The International Energy Agency foresees the global oversupply of crude oil continuing through 2018. The driver is US shale oil production which will grow by 430,000 barrels per day this year and 780,000 next year. Total non-OPEC production including the US is forecast to grow by 1.5 million b/d next year. With global inventories currently 292 million barrels above OPEC’s target, it is difficult to see how the excess oil will be consumed in the next year or so if US shale oil production continues to grow at projected rates.

Libya could be on track to get its crude oil production back up to 1 million barrels per day in the next few months and Nigeria to regain a 2 million b/d production level. If this can be achieved, the two countries together could be producing about 900,000 b/d more than at the time the OPEC production cuts were established last fall. It is easy to see why oil traders are pessimistic about oil prices rising anytime soon.

There have been major efficiencies in the production of shale oil in the US in the past few years such as walking rigs, better drilling equipment, longer lateral well shafts, more intense fracking, better logistics and drilling in only the best locations. Together these efficiencies have lowered production costs from above $60 a barrel a few years ago to the $40s today, allowing for profitable production in the $50 barrel range.

NGVA Europe (the European Natural & bio Gas Vehicle Association) has published a study that shows natural gas reduces greenhouse gas emissions from passenger cars on a Well-to-Wheel (WtW) basis by 23% compared with petrol and by 7% compared with diesel. The study, entitled Greenhouse Gas Intensity of Natural Gas, also shows that for heavy-duty applications, benefits compared to diesel are of 16% for CNG and up to 15% for LNG. Also in the maritime sector, overall WtW benefits are up to 21% compared to conventional HFO (Heavy-Fuel-Oil) fuels. By blending natural gas with just 20% renewable gas, GHG emissions are reduced by 40% compared with oil-derived fuels.

The first shipment of American liquefied natural gas (LNG) arrived in Poland last week, a feat hailed as an energy milestone in both Poland and Europe. Some US energy observers suggest American suppliers could help end Polish dependence on Russia’s state oil company, Gazprom, which provides 59% of Poland’s annual natural gas consumption.

Portugal has created the environment to put in place a national framework for the implementation of alternative fuel networks across the country. linking with its European neighbours. This will include creating guidelines for the sizing of networks of liquefied natural gas (LNG) and compressed natural gas (CNG) supply points, and legislating the technical specifications for the supply of natural gas for road and marine transport.

in China, all manufacturers will be required to generate electric vehicle credits equal to 8% of their total sales in 2018, 10% by 2019, and 12% by 2020. The rule applies to both foreign and domestic car makers.

According to the Norwegian Electric Vehicle Association, 72% of EV buyers in that country are choosing an electric car for economic reasons (eg. government subsidies and tax savings) while just 26% purchase them for environmental ones. Because of its generous policies geared towards EV buyers, Norway has the highest sales of electric cars in the world on a per capita basis.

Bloomberg New Energy Finance estimates solar already challenges the cost of new coal power plants in Germany and the US and by 2021 will do so in markets like China and India.

 

 

h/o to Tom Wipple

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