Cal on June 23rd, 2016

The International Energy Agency estimates electric vehicles account for 0.1% of the global automobile market. The Agency expects 1.26 million electric vehicles to be on the world’s roads by the end of the year.

Volkswagen (VW) said it will invest billions of euros in electric cars, ride-hailing and automated driving to become a world leader in green transport by 2025 as it reshapes its business following a diesel emissions scandal. As a result it is phasing out some 40 models. VW currently makes about 340 car models across its portfolio, which includes brands such as Audi, Skoda and Seat.

BMW is adapting its electric vehicle battery technology for home use. The German automaker has built a home energy system using i3 batteries that integrates seamlessly with EV charging stations and solar panels. The system combines the automaker’s charging station with an extra 22- or 33-kWh battery pack that can charge off of the normal electric grid and be used as a backup during power outages or to cut costs during peak energy usage times when electric rates are highest. These batteries are identical to those found in the i3 and Mini E.  The eventual goal is to repurpose used battery packs pulled right out of an i3 as they start to lose some of their charge/discharge capacity and hit the secondary market. Hence the company is creating a home energy storage solution and a battery recycling program at the same time.

European automaker Renault has launched in Sweden a new service that allows anyone in that country to transform their house into a charging station for electric vehicles. Called Elbnb, the online service will feature a map that will enable EV drivers to quickly locate homes that will allow them to recharge their vehicles. The charging price and times will be determined by the driver and homeowner.

Last week three African countries, Nigeria, Kenya and Zambia announced they had signed a Memorandum of Understanding with Russia on nuclear energy. Russia will be assisting them in building nuclear technology in the African countries. Countries around the world are increasingly becoming interested in nuclear power because it is a way of diversifying their energy supplies while enhancing energy security. With the present decline in the global production and supply of crude oil, countries like Nigeria are concerned about energy security once again and diversifying its sources of energy will help cushion the fluctuations in global oil prices.

UK energy regulator Ofgem has granted a license to build a 650 kilometer long underwater power cable with a capacity of 1.4 gigawatts to bring Norwegian hydropower to Scotland. That represents about 25% of Scotland’s peak energy consumption. The interconnector is scheduled to start operating from 2022. The project will be constructed by the Swedish utility Vattenfall along with the Norwegian energy companies E-CO Energi, Agder Energi and Lyse.

The government of Indonesia wants an acceleration of renewable energy development by five-fold so that renewable energy could reach 23% percent of the total energy mix by 2025.

The International Renewable Energy Agency (Irena) says the amount of electricity generated using solar panels stands to expand as much as sixfold by 2030 as the cost of production falls below competing natural gas and coal-fired plants.  Solar plants using photovoltaic (PV) technology could account for 8% to 13% of global electricity produced in 2030, compared with 1.2% at the end of last year, the Agency says. The average cost of electricity from a PV system is forecast to plunge as much as 59% by 2025, making solar the cheapest form of power generation “in an increasing number of cases”, it said.

With a burgeoning surplus of natural gas globally, large energy firms like Total and Royal Dutch Shell are looking at building liquefied natural gas (LNG) plants downstream in new countries to find a market for the product. The companies see this an opportunity to create new markets from Africa’s Ivory Coast to remote Indonesian islands by building gas-fired power plants, pipelines, regasification and storage terminals. Other potential markets include Chile, Ghana and Morocco.

 

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Cal on June 23rd, 2016

Earth's Energy

Cal on June 22nd, 2016

Some US shale oil producers, who already have large amounts of capital sunk into leases, infrastructure, and drilled but uncompleted wells, are expected to resume drilling as world crude oil prices rise above $50 a barrel.

The International Energy Agency said that unplanned supply interruptions, mostly in Nigeria, have reduced the global oversupply of crude oil from 1.5 million barrels per day to about 800,000  b/d in the first half of this year and forecasts that global demand will be up about 1.3 million b/d for the rest of the year. However, the IEA also noted that OECD countries now have over 3 billion barrels in stockpiles and that this inventory grew by 222 million barrels as compared to last year.  These large inventories of crude oil will keep a downward pressure on world oil prices for some time to come.

US investment banker Goldman Sachs said world oil markets are “fragile” and that supply overproduction will continue into next year.

Energy consultant Wood Mackenzie reported the global oil and gas industry will cut $1 trillion from planned spending on exploration and development because of the drop in prices, leading to slower growth in production. Worldwide investment in the development of oil and gas resources from 2015 to 2020 will be 22%, or $740 billion, lower than anticipated before prices plunged in 2014, with the deepest cuts in the US. A further $300 billion will be eliminated from exploration spending. Spending cuts mean the loss of about 3%  of global production this year and another 4% next year, with onshore US production accounting for about 70% of the total decline.

Deloitte Center for Energy Solutions believes that there will be an oil exploration funding shortfall of $2 trillion over the next five years and that capital expenditures are now below the level required to replace existing reserves. Other industry experts agree and say it certainly appears that the rapid decline in capital expenditures will have a major impact on global crude oil supply and production.

Iran is partnering with China to build a new $550 million oil terminal on Qeshm Island in the Persian Gulf to increase Iran’s capacity to export oil. Iran expects to produce 4 million barrels a day of crude oil by the end of this year.

China’s potential crude oil reserves have increased 64% since 2007 due to increased exploration activities, according to a new report from the Chinese Land and Resource Ministry. These numbers now put China’s potential oil reserves at 126 billion tons, with 30 billion tons of recoverable reserves—up significantly since the last assessment nearly a decade ago. The report also puts the country’s estimated natural gas reserves up 158%, to 90 trillion cubic meters, with recoverable natural gas reserves up 127%, to 50 trillion cubic meters.

Russia said last week that it wants a new natural gas export pipeline to southern Europe to replace the canceled South Stream route. With the Middle East ramping up to produce more natural gas, Russia fears that its natural gas sales may suffer from inroads from liquefied natural gas (LNG) and new gas pipelines into southern Europe that are under discussion.

The return of Iran to the European crude oil markets is hurting Russia’s crude sales in the region.  The discount of Urals crude to Brent widened to $2.40 a barrel last week, the lowest in two years. Russia’s two largest buyers of gas in Europe are Germany and Italy.

In Ukraine, Halliburton, Schlumberger, and Weatherford are among nine companies that submitted bids to carry out hydraulic fracturing operations for Ukraine’s largest natural gas producer.

The world’s two largest oil importers are the US and China, with each importing about the same amount.

The International Renewable Energy Agency said the cost for solar and wind could drop by as much as 59% by the middle of the next decade. Already, the price for solar installations fell by 80% and 30% for wind since 2009.

The amount of coal produced in the US is the lowest it’s been since the early 1980s as overall demand falters. Natural gas is replacing coal the primary source of electricity in that country. One result of this major shift was bankruptcies declared earlier this year by large coal producers Peabody Energy Corp., Arch Coal, and Alpha Natural Resources, among others.

NASA is working on an all-electric plane concept as its newest, futuristic aircraft in the biggest boost yet for the idea of building airliners that don’t burn fuel. The electric aircraft is expected to be called the X-57 and could fly as early as next year.

 

with h/t Tom Whipple

 

 

 

 

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Cal on June 22nd, 2016

Something Different

Cal on June 21st, 2016

“The embattled crude oil and natural gas industry worldwide has slashed capital spending to a point below the minimum required levels to replace reserves — replacement of proved reserves in the past constituted about 80 percent of the industry’s spending; however, the industry has slashed its capital spending by a total of about 50 percent in 2015 and 2016. According to Deloitte’s new study, “Short of Capital? Risk of underinvestment in Oil and Gas is amplified by competing cash priorities,” this underinvestment will quickly deplete the future availability of reserves and production.”

 

The BOE Report

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Cal on June 20th, 2016

Earth's Energy

Cal on June 19th, 2016

Something Different

Cal on June 18th, 2016

Thompson Reuters predicts that solar PV, hydro power, and nuclear fusion will be the three dominant sources of energy over the next three decades, in its report Powering the Planet 2045. The report projects fossil-fuel-based energy sources will be all but gone by the end of this century. Clean coal and natural gas will remain important in the near-term, but over the next three decades solar PV, hydro power, and nuclear fusion will the largest global energy sources, citing innovation in these industries as one of the major driving forces.

McKinsey Energy Insight’s latest analysis reveals that despite an expected increase in global population of around 36%, alongside a doubling in global GDP by 2050, a number of structural shifts in the level and composition of economic growth as well as energy sector dynamics will depress global energy demand growth. This reduction in energy demand growth has significant implications for investment decisions. Major investments in the energy system may no longer be needed and some could be at risk of being stranded. McKinsey projects that crude oil demand will flatten, primarily due to a decline in demand from light vehicles – driven by improved efficiency of internal combustion engines and increased adoption of electric vehicles, autonomous vehicles and ride sharing. Fossil fuels will continue to dominate the energy mix to 2050, but their contribution will decline from 82% today to 74% in 2050. Growth in electricity demand will outstrip growth in demand for other sources of energy by more than two to one, primarily as a consequence of building and industry electrification in China and India. Almost 80% of capacity to meet this overall increase will be in the form of solar and wind power.

The Oxford Business Group reported South Africa’s renewable energy sector is the African continent’s largest producer of renewable energy. Renewable energy generation is expected to reach 7 gigawatts (GW) the middle of this year. Based on existing projects and new projects coming on-line, South Africa appears to be on course to achieve its renewable target of 17.8 GW by 2030 or 21% of total the country’s energy capacity.

Solar is India’s fastest growing new energy source, according to Mercom Capital Group. The south Asian country has installed 2.2 gigawatts (GW) of new solar capacity this year to date, putting it on course to reach 5 GW by the end of the year. Projections for next year are even more bullish, with Mercom expecting India to install more than 9 GW of new PV capacity in 2017. Renewables in general account for 14% of India’s installed power capacity mix. Wind remains the nation’s dominant renewable source, but solar – at 17% of the country’s installed renewable capacity – is rapidly closing the gap.

Mercatus Energy Investment Management report finds that emerging solar markets offer higher returns on investment than developed markets. According to the report’s findings, the average rate of return per solar project in the Middle East is 10.4%, compared to returns of just 4% in Europe. African solar projects offer returns of 10.3% on average, while many parts of the Asian market will see returns of 8.4%. Contrast this with the North American market’s 6.4% average rate of return, and the trend is clear – where there is greater risk, there is greater return. The Mercatus report further finds that the average size of a solar installation in Africa is 45 MW, while for the Middle East and Asia it is 34 MW and 22 MW respectively. In Europe, that figure falls to just 3 MW as the market there continues its transition from ground-mount projects to rooftop installation for the residential and commercial sectors.

A prolonged slump in natural gas prices is delaying the economic transformation of the East African nations of Tanzania and Mozambique.  Years of government inaction means it will be anywhere from 5 years to a decade before trillions of cubic feet of newly found natural gas will be pumped and sold to export markets. The current price for natural gas is $2.16, up from a March low of $1.64 but far short of more than $4 in 2014. See The Wall Street Journal, Gas Slump Defers Eastern African Nations’ Transformation

Saudi Arabia has decided to dramatically cut back on its renewable-power targets and use more natural gas. The desert kingdom now plans to have renewable energy (primarily solar) make up 10% of the energy mix, a reduction from an earlier target of 50%. Energy Minister Khalid Al-Falih commented: “The previous target of 50 percent from renewable sources was an initial target and it was built on high oil prices, near $150 a barrel.” The country will double natural gas production and expand the distribution network to the western part of the nation. Using more gas domestically to generate electricity will free up crude oil for export.

 

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