unexpectedly strong earnings growth. And unlike certain trends that take us by surprise, this is one that we can see coming fairly clearly. (Source: Oil Price)
EIA: Global Oil Consumption Crashed By 9% In 2020 (29 January 2021): By Tsvetana Paraskova - Due to the coronavirus restrictions and lockdowns, global consumption of petroleum and other liquid fuels crashed by 9 percent to 92.2 million barrels per day (bpd) in 2020, the U.S. Energy Information Administration (EIA) said on Friday, nothing this was the largest drop in EIA’s series dating back to 1980. The world will return to more normal consumer behavior this year, and a continued recovery in economies is set to contribute to rising oil consumption in 2021 as the year progresses. EIA expects in its January Short-Term Energy Outlook that global liquid fuels consumption will grow by 5.6 million bpd this year, or by 6 percent compared to 2020, and rise by another 3.3 million bpd in 2022. The United States will contribute with a 1.4 million bpd consumption increase to the growth in 2021, the EIA forecasts. Oil consumption will rise this year thanks to both economic growth and a return to more normal travel patterns by the middle of the year, which will also have a small effect on oil consumption growth in 2022. (Source: Oil Price)
Saudi Arabia: “We Will Be Another Germany In Renewables” (28 January 2021): By Tsvetana Paraskova - Saudi Arabia will work to become the next Germany in the renewable energy sector, the Kingdom’s Energy Minister Prince Abdulaziz bin Salman said at an event on Wednesday. “We will be another Germany when it comes to renewables,” Prince Abdulaziz bin Salman said at the Future Investment Initiative (FII) conference held in Riyadh. “We will be pioneering,” the energy minister added. Saudi Arabia aims to replace the use of petroleum liquids for power generation with solar energy and gas-fired capacity, Prince Abdulaziz bin Salman was quoted as saying earlier this week. As part of the program ‘Hydrocarbon Demand Sustainability’, the world’s largest oil exporter will aim to replace petroleum—which it still burns for electricity—with solar power energy, he added. (Source: Oil Price)
Amazon Is Leading The Big Tech Green Energy Push (27 January 2021): By Tsvetana Paraskova - Amazon was the world’s largest corporate buyer of renewable energy generation in 2020 and became the top buyer of any corporation to date in a year in which global corporate power purchase agreements hit a record high, new research by BloombergNEF (BNEF) showed. Despite the pandemic, the uncertainty over the U.S. policies ahead of the presidential election, and the economic recession, last year set a record for corporate power purchase agreements (PPAs) which totaled 23.7 gigawatts (GW) globally, up by 18 percent from 20.1 GW in 2019, BloombergNEF has found. In 2018, the corporate PPAs totaled just 13.6 GW. Amazon was the top corporate buyer of long-term agreements for renewable energy, announcing 35 separate clean energy PPAs in 2020, for a combined capacity of 5.1 GW. The corporate purchases in 2020 took Amazon’s total clean energy purchases to 7.5 GW, which helped it jump ahead of Google and Facebook, which have bought 6.6 GW and 5.9 GW renewable energy to date, respectively. (Source: Oil Price)
Shell Buys UK’s Top EV Charging Network (25 January 2015): By Tsvetana Paraskova - Shell is buying ubitricity, the European provider of on-street charging for electric vehicles (EVs) that has the largest public EV charging network in the UK, the supermajor said on Monday. The expansion of Shell’s EV charging offering is part of the oil major’s support for low-carbon transport by offering electric vehicle drivers public on-street charge points integrated into existing street infrastructure, the company said. That’s not the first deal for Shell in the EV charging business. As early as 2017, Shell signed a deal to buy one of Europe’s biggest EVs charging networks, Netherlands-based NewMotion. Shell has also partnered with a consortium involving some of Europe’s largest carmakers to build a network of EV fast-charging stations across the continent. The acquisition of ubitricity, founded in Berlin, is the first major EV charging deal since Shell announced in April 2020 its ambition to become a net-zero emissions energy business by 2050 at the latest, joining other majors such as BP and Eni in unveiling plans to curb carbon emissions. (Source: Oil Price)
Oil Major BP Significantly Downsizes Oil Exploration Division (25 January 2021): By Tsvetana Paraskova – As part of its ambition to reduce oil and gas production and raise investments in clean energy, BP has been cutting staffing levels at its oil and gas exploration division since Bernard Looney became chief executive at the UK-based supermajor a year ago. The upstream division has seen the number of scientists, geologists, and engineers drop to fewer than 100 from 700 just a few years ago, after Looney—who was chief executive of BP’s Upstream before taking over as group CEO in February 2020—announced a new direction for the company, Reuters reported on Monday, quoting former and current employees at BP. According to those sources, hundreds of people from the oil and gas exploration teams from Houston to London have left the division in recent months. Some of them have been transferred to other divisions focused on clean energy, but others have been laid off. (Source: Oil Price)
U.S. Proved Oil Reserves Remain Flat, Natural Gas Reserves Decline (22 January 2021): By Charles Kennedy - Lower crude oil and natural gas prices reversed in 2019 a two-year trend of record high proved reserves in the United States as operators revised down their total proved reserves estimates, the Energy Information Administration (EIA) said on Friday. The annual report from the EIA showed that proved reserves of crude oil and lease condensate remained basically the same in 2019 as in 2018, with a very slight increase of 0.1 percent. Proved reserves of natural gas, on the other hand, dropped by 1.9 percent, according to EIA’s data through the end of 2019. In that year, crude oil prices were generally lower than oil prices in 2018, with the price of the U.S. benchmark, West Texas Intermediate (WTI) crude oil, averaging $57 per barrel, down by $7 a barrel compared to 2018. “Lower crude oil prices in 2019 caused many operators to revise their total proved reserves estimates downward even though proved reserves from extensions and discoveries increased slightly,” the EIA said. (Source: Oil Price)
How Climate Change Increased The Need For Fossil Fuels In 2021 (23 January 2021): By Rystad Energy - As the climate is changing, the Arctic is warming four times faster than global averages, causing the circumpolar Jetstream to weaken and move southwards. Consequently, freezing cold air masses – known as the Polar Vortex – descend to more densely populated areas in the earth’s Northern Hemisphere, where humans have no other immediate choice but to increase fossil fuel consumption to keep warm. Analyzing global temperatures and related weather phenomena, Rystad Energy believes that the increased frequency of this weather pattern – which has caused a rise in demand for coal, liquefied natural gas (LNG), electricity and even a bit of oil – is here to stay. Recent eye-popping price spikes and their spread between summer and winter will widen, especially for gas, both natural and liquefied. With European and Asian markets hungry for natural gas and LNG, storage levels are getting depleted. And with the Polar Vortex expected to create another cold snap in February, a perfect demand storm will likely cause a spike in global demand and contribute to a 4% rise in LNG consumption this year, reaching about 377 million tonnes (MT) in 2021 versus 363 MT in 2020. (Source: Oil Price)
The Real Reason Why Solar Stocks Are Selling Off (19 January 2021): By Alex Kimani - The shift from high-carbon fuels to clean energy is in full swing, and solar stocks have been enjoying their moment in the sun. The market’s only pure-play solar ETF, Solar Invesco ETF (NYSEARCA:TAN), has posted triple-digit gains over the past year thanks to Wall Street growing more bullish on clean energy after the Democrats clinched a decisive win in the Georgia Senate runoff. Unfortunately, the solar sector has begun to let off some steam with investors beginning to confront harsh reality. Leading solar names have been selling off heavily, with First Solar Inc. (NASDAQ:FSLR) down 8.8% on Monday; SolarEdge Technologies (NASDAQ:SEDG) has cratered 15.9%, Enphase Energy Inc. (NASDAQ:ENPH) is down 8.7%, SunPower Corp. (NASDAQ:SPWR) has lost 8.9% while Canadian Solar Inc. (NASDAQ:CSIQ) has dropped 7.9%. TAN ETF is down 10.2% over the past five trading days in what is shaping up as a major correction for the solar sector. (Source: Oil Price)
IEA Slashes Oil Demand Outlook For 2021 (19 January 2021): By Irina Slav - The International Energy Agency cut its crude oil demand recovery outlook for this year by 300,000 bpd to 5.5 million bpd in its latest Oil Market Report, out today. The authority said it expected demand to average 96.6 million bpd in 2021, after crashing by an all-time high of 8.8 million bpd in 2020 under the weight of the Covid-19 pandemic. On the supply side, the IEA forecast a recovery of over 1 million bpd, most of it to come from OPEC members after last year supply fell by 6.6 million bpd. It also sounded a positive note, leaving space for further improvement in supply during the second half of the year, with the rate of improvement reaching 1.2 million bpd. The IEA attributed its expectations for demand and supply growth to the rollout of Covid-19 vaccines across much of the world. However, the agency noted demand rebound will be slow because of the renewed or extended lockdowns in some countries, which are weighing on fuel demand. (Source: Oil Price)
Rosneft Starts Work On Mega Arctic Oil Project (18 January 2021): By Vanand Meliksetian - Russia is a country of superlatives. Its energy sector is one of the most important in the world where the country shares the number one position interchangeably with the U.S. and Saudi Arabia. The story of Russian oil and gas goes back to the early days of the industry in the 19th century. This means that relentless exploration and production are required to maintain output. Rosneft's masterplan is the Vostok project that will become the backbone of Russia's oil industry. CEO Igor Sechin announced the implementation in November 2020 during a working meeting with President Putin. In the early days, when Tsars ruled the Russian Empire, most of the oil was produced on the shores of the Caspian around the city of Baku in what is now Azerbaijan. As an integral part of the empire, the oil industry lay the foundations for the country's massive industrialization. Decades later, the industry's next step would become the development of the Volga-Ural basin in Western Siberia. The slow but steady depletion of the resources in the region necessitates visionary planning. Vostok could be the result. (Source: Oil Price)
Are Your Netflix Binges Killing The Planet? (17 January 2021): By Alex Kimani - The use of streaming video has grown exponentially around the world, with pandemic-driven shelter-in-place mandates helping to supersize the industry. The live streaming industry recorded nearly 100% growth at the height of the pandemic, with viewers consuming 3.93 billion hours of content in April 2020 compared to 1.97 billion hours in April 2019. The rapid growth of these services has frequently been linked to increased energy use and carbon emissions from data centers, network infrastructure and user devices, with the lion’s share of the blame falling on video streaming king,Netflix Inc.(NASDAQ:NFLX). You’ve probably heard rather outrageous claims such as watching 30 minutes of Netflix generates as much carbon emissions [1.6 kg of CO2] as driving almost 4 miles thrown around as facts by reputable sites such as the New York Post, CBC, DW, Yahoo, Gizmodo, BigThink and Phys.org. That means your Tiger King binge created as much carbon emissions as if you were to have driven over 1200 miles. (Source: Oil Price)
German Tech Giant Places Major Bet On Green Hydrogen (16 January 2021): By Irina Slav - Hydrogen is turning into the next media star after solar and wind. In its latest claim to fame, two spinoffs of German tech conglomerate Siemens are joining forces to advance green hydrogen technology by building wind-to-hydrogen systems to help decarbonize the global economy. Green hydrogen is touted as a solution to many climate change problems: the element can be an energy carrier, it can be used to store energy and it can be used in fuel cells to power vehicles. Green hydrogen is a particularly attractive option because its production comes from hydrolyzing water using electricity produced by renewable systems, meaning it has a much lower carbon footprint than gas- or coal-sourced hydrogen. Siemens Gamesa and Siemens Energy have therefore joined a growing group of green hydrogen proponents, many of whom see it as the ultimate solution to the planet’s pollution problem. The two plan to invest $120 million over five years to develop a fully integrated offshore wind-to-hydrogen system that involves a turbine with an electrolysis system integrated into it, the companies said in a press release this week. They are aiming for a full-scale demonstration of their pilot by 2025 or 2026. (Source: Oil Price)
OPEC Oil Revenues Could Slump To 18-Year Low (15 January 2021): By Irina Slav - OPEC’s crude oil export revenues for 2020 could decline to $323 billion, the U.S. Energy Information Administration said in a new report, noting that this would be the lowest revenue level in 18 years. This would compare to $595 billion in oil revenues for 2019, the authority added. Unsurprisingly, the biggest chunk of OPEC’s collective oil revenues for 2020 will be for Saudi Arabia as the biggest exporter in the cartel. For 2019, Saudi Arabia’s oil revenues totaled $202 billion—more than a third of the total—but last year’s revenues will be hit by the pandemic like those of its fellow OPEC exporters. Like other forecasters, the EIA warned the lower oil revenues will have a strong negative impact on OPEC economies. “The decrease in revenues could be detrimental to member countries’ fiscal budgets, which rely heavily on oil sales to import goods, fund social programs, and support public services,” the authority said. (Source: Oil Price)
OPEC Sees Oil Demand Rise To 95.9 Million Bpd In 2021 (14 January 2021): By Tsvetana Paraskova - Global oil demand is set to rise by 5.9 million barrels per day (bpd) in 2021 from an estimated average demand of 90 million bpd in 2020, OPEC said on Thursday, leaving its 2021 demand growth forecast unchanged from last month but warning that the pandemic is still skewing risks to the downside. Developed economies will see oil demand rise by 2.6 million bpd this year, driven by North America, while emerging markets—led by China and India—will see oil demand increase by 3.3 million bpd, OPEC said in its Monthly Oil Market Report (MOMR). In total, world oil demand is expected to average 95.9 million bpd in 2021—still nearly 5 million bpd below the pre-crisis levels from 2019. “Oil demand is not projected to fully recover from the 2020 slump,” said OPEC, which estimates 2020 demand to have crashed by 9.8 million bpd to average 90 million bpd. (Source: Oil Price)
EIA Lowers 2021 Global Oil Demand Growth Estimate (13 January 2021): By Tsvetana Paraskova - Global oil demand is expected to grow by 5.6 million barrels per day (bpd) in 2021 compared to the 2020 low of 92.2 million bpd, the U.S. Energy Information Administration (EIA) said in its latest estimate, with the growth forecast now around 200,000 bpd lower compared to last month’s outlook. In its January Short-Term Energy Outlook (STEO), the EIA expects global consumption of petroleum and liquid fuels to average 97.77 million bpd this year, down from the December STEO estimate of 98 million bpd. For 2020, global oil demand averaged 92.2 million bpd, down by 9.0 million bpd from 2019. The 2020 estimate is also lower compared to EIA’s December forecast of 92.38 million bpd. According to EIA’s latest estimates published in the January STEO this week, global oil demand will return to the pre-pandemic level in the second half of 2022, with the average 2022 demand at 101.08 million bpd, which would be growth of 3.3 million bpd compared to this year. (Source: Oil Price)
Google Looks To Turn Data Centers Into Energy Storage (12 January 2021): By Haley Zaremba - When most people imagine the internet, the last thing that comes to mind is huge, on-the-ground facilities and thousands of miles of wires across the ocean floor, but even the digital age depends entirely on material things. Even the cloud, whose very name suggests an ethereal, floating datasphere free from servers, towers, and wires, is housed in data centers around the world. And those data centers require energy--a LOT of energy. As more and more people get connected to the internet around the world and spend increasingly lengthy amounts of time online, that means that the internet’s energy and ecological footprints are massive and growing. Especially now, when so many people around the world are working online all day before retiring to a relaxing evening online before sleeping next to a phone that is still awake and connected to the internet to receive all those emails and notifications while you dream, the energy usage of the data warehouses that run the internet has become astronomical. “Google estimates that each search emits roughly 0.2 grams of CO2 into the atmosphere, due to the energy it takes to power the cables, routers, and servers that make Google work,” Wired reported back in 2018. “Watching or uploading a video to YouTube is worse for the environment: 1 gram of carbon for every 10 minutes of viewing.” All of those clicks really add up: internet companies emit as much carbon dioxide as the airline industry--and that was before COVID-19 grounded most planes. (Source: Oil Price)
Renewable Energy Stocks See Record Investments (11 January 2021): By Haley Zaremba - As a global community, we’re known for a long time now that it’s imperative for the worldwide economy to decarbonize rapidly and in earnest if we have any chance of avoiding catastrophic climate change. But as clear as this message has been and as loud as the pleading from the scientific community and elite international consortiums like The Intergovernmental Panel on Climate Change (IPCC) has gotten in recent years, global leaders and the private sector have been excruciatingly slow to lead the charge toward a more climate-friendly world. It turns out that maybe all we needed was a global apocalypse to finally catalyze the global clean energy transition. The novel coronavirus dealt such a sweeping interruption to the economic status quo and the monumental momentum of business as usual that, for the first time since the industrial revolution, the world was able to take a breather and make a real attempt to realign our industrial and economic trajectory. (Source: Oil Price)
Should You Follow Buffett's Energy Strategy Into 2021? (9 January 2021): By Alex Kimani - For decades, Berkshire Hathaway (NYSE:BRK.B) chairman and CEO Warren Buffett maintained a pretty conservative approach to investing, only buying shares of businesses he was well acquainted with. As such, Buffett avoided tech and energy stocks before finally pulling the trigger on PetroChina Co. (NYSE:PTR) in 2002 and Apple Inc. (NASDAQ:AAPL) in 2011. The Oracle's foray into energy and tech initially paid off after he realized a tidy $3.5B profit on PetroChina while his $90 billion Apple stake now represents a ridiculous 20% of Berkshire Hathaway's market value. Unfortunately, the same can hardly be said about Buffett's more recent energy picks. Over the years, Berkshire Hathaway has lost several billions of dollars in its ConocoPhillips (NYSE:COP) stake as well as its Phillips 66 (NYSE:PSX) spinoff, eventually cutting ties with PSX at the depth of the oil price crash in May 2020. Still, Berkshire Hathaway has maintained significant energy stakes that could pay off handsomely now that the oil and gas sector appears to be on a firm rebound. (Source: Oil Price)
Scientists Find Way To Convert CO2 Into Jet Fuel (7 January 2021): By Irina Slav - Air travel accounts for about 12 percent of greenhouse gas emissions from the transport industry—or at least it did before the pandemic. It is likely that once again travel will account for a solid portion of emissions once the industry recovers. Now, a team of scientists has found a way to reverse some of the damage by making jet fuel from carbon dioxide. Air transport generated 915 million tons of carbon dioxide in 2019, according to data from the Air Transport Action Group, a Swiss-based industry organization. This represented some 2 percent of total human CO2 emissions that year, which may be a small number in terms of percentages but still a substantial amount of emitted CO2. And this CO2 could be out to good use. The Oxford University team used a process called organic combustion to break down the carbon dioxide molecule into its constituents and convert these into new molecules, including liquid jet fuel, water, and some other compounds. In a paper published in the journal Nature, the team of researchers noted this process of direct conversion of CO2 into jet fuel was more economical than the indirect method as it involved fewer steps. (Source: Oil price)
The World’s First Major Hydrogen Hubs Are In The Making (6 January 2021): By Alan Mammoser - A profuse literature on hydrogen is coming forth from companies, governments, and energy market analysts. All are seeking the most likely paths forward for what is anticipated to be a key energy intermediary in a future carbon-free economy. It is all conceptual for now, as hydrogen production for industrial use remains quite carbon-intensive. It looks to later in the 2020s and 2030s, when hydrogen’s importance as an energy store and carrier should emerge. Hydrogen may prove indispensable for energy storage in the power sector, and for the sector coupling that interconnects energy users and power sources. A widespread view, held by the major energy agencies and others, is that ‘hydrogen hubs’ will play an important role in getting carbon-free hydrogen going. These industrial locales, in which electrolysis facilities are located in close proximity to industrial users, shipping and transport infrastructure, should offer scale efficiencies. Numerous regional plans to achieve such concentrations are now appearing. (Source: Oil Price)
Oil Demand Is Still OPEC’s Top Concern (4 January 2021): By Irina Slav - OPEC has signaled it is concerned about oil demand despite its production control efforts as Covid-19 cases continue to surge in key markets, and the global total is still on the rise. It seems vaccine optimism has begun to wear off, too, as it has become clear mass vaccinations will take months rather than weeks, so demand will be subdued for longer than some optimists in the trading community may have hoped. “The outlook for the first half of 2021 is very mixed,” OPEC Secretary-General Mohammad Barkindo said on Sunday, ahead of an OPEC+ meeting later today. “There are still many downside risks to juggle,” Bloomberg quoted the official as saying. In December, the extended cartel agreed to Russia’s proposal to start adding 500,000 bpd to their daily total from January based on the improved demand outlook and some members’ unwillingness to continue cutting deep. Yet this may change at today’s meeting. Russian Deputy Prime Minister and OPEC coordinator Alexander Novak suggested at the end of last year that the new deal could be tweaked if demand were to recover faster than previously expected. (Source: Oil Price)
How Gold, Silver And Platinum Are Used In The Battle Against COVID-19 (2 January 2021): By MINING.com - As covid-19 spread across the globe last spring, investors rushed to precious metals as a financial safe haven. Gold rose to over $2,000 by early August, up more than 30% from the start of the year. Silver surged more than 50% over the same period, reflecting the common correlation among precious metals during times of financial uncertainty or volatility. Providing financial protection is not the only role that precious metals are playing in the fight against covid-19. The metals also have broad applications in the medical field, well beyond the dental uses most people associate with them.