In its mid-term report the International Energy Agency now forecasts that the US shale oil boom will continue until 2020 but that crude oil prices will stabilize considerably below the $100 a barrel level we have seen in recent years. The agency also says that the drop in US shale output later this year will be limited which is why prices will remain in lower trading ranges. Moreover, the continued production of US shale oil will continue to put a cap on the height of crude oil prices for at least the next five years.

Investment bank Goldman Sachs released a sophisticated new supply and demand analysis, which concludes that the current decline in global crude oil prices is being driven by an oversupply in the oil market.  The firm predicts the coming equilibrium between supply and demand will be at much lower oil prices than we have seen over the past decade. Goldman Sachs also concludes that by the 4th quarter of this year, US shale oil production will have grown by another 615,000 barrels per day over December 2014 and that the number could be even higher.  Most of the oil rigs being pulled out of service these days are those drilling in the least productive parts of shale oil fields and, coupled with growing efficiency of the rigs, this may mean that a lower rig count will not cut production growth by as much as many analysts had believed.

In 2013, when almost all of Japan’s nuclear reactors were shut down due to the Fukushima disaster, more than 86% of Japan’s electric generation mix was composed of fossil fuels. In 2014, Japan’s nuclear generation was zero. The Japanese government anticipates bringing online a few nuclear facilities later this year. Nuclear reactor restarts could begin as soon as May 2015, as Kyushu Electric’s Sendai Units 1 and 2 in southwestern Japan received approval to restart from the Japan’s Nuclear Regulatory Agency.  The Japanese government believes that the use of nuclear energy is necessary to help reduce current energy supply strains and alleviate high electricity prices. The latter have risen 20% with the heavy reliance on high priced imported oil and gas since 2011.

Last year China’s grid-connected wind capacity rose almost 26%, or 19.81 GW, to 7% of national electricity capacity. According to the National Energy Administration, installed wind capacity in that Asian nation is now 96.37 GW – well on track for the 100 GW target set in the government’s 2011-2015 five-year plan. The nation produced 154,300,000 MWh of wind energy, 2.78% of the electric market total, in 2014,

A new report from energy market analysts Wood MacKenzie says that small and large-scale solar could transform US electric power markets just as shale extraction transformed natural gas and crude oil markets. The report finds large-scale solar economics have already reached grid parity (exluding integration costs) across multiple regions in the US with 19 states to be  a grid parity by 2020 and 38 by 2030.  It predicts a US solar market of 26 gigawatts (GW) of small solar and 45 GW of large scale solar by 2035, totalling above 71 GW. (You can access the report here.)

The Indian government announced it hopes to more than double the share of renewable sources to over 15% the country’s overall energy capacity over the next decade. Presently renewable energy accounts for 6% of India’s electric power capacity.

Energy consumption in the European Union has fallen to its lowest levels in 20 years. In 2013 energy usage in the EU was down by more than 9% from its 2006 peak. The decline reflects the continuing economic troubles in the eurozone following the Great Recession as well as efforts taken by member states and businesses to cut energy use and improve efficiency. The total energy used across the EU in 2013 was 1,666 million tonnes of oil equivalent (Mtoe), a widely used measure. That was just below 1990’s total of 1,667 Mtoe.

 

 

with h/t Tom Whipple

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