Aramco CEO: Energy Transition “Is Not Going Smoothly” (27 January 2022): By Charles Kennedy - The energy transition “is not going smoothly,” the chief executive of Saudi Aramco, Amin Nasser, said on Thursday, calling for continued investment in oil and gas until low-carbon energy could grow and mature enough to meet rising energy demand. “We have to acknowledge that the current transition is not going smoothly,” Nasser said at an online conference, as carried by Reuters. “We all agree that to move towards a sustainable energy future a smooth energy transition is absolutely essential but we must also consider the complexities and challenges to get there,” Nasser said. The top executive of the oil giant of the world’s largest oil exporter, Saudi Arabia, has frequently warned energy analysts and industry in recent months that investment in oil and gas will still be needed even as renewable energy installations boom. (Source: Oil Price)
Will Scotland's Pivot To Wind Power Pay Off? (26 January 2022): By Felicity Bradstock - Scotland has auctioned off parts of its seabed to wind energy companies, raising $951 million and propelling the country’s renewable energy industry. But some are questioning whether it’s the right move to sell Scotland’s significant wind energy potential to private companies. As part of the auction, 17 projects were selected from 74 applications for an area of seabed totaling 7,000km2as part of the Scottish Government’s Sectoral Marine Plan. This marks the first offshore leasing round in over a decade. Scottish Power Renewables invested $194.2 million across several sites, while Shell spent almost $161.2 million on one 2,000MW site. BP Alternative Energy Investments and SSE Energy also invested, each offering funds of $116 to construct 2,907 and 2,610 MW projects. The total potential energy from these auctions equates to powering approximately 23 million U.K. homes a year. (Source: Oil Price)
Goldman: Ukraine Conflict Could Double EU Natural Gas Prices (25 January 2022): By ZeroHedge - Geopolitical tensions are soaring over Ukraine between Russia and the U.S. and its European allies. On Sunday, the U.S. ordered family members of the Kyiv embassy to evacuate after President Biden may deploy thousands of troops to Eastern Europe. NATO said on Monday it was putting forces on standby. The impending threat of World War III has quashed demand for riskier assets such as bitcoin and technology stocks and supported demand for energy. In particular, European natural gas soared 20% Monday as the increasing risk of conflict threatens fuel-starved Europe with supplies from Russia. (Source: Oil Price)
The U.S. Is Preparing European Gas Markets For A Russian Invasion (24 January 2022): By Tsvetana Paraskova - The U.S. Administration is in talks with energy companies and major gas-producing countries globally about the potential for a large supply of natural gas to Europe in case Russian deliveries are interrupted if Russia invades Ukraine, U.S. officials with knowledge of the talks told CNN. Russia, which supplies over one-third of the natural gas that Europe consumes, could weaponize gas deliveries if the West imposes sanctions on Moscow over a possible invasion of Ukraine, European allies of the United States fear. In addition, in the event of military action and subsequent energy sanctions against Russia, Europe will be hit the first and the most, including in its gas supply from Russian gas monopoly Gazprom, analysts say. (Source: Oil Price)
Mexico’s Mega Refinery: Delayed And $3.6 Billion Over Budget (21 January 2022): By Charles Kennedy - The construction of Mexico’s Dos Bocas oil refinery is running $3.6 billion over budget and delays could mean that the flagship project of Mexican President Andrés Manuel López Obrador may not start operations this year and not even in time for the state oil firm’s plan to end oil exports in 2023 and focus on refining fuel domestically. Dos Bocas is the favorite project of López Obrador for weaning the country off fuel imports. Originally, the plan for the refinery in López Obrador’s home state of Tabasco was expected to cost US$8 billion. Even when it was announced, analysts doubted the budgeted costs would be sufficient and were not optimistic about the financial viability of the refinery. (Source: Oil Price)
Buffett Eyes Largest Wind Power Project Ever In U.S. (20 January 2022): By Charles Kennedy - Warren Buffett’s investment firm Berkshire Hathaway has proposed a plan for a renewable energy project comprising wind and solar power that would cost $3.9 billion to build. The Wind Prime project, according to BloombergNEF analyst Ethan Zindler, stands to potentially be the single largest wind project ever built in the United States. However, Zindler told Bloomberg, there have been such massive projects before that had never gotten to the finish line, so “there’s a long way to go for this project.” The Wind PRIME project will include over 5 GW of wind power and some 50 MW of solar power, to be built in Iowa, Berkshire Hathaway subsidiary MidAmerican Energy said in a statement. (Source: Oil Price)
IEA Turns Bullish On Oil, Raises Demand Growth Forecast (19 January 2022): By Tsvetana Paraskova - Global oil demand defied gloomy expectations from a month ago to withstand the Omicron wave with much less disruption than expected, the International Energy Agency (IEA) said on Wednesday, raising its demand growth estimates by 200,000 bpd for both 2021 and 2022. Demand increased by 1.1 million bpd to 99 million bpd in the fourth quarter of 2021, defying expectations of a serious hit to consumption due to the Omicron wave, the IEA said in its Oil Market Report (OMR) for January today. A month ago, the IEA said that the surge in COVID cases was set to temporarily slow the recovery in global oil demand, but the impact of the Omicron variant would likely be more muted than previous waves and will not upend the demand recovery. (Source: Oil Price)
Goldman Sachs Sees $105 Oil In 2023 (18 January 2022): By Tsvetana Paraskova - Oil prices could hit $100 this year and rise to $105 per barrel in 2023, on the back of a “surprisingly large deficit” on the oil market now due to the much milder and potentially briefer impact of Omicron on oil demand, Goldman Sachs says. “Importantly, we are not forecasting Brent trading above $100/bbl on an argument of running out of oil as the shale resources is still large and elastic,” Goldman Sachs strategists including Damien Courvalin and Jeff Currie wrote in a note to clients dated Monday, as carried by ZeroHedge. Due to gas-to-oil substitution, supply disappointments, and stronger-than-expected demand in Q4 2021, OECD inventories are set to dip by the summer to their lowest levels since 2000, Goldman’s analysts note. Moreover, OPEC+ spare capacity is also set to decline to historically low levels of around 1.2 million barrels per day (bpd). (Source: Oil Price)
The Oil Market Is Already Looking Beyond Omicron (17 January 2022): By Alex Kimani - We are halfway through the first month of the new year, and oil's bull run is showing no signs of slowing. Oil futures have vaulted 12% in the first two trading weeks of the new year, boosted by several catalysts, including supply constraints, worries of a Russian attack on neighboring Ukraine, and growing signs the Omicron variant won't be as disruptive as feared. Brent crude futures settled $1.59, or 1.9%, higher in Friday's session at a 2-1/2-month high of $86.06 a barrel, gaining 5.4% in the week, while U.S. West Texas Intermediate crude gained $1.70, or 2.1%, to $83.82 per barrel, rising 6.3% in the week. Both Brent and WTI futures have now entered overbought territory for the first time since late October. (Source: Oil Price)
Life After Death For The Coal Industry (15 January 2022): By Felicity Bradstock - Around the world, countries are exploring ways of repurposing their coal infrastructure, as many governments pledge to stop production of the fossil fuel within the next decade or two. While the U.K. looks to geothermal energy as the potential answer, the U.S. is converting old coal plants into solar farms and nuclear energy sites, and South Africa is using infrastructure for community and sports centers. In Australia, while there are no plans for the government to turn its back on coal any time soon, the world’s largest coal port has announced it will be powered entirely by renewable energy. Across the U.S. there are several coal regions now looking at how to repurpose disused or soon to be abandoned infrastructure as well as how to reinvigorate towns that previously relied on coal jobs and revenue. While some areas are choosing to redevelop coal facilities to be used as student unions and recreational centers, others are welcoming renewable energy companies, hoping they’ll bring new jobs with their operations. (Source: Oil Price)
Why Global Emissions Bounced Back In 2021 (13 January 2022): By Felicity Bradstock - Greenhouse gas emissions are up worldwide despite big promises for carbon-cutting and a transition to renewables. Optimism around the drop in emissions throughout 2020, mainly owing to pandemic restrictions and a change in lifestyle, as well as enthusiasm around international action coming out of COP26, was perhaps misguided. While many governments and energy companies around the world have carbon-reduction and net-zero ambitions, we can expect to see high levels of carbon emissions until low-carbon energy becomes more widely available. Emissions in the U.S. rose 6.2 percent in 2021 compared to 2020 despite hopes that a shift in behavior during the pandemic would spur lasting change. Throughout the first year of the pandemic, environmental activists highlighted the drop in emissions that occurred as people began to work from home, stopped traveling so much, and as industrial operations slowed down. The idea that it was possible to make a meaningful change led activists, youths, and even governments to suggest the need for change. (Source: Oil Price)
A Watershed Moment That Could Send Oil Prices To $100 (12 January 2022): By Irina Slav - Crude oil prices could reach $100 per barrel, according to Ninepoint Partners portfolio manager Eric Nuttall, the latest to add to a growing number of analysts expecting three-digit oil prices. “The oil market remains exceptionally tight,” Nuttall told Bloomberg, adding, “When we look at global oil demand, we’re back to pre-COVID levels. So there are strong reasons to believe the market will continue to grow throughout this year as Omicron passes.” “But the real story remains on supply. I believe we’re in a structural bull market – a multi-year bull market for oil that will end in all-time high oil prices,” Nuttall also said. The asset manager’s opinion reflects an overall bullish sentiment on the market, as noted by Barron’s in a report from earlier this week, which saw a growing number of traders betting that U.S. crude could hit $100 a barrel. (Source: Oil Price)
Investors, Now It Needs Consumers (11 January 2022): By Irina Slav - For years EV-related headlines had Tesla in them. It was something of a must - any EV news was either about Tesla or about another company taking on Tesla. But not anymore. Now that all the Detroit auto giants have joined the race for an electrified transport system, it’s about much more than challenging the dominion of Tesla. Normally, the Consumer Electronics Show in Las Vegas is, true to its name, about consumer electronics. This year, however, the stars of the CES were electric vehicles. Ford’s F-150 Lighting, GM’s Chevy Silverado and plans to have 10 models in just two years (up from two currently), and Stellantis’s announcement that its Chrysler brand will be fully electric by 2028 were among the highlights of the show. (Source: Oil Price)
Kuwait's Oil Wealth Fund Looks To Be Entirely ESG Compliant (10 January 2022): By Charles Kennedy - Kuwait Investment Authority, the sovereign wealth fund of one of OPEC's largest producers, aims to ultimately make its portfolio 100-percent compliant with environmental, social, and governance (ESG) principles, the fund's managing director Ghanem Al-Ghunaiman told Bloomberg. "The process is ongoing with the KIA currently transitioning toward 100% ESG compliance for the entire portfolio while currently focusing on the E part of ESG," Ghanem Al-Ghunaiman told Bloomberg News. Kuwait Investment Authority (KIA) is the world's first-ever sovereign wealth fund created from the riches the country has amassed from its oil sales. Since 1976, Kuwait has been allocating a minimum of ten percent of the state's annual revenues to a fund for future generations "by diversifying revenue streams and ensuring a fiscally sustainable and secure future." (Source: Oil Price)
Doosan Mobility, 42air to develop delivery services using H2 fuel cell UAVs (January 2022): Doosan Mobility Innovation and 42air signed an MOU at CES 2022 for a partnership to co-develop delivery services using hydrogen fuel cell unmanned aerial vehicles (UAV). The companies plan to collaborate to create new business models and develop a service model including specifying and integrating fuel cell power systems, automation software, logistics software, cargo handling systems, and other technologies and processes to enable the new aerial delivery ecosystem. DMI delivers commercial drone platforms with fuel cell powerpacks to maximize drone performance. The hydrogen-powered fuel cell drones can stay airborne for over two hours of flight time, as fuel cells have approximately four to five times higher energy density when compared to lithium-ion batteries. This makes hydrogen powered drones Beyond Visual Line of Sight (BVLOS) capable and well suited for delivery purposes. (Source: H2Tech)
Could A Graphite Shortage Derail The $3 Trillion EV Boom? (5 January 2022): By Tom Kool - The $3-trillion EV market needs batteries that are 20-30% graphite–a material the U.S. currently doesn’t produce at all. That makes graphite a matter of national security in the global energy race. Each EV battery requires not only lithium–a metal that investors are very interested in–but even more graphite, the metal that prevents the lithium batteries from breaking down. Yet, the U.S. hasn’t produced any graphite for decades. Now, with the EV market starting to explode, and automakers and battery manufacturers expected to consume far more than ever, we’re looking at a nightmarish graphite supply chain that is mostly dependent on China–but not necessarily on the Chinese. (Source: Oil Price)
Coal Price Set To Surge As Major Producer Indonesia Bans Exports (4 January 2022): By Irina Slav - Coal prices moved higher and have higher still to go as Indonesia imposed a temporary ban on coal exports on worries that it will be unable to meet domestic demand. Reuters reported that President Joko Widodo had also threatened miners with business license revocation should they fail to supply enough coal for domestic consumption. Indonesia is the world’s biggest exporter of thermal coal, and there is concern the ban will be disruptive to the global supply. According to Bloomberg, Indonesia is expected to export 482 million tons of coal, far ahead of the world’s second-largest exporter, Australia, with 204 million tons. “Losing 40% of the seaborne market overnight, in the midst of peak winter demand, could set us up for another coal price spike,” Morgan Stanley commodity analysts wrote in a note cited by Bloomberg. (Source: Oil Price)
Energy Prices Rose 59% In 2021 (3 January 2022): By Julianne Geiger - Energy prices at the end of 2021 were 59% higher than they were at the beginning of the year, according to a new report by the Energy Information Administration (EIA). The boom in energy prices—which was more than the gains seen by other commodities—was largely the result of economic recovery from the Covid-19 pandemic. Most other commodity prices in the S&P Goldman Sachs Commodity Index (GSCI) saw about a 20% increase, with the exception of precious metals, which saw a decline. Within the energy portion of the commodity index that tracks the performance of global commodities markets, RBOB (wholesale gasoline) saw the largest gain at 67%, followed by heating oil, then WTI and Brent. Gasoil and natural gas rounded out the energy segment of the GSCI. (Source: Oil Price)
The Lone Star State May Host The World’s Next Big Hydrogen Hub (2 January 2022): By Alan Mammoser - It is widely thought that a future low-carbon hydrogen industry will arise in industrial clusters. The emphasis is on ports, where concentrations of basic industries, pipelines, and shipping will support large scale production and efficient supply. Plans for major industrial ports in Europe, such as Antwerp and Rotterdam, are enhanced with the possibility of offshore storage of carbon dioxide. In the US, the region that appears best equipped for widespread adoption of clean H2 is the Texas Gulf Coast centered on Houston. The Houston region's industrial sector comprises approximately 30% of US refining capacity and more than 40% of US petrochemical capacity. Its industrial sector accounts for 40% of the state of Texas’ industrial emissions. (Source: Oil Price)