Showing posts with label Energy. Show all posts
Showing posts with label Energy. Show all posts

25 April 2017

OPEC’s Misleading Narrative About World Oil Supply

Leonardo Maugeri

At a time when energy market headlines focus mainly on OPEC cuts, observers may be forgiven for concluding that a supply crunch and higher prices are imminent. On the contrary, there is still too much oil in global markets. In this context, OPEC production cuts (which notably fall short of the original target envisaged by the organization) appear to serve mainly as a psychological support to oil prices.

Analyzing trends from my proprietary database of more than 1,200 global oilfields helped me to make a bold prediction in 2012 regarding a coming oil supply boom. In January, my similar field-by-field analysis indicated that world oil production capacity and actual production were still growing—while prospects for demand growth were not sufficiently high to absorb the excess supply. In particular, actual oil production (which includes crude oil and other liquids such as condensates, NGLs, and more according to the standard definition used by most statistics) was almost 99.5 million barrels per day (mbd)—leaving a voluntary and involuntary spare capacity (the result of local civil wars and other geopolitical factors) of more than 4 mbd.

NYC, SF, and LA Outages Surface Concerns About Power Grid Attack The Department of Energy needs to step its game up.

Peter Hess

On Friday morning, a series of power outages struck New York City, San Francisco, and Los Angeles. Officials tracked down the root causes of each issue, none of which seemed to be related to cyber attacks, but the incidents got a lot of people thinking about how vulnerable the United States’ power grid is to terrorist attacks — not to mention weather and squirrels.

The outage in New York City disrupted public transit, but not much else since it was limited to a single subway station. In Los Angeles, things were a bit more serious, with passengers experiencing difficulties and delays at Los Angeles International Airport, as well as power losses in some other areas around the city. San Francisco got it worst, with outages causing gridlock and taking some companies’ websites offline. The city was pretty much out of commission until power came back on.

So while these concurrent power grid failures appear to be unrelated accidents, they gave the U.S. a snapshot of what a power grid attack might look like. They also raise the question: What is being done now to protect the grid?

Earlier this year, the U.S. Department of Energy published a report saying that the nation’s electrical grid “faces imminent danger” from cyber-attacks. Given growing fears over cyber-attacks, whether DDos attacks affecting the internet of things or international efforts to undermine U.S. democracy, even the most absurd concerns that the U.S. power grid could be targeted by cyber-attacks are not totally out of line.

19 April 2017

Energy Fact & Opinion: India Joins International Energy Agency as an Association Country


In March 2017, India activated the association status with the International Energy Agency (IEA), an organization comprising 29 member countries and 6 association countries. 

Membership in the IEA, which is restricted to advanced economy members of the Organization for Economic Co-operation and Development (OECD), requires them to demonstrate their net oil importer status, have reserves equivalent to 90 days’ average of crude oil and/or oil products imports in the prior years, and have a demand restraint program for reducing national oil consumption by up to 10 percent. 

In an effort to reflect the rising role of non-OECD economies with major impact on the global energy market, the IEA introduced the “association” status in 2015. Since its inception, China, Indonesia, Thailand, Singapore, Morocco, and now India have become associated with the IEA. 

The association status allows these countries to participate in meetings of IEA standing groups, committees, and working parties, without prior invitation. Association countries can work with the IEA on matters of energy security, energy data and statistics, energy policy analysis, and benefit from priority access to IEA training and capacity-building activities. 
With India’s inclusion, the IEA accounts for about 70 percent of the world’s energy consumption. 

14 April 2017

** Energy Fact & Opinion: China's Net Oil Import Problem


Crude oil shipments to China from the Americas hit an all-time high in March, with the region’s share of the Chinese market reaching 14 percent. China was the largest foreign purchaser of U.S. crude in February and also made its first-ever U.S. strategic petroleum reserve (SPR) purchase in March. 

U.S., Canadian, and Brazilian oil has made up for a large part of the growth in exports to China, which continue to climb as net oil imports in the largest oil demand growth market in the world continue to grow. 

Driven by the combination of sustained oil demand growth and declining levels of production, Chinese net imports of crude oil grew by a staggering 0.7 million barrels per day (mb/d) in 2016 and are estimated to grow by a further 0.5 mb/d in 2017 and 0.4 mb/d in 2018. 

In 2016, Chinese oil and other liquid fuel production stood at 4.9 mb/d, falling by 0.3 mb/d from output levels in 2015, while demand grew by 0.3 mb/d. This trend of slowing production is expected to continue with a further 0.2 mb/d decline in 2017 and 0.1 mb/d drop in 2018. 
Domestic Chinese oil production has been hit particularly hard by the oil price collapse. Even with government supports, capital expenditure and production levels have been curbed because of the relatively high break-even costs of its maturing fields. 

* Clean energy can continue to grow

Richard Somerville

The biggest unknown about future climate is human behavior. Everything depends on what humanity does. Those of us who are alive today have our hands on the thermostat that controls the climate of our children and grandchildren. Carbon dioxide is the most serious of the heat-trapping gases that human activities emit into the atmosphere. A considerable portion of the carbon dioxide we emit can remain in the atmosphere for many centuries. It accumulates.

Deciding how much global warming is tolerable is a political decision. It depends on priorities, values, risk tolerance, economics, and so forth. That’s how we got the 2-degree Celsius target of the 2015 Paris Agreement. This target is an international commitment to take actions that will limit global warming to 2 degrees Celsius (3.6 degrees Fahrenheit) above the average pre-industrial temperature of the Earth. We’ve already experienced about half that much warming.

Now that the nations of the world have agreed in Paris on how much warming is to be allowed, climate science can tell us approximately how much more carbon dioxide and other heat-trapping gases and particles can be emitted. To have a reasonable chance of meeting the 2-degree Celsius target, the science shows clearly that emissions need to be reduced drastically and quickly. Science is based on facts and evidence. Politics sets the target, but the urgency of reducing emissions arises directly from the physics and chemistry of the climate system. It has nothing to do with politics.

12 April 2017

*** Three game changers for energy

By Nikhil Patel, Thomas Seitz, and Kassia Yanosek

Change is afoot in the energy system. Soaring demand in emerging markets, new energy sources, and the likely growth of electric vehicles (EVs) are just some of the elements disrupting the status quo. It is hard to discern how the aftershocks will affect the extraordinarily complex network of sectors and stakeholders. New research by McKinsey and the World Economic Forum has identified the game changers for companies and policy makers, as well as their implications. 

A proliferation of new energy sources 

Stay current on your favorite topicsSUBSCRIBE

An array of energy technologies seems poised for a breakthrough. Within two decades, as many as 20 new energy sources could be powering the global economy, including fuel cells; small, modular nuclear-fission reactors; and even nuclear fusion. Fossil fuels will still be part of the mix, but renewables’ share is likely to grow owing to environmental concerns, further cost reductions that make renewable energy more competitive, and demand for electricity. Electricity demand is expected nearly to double by the middle of the century, propelled primarily by economic development in China and India (Exhibit 1). By 2050, electric power, which can be generated by low-carbon energy sources such as wind and solar, could account for a quarter of global energy demand. 

1 April 2017

Why Saudi Arabia Must Push OPEC To Extend Production Cuts


When news broke on Nov. 30, 2016, that OPEC had finally agreed on a deal to cut oil production, its first since 2008, traders sent Brent crude prices leaping 9 percent to break the $50 per barrel threshold. But after the deal was implemented, and despite reduced output among OPEC and non-OPEC producers of 1.4 million to 1.5 million barrels per day, the price of Brent fell back below $50 per barrel on Wednesday.

There are a number of factors driving continuing soft prices, but OPEC members' compliance with the deal does not appear to be a significant one. This weekend in Kuwait, an OPEC committee charged with monitoring production output will meet to discuss compliance. The same meeting will also bring a key question into focus: Will OPEC members be willing to extend the deal beyond its June expiration?

Total production cuts among OPEC members rest at more than 90 percent of agreed-upon levels, with a compliance rate of about 40 percent among non-OPEC countries. Compared with previous deals, compliance levels are high. Saudi Arabia has driven the OPEC percentage up by trimming considerably more production than it had pledged. For instance, Saudi output for February averaged about 770,000 bpd less than it produced in October 2016, a 58 percent deeper cut than it had agreed to in November.

28 March 2017

*** Nuclear power promise fades


Brahma Chellaney

It is often said that China could become the first country in the world to age before it gets rich. India faces no such spectre. However, India has already become the first important economy in the world to take on onerous climate-related obligations before it has provided electricity to all its citizens.

This reality has greatly accentuated India’s energy challenge, which is unique in some respects. Consider the scale of its challenge: Before its population stabilizes, India will add at least as many people as the U.S. currently has. Even if India provided electricity to its projected 1.6 billion population in 2050 at today’s abysmally low per capita energy consumption level, it will have to increase its electricity production by about 40% of the total global output at present.

India’s domestic energy resources are exceptionally modest in comparison to population size and the demands of a fast-growing economy, with energy demand projected to rise 90% just over the next 13 years. And, unlike China, India does not share common borders with any energy-exporting country and thus must rely on imports from beyond its neighbourhood, making it vulnerable to unforeseen supply disruptions.

24 March 2017

The Southern Gas Corridor: Challenges to a Geopolitical Approach in the EU´s External Energy Policy

By Marco Siddi

Natural gas is considered an important component of the EU energy mix, both as a replacement for more polluting fossil fuels and as a back-up for intermittent renewable energy production. However, declining domestic production has led to an increase in EU import dependency on gas. 

After the Ukraine crisis, the EU has become wary of energy interdependence with Russia, its main external supplier. This led the Union to accelerate the integration of its internal gas market and to support new pipeline projects, most notably the Southern Gas Corridor (SGC). 

The SGC will transport Azeri gas to South Eastern Europe, but faces numerous challenges related to its geopolitical nature. These include the lack of access to significant gas resources, security related risks along its route and geopolitical competition from Russia and China. 

The EU can reduce its exposure to external supply shocks by pursuing market integration and a more ambitious agenda focusing on renewable energy and energy efficiency, which will decrease its reliance on fossil fuels. 

18 March 2017

OPEC and US shale drillers seem back at the brink of war



In December, the world’s petro-states congratulated themselves for what they called a historic achievement—24 of them agreed to cut their collective production by 1.8 million barrels a day, all in the service of bringing order to a chaotic oil market in which prices had plunged to about $27 a barrel. Among the most surprising things was the involvement of Russia, traditionally an outsider that refused to cooperate with OPEC.

Today, all of that seems to be in shambles. Since March 7, oil has again been in free fall. Internationally traded Brent crude is down 9% in March, and, as of this writing, by 1.7% today, to $50.48 a barrel. US-traded West Texas Intermediate (WTI) is being pummeled even worse—it is down by 2% this morning, to $47.41 a barrel.

Russia, for one, is not amused. In an exchange of messages with Reuters, Rosneft, Russia’s top oil company, said that the longer-term trend is for a balanced oil market, but that meanwhile “the risk of a price war resuming remains.” Saudi Arabia appears to feel the same: After reducing its production to 9.8 million barrels a day in January, it said today that it tacked back on over 10 million in February—which was the news that pushed down prices this morning.

Hackers drawn to energy sector’s lack of sensors, controls


by Houston Chronicle 

HOUSTON (AP) — Oil and gas companies, including some of the most celebrated industry names in the Houston area, are facing increasingly sophisticated hackers seeking to steal trade secrets and disrupt operations, according to a newspaper investigation.

A stretch of the Gulf Coast near Houston features one of the largest concentrations of refineries, pipelines and chemical plants in the country, and cybersecurity experts say it’s an alluring target for espionage and other cyberattacks.

“There are actors that are scanning for these vulnerable systems and taking advantage of those weaknesses when they find them,” said Marty Edwards, director of U.S. Homeland Security’s Cyber Emergency Response Team for industrial systems.

Homeland Security, which is responsible for protecting the nation from cybercrime, received reports of some 350 incidents at energy companies from 2011 to 2015, an investigation by the Houston Chronicle has found. Over that period, the agency found nearly 900 security flaws within U.S. energy companies, more than any other industry.

17 March 2017

An Excellent Year For Energy

by Robert Rapier, Investing Daily

A year ago, a barrel of oil was worth something in the low $30s and natural gas prices stood below $2/MMBtu. This was the lowest natural gas price in nearly two decades, and some energy analysts seemed to be vying to make the most outrageously low prediction on future oil prices.

It was obviously a dumb time to invest in energy, right? Wrong! It was exactly the right time to invest in energy companies. It seems to be a well-kept secret, but energy was the top-performing S&P 500 sector in 2016:

16 March 2017

OPEC’s Misleading Narrative About World Oil Supply


At a time when energy market headlines focus mainly on OPEC cuts, observers may be forgiven for concluding that a supply crunch and higher prices are imminent. On the contrary, there is still too much oil in global markets. In this context, OPEC production cuts (which notably fall short of the original target envisaged by the organization) appear to serve mainly as a psychological support to oil prices.

Analyzing trends from my proprietary database of more than 1,200 global oilfields helped me to make a bold prediction in 2012 regarding a coming oil supply boom. In January, my similar field-by-field analysis indicated that world oil production capacity and actual production were still growing—while prospects for demand growth were not sufficiently high to absorb the excess supply. In particular, actual oil production (which includes crude oil and other liquids such as condensates, NGLs, and more according to the standard definition used by most statistics) was almost 99.5 million barrels per day (mbd)—leaving a voluntary and involuntary spare capacity (the result of local civil wars and other geopolitical factors) of more than 4 mbd.

This surprising level of oil availability is a consequence of the impressive acceleration of world oil production that began between September and October 2016 and culminated in December 2016 and the early weeks of January 2017.

IEA Oil Market Report 2017

Source Link

KEVIN BOOK: Good morning, and hi and welcome. My name is Kevin Book, and I’m a senior associate here at the Center for Strategic and International Studies. And I also wear a lot of hats, as someone with my haircut might, and I’m managing director at ClearView Energy Partners as well. 

And we’re going to get started here in just a moment. I wanted to welcome you to this – second unveiling? You can’t really unveil, I guess, a second time. The Washington debut of the Oil Market Report with Keisuke Sadamori, back again to do I think what will be a very interesting discussion. We’ll go through slides. We’ll have a discussion. I will take the privilege of asking a few questions beforehand. And then hopefully we’ll look to a lot of old friends and skilled oil mavens in the crowd. Apparently they followed you up here from Houston. All the intelligentsia are here now for you. 

For those who don’t have the benefit of knowing Keisuke Sadamori, he is the director of energy, markets and security at the IEA. If you – if you saw him last year or you’ve seen him speak in the past, you know that he has at his command a wealth of knowledge, not just in terms of what’s in the report but how the report was made. He has a command of statistics and figures, and more importantly trends and observations, and we’re very delighted to have him here to take us through what the IEA has learned. 

11 March 2017

Oil Glut: It's The Demand, Stupid!

by Reverse Engineer

I ran across a chart on Bloomberg which is perhaps the best demonstration to date that the Oil Economy is in Full On Collapse mode now. The chart is of Oil Inventory in storage, and covers the last 35 years since 1982 of Oil Inventory in the FSoA, and is the first graphic below the picture.


Do you note the Hockey Stick nature of this graph? For 35 years until 2014, Oil Inventories were kept within a very narrow range. Supply & Demand were kept in balance by the folks in control of both the extraction of Oil and the production of money. A more or less steady "growth" rate of the entire system was maintained, as oil output and population increased, the money supply increased in tandem with it, a couple of percentage points ahead which provided return on investment for those in charge of creating the money in the first place. For everyone else, this appeared as Inflation as the cost of housing, food and just about everything else besides technological gizmos kept spiraling upward.

24 February 2017

Why Is Asia Returning to Coal?

By Grace Guo

Just a few short years ago, few would have dared to predict that coal could have a future in the energy policies of emerging and developed countries alike. Yet the fossil fuel is undergoing an unexpected renaissance in Asia, buoyed by technical breakthroughs and looming questions about squaring development with energy security.

For Japan, coal has emerged as the best alternative to replacing its 54 nuclear reactors, which are deeply unpopular with the population and seen as symbols of devastation after the Fukushima Daiichi nuclear disaster six years ago. Mindful of the public mood, the government of Shinzo Abe has completely given up on the country’s dream of nuclear self-sufficiency, and pulled the plug in December on the $8.5 billion experimental reactor project at Monju. On February 1, the government pledged to decommission all reactors and replace them with 45 new coal-fired power plants equipped with the latest clean coal technology. In this, Tokyo seeks to achieve two overreaching goals: preserve its energy security and stay on course to fulfill the obligations set forth by the 2016 Paris Climate Agreement.

But why did Abe go with coal and not renewables or, say, natural gas? After Fukushima, Japan initially ramped up its imports of liquefied natural gas, but realized that LNG would be prohibitively expensive in the long-term. Cost-conscious, the government has instead opted for high-efficiency low-emissions (HELE) coal plants and plans to market its clean coal technologies abroad in addition to implementing them at home. Coal power already made up 31 percent of Japan’s energy mix in 2015 but under the current plan, the fossil fuel will become the country’s primary power source by 2019.

8 February 2017

Over the barrel: Prepare for an oil chage

Source Link
by Vikram S Mehta


India hasn’t yet joined the global move towards clean energy. But for how long can it hold out?

Exponential advancement of technology leading to the development of a competitive and scalable substitute for the internal combustion engine and liquid fuels for transportation.

A large part of my working life was spent with the Shell Group and I accumulated shares in the company. Last year, I decided to reduce my holdings of these shares. This was because I felt the business model of large, integrated, petroleum MNCs was under threat; public sentiment and the regulatory regime would constrain their licence to operate, and more generally, the oil era had entered a period of secular decline.

I may regret my decision but I know these were the reasons I reacted to the FM’s budget pronouncement that the government was going to create vertically integrated petroleum PSUs and the minister of petroleum’s subsequent explanation that scale and size were necessary prerequisites for international competitiveness with equivocation. I asked myself whether, given the speed with which technology is upending the conventional drivers of the petroleum sector, the government should be contemplating such a move at this juncture. Further, I have to admit to disappointment that the FM did not follow this announcement with a statement that the government would make these changes within the frame of a holistic and integrated approach to energy policy.

In my view, historians will with the benefit of hindsight, look back on 2016 as the year of inflexion for the oil industry. They will see it as the year the oil era began to slowly but inexorably hand over the energy baton to clean energy. They will not adduce any one particular event or decision but they will point to the following five broad trends.

Long-awaited TAPI pipeline to finally see light of day in Pak this month

A team from Turkmenistan will reach Islamabad on February 14 to begin work on the route survey, engineering and feasibility study to implement the TAPI pipeline project.
Work on the long-awaited 1,680 km Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline will begin in Pakistan this month, a senior Pakistani official has said.

Leaders of Turkmenistan, Afghanistan, Pakistan and India performed the ground-breaking of the project in December 2015. The project would help ease energy deficiency in South Asia.

The Express Tribune newspaper reported that the Tapi Company, having the mandate to run the pipeline, has awarded the project management consultant (PMC) contract to German firm ILF.

Pakistan’s Inter State Gas Systems Managing Director Mobin Saulat told the daily that the consultant was ready to conduct route survey, detailed engineering and feasibility study this month.

“A team from Turkmenistan will reach Islamabad on February 14 to begin work on the route survey, engineering and feasibility study to implement the TAPI pipeline project,” he said.

The team will first start work in Pakistan and then it will proceed to Afghanistan.

“Pipeline construction and gas-field development has started in Turkmenistan and we appreciate efforts of Turkmenistan authorities to expedite the project,” said Saulat.

24 January 2017

China’s Energy Security Strategies – Analysis


BY MARÍA MONTOSA

China invested 103 billion dollars in renewable energies in 2015, becoming the first country in the world which invested the most in this type of energy. China has several reasons for becoming greener and promoting this kind of resources, but in relation to this article’s nature, the most important motivation may be the diversification in the sources of energy supply.

China’s new Law of National Security states in the articles 28 and 30 that the protection of the channels through from which China obtains its energy sources are strategic for the country’s security and therefore they must be protected. Energy resources are a very important priority for China, determining Beijing’s foreign policy and investments.

This article addresses a general view of the different energy security strategies China is developing, including crucial issues regarding this topic like the Spratly Islands and the Malacca Dilemma, the New Silk Route and the recent importance of renewable energies.
1. China’s main energy security threat: South China Sea, the Malacca Dilemma and the Spratly Islands

18 January 2017

Getting to deep de-carbonization: What role for nuclear power?


Stover is a science writer based in the Pacific Northwest and is a contributing editor at the Bulletin. Her work has appeared in...

The Bulletin of the Atomic Scientists devoted its 2016 Clock Symposium to the question of what role nuclear power can and should play in achieving the deep de-carbonization required to halt global warming. Read the report.