CNBC wrote that Chinese and Indian demand will assure coal’s future. “Anathema to environmentalists because it creates so much pollution, coal still has the undeniable advantages of being widely available and easy to ship and burn…The biggest attraction, however, is low cost…Burning coal still costs about one-third as much as using renewable energy like wind or solar.” Global demand for coal is expected to grow from 7.9 billion tons this year to 8.9 billion tons by 2016, with the bulk of new demand coming from China and India.

UPI Energy Resources revealed the US may be energy independent by 2035. A new report from the International Energy Agency (IEA) says by 2020, the United States is expected to be a net exporter of natural gas and the North American region should follow suit in terms of crude oil by 2035. The IEA further predicts that fossil fuels will remain the dominant form of energy in part because of government subsidies in North America, North Africa and the Middle East.

The Globe and Mail said the US will be the world’s largest crude oil producer by the end of the decade due to the shale oil boom in the country’s midwest. Rising crude oil output in the US is “nothing short of spectacular” and will exceed that of Saudi Arabia or Russia by 2020 reports the International Energy Agency. The IEA forecasts the US will be producing 11.1 million barrels per day by 2020, up from 8.1 million last year. These rosy forecasts explain why Canada is pushing hard for pipelines to serve Asian markets rather than ship crude oil south of the border as it has traditionally done. See also The Financial Post Is Bakken set to rival Saudi supergiant Ghawar oilfield?

allAfrica told us East Africa is a new frontier for natural gas. The region has emerged as the new frontier for natural gas production, boosted by recent large offshore discoveries in Mozambique, Tanzania and Madagascar according to a new report from Ernst & Young. The report described East Africa as the “next epicentre” for global natural gas. Its author says: “Natural gas development holds tremendous opportunity for Africa. It can be a primary driver of economic growth and broader social development, as well as a major spur for local employment growth and infrastructure development.” With limited local gas demand apart from South Africa, the new discoveries are likely to be targeted for export as liquified natural gas (LNG) principally to Asian markets where it will compete with Russian gas.  See also BDLive East Africa ‘the new promised land’ for gas.

The Globe and Mail reported the global LNG market is increasingly focused on Asia. The market for liquefied natural gas (LNG) will shift toward Asia by 2020, where high prices will attract new supply sources. Europe is expected to remain dependent on pipeline supplies from Russia and North America will become a mid-sized LNG exporter to Asia.. The primary buyers will be Japan, South Korea, China and India.

The changing global market for natural gas, brought about by the huge shale gas finds in North America and conventional finds off East Africa, appears to be forcing Gazprom to lower its prices to Europe. The Energy Tribune informs us that Gazprom has cut the price of natural gas exports to Poland by 10%. The price cut to Poland and other European countries, right before the high demand winter months, is the Russian company’s response to weak demand in Europe coupled with the emergence of new natural gas supplies elsewhere in the world.

Forbes wondered if natural gas will be the future of the US electric grid. Rather than spend enormous mounts of money on a smart grid to upgrade the aging electricity infrastructure in the US, the author proposes switching to the more modern, ubiquitous and reliable natural gas grid which can transport natural gas to and from nearly any location in the lower 48 States with over 90% efficiency. “Natural gas storage provides an enormous amount of flexibility for the gas grid. There are currently more than 400 underground gas storage fields in operation. Gas storage fields are like giant, dirt-cheap batteries that allow power generators to ramp up operations quickly, manage imbalances and maintain reliability during disruptions in production, processing or off-shore delivery infrastructure.” In the comments you will see that the author has his detractors.

Engineering and Technology Magazine suggested methane hydrate could be the next big energy source. Recent experimental drilling in the North Slope of Alaska has produced 30,000 cubic metres of methane. In 2008 it was estimated that 85 trillion cubic feet (2.41 trillion cubic meters) of undiscovered, technically recoverable gas lies within methane hydrate deposits on Alaska’s North Slope. Methane is the main chemical component of natural gas but is in little demand today given the substantial deposits of natural gas around the world in both conventional and unconventional forms. The world has an abundance of methane hydrate and the combined energy content of methane hydrate may exceed all other known fossil fuels, according to the US Department of Energy.

The China Law Blog posted a three part series examining China’s energy challenge.  You can read the series here (Part 1, Part 2, Part 3). The author starts from a basic fact: China uses substantially more energy than the U.S. to produce less than half the economic output. Since China is about to overtake the US within the next decade, this means China’s consumption of energy will  need to grow to about 2.5 times its current size to fuel that increase in GDP. The post sets out the implications for Chinese resource use, consumption, Chinese energy policy and the impact this will have on foreign firms doing business with China or in China. The Oil Drum adds China Energy Outlook: An Inside Look at Chinese Energy Thinking.

India’s energy situation was a topic this week. The Indian Express focused on India’s energy trilemma. India has one of the lowest per capita energy consumption levels globally, at only 20%t of the world average, according to the World Bank. Additionally, India’s energy supply falls well short of growing demand. And even when it is available, it is unreliable and erratic, as the power outage in most of northern India in July 2012 highlighted when the night went dark for 600 million people. The same source added a companion piece, Why the energy future looks bleak. “India’s appetite for energy will grow by 54 per cent between 2011 and 2020. But a range of problems, particularly artificially low energy prices and state involvement in fuel production, will exacerbate the difficulty of meeting surging demand and supporting economic growth. The fundamental problem in the power sector is that consumers buy electricity for less than it costs to generate.”

 

Tags: , , , , , , , , , , , , , ,