Coal is about to become the most-used fuel for electric power generators through the rest of this decade, undermining targets for cutting greenhouse gases even as prices rebound from a four-year low. About 434 gigawatts of coal-power capacity will be added globally by 2020, compared with 241 gigawatts for natural gas and 92 gigawatts for nuclear generation. Coal is emerging as a fuel of choice because of its abundance and affordability. European coal prices for 2014 delivery dropped to an all-time low of $81.75 a ton this week.

Saudi Arabia is trying to boost its crude oil production capacity by 1.75 million barrels per day (b/d) by 2017 and is fast-tracking shale gas exploration. The country is faced with rapidly increasing population leading to increased domestic oil consumption (currently 3 million b/d, growing 7% per year, and doubling in a decade), which means reducing the oil exports that provide most of the desert kingdom’s revenue. To meet the projected domestic and global demands by 2020, Saudi Arabia will have to pump between 12.5 million and 15 million b/d.

China has overtaken the US as the world’s biggest net importer of crude oil. Demand is being driven by the country’s fast growing economy and its yearning for new cars. The US Energy Information Administration recently reported that oil consumption in China had outstripped production by 6.3 million b/d, compared to the 6.1 million b/d in the US and hence causing the need for more imports.

Protests broke out in Khartoum and other Sudanese cities in late September when the government of the African country – reeling from the loss of oil revenues after the independence of South Sudan – lifted gasoline subsidies. This nearly doubled the price of gasoline overnight and caused an increase in the price of other goods. The government reacted forcefully; nearly 70 people died in the violence and 700 people were arrested.

Iraq has signed an agreement with Switzerland-based Satarem to build southern Iraq’s first new, large-scale (150,000 b/d) oil refinery in 30 years. The unit will cost nearly $6 billion and open by 2018.

During the last few weeks we have witnessed the startup of three large new energy projects: Kazakhstan’s much delayed, hugely expensive Kasahagan oil field; the Caspian Shah Deniz natural gas field; and Iraq’s giant Majnoon oil field.

Norway may find itself with a series of Arctic oil finds after a well produced crude oil from a previously unproductive layer of rock. The Gohta discovery in the Barents Sea, holding as much as 145 million barrels of oil, opens as many as 10 possible drilling targets in the surrounding area.

North Africa may be “the next big opportunity” after North America for oil and gas production from shale, if drilling costs can be reduced, said Repsol.

US refiners are selling more refined petroleum products abroad than ever before, effectively exporting the American energy boom. Refiners along the Gulf Coast are increasingly using domestic oil, which is less expensive than the North Sea crude that European refiners use. Fuels made in the US are a bargain in Europe even after adding the shipping costs.

Shale gas may be slow to develop, if at all, in Europe. Densely populated Europe, with citizens generally more sensitive to environmental concerns and more willing to tolerate high energy costs, is unlikely to embrace the technique as North Americans have. France and Bulgaria have already banned hydraulic fracturing and in Britain the government’s attempts to promote it have led to heated demonstrations in the countryside.

The price of solar photovoltaic cells has dropped 99% in the past quarter century. Many believe that in an increasing number of markets around the US, solar PV is at or very close to grid parity.

The World Energy Council and Bloomberg New Energy Finance have launched a new report into the worldwide cost of developing and delivering electricity. The study, “World Energy Perspective: Cost of Energy Technologies”, provides a comprehensive comparative study of the costs of producing electricity from a range of conventional and unconventional sources. These include utility-scale wind, solar PV, solar thermal, marine, biomass, hydro, thermal, coal, gas, and nuclear. Globally, coal is still the king of electricity production, accounting for more than 1.8 terawatts of installed generation capacity.  Electricity from fossil fuels makes up 65% of global power production.

Global investment in renewable energy fell almost US$46 billion to US$47 billion in the third quarter of this year as project finance for renewables stalled owing to policy uncertainty in Europe, overcapacity and cheap natural gas in North America. The third-quarter decline makes it likely that new renewable energy investment for the full year will be below last year’s US$281 billion, which was already 11% below record levels of investment in 2011.

 

With h/t Tom Whipple

 

 

 

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