Netherlands politicians have proposed banning the sale of gasoline and diesel-powered vehicles starting in 2025. This would include hybrid vehicles. The lower house of the Dutch parliament recently supported the motion and the cabinet must now come up with a plan to implement the proposal. The motion has yet to pass into law. Over time fossil fuel cars would be replaced by fully electric, hydrogen and self-driving vehicles. These latter vehicles would be the only ones allowed for sale starting in 2025. As of last year, EVs made up almost 10% of the Dutch automotive market with 449,347 vehicle registrations. Netherlands’ proposal would require getting auto makers to produce about 10 times as many electric vehicles as are currently sold to Dutch drivers. Many observers question whether a decade is sufficient time to achieve this ambitious goal.

The International Monetary Fund says slumping crude oil, natural gas and coal prices could hold back a global shift towards renewable energy sources. In its latest World Economic Outlook the IMF notes cheap fossil fuel prices reduce a country’s desire to adopt low carbon but often costlier renewable fuels like solar and wind. Oil prices have dropped more than 70% since July 2014 to about $40 a barrel while coal is trading at decade lows.

The IMF predicts that between now and 2040 renewable energy’s share of global energy use will rise from 14% to 19%. However coal and oil will continue to dominate the world’s energy supply, despite falling from 36% to 26%, and 19% to 12%, respectively.

OPEC now believes that oil production from non-OPEC producers such as the US shale oil producers will fall by some 730,000 barrels per day this year. Whether this is offset by increased Iraqi and Iranian exports remains to be seen.

The political/economic situation in Nigeria and Venezuela continues to deteriorate. This raises the possibility that we may be seeing reduced crude oil exports shortly from either or both of these countries.

Joining other countries in the Mid-East, Egypt announced it will reduce spending on fuel subsidies by nearly 43% in its 2016/17 budget due mainly to lower global energy costs. Consumers reacted angrily when the government cut spending on energy subsidies in mid-2014, a measure that caused domestic prices of natural gas, diesel and other fuels to rise by as much as 78%. To improve its fiscal situation, Egypt has been trying to cut consumer subsidies, which eat up a large portion of the overall budget.

China’s crude oil imports set a record in the first quarter, climbing by 13% year-on-year to 7.3 million barrel per day. Much of the increase is thought to be going to export and its strategic storage reserve, or to fuel the 20 million new cars that the Chinese are selling themselves each year.

The world’s second largest coal company, US-based Peabody Energy Corp., filed for bankruptcy last week.  It joins at least four other US coal companies that have sought bankruptcy as the industry endures its worst downturn in decades — a result of tougher environmental policies, a flood of cheap natural gas from US shale reserves, and a global oversupply of metallurgical coal that has brought down prices for steelmaking to the lowest level in more than a decade. US coal production is down 38% from a year ago.

 

 

with h/t Tom Whipple

 

 

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