A new study by the China University of Petroleum in Beijing says the Asian country is about to experience a peak in its total crude oil production as early as next year.  Without finding an alternative source of “new abundant energy resources”, the study warns, the 2018 peak in China’s combined conventional and unconventional oil will undermine continuing economic growth and “challenge the sustainable development of Chinese society.” This has major implications for the prospect of a 2018 oil supply squeeze — as China scales its domestic oil peak, rising demand will impact world oil markets contributing to a potential supply squeeze. That could happen in 2018 proper, or in the early years that follow. The Chinese options would seem to be: (1) shift to reducing its demand for energy, a tall order in itself given population growth projections and rising consumption; (2) accelerate a renewable energy transition; or (3) militarise the South China Sea in hopes of finding more deepwater oil and gas. China has increased its imports, especially from Russia. So far this year, China’s demand for crude oil has increased by an average of 550,000 barrels per day, more than double the increase during the same period in 2016. It is importing some 11 million barrels of crude a day and is clearly the worlds largest importer, but is highly vulnerable to supply disruptions – hence the ongoing efforts to diversify its oil imports.

Russia’s Gazprom said it expects to supply 10% share of the Chinese natural gas market after 2025. Gazprom said earlier this year it planned to begin supplying gas to China through Siberia in December 2019.

Gazprom has passed ExxonMobil as the top energy company in the world, according to the 2017 S&P Global Platts Top 250 Global Energy Company Rankings. The rankings measure the financial performance of energy firms on four key metrics: asset worth, revenues, profits, and return on invested capital. The list only includes companies that have assets greater than $5.5 billion

RBC Capital Markets said Russia could be an energy superpower by the end of this year. The country could exploit its position on the world crude oil market given recent geopolitical turmoil. Russia stands to gain because of security and economic complications for some of the world’s largest oil producers: Iran, Iraq, and Venezuela.

Cove Point in the US state of Maryland is to become the second major US liquefied natural gas (LNG) facility to begin exporting cargoes. The facility is on schedule for completion before the end of this year.

The average US household expenditure on gasoline in 2017 is expected to total $1,977, or approximately 2.4% of median incomes of households, according to the Energy Information Administration. This compares with the peak of $2,715, or 4% of household income, in 2008.

Taiyuan, the capital of China’s northern province of Shanxi, which is known for its coal production, has banned the sale, transport and use of most coal as it tries to cut air pollution. The ban is designed to cut coal use by more than 90% of the city’s total consumption.

The International Energy Agency announced that it now sees renewable energy as a serious global force, increasingly taking market share away from coal and natural gas. Last year 164 gigawatts of new renewable energy capacity came online around the world, more than triple the amount of new gas-fired power plants, and more than twice the volume of coal. The 164 GW was two-thirds of the net expansion in global electricity supply.

Ten 4.2 megwatt wind turbines—designed to cope with the rough, cold and icy Finnish winters—have been installed over the last two years. This is the first wind farm built to withstand ice-prone conditions off the coast of Finland.

The North African country of Morocco has earmarked €206 million ($244 million) for investments in solar power, to be directed towards projects capable of increasing agricultural output. The capital will be used to promote the use of solar energy to power water pumps for irrigation as part of a plan to expand agricultural water access to more than 100,000 hectares of new land by 2021. This should also reduce consumption of butane gas in farming operations.

A Finland utility is expected to use horse manure to generate electricity to power the entire Helsinki International Horse Show later this month.

The French city of Paris wants to ban all cars with internal combustion engines from its streets by 2030.  The city has already said it will ban diesel-powered cars (which account for more than 40% of the total on French roads) from 2024. The French government is  phasing out long-standing tax incentives for diesel starting next year.

Oxford will be first UK city to ban petrol vehicles from its streets as of 2020. As of that year, only electric vehicles will be allowed on selected roads in the downtown corridor.

The US state of California now requires that as of 2025 15% of all vehicles, with a gross vehicle weight of more than 19,000 pounds, purchased by state agencies must be zero-emission vehicles (ZEV). This figure doubles to 30% beginning in 2030. This would apply to trucks and buses.

UK bank Barclays says the adoption of electric vehicles and improved fuel economy could reduce crude oil demand by 3.5 million barrels a day by 2025. This is roughly equivalent to the total production of OPEC’s third-largest producer, Iran. f electric vehicles make up one-third of the car market by 2040, it could knock out 9 million barrels a day of demand, or about 90% of Saudi Arabia’s daily output. Barclays acknowledges there are still multiple barriers to electric vehicle adoption. Consumers can be turned off by their price and battery life as well as limited refueling opportunities. Moreover, there are questions about the auto industry’s ability to ramp up to large scale EV production.

 

 

 

 

with h/t Tom Whipple

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