Intel Warns: Chip Shortage Threatens EV Boom (31 May 2021): By Tsvetana Paraskova - The current global chip shortage could take until 2023 to be overcome, semiconductor maker Intel said on Monday in another warning that the microchip supply crunch could delay the electric vehicle (EV) revolution. “But while the industry has taken steps to address near term constraints it could still take a couple of years for the ecosystem to address shortages of foundry capacity, substrates and components,” Intel’s chief executive Pat Gelsinger said during a virtual talk at the Computex trade show in Taipei, as carried by Reuters. The semiconductor shortage—caused by surging demand for consumer electronics during the pandemic and car technology for EVs and conventional vehicles—has affected the car manufacturing industry, from delays of electric car launches to production halts of some of the most iconic U.S. cars for weeks. Intel announced in March an estimated $20 billion investment to build two new factories in Arizona. While expansion in chip production will address demand in several years, the current shortage is expected to last another year or two. (Source: Oil Price)
The World's Most Attractive Renewable Energy Market (30 May 2021): By Alex Kimani - When it comes to the global shift to low-carbon energy sources, Europe has traditionally been viewed as the world leader. Meanwhile, the United States has frequently been regarded as an important—albeit grudging—participant. Over the past half-decade, China has also improved its stock in the fast-growing market through a plethora of heavy investments, especially in solar and wind. For the most part, those views appear merited: Renewables rose to generate 38% of Europe's electricity in 2020 (compared to 34.6% in 2019), marking the first time renewables overtook fossil-fired generation, which fell to 37%. In contrast, the IEA estimates that natural gas and coal generated a combined 61% of electricity in the United States in 2020, with renewables accounting for just 20%. And the country's standing in the energy transition became even murkier after former president Donald Trump fulfilled a key campaign pledge by withdrawing the United States from the Paris climate agreement, joining the likes of Syria and Nicaragua as the only countries not a party to the agreement. (Source: Oil Price)
Asia's LNG demand growth to slow in 2022 as nuclear, coal gain (28 May 2021): LNG demand growth in Asia is expected to slow down next year as the economic recovery stagnates and the capacity of competing fuels nuclear and coal expand in Japan and South Korea, research consultancy Wood Mackenzie said. LNG demand in Asia is expected to rise by 12 million tons per year (MMtpy) in 2022, down from the 19 MMtpy growth in 2021, Robert Sims, head of Woodmac’s LNG short-term, gas and LNG research, said in a note. “LNG demand growth in Asia will slow down as the economic recovery decelerates, coal and nuclear capacity will increase in Japan and South Korea and more offshore domestic supply will be available in India,” he added. At the same time, global LNG supply will grow by 18 MMtpy because of new supply from the Sabine Pass Train 6 and Calcasieu Pass projects in the United States and Indonesia’s Tangguh Train 3, he said. This will mean that there will be about 6 to 7 MMtpy of more LNG available for Europe, which will be 9% more than in 2021. (Source: Gas Processing)
Oil Rig Count Rises As Brent Prices Flirt With $70 (28 May 2021): By Julianne Geiger - Baker Hughes reported on Friday that the number of oil and gas rigs in the United States increased by 2 again this week, bringing the total rig count to 457—a more than 100-rig gain since the start of the year. In the week prior, the U.S. oil and gas rig count increased by 2. But the longer trend in rig count additions bodes well for the U.S. oil industry, as drillers pick up the pace, adding 106 rigs so far this year, more than half of which were added in Texas. The total number of active oil and gas drilling rigs in the U.S. is now 156 more than this time last year. The oil rig count increased by 3 this week, bringing the total oil rig count to 359. The number of gas rigs decreased by 1 to 98. The number of miscellaneous rigs stayed the same. The EIA’s estimate for oil production in the United States for the week ending May 21—the last available data—held steady this week at an average of 11 million barrels per day. The EIA estimates that U.S. oil production will reach a modest 11.04 million bpd this year, after falling from the 13.1 million bpd peak production reached in February 2020, before the pandemic crushed oil demand. (Source: Oil Price)
Biden's Asia Advisor: ''U.S. Entering Period Of Intense Competition With China'' (27 May 2015): By ZeroHedge - President Biden, possibly most famous for his - and his son's - business dealings in China coming into question whilst running for the Presidency, may wake up this week to find out from one of his top advisors that he's now a China hawk. That is, if you ask Kurt Campbell, the U.S. coordinator for Indo-Pacific affairs on the National Security Council. Campbell said this week that the U.S. was "entering a period of intense competition with China as the government running the world’s second-biggest economy becomes ever more tightly controlled by President Xi Jinping," according to Bloomberg. Campbell, speaking at Stanford University, commented: “The period that was broadly described as engagement has come to an end. China will now operate under a new set of strategic parameters. The dominant paradigm is going to be competition.” "China is determined to play a more assertive role,” he said. He said that President Xi has “almost completely disassembled nearly 40 years of mechanisms designed for collective leadership.” (Source: Oil Price)
S&P Report: Gulf Producers To Slash Deficits As Oil Prices Rise (26 May 2021): By Charles Kennedy - The Arab Gulf oil producers are expected to slash their combined government deficits to some $80 billion this year from $143 billion last year, thanks to higher oil prices, reopening economies, and fiscal consolidation, S&P Global Ratings said in a report on Wednesday. The total government deficits of the six members of the Gulf Cooperation Council (GCC)—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE)—are expected to drop to 5 percent of gross domestic product (GDP) this year, compared to deficits of 10 percent of GDP in 2020, according to the ratings agency. Despite the expectation of reduced deficits compared to the shock of 2020, deficits will further deteriorate governments’ balance sheets in most cases, S&P Global Ratings said. Many of the GCC countries introduced austerity measures last year to cope with the double shock of collapsing oil prices and economic restrictions due to the pandemic. For example, Saudi Arabia, the biggest GCC economy and the world’s top oil exporter, was forced by oil market circumstances to implement some unpopular austerity measures, including a triple increase in value-added tax (VAT) and the cancellation of so-called cost-of-living allowances for civil servants. (Source: Oil Price)
Biden Administration Looks To Build Two Wind Farms Off California's Coast (25 May 2021): By Julianne Geiger - The Biden Administration is looking to further its green agenda with two wind farms off the California coast. The wind farms would generate as much power as 1.6 million households would consume. The projects would go a long way to fulfilling President Biden’s wind power goals, which include doubling the amount of offshore wind production by the end of this decade. The first proposed wind farm, near California’s Morro Bay, will support 3GW of offshore wind and will take up an area totaling 399 square miles. The second proposed site, in Humboldt County (Humboldt Call Area) near the Oregon border, will support up to 1.6GW of offshore wind power. California Governor Gavin Newsom said that developing this wind power “could be a game changer to achieving California’s clean energy goals,” the Wall Street Journal reported. (Source: Oil Price)
The IEA's Seven Pillars Of Decarbonization (24 May 2015): By Robert Rapier - Last week the International Energy Agency (IEA) released a new report detailing the steps that would be required to get the world to net?zero carbon emissions (NZE) by 2050. The report is Net Zero by 2050: A Roadmap for the Global Energy Sector, and it can be downloaded here. The part of the report that has gotten the most attention so far is the idea that development of new oil and gas fields must stop, and that no more coal plants can be built if NZE is to be achieved. IEA Executive Director Fatih Birol said: “If governments are serious about the climate crisis, there can be no new investments in oil, gas and coal, from now – from this year.” I may dissect this challenge in a future article, but today I want to just highlight the seven pillars that the IEA identified for achieving the goal. These pillar are: Energy efficiency; Behavioral changes; Electrification; Renewables; Hydrogen and hydrogen? based fuels; Bioenergy; Carbon capture and storage (CCS) (Source: Oil Price)
Is It Possible To Have A Nuanced Discussion About The Energy Transition? (23 May 2021): By Alex Kimani - Climate change is no longer a fiery apocalypse that we expect to happen in the far-off future. Rising sea levels, wild-fires, heatwaves, and extreme weather events are already wreaking havoc everywhere even as we speak and could cost the global economy a staggering $1 trillion dollars over the next five years in crumbling infrastructure, reduced crop yields, health problems, and lost labor as per the Carbon Disclosure Project (CDP). Climate change is real, and its effects are clearly devastating: Since January 2019, we have recorded no less than three dozen extreme weather events across the globe, exacerbated by climate change. Each event caused more than $1 billion in damage, with nearly 10 causing more than $10 billion in damages. According to NASA, the earth's average surface temperature in 2020 tied with 2016 for the hottest years on record, making the last seven years the seven hottest on record. There's little doubt that large-scale use of fossil fuels tops the list of factors contributing to climate change. So, the million-dollar question becomes, "We know that oil contributes to climate change and other environmental problems; then, why do we still use it? Why don't we just quit already? Why is the concentrated energy provided by fossil fuels proving so hard to replace?" (Source: Oil Price)
Are The Risks Of Nuclear Energy Overblown? (22 May 2021): By Haley Zaremba – Nuclear energy is all about control. The process by which we generate nuclear power, after all, is not so different from the mechanics that take place to trigger an atomic bomb. It’s all about the way in which the process of nuclear fission is tightly controlled, scheduled, and slowed, which makes nuclear energy production possible and safe. The amount of force that holds the nucleus of an atom together is monumental, and stores a massive amount of energy. When we split atoms into smaller atoms, or “fission fragments”, this energy is released, and in the case of nuclear energy, harvested. But every time an atom is split, it begins a chain reaction triggering more and more atoms to split. So why doesn’t every nuclear fission process turn into a nuclear explosion? Because scientists have gotten very, very good at controlling and slowing down the chain reaction process. Now, a fairly average-sized (1,000 megawatts) nuclear energy plant produces as much energy in a single day as was released by the atomic bomb that detonated over Nagasaki, a 21 kiloton weapon that leveled 90% of the city. And now, in this day and age, neither a 1,000mw nuclear plant nor a 20kt nuclear weapon are particularly big. (Source: Oil Price)
Barclays: Reopening Economies Drive Oil Demand Higher (21 May 2021): By Tsvetana Paraskova - Global oil demand is recovering with major economies reopening amid a cautious supply approach from OPEC+ and restraint in U.S. shale, Barclays said on Friday. Despite the possibility of a return of Iranian oil supply and the resurgence of COVID in parts of Asia, global oil demand is “healing” and oil inventories are set to normalize over the next two to three months, the UK bank said in a note on Friday carried by Reuters. Barclays expects the global market to be in a deficit of around 1.5 million barrels per day (bpd) in the second half of this year. “Extended mobility restrictions in the region [Asia] might slow the demand recovery somewhat, but seem unlikely to stall it for a sustained period, given largely positive results of vaccination programs worldwide,” analysts at Barclays noted. The bank sees Brent Crude prices averaging $66 per barrel in 2021, while WTI Crude is set to average $62 a barrel this year. Those price forecasts were very close to the actual prompt prices early on Friday, when WTI Crude traded up by 1.5 percent to just above $63, and Brent Crude was also up more than 1 percent at $66.00 as of 7:42 a.m. EDT, as the U.S. dollar was falling. (Source: Oil Price)
The Four Biggest Threats To U.S. Energy Independence (20 May 2021): By Haley Zaremba - The United States’ shale revolution completely redrew the geopolitical map. The gush of cheap and plentiful shale oil and gas out of West Texas and New Mexico over the last decade has allowed the United States to achieve a new level of energy independence and has fundamentally changed the relationship between the U.S., and the rest of the world to some degree, with the oil-rich Middle East. But now the geopolitical power of the shale revolution is fading, and the world’s complex web of power dynamics are in flux once again. When it comes to energy, the United States’ self-sufficiency and independence is now under threat from a number of different factors, some of the biggest and most dire of which are climate change, security, ramping up international competition, and woefully underdeveloped infrastructure. It’s going to become increasingly more difficult for the United States to maintain its energy independence unless the country starts addressing the issues in a serious way and with a major sense of urgency. (Source: Oil Price)
The U.S. Is Not Ready For An All-Electric Future (19 May 2021): By Tsvetana Paraskova - The setting of a net-zero target by the Biden Administration was the first step toward decarbonization of the energy system and industry. But having a target is the easiest part of America’s energy transition. Now comes the much more difficult part of making all those proposals and ideas for a greener future work. Emissions reduction, decarbonization of the U.S. power grid by 2035, and increased electrification in the transportation and buildings sectors will require an enormous amount of investment from industry as well as government support. The challenges will be not only to raise trillions of U.S. dollars of investment—the sooner the better—but also to change consumer perception about electric vehicles (EVs) and space heating, for example, as well as persuade communities to host exponentially growing solar and wind power generating facilities. The U.S. is woefully unprepared to handle “the electrification of everything,” as Amy Myers Jaffe, a research professor at Tufts University’s Fletcher School, describes the drive to electrify transportation and buildings and parts of industry in The Wall Street Journal. (Source: Oil Price)
3 Hydrogen Stocks That Are Poised To Break Out (18 May 2021): By Alex Kimani - Hydrogen stocks have been red-hot over the past year as the ESG and clean energy momentum went into overdrive. Hydrogen fuel cell stalwarts Plug Power Inc. (NASDAQ:PLUG), FuelCell Energy (NASDAQ:FCEL), Bloom Energy Corporation (NASDAQ:BE) and Ballard Power Systems (NASDAQ:BLDP) were all up in triple-digits as a growing section of Wall Street punters including Bank of America declared that the industry had reached a tipping point and was finally ready to take off. Meanwhile, the EU made major commitments to invest in green hydrogen. But maybe Wall Street rushed its fences. Hydrogen stocks have been stinking the place out this year, with the leading stocks down in double-digits at a time when their oil and gas peers have been soaring. To wit, PLUG is down 26.5% in the year-to-date; FCEL has lost 28.8%, BE is -31.6%, while BLDP has cratered 38.9%. In sharp contrast, the Energy Select Sector SPDR ETF (XLE) has emerged as the best-performing sector with a 44.4% YTD gain. The shocking turn of fortunes can be chalked up to stratospheric valuations in the hydrogen sector at a time when value stocks are coming back in rotation. However, long-term investors in the hydrogen sector can still take some comfort in that the worst might be in the rear-view mirror, and hydrogen stocks could be poised for a comeback. (Source: Oil Price)
UK Climate Boss: World Must End Coal To Save Planet (14 May 2021) By Charles Kennedy - The world needs to ditch coal in order to tackle climate change and save the planet, former UK business secretary Alok Sharma, who is now president for this year’s global climate summit COP26, said on Friday. In a speech in Glasgow, the city that will host the 26th United Nations Climate Change Conference in November, Sharma stressed the need to end coal power to tackle climate change and noted that the summit is the world’s “best chance” of limiting rising global temperatures to 1.5 degrees Celsius. COP26 will bring together climate negotiators from 196 countries, as well as businesses, organizations, experts, and world leaders in Glasgow between November 1 and 12. “Because if we are serious about 1.5 degrees, Glasgow must be the COP that consigns coal to history… we are working directly with governments, and through international organizations. To end international coal financing. This is a personal priority. And to urge countries to abandon coal power, with the G7 leading the way,” Sharma said. “The days of coal providing the cheapest form of power are in the past. And in the past they must remain… The coal business is, as the UN Secretary General has said, going up in smoke,” the UK’s climate leader said. (Source: Oil Price)
Oil Prices Set For Biggest Daily Drop Since Early April (13 May 2021): By Tsvetana Paraskova - Oil prices dropped by almost 3 percent on Thursday morning and were set for the biggest percentage drop since early April, after the restart of Colonial Pipeline eased some of the concerns about gasoline shortages in the U.S. East. As of 11:01 a.m. EDT on Thursday, WTI Crude was falling by 2.94 percent at $64.14 and Brent Crude was down by 2.64 percent at $67.49. Oil prices snapped the winning streak from earlier this week when reports from both OPEC and the International Energy Agency (IEA) reiterated the view that global oil demand would rebound strongly in the second half of the year with more economies reopening and increased travel amid higher vaccination rates. The excess oil inventories of the past year have been all but depleted, and a strong demand rebound in the second half this year could lead to even steeper stock draws, the IEA said on Wednesday. The agency’s bullish outlook on demand, coupled with a similar view from OPEC from Tuesday, sent oil prices to an eight-week high on Wednesday. (Source: Oil Price)
Qatar Could Offer Chinese Firms Stakes In World’s Largest LNG Project (12 May 2021): By Tsvetana Paraskova - Qatar is in discussions with Chinese state energy giants to potentially make them equity partners in the world’s largest liquefied natural gas (LNG) project, in what could be a strategic choice to add huge potential LNG customers to its partners alongside Western majors, industry sources with knowledge of the matter told Reuters. In February, Qatar approved what would be the world’s largest LNG project in terms of capacity, North Field East Project (NFE), set to raise the tiny Gulf nation’s LNG production capacity from 77 million tons per annum (mmtpa) to 110 mmtpa. Apart from hosting the biggest project, which would help it to be the global LNG export leader, Qatar also has one of the lowest breakeven prices for its projects, which is set to contribute to its position as one of the world’s top LNG suppliers, analysts say. “At a long-term breakeven price of just over $4 per million British thermal units, it’s right at the bottom of the global LNG cost curve, alongside Arctic Russian projects,” Wood Mackenzie research director Giles Farrer said, commenting on Qatar’s LNG expansion project. (Source: Oil Price)
Is The Global Oil Industry Relying Too Much On China? (11 May 2021): By Irina Slav - Chinese oil imports are among the closest watched indicators for global oil demand trends in the world. That’s despite the fact there are things like seasonal factors affecting the country’s demand for oil and price considerations. The dominant narrative remains that if China is buying, all is well for oil, and prices will go up. If China is reducing its buying, the outlook immediately dims. However, recently things have not been so clear-cut, as Reuters’ columnist Clyde Russell wrote this week. China’s oil imports in April, he said, were higher than they were a year ago but lower than they were in March. This made judging whether the Chinese economy was continuing on its strong growth path or the recovery path was losing steam more difficult. Indeed, China’s April oil imports, based on early data, were up by 5 percent on the year but 11 percent down on the month. Official data from the country’s customs agency later revealed that April imports were actually lower on the year as well, by 0.2 percent. Even such a minor decline is enough to spark worry about China’s economy as dozens of observers and oil market players continue to pin hopes and plans on a constant, uninterrupted Chinese economic growth curve. (Source: Oil Price)
Cyberattack Shuts Down Major U.S. Gasoline Pipeline (10 May 2021): By Irina Slav - A cyberattack during the weekend caused the shutdown of the Colonial pipeline, which carries some 45 percent of the gasoline and diesel fuel the East Coast of the U.S. consumes, media have reported, noting that the attack could threaten the security of gasoline supply and push up prices. Gasoline futures immediately jumped on the news of the attack, adding 2 percent. According to the Wall Street Journal, Colonial Pipeline Co. learned on Friday that it had become the target of a cyberattack and that it “took certain systems offline to contain the threat, which has temporarily halted all pipeline operations.” The New York Times reported that Colonial Pipeline Co. had declined to say when it will reopen the pipeline, fueling fears about the supply of gasoline on the East Coast. Reuters cited experts as saying the outage will not have an impact on prices at the pump unless the Colonial pipeline remained shut for more than three days. The Colonial pipeline is the biggest pipeline infrastructure in the United States, running 5,500 miles from Houston to Linden, New Jersey, carrying some 2.5 million barrels of gasoline and diesel daily. (Source: Oil Price)
Can Oil Firms Win Over ESG Investors? (9 May 2021): By Tsvetana Paraskova - As institutional investors grow increasingly picky in where they put their money amid the global Environmental, Social, and Governance (ESG) push, North America's oil sector has started to look at ways to attract those investors who have been shunning fossil fuels by default. In recent weeks, two Canadian firms became the first North American oil companies to link their credit facilities to sustainability targets, willingly signing up for potentially higher borrowing costs if they miss those targets. The sustainability-linked loans in the oil industry suggest that some companies are looking to turn around investors' reluctance to invest in fossil fuels by showing they are so serious about meeting sustainability targets to the point of embedding them in their future financial costs. The so-called sustainability-linked loans originated in Europe four years ago, and have become increasingly popular in many industries since then. Now it's North American oil companies' turn to appeal to the ESG concerns of investors, linking their targets to cut emission and boost diversity and inclusion to their borrowing costs. (Source: Oil Price)
The Energy Crisis That No One Is Talking About (6 May 2021): By Gail Tverberg - We live in a world where words are very carefully chosen. Companies hire public relations firms to give just the right “spin” to what they are saying. Politicians make statements that suggest that everything is going well. Newspapers would like their advertisers to be happy; they certainly won’t suggest that the automobile you purchase today may be of no use to you in five years. I believe that what has happened in recent years is that the “truth” has become very dark. We live in a finite world; we are rapidly approaching limits of many kinds. For example, there is not enough fresh water for everyone, including agriculture and businesses. This inadequate water supply is now tipping over into inadequate food supply in quite a few places because irrigation requires fresh water. This problem is, in a sense, an energy problem, because adding more irrigation requires more energy supplies used for digging deeper wells or making desalination plants. We are reaching energy scarcity issues not too different from those of World War I, World War II, and the Depression Era between the wars. (Source: Oil Price)
IEA: Governments Should Start Stockpiling Battery Metals (6 May 2021): By ZeroHedge - China's dominance in green energy technologies are rare earth metal production is very concerning to the International Energy Agency (IEA), who posted a stark warning Wednesday advising western governments to stockpile critical battery metals such as cobalt and lithium. IEA's warning comes as the next chapter in US-China tensions will be climate wars as energy transition investment ramps up with peak oil around 2030. Many Western countries and China have estimated net-zero carbon emission economies somewhere around 2040-2060. The need for western economies to become less reliant on China for rare earth minerals and battery metals, such as lithium and cobalt, is a necessity for independence from the East. China has arguably been faster in adopting green technologies than western countries. Climate wars are much more than climate action and saving the planet - it's about the superpower race between the US and China and who can deliver climate change solutions and clean-tech. (Source: Oil Price)
The Shocking Truth About Data Center Energy Consumption (5 May 2021): By Haley Zaremba - It’s almost impossible to qualify, much less quantify, the amount of disruption and destruction the spread of the novel coronavirus caused to the global economy. One of the many side effects of the pandemic was to push the world even further into the digital age as more and more of our work and social lives have shifted from the physical world to cyberspace. More of us are spending more time online than ever, and this means that the amount of computing power being used around the world is exploding. This is especially true as Big Data becomes an ever-larger and ever more relevant economic sector, with growing numbers of industries increasingly turning to the employment of data-driven analytics to help guide decision making. All of this bodes very, very poorly for the world’s carbon footprint. (Source: Oil Price)
Russia and China set to ramp up small-scale LNG (4 May 2021): Russia and China will lead global small-scale liquefaction natural gas (LNG) capacity additions by 2025. According to a report “Global Small-Scale LNG Liquefaction Capacity and Capital Expenditure Outlook, 2021–2025 – Russia and China Lead Global Capacity Additions” the global small-scale LNG liquefaction capacity is expected to expand by 30% over the next four years increasing from 33,900 thousand tonnes per annum (ktpa) in 2021 to 43,920 ktpa in 2025. Region-wise, the former Soviet Union region is expected to witness largest small-scale LNG liquefaction capacity growth. This global-scale growth will result from new facilities and expansion projects. A projected growth of 2,940 ktpa. during the outlook period 2021 to 2025 with 2,940 ktpa. Asia closely trails with 2,820 ktpa, followed by North America with 2,480 ktpa. Among countries, Russia, China, and Oman would be the top three countries globally for new build and expansion small-scale liquefaction capacity additions by 2025. Russia is expected to add 2,940 ktpa of new build and expansion small-scale liquefaction capacity additions, while China and Oman are expected to add 2,810 ktpa and 2,000 ktpa, respectively. (Source: Gasprocessing)
Are Big Oil’s Renewable Investments Paying Off? (3 May 2021): By Irina Slav - The world’s largest oil companies reported solid earnings and strong cash flow generation for the first quarter. But all those profits had very little to do with the pledges from Europe’s major oil firms to boost investment in renewables and work more for low-carbon energy solutions to reach net-zero emissions by 2050. The main driver of the higher earnings—in Exxon’s case a return to earnings after four consecutive quarters of losses—was the recovery of oil prices during the first quarter this year. All supermajors benefited much more from the rising oil and gas prices and profitable oil and gas trading than from their investments in renewable energy. If anyone at all had expected a pivot to renewables to start bringing in loads of cash for Big Oil less than a year after all the pledges for net-zero emissions and increased investment in low-carbon energy, they haven’t been paying attention to the top oil executives who have repeatedly said that the renewables business will not have the same return on investment as the ones from oil and gas—at least not in the short and medium term. (Source: Oil Price)
Building Australia’s First-Ever Offshore Wind Farm (1 May 2021): By Viktor Katona - It is very hard to give up on one’s own resource bounty and Australia knows it only too well. Endowed with the world’s third-largest coal reserves coupled with ample hydrocarbon plays in offshore deposits, many of which are still yet to be assessed and located, Australia’s energy transition to include more of renewables into its energy matrix has always been burdened by cautious skepticism. Would it serve Australia’s interests if it started to wind down coal production too soon? Difficult as it is to answer that question reliably, Australia would certainly benefit from a bit of experimenting, incorporating the lowest-hanging renewables fruits and then seeing where to go next. Bursting into the public consciousness with grand ambitious projects, wind energy might very well become Australia’s new favourite. Of the 260GW renewable energy capacity added in 2020 across the globe, Australia’s share corresponded to 3% (7GW). This was marked as an unprecedented result by the Australian authorities and rightly so, the tangible increase in rooftop solar installations during the past two years has significantly boosted the country’s renewables statistics (see Graph 1). COVID, several lockdowns and decreasing solar subsidies notwithstanding, Australia managed to reach its installed renewables capacity target of 33GW. At the same time, given Australia’s massive potential, wielding a total installed capacity of 35.7GW for all categories of renewable energy – i.e. including hydro energy which barely moved in the last decade – feels as if there remains significant underutilized capacity. (Source: Oil Price)
Will Covid-19 End The Oil Indexation Of Gas Prices? (1 May 2021): By Tatiana Serova - With a historic drop of 75 bcm in gas consumption, it would be legitimate to say that 2020 has been a turbulent year for natural gas. However, even though successive lockdowns have slapped the gas supply-chains and created uncertainty in an already volatile market, gas has been much more resilient than other fuels during this year. The IEA remains optimistic for its prospects, predicting that gas prices will reach pre-pandemic levels in 2021. And as the world slowly recovers from the crisis, global gas markets will be reshaped in-depth and may witness a moment of change for future price setting patterns. One possible scenario could be the end of oil-indexation of natural gas. A Roller Coaster of Gas Prices Beyond the structural decline in demand in 2020, gas markets have been characterized by strong volatility throughout the year, with record-low prices during the summer and then soaring back from December to February 2021. These variations resulted from the high sensitivity of gas prices to external shocks - such as cold snaps, the Suez Canal crisis, or the Covid pandemic - leading to major demand and supply disruptions. (Source: Oil Price)