In The Geopolitics of Energy Joseph Nye writes about how the discovery of shale oil in the US has changed the balance of international political power in the world.

The International Monetary Fund estimates Saudi Arabia will need crude oil prices at about $70 per barrel in 2018 for its budget to break even, a dramatic improvement from the $96 per barrel it needed just last year. This improvement suggests the combination of austerity, cuts to wasteful subsidies, new taxes and economic reforms are starting to bear fruit.

40 million Americans are living in poverty, according to the US Census Bureau, with the poorest households generally spending more than 20% of their income on home energy bills, and in some extreme cases, more than 50%. According to the country’s Energy Information Administration, the average American spends $3,512 annually on energy.

Last weekend wind powered nearly one-quarter of Europe’s electricity demand – the highest proportion on record. Experts say 24.6% percent of Europe’s electricity needs was generated by wind power. Wind power met all of Denmark’s electricity demand, followed by Germany, 61%; Portugal, 44%; Ireland, 34%; Austria, 33%; Spain, 31%; UK, 29%; Netherlands, 25%; Sweden, 24%; and Poland, 22%. Annually, wind currently represents on average around 10% of Europe’s electricity. The previous record for Europe was 19% set in October.

Last weekend wind produced so much energy in Germany that it had to give some away for free. 39.5 gigabites or the equivalent of 40 nuclear power plants worth of energy was generated during the storms, leading the wholesale costs to fall below zero. To balance supply and demand in this situation, some electricity producers closed power stations while others paid their customers to take extra electricity from the network. World oil prices are currently just over $50 a barrel.

The world’s tallest onshore wind turbine, under construction at a German wind farm, will be paired with 70 megawatt-hours of pumped hydro energy storage onsite. Four wind turbines of 3.4 megawatt rated capacity each are being installed in Gaildorf, near Stuttgart in southern Germany. One turbine has a height of 246.5 metres, making it to date the world’s largest on-shore wind turbine. Estimates have the wind power plant generating 10 gigawatt-hours of energy annually. The nearby hydroelectric plant acts as a giant battery and stores surplus power from the wind turbines and can dispatch the energy in times of low wind generation, helping maintain grid stability and guaranteeing continuous power supply.

The government of Bangladesh has entered into an agreement to get 3.6 gigawatts of electricity from a liquefied natural gas (LNG) power plant at the port of Payra. A total of three power units will be constructed with the first two in operation by 2020 and the third in 2021. The power plant will run on imported natural gas and will have a LNG terminal for export.

China is buying up liquefied natural gas (LNG) cargoes worldwide, pushing spot prices for the fuel above those for oil-indexed cargoes, as the Asian country scrambles to avoid a looming winter supply crunch.  China has moved millions of households from burning coal to natural gas this year, pushing up import demand amid an already tightening market. Most Asian LNG supplies are delivered under long-term contracts with prices linked to crude oil. But with the upcoming winter heating season, Chinese utilities have turned to the spot market in desperation to cover themselves to meet surging demand, chartering tankers from as far away as Norway.

A quarter of the world’s oil refineries risk closure by 2035 if governments meet targets to limit fossil fuel burning. A surge in electric vehicle sales and higher efficiency in internal combustion and jet engines are expected to slow demand growth for fuels such as gasoline, diesel and aviation fuel in the coming decades, potentially putting intense pressure on refining profits.

 

with h/t Tom Whipple

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