Natural Gas Demand Suggests The IEA Got Peak Demand Wrong (31 October 2023): By Tsvetana Paraskova - Executives in the natural gas industry expect strong demand for the fuel in Asia through 2040 and 2050 as countries continue their coal-to-gas switch policy and look to meet emission reduction goals. Recent estimates and reports diverge from the International Energy Agency’s (IEA) peak fossil fuel demand projections announced in recent weeks. The IEA expects demand for all three fossil fuels – oil, coal, and natural gas – to peak before the end of this decade. The IEA said in its World Energy Outlook 2023 in October that global natural gas demand growth will slow down this decade compared to the decade to 2021 and peak by 2030, under its conservative Stated Policies scenario (STEPS). In this scenario, natural gas demand growth between 2022 and 2030 would be much lower than the 2.2% average rate of growth seen between 2010 and 2021, according to the IEA. Global gas demand is set to peak by 2030, maintaining a long plateau before gradually declining by around 100 bcm by 2050, the agency said. ... (Source: Oil Price)
How The Energy World Will Look In 2030 (30 October 2023): By Felicity Bradstock - This October, the International Energy Agency (IEA) published its World Energy Outlook 2023, forecasting the likely end-of-decade energy scenario given the current global pipeline and climate policies. While the world’s renewable energy capacity is growing rapidly, thanks to huge investments in recent years and greater support from governments worldwide, the IEA suggests that not enough is being done to achieve end-of-decade global climate goals. And while the IEA is optimistic in its energy outlook, other organisations are doubtful that the world will be able to make such a meaningful shift away from oil and gas in this time. In its World Energy Outlook, the IEA stated, “Some of the immediate pressures from the global energy crisis have eased, but energy markets, geopolitics, and the global economy are unsettled and the risk of further disruption is ever-present.” The price of fossil fuels has fallen from its 2022 peak, but the Russia - Ukraine conflict continues, and other conflicts are being seen in the Middle East. Meanwhile, inflation remains high, and the world is battling against ever-stronger weather events, such as severe heatwaves, hurricanes and extreme freezes. Further, greenhouse gas emissions have not yet peaked, with air pollution still being linked with the death of millions each year. ... (Source: Oil Price)
Global Carbon Market Hits $800 Billion Despite Dwindling Trade Volumes (28 October 2023): By Alex Kimani - A few days ago, we reported that green and socially responsible investments, aka ESG (Environmental, Social, and Governance) investing, have slowed down dramatically amid multi-year highs in oil and gas prices. ESG assets in the United States have fallen by 50% compared to 2020 levels, a worrying trend considering the alarming climate reports that have been coming in. Back in March, the Intergovernmental Panel on Climate Change (IPCC) published a report that claimed that global financial flows into climate solutions are 3-6x lower than the levels required for the world to meet its climate goals by 2030. But a fresh climate report suggests that it’s not all doom and gloom. Bloomberg New Energy Finance (BNEF) has reported that the total value of major compliance carbon markets is expected to exceed $800 billion in the current year, good for a 5% Y/Y increase despite falling trade volumes amid Russia's War in Ukraine. The growth reflects an increase in allowance prices from reforms looking to leverage carbon markets, which have been tempered by concerns related to energy affordability and security. ... (Source: Oil Price)
Big Oil’s Mega Acquisitions Raise Questions About Peak Oil Demand (25 October 2023): By Irina Slav - Last year, Big Oil annoyed their home governments by raking in billions on the back of soaring oil and gas prices. Those were caused by demand exceeding supply for hydrocarbons. The pain was especially great for the Biden administration. Despite its efforts to clip the industry’s wings, U.S. oil booked all-time high earnings. And while most used the money to pay down debt and boost shareholder returns, some set their sights higher and further into the future. Exxon made $56 billion in net earnings last year. This year, it used a sum slightly higher than the 2022 net total to acquire Pioneer Natural Resources, establishing itself as the leader in U.S. shale. ... (Source: Oil Price)
Germany And France Finally Compromise On Nuclear (24 October 2023): By Leonard Hyman & William Tilles - If you believe that nuclear power should play a role in the energy mix, pay attention to the nuclear deal fashioned this October between Germany and France. Here is the background, simplified. France depends heavily on nuclear power generated by state-owned EDF. Existing French nuclear plants will require major capital improvements and the plants under construction are enormously expensive. The French government wants to subsidize its nuclear program, but other European Union (EU) countries (especially Germany) objected, because state subsidies are not in the spirit of the EU’s energy markets. The market should determine prices, and should determine the appropriate means to supply the demand, the opponents argue. (Perhaps we should note that depending on the free market to sort it all out is a principal reason why Europe’s energy sector is in such a mess. The market, which sets day ahead prices does not look too far ahead and seems not to take into account such trivial matters as national security or climate change. Sorry for the editorial.) ... (Source: Oil Price)
The IEA Reiterates Its Peak Oil Demand Prediction (24 October 2023): By Irina Slav - Demand for oil, natural gas, and coal is set to peak before 2030, which undermines the case for increasing investment in fossil fuels. This is one of the outtakes from the International Energy Agency’s World Energy Outlook, released earlier today. While the agency does admit that investment in fossil fuels will remain necessary, it claims the growth era is over. Last month, the agency’s head, Fatih Birol, wrote in an op-ed that oil, gas, and coal demand were all going to peak before 2030 thanks to the increase in EV adoption and slower Chinese GDP growth. Now, this is being reiterated in the IEA’s outlook, which talks about the emergence of “a new clean energy economy, led by solar PV and electric vehicles.” The report notes that investment in “clean energy” has gone up by 40% since 2020, emphasizing the point that lowering emissions has not been the single motivator. According to the IEA, “The economic case for mature clean energy technologies is strong” and energy security is an increasingly important consideration, too. ... (Source: Oil Price)
Grid Upgrades Estimated To Cost Over $2.5 Trillion By 2035 (22 October 2023): By ZeroHedge - Electricity grid capacity available in the world isn't keeping pace with the rapid growth of "clean energy" technologies, possibly putting governments' climate goals at risk, according to a recent report by the International Energy Agency (IEA). In order to achieve climate goals set by global governments, more than 80 million kilometers (49.7 million miles) of electric grids have to be added or refurbished by 2040, which is the “equivalent of the entire existing global grid,” according to the Oct. 17 IEA report. Even though “electrification and renewables deployment are both picking up pace,” there is a risk of the clean energy transition stalling due to a lack of “adequate grids to connect the new electricity supply with the demand.” “At least 3,000 gigawatts (GW) of renewable power projects, of which 1,500 GW are in advanced stages, are waiting in grid connection queues—equivalent to five times the amount of solar PV and wind capacity added in 2022,” the report noted. ... (Source: Oil Price)
MIT Solar Breakthrough Boosts Hydrogen Efficiency (21 October 2023): By Brian Westenhaus - Massachusetts Institute of Technology engineers have designed a system that can efficiently produce ‘solar thermochemical hydrogen.’ It harnesses the sun’s heat to split water and generate hydrogen – a clean fuel that emits no greenhouse gas emissions. In a study appearing in Solar Energy Journal, the engineers lay out the conceptual design for a system that can efficiently produce “solar thermochemical hydrogen.” The system harnesses the sun’s heat to directly split water and generate hydrogen – a clean fuel that can power long-distance trucks, ships, and planes, while in the process emitting no greenhouse gas emissions. Today, hydrogen is largely produced through processes that involve natural gas and other fossil fuels, making the otherwise green fuel more of a “grey” energy source when considered from the start of its production to its end use. In contrast, solar thermochemical hydrogen, or STCH, offers a totally emissions-free alternative, as it relies entirely on renewable solar energy to drive hydrogen production. But so far, existing STCH designs have limited efficiency: Only about 7 percent of incoming sunlight is used to make hydrogen. The results so far have been low-yield and high-cost. ... (Source: Oil Price)
Oil Markets Underestimating The Risk Of A Middle East Blowout (18 October 2023): By Alex Kimani - Last week, the Israeli government ordered its state-run electricity company to halt power supply to the Gaza Strip days after Palestinian militant group Hamas launched a surprise attack on the country. The Israeli prime minister's office revealed that the security cabinet has approved several steps to destroy the military and governmental capabilities of Hamas and Islamic Jihad "for many years”, in a war that has seen more than 3,000 Palestinians and about half as many Israelis killed. But now there’s a growing risk this could escalate into a regional conflict after Lebanon-based Hezbollah warned that it’s ready to fully enter the war in support of Hamas. Indeed, there are growing fears that Hezbollah may open a new front against Israel at the behest of its leaders and their Iranian backers while Iran has warned of preemptive action against Israel if it goes ahead with a ground offensive. ... (Source: Oil Price)
Biden Unveils $7 Billion Jackpot To Build Regional Hydrogen Hubs (17 October 2023): By Alex Kimani - Last Friday, President Joe Biden announced the locations of seven regional hydrogen hubs that will receive $7 billion from the government as part of the bipartisan infrastructure law. The infrastructure bill passed by Congress in 2021 allocated up to $7B to launch the Regional Clean Hydrogen Hubs program, which will help fund 6-10 regional clean hydrogen hubs across the country. The hubs are part of Biden’s ambitious climate goals wherein he has pledged to cut the country’s greenhouse gas emissions by 50%-52% below its 2005 emissions levels by 2030. The hubs will produce hydrogen powered by renewables, natural gas and nuclear energy. ... (Source: Oil price)
Oil Poised To Become U.S.’ Single Largest Export Product (16 October 2023): By Tsvetana Paraskova - Oil is on track to be the largest export item for the United States this year for the first time in history, highlighting the growing influence of U.S. oil production and exports on the global oil market. Rising U.S. crude oil production in recent years and growing exports after the ban was lifted in 2015 have made U.S. oil an increasingly important commodity on the market, especially after the Russian invasion of Ukraine and the ban and sanctions on Russian crude in the West. U.S. oil supply offset some of the OPEC+ cuts in the first half of this year as it is set for record-high production in 2023 and 2024. America's crude oil production is expected to average 12.92 million barrels per day (bpd) this year and 13.12 million bpd next year—new record highs, the Energy Information Administration (EIA) says in its October Short-Term Energy Outlook. Oil exports are also at a record high, averaging 3.99 million bpd in the first half of 2023—up by nearly 20% from the first half of 2022. ... (Source: Oil Price)
Kenya's Ambitious Carbon Capture Plant Sparks Debate (16 October 2023): By Felicity Bradstock - Africa is taking centre stage when it comes to the future of energy, with significant interest in the continent’s largely untapped oil and gas resources, as well as significant potential for the development of renewable energy operations. As oil and gas companies look to diversify their operations, many are looking to Africa to develop new “low-carbon” projects in largely unexplored areas. Meanwhile, there are increased calls from international organisations and governments to develop Africa’s green energy potential in support of a global green transition. However, as companies begin to invest in the region, there is increasing controversy over some of the new projects emerging, with fears that they could support the ongoing global reliance on fossil fuels rather than advancing a green transition. ... (Source: Oil Price)
All Eyes On Iran For Security Of Oil Supply (14 October 2023): By Irina Slav - Iran has become the focus of international attention in the wake of Hamas attacks on Israel that prompted large-scale retaliation as the make-or-break actor in what increasingly looks like a new war in the Middle East. While any war in the Middle East is a potential threat to oil supply security, one involving a producer the size of Iran could have even deeper implications for global oil markets. None of these implications are positive. Soon after the news of the attacks broke, there were reports claiming Iran, a supporter of Hamas, was involved in their planning. The information was denied by Tehran, while Israel and its biggest ally, the United States, said there was no evidence of Iran's involvement. Yet this did not stop U.S. Senator and vocal war hawk Lindsay Graham from calling on the U.S. to bomb Iranian refineries. ... (Source: Oil Price)
U.S. Oil Defies Odds, Races Towards Annual Production Record (12 October 2023): By Robert Rapier - One of my 2023 energy sector predictions was that U.S. oil production would set a new all-time high this year. After record-setting production thus far this year, it would take a collapse along the lines of the huge Covid drop seen in the spring of 2020 for the U.S. to not set a new annual production record for 2023. For the first three quarters of 2023, U.S. oil production has averaged 12.8 million barrels per day (bpd). The previous annual record — set in 2019 just before the Covid-19 pandemic impacted production —was 12.3 million bpd. U.S. weekly production at the end of September was 12.9 million bpd. That is 900,000 bpd higher than it was one year earlier. For the entire month of September, production also averaged around 12.9 million bpd, but July’s production was higher than September’s, at 12.99 million bpd. These numbers are just short of the previous monthly record of 13.0 million bpd set in November 2019. ... (Source: Oil Price)
Climate Change Is Investors’ Most Common Motivation To Dump Stocks (October 2023): By Tsvetana Paraskova - Climate change is the single largest motivation of investment institutions to decide to exclude companies from their portfolios, a newly launched ‘exclusion tracker’ shows. Investors have become increasingly wary of investing in ‘sin industries’, which for many now include fossil fuel companies alongside the weapons and tobacco sectors. Pension funds and other institutional investors in Europe have excluded some major oil and gas companies from their portfolios, while some European banks have scaled back financing for fossil fuel projects. But in the United States, there has been growing pushback against ESG investing, and fossil fuel-producing states have blacklisted and vowed not to do business with funds they believe are “boycotting” their oil and gas industries, which finance large parts of the state programs including for schools. ... (Source: Oil Price)
Hamas Attack Brings Middle East War Premium Back To Oil Markets (9 October 2023): By Tsvetana Paraskova - War premium returned to the oil market on Monday after the weekend attack by Hamas on Israel, which upended—again—the geopolitical landscape in the world’s most important oil-exporting region, the Middle East, and buried hopes of an imminent Saudi-Israel rapprochement that could ease the tight oil market. The Hamas attack on Saturday took place just as several Middle Eastern countries, including the large oil producer the United Arab Emirates (UAE), had started to normalize relations with Israel. The U.S. Administration was also reportedly working on a Saudi-Israel normalization in relations. On Friday, The Wall Street Journal reported that Saudi Arabia, the world’s top crude oil exporter, could be willing to raise early next year its oil production— currently at around 9 million barrels per day (bpd) due to a voluntary cut of 1 million bpd—if oil prices are too high, to win goodwill at U.S. Congress. A possible agreement would have led to Saudi Arabia recognizing Israel in exchange for a defense deal with the United States. ... (Source: Oil Price)
OPEC+ Stands Firm As Global Oil Demand Teeters (8 October 2023): By Irina Slav - Last week, OPEC+ decided to keep current oil production cuts in effect until the end of the year. The announcement was anything but surprising, and yet crude oil prices fell substantially, sparking suggestions that the OPEC+ cuts may already be activating what many call the cure for high oil prices, which is even higher prices. But there is a possibility that oil has higher to go still before it begins affecting demand. The question, as always, is just how high. The answer: perhaps a bit higher. India's oil minister this week warned about unintended consequences from the OPEC+ cuts, saying it was the right of the OPEC+ producers to decide how much oil they would pump, but they should not be "unmindful of the consequences." ... (Source: Oil Price)
ESG Investments Face Financial Hurdles (7 October 2023): By Felicity Bradstock - After several years of enthusiasm around environmental, social, and governance (ESG) investment, some financial experts are becoming increasingly pessimistic about the return on investment. There was a great deal of hype around sustainable or ESG investment in 2020 and 2021, as governments worldwide showed great support for a global green transition. Investment companies quickly labelled many of their funds as sustainable, as well as creating new ESG funds, to attract companies looking to “go green”. However, a poor return on investment over the last couple of years has made many financial experts wary of continuing to invest in these types of funds, as they are unwilling to take the wait-and-see approach. ... (Source: Oil Price)
Canada Set To Add Nearly 600,000 Bpd To Oil Supply Next Year (4 October 2023): By Alex Kimani - Global consulting firm Deloitte has predicted that Canadian oil producers will enjoy higher crude prices next year when the TMX pipeline begins transporting about 590,000 bbl/d for export. A large chunk of these additional exports is expected to go to markets outside the United States, thus allowing Canadian producers to lower their dependence on U.S. refineries and narrow the WCS price differential. “The extra capacity created by the TMX pipeline is expected to boost Canadian production by about 375,000 barrels a day over the next two years. That’s more than the total amount added over the last five years,” Deloitte Canada’s Andrew Botterill said in an October 4 report. ... (Source: Oil Price)
EU Launches Carbon Border Tax To Push Greener Global Trade (3 October 2023): By Tsvetana Paraskova - The EU’s Carbon Border Adjustment Mechanism (CBAM), commonly known as the “carbon border tax”, kicked off on October 1 in the first transitional phase for imports of several carbon-intensive groups of products into the European Union. The first phase of the EU’s carbon import pricing legislation will not impose levies on the products—such will apply from 2026. However, importers of iron and steel, cement, aluminum, fertilizer, hydrogen, and electricity into the EU will be asked—as of now—to report on the volume of their imports and the greenhouse gas (GHG) emissions embedded during their production, although they will not be paying any financial adjustment at this stage. ... (Source: Oil Price)
Offshore Wind Industry Hits Rough Waters Amid Rising Costs (3 October 2023): By Haley Zaremba - The offshore wind industry is in crisis. Already this year, projects across Europe and the United States have been delayed or shelved thanks to a “perfect storm of supply chain delays, design flaws and higher costs” just when added clean energy capacity is needed the most. "If this turns into a prolonged pause of projects then without a doubt a lot of the 2030 renewables goals will be under pressure," Jon Wallace, an investment manager at Jupiter Asset Management, was quoted by Reuters this week. The turmoil throughout the industry has certainly given investors pause, and has scared potential investors away from beginning new offshore wind projects in the near term. Just this month, a renewable energy auction in the United Kingdom failed to attract a single bid from offshore wind developers. The major deterrent in both European and U.S. markets is sharply rising costs related to offshore wind development. ... (Source: Oil Price)
AI-Tech Leads To NASA Energy Breakthrough (1 October 2023): By Alex Kimani - NASA and energy startup ADC Energy USA, Inc. have jointly published a breakthrough validation of a "new form of energy" that does away with conventional AC/DC power conversion. The two parties have been researching "alternating direct current" (ADC) for 5 years, an AI-enabled, energy technology that makes lossless power transmission possible. "ADC is the greatest innovation I've seen in my 50-year career," Terry Boston, advisor to The White House and the United States Congress, and former CEO of PJM, gushed when speaking at a keynote speech at the Energy and Mobility Conference & Expo. "The results of this extensive multi-year endeavor are profound to say the least. The conclusions confirm that ADC is an historical paradigm shift, and most important, ADC is ready to deploy to provide innovative solutions to our global climate and energy crisis,” said Henry Lee, CEO of ADC Energy. ... (Source: Oil Price)