Saudi Arabia’s budget deficit is forecast at US$87 billion for this year, assuming a global crude oil price of about $40 per barrel. (Note: as of this posting the world price of oil has fallen further to about $30 per barrel.)  At this rate the desert kingdom’s financial reserves will be exhausted within seven years. To stop the bleeding, Saudi Arabia has decided to remove energy subsidies for residential and industrial consumers. Petrol prices are increasing by up to 60%, natural gas is going up by two-thirds, ethane (a petrochemical feedstock) by 133%, and there will be increased electricity prices for heavy users.  Saudi Arabia has been widely blamed for the plummeting oil prices as the country has adamantly refused to cut its crude oil output in a bid to drive other oil market players, including US shale producers, out of the market.

Following Saudi Arabia, the government of tiny Persian Gulf island of Bahrain said it cut subsidies for diesel and kerosene and increased gasoline prices by more than 50%.

With the world oil price continuing to collapse, Oppenheimer & Co. says half of US shale oil producers could go bankrupt before the crude market reaches equilibrium in a couple of years time. Half of the current producers need $70 oil to survive.

This past weekend Australia’s first cargo of liquefied natural gas (LNG) left the Australia Pacific LNG facility in the state of Queensland for a customer in Asia. This is among the first in a wave of LNG projects that are coming online in the country to serve international markets.  Australia is aiming to become the world’s largest exporter of LNG. This facility takes coal seam gas from Eastern Australia, liquefies it and then ships the fuel to customers in Asia.

Exploration company ONGC has discovered India’s largest hydrate gas reserves off the Andhra coast. Sources put the initial reserve potential of the hydrates at 134 trillion cubic feet. Commercially useful gas hydrates are formed when methane or natural gas get trapped in icicles and are found at places with extreme cold temperatures such as the Arctic region, Alaska and Siberia, or below the seabed under high pressure of water depth. Japan, which has also found gas hydrates off its coast, aims to start commercial production in 2020. ONGC intends to benefit from Japan’s experience and technology by starting pilot production from its discovery in 2017.

The renewable energy share of overall energy consumption in the European Union has reached a member-wide average of 15.8% according to EurObserv’ER. The EU has a goal for each of the 27 member countries to obtain 20% of their energy from renewable sources by 2020. Seven states have already reached this target: Bulgaria, Czech Republic, Estonia, Italy, Lithuania, Romania and Sweden. Meanwhile, Austria, Croatia, Denmark, Finland  and Latvia are close having achieved more than 90% of their national targets. Renewable energy sources include wind, solar, biomass, biofuels and hydro power.

US wholesale electricity prices dropped 27% to 37% across the nation in 2015 compared with 2014, according to the Energy Information Administration. The decrease was driven largely by lower natural gas prices. Because natural gas-fired generation sets the marginal price in many markets, wholesale electricity prices are sensitive to changes in natural gas prices.

State-owned Taiwan Power Co. (Taipower) announced plans to invest US$12 billion in renewable energy in the next 15 years, with the goal of expanding the country’s total installed offshore wind power capacity to 180 megawatts and the total installed solar power capacity to 100 MW by 2030. In addition the company aims to bring the land-based wind energy capacity and thermal power capacity up to a total of 70 MW by that time. Currently the Asia country’s installed wind power and solar power capacity is about 30 MW.

Saudi Arabia plans to spend $109 billion to install 54 gigawatts (GW) of renewable energy by 2040. Of this amount, 41 GW will be for solar power. The desert kingdom has the largest potential for both solar and wind power in the Persian Gulf region. (1 GW is the size of a typical nuclear power facility.)

In the South American country of Argentina, 1.8 million vehicles are now powered by compressed natural gas (CNG).

Navigant Research reports global annual natural gas vehicle (NGV) sales will increase from 2.4 million vehicles in 2015 to 3.9 million in 2025.  The collapse in global crude oil prices that began in late 2014 is putting a damper on NGV sales but fleet markets, (particularly for local applications such as refuse trucks, delivery vehicles and transit buses) are expected to see modest growth.

 

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