Showing posts with label Energy. Show all posts
Showing posts with label Energy. Show all posts

28 March 2017

*** Nuclear power promise fades

Brahma Chellaney

It is often said that China could become the first country in the world to age before it gets rich. India faces no such spectre. However, India has already become the first important economy in the world to take on onerous climate-related obligations before it has provided electricity to all its citizens.

This reality has greatly accentuated India’s energy challenge, which is unique in some respects. Consider the scale of its challenge: Before its population stabilizes, India will add at least as many people as the U.S. currently has. Even if India provided electricity to its projected 1.6 billion population in 2050 at today’s abysmally low per capita energy consumption level, it will have to increase its electricity production by about 40% of the total global output at present.

India’s domestic energy resources are exceptionally modest in comparison to population size and the demands of a fast-growing economy, with energy demand projected to rise 90% just over the next 13 years. And, unlike China, India does not share common borders with any energy-exporting country and thus must rely on imports from beyond its neighbourhood, making it vulnerable to unforeseen supply disruptions.

24 March 2017

The Southern Gas Corridor: Challenges to a Geopolitical Approach in the EU´s External Energy Policy

By Marco Siddi

Natural gas is considered an important component of the EU energy mix, both as a replacement for more polluting fossil fuels and as a back-up for intermittent renewable energy production. However, declining domestic production has led to an increase in EU import dependency on gas. 

After the Ukraine crisis, the EU has become wary of energy interdependence with Russia, its main external supplier. This led the Union to accelerate the integration of its internal gas market and to support new pipeline projects, most notably the Southern Gas Corridor (SGC). 

The SGC will transport Azeri gas to South Eastern Europe, but faces numerous challenges related to its geopolitical nature. These include the lack of access to significant gas resources, security related risks along its route and geopolitical competition from Russia and China. 

The EU can reduce its exposure to external supply shocks by pursuing market integration and a more ambitious agenda focusing on renewable energy and energy efficiency, which will decrease its reliance on fossil fuels. 

18 March 2017

OPEC and US shale drillers seem back at the brink of war

In December, the world’s petro-states congratulated themselves for what they called a historic achievement—24 of them agreed to cut their collective production by 1.8 million barrels a day, all in the service of bringing order to a chaotic oil market in which prices had plunged to about $27 a barrel. Among the most surprising things was the involvement of Russia, traditionally an outsider that refused to cooperate with OPEC.

Today, all of that seems to be in shambles. Since March 7, oil has again been in free fall. Internationally traded Brent crude is down 9% in March, and, as of this writing, by 1.7% today, to $50.48 a barrel. US-traded West Texas Intermediate (WTI) is being pummeled even worse—it is down by 2% this morning, to $47.41 a barrel.

Russia, for one, is not amused. In an exchange of messages with Reuters, Rosneft, Russia’s top oil company, said that the longer-term trend is for a balanced oil market, but that meanwhile “the risk of a price war resuming remains.” Saudi Arabia appears to feel the same: After reducing its production to 9.8 million barrels a day in January, it said today that it tacked back on over 10 million in February—which was the news that pushed down prices this morning.

Hackers drawn to energy sector’s lack of sensors, controls

by Houston Chronicle 

HOUSTON (AP) — Oil and gas companies, including some of the most celebrated industry names in the Houston area, are facing increasingly sophisticated hackers seeking to steal trade secrets and disrupt operations, according to a newspaper investigation.

A stretch of the Gulf Coast near Houston features one of the largest concentrations of refineries, pipelines and chemical plants in the country, and cybersecurity experts say it’s an alluring target for espionage and other cyberattacks.

“There are actors that are scanning for these vulnerable systems and taking advantage of those weaknesses when they find them,” said Marty Edwards, director of U.S. Homeland Security’s Cyber Emergency Response Team for industrial systems.

Homeland Security, which is responsible for protecting the nation from cybercrime, received reports of some 350 incidents at energy companies from 2011 to 2015, an investigation by the Houston Chronicle has found. Over that period, the agency found nearly 900 security flaws within U.S. energy companies, more than any other industry.

17 March 2017

An Excellent Year For Energy

by Robert Rapier, Investing Daily

A year ago, a barrel of oil was worth something in the low $30s and natural gas prices stood below $2/MMBtu. This was the lowest natural gas price in nearly two decades, and some energy analysts seemed to be vying to make the most outrageously low prediction on future oil prices.

It was obviously a dumb time to invest in energy, right? Wrong! It was exactly the right time to invest in energy companies. It seems to be a well-kept secret, but energy was the top-performing S&P 500 sector in 2016:

16 March 2017

OPEC’s Misleading Narrative About World Oil Supply

At a time when energy market headlines focus mainly on OPEC cuts, observers may be forgiven for concluding that a supply crunch and higher prices are imminent. On the contrary, there is still too much oil in global markets. In this context, OPEC production cuts (which notably fall short of the original target envisaged by the organization) appear to serve mainly as a psychological support to oil prices.

Analyzing trends from my proprietary database of more than 1,200 global oilfields helped me to make a bold prediction in 2012 regarding a coming oil supply boom. In January, my similar field-by-field analysis indicated that world oil production capacity and actual production were still growing—while prospects for demand growth were not sufficiently high to absorb the excess supply. In particular, actual oil production (which includes crude oil and other liquids such as condensates, NGLs, and more according to the standard definition used by most statistics) was almost 99.5 million barrels per day (mbd)—leaving a voluntary and involuntary spare capacity (the result of local civil wars and other geopolitical factors) of more than 4 mbd.

This surprising level of oil availability is a consequence of the impressive acceleration of world oil production that began between September and October 2016 and culminated in December 2016 and the early weeks of January 2017.

IEA Oil Market Report 2017

Source Link

KEVIN BOOK: Good morning, and hi and welcome. My name is Kevin Book, and I’m a senior associate here at the Center for Strategic and International Studies. And I also wear a lot of hats, as someone with my haircut might, and I’m managing director at ClearView Energy Partners as well. 

And we’re going to get started here in just a moment. I wanted to welcome you to this – second unveiling? You can’t really unveil, I guess, a second time. The Washington debut of the Oil Market Report with Keisuke Sadamori, back again to do I think what will be a very interesting discussion. We’ll go through slides. We’ll have a discussion. I will take the privilege of asking a few questions beforehand. And then hopefully we’ll look to a lot of old friends and skilled oil mavens in the crowd. Apparently they followed you up here from Houston. All the intelligentsia are here now for you. 

For those who don’t have the benefit of knowing Keisuke Sadamori, he is the director of energy, markets and security at the IEA. If you – if you saw him last year or you’ve seen him speak in the past, you know that he has at his command a wealth of knowledge, not just in terms of what’s in the report but how the report was made. He has a command of statistics and figures, and more importantly trends and observations, and we’re very delighted to have him here to take us through what the IEA has learned. 

11 March 2017

Oil Glut: It's The Demand, Stupid!

by Reverse Engineer

I ran across a chart on Bloomberg which is perhaps the best demonstration to date that the Oil Economy is in Full On Collapse mode now. The chart is of Oil Inventory in storage, and covers the last 35 years since 1982 of Oil Inventory in the FSoA, and is the first graphic below the picture.

Do you note the Hockey Stick nature of this graph? For 35 years until 2014, Oil Inventories were kept within a very narrow range. Supply & Demand were kept in balance by the folks in control of both the extraction of Oil and the production of money. A more or less steady "growth" rate of the entire system was maintained, as oil output and population increased, the money supply increased in tandem with it, a couple of percentage points ahead which provided return on investment for those in charge of creating the money in the first place. For everyone else, this appeared as Inflation as the cost of housing, food and just about everything else besides technological gizmos kept spiraling upward.

24 February 2017

Why Is Asia Returning to Coal?

By Grace Guo

Just a few short years ago, few would have dared to predict that coal could have a future in the energy policies of emerging and developed countries alike. Yet the fossil fuel is undergoing an unexpected renaissance in Asia, buoyed by technical breakthroughs and looming questions about squaring development with energy security.

For Japan, coal has emerged as the best alternative to replacing its 54 nuclear reactors, which are deeply unpopular with the population and seen as symbols of devastation after the Fukushima Daiichi nuclear disaster six years ago. Mindful of the public mood, the government of Shinzo Abe has completely given up on the country’s dream of nuclear self-sufficiency, and pulled the plug in December on the $8.5 billion experimental reactor project at Monju. On February 1, the government pledged to decommission all reactors and replace them with 45 new coal-fired power plants equipped with the latest clean coal technology. In this, Tokyo seeks to achieve two overreaching goals: preserve its energy security and stay on course to fulfill the obligations set forth by the 2016 Paris Climate Agreement.

But why did Abe go with coal and not renewables or, say, natural gas? After Fukushima, Japan initially ramped up its imports of liquefied natural gas, but realized that LNG would be prohibitively expensive in the long-term. Cost-conscious, the government has instead opted for high-efficiency low-emissions (HELE) coal plants and plans to market its clean coal technologies abroad in addition to implementing them at home. Coal power already made up 31 percent of Japan’s energy mix in 2015 but under the current plan, the fossil fuel will become the country’s primary power source by 2019.

8 February 2017

Over the barrel: Prepare for an oil chage

Source Link
by Vikram S Mehta

India hasn’t yet joined the global move towards clean energy. But for how long can it hold out?

Exponential advancement of technology leading to the development of a competitive and scalable substitute for the internal combustion engine and liquid fuels for transportation.

A large part of my working life was spent with the Shell Group and I accumulated shares in the company. Last year, I decided to reduce my holdings of these shares. This was because I felt the business model of large, integrated, petroleum MNCs was under threat; public sentiment and the regulatory regime would constrain their licence to operate, and more generally, the oil era had entered a period of secular decline.

I may regret my decision but I know these were the reasons I reacted to the FM’s budget pronouncement that the government was going to create vertically integrated petroleum PSUs and the minister of petroleum’s subsequent explanation that scale and size were necessary prerequisites for international competitiveness with equivocation. I asked myself whether, given the speed with which technology is upending the conventional drivers of the petroleum sector, the government should be contemplating such a move at this juncture. Further, I have to admit to disappointment that the FM did not follow this announcement with a statement that the government would make these changes within the frame of a holistic and integrated approach to energy policy.

In my view, historians will with the benefit of hindsight, look back on 2016 as the year of inflexion for the oil industry. They will see it as the year the oil era began to slowly but inexorably hand over the energy baton to clean energy. They will not adduce any one particular event or decision but they will point to the following five broad trends.

Long-awaited TAPI pipeline to finally see light of day in Pak this month

A team from Turkmenistan will reach Islamabad on February 14 to begin work on the route survey, engineering and feasibility study to implement the TAPI pipeline project.
Work on the long-awaited 1,680 km Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline will begin in Pakistan this month, a senior Pakistani official has said.

Leaders of Turkmenistan, Afghanistan, Pakistan and India performed the ground-breaking of the project in December 2015. The project would help ease energy deficiency in South Asia.

The Express Tribune newspaper reported that the Tapi Company, having the mandate to run the pipeline, has awarded the project management consultant (PMC) contract to German firm ILF.

Pakistan’s Inter State Gas Systems Managing Director Mobin Saulat told the daily that the consultant was ready to conduct route survey, detailed engineering and feasibility study this month.

“A team from Turkmenistan will reach Islamabad on February 14 to begin work on the route survey, engineering and feasibility study to implement the TAPI pipeline project,” he said.

The team will first start work in Pakistan and then it will proceed to Afghanistan.

“Pipeline construction and gas-field development has started in Turkmenistan and we appreciate efforts of Turkmenistan authorities to expedite the project,” said Saulat.

24 January 2017

China’s Energy Security Strategies – Analysis


China invested 103 billion dollars in renewable energies in 2015, becoming the first country in the world which invested the most in this type of energy. China has several reasons for becoming greener and promoting this kind of resources, but in relation to this article’s nature, the most important motivation may be the diversification in the sources of energy supply.

China’s new Law of National Security states in the articles 28 and 30 that the protection of the channels through from which China obtains its energy sources are strategic for the country’s security and therefore they must be protected. Energy resources are a very important priority for China, determining Beijing’s foreign policy and investments.

This article addresses a general view of the different energy security strategies China is developing, including crucial issues regarding this topic like the Spratly Islands and the Malacca Dilemma, the New Silk Route and the recent importance of renewable energies.
1. China’s main energy security threat: South China Sea, the Malacca Dilemma and the Spratly Islands

18 January 2017

Getting to deep de-carbonization: What role for nuclear power?

Stover is a science writer based in the Pacific Northwest and is a contributing editor at the Bulletin. Her work has appeared in...

The Bulletin of the Atomic Scientists devoted its 2016 Clock Symposium to the question of what role nuclear power can and should play in achieving the deep de-carbonization required to halt global warming. Read the report.

11 January 2017

The Future Of Oil And Gas? Look To The Past

Chris Ross
WASHINGTON, DC - JANUARY 19: U.S. Senate Energy and Natural Resources Committee Chair Lisa Murkowski (R-AK) (C) talks with Energy Information Administration Administrator Adam Sieminski (R) before a hearing about the outlook for energy and commodity markets in the Dirksen Senate Office Building on Capitol Hill January 19, 2016 in Washington, DC. Many of those who testified before the committee predicted a highly uncertain outlook for producers of traditional fossil fuels like oil and gas while investment in renewable energy sources continues to increase. (Photo by Chip Somodevilla/Getty Images)

In the early days of 2017, it behooves oil and gas companies to reflect on the past, while making plans robust to an uncertain future outlook. There are several questions that should be asked: 

Where are we in the oil and gas price cycles? 

How will politics and policies affect the business outlook? 

What are the appropriate strategies? 

26 December 2016

A Puzzle of Rising Coal Power Capacity in China

China embarked on a highly visible effort of addressing the twin problems of air pollution and climate change when President Xi Jinping announced in November 2014 that the country would reach peak carbon emissions by 2030. One key focus has been on how to control the use of coal in its power generation and industrial activities. The 13th Five-Year Plan (FYP), covering 2016–2020 and released in spring 2016, put forward major economic targets and a list of nonquantitative goals that provide the overall direction for individual fuels that will together help reduce coal use. A major question, however, has been whether or not China will continue to focus on the key drivers behind climate change and air pollution reform measures in the face of sluggish economic growth and the temptation to use cheap coal resources and energy intensive economic activity to stimulate growth. The 13th FYP for the electricity sector, released last month, offers some details about how China views these challenges as they relate to electric power and acknowledges that coal capacity will increase. The plan underscores the challenge of shifting electricity supply mix, as well as the staying power of coal in the largest carbon emitting country in the world.

Several targets in the 13th FYP for electricity warrant particular attention. First and foremost, the plan states that installed capacity for coal power generation will rise by 200 gigawatts (GW), to 1,100 GW—roughly a 20 percent rise—by 2020. To give a sense of scale, this increment of growth in coal-fired power generation capacity is more than the total installed solar photovaltaic capacity in the world through 2014. Even if the share of coal in the power supply mix remains on track to decline by 10 percentage points by 2020, the rise in generation capacity is likely to complicate the country’s ability to achieve the carbon emissions peak by 2030.

24 December 2016

Rethinking the oil and gas organization

By Christopher Handscomb, Scott Sharabura, and Jannik Woxholth

Organizational choices made during a time of resource scarcity need reexamination when the cycle turns. 

When business cycles turn, cyclical industries can struggle to retool their organizations for the new environment. For instance, today’s oil and gas companies were developed in a time of resource scarcity. To get at those hard-to-find, difficult-to-develop resources, companies greatly expanded the role of their central functions—mandating them to set common standards, make technical design decisions, track company-wide metrics, and disseminate best practices. This worked well during a decade of high growth and high prices but created complexity that added costs, stifled innovation, and slowed down decision making. As these central teams expanded, general and administrative costs grew fivefold, hitting nearly $5 per barrel in 2014 (exhibit), with the biggest increases coming from technical functions such as engineering, geosciences, and health and safety. 

12 December 2016

Energy 2050: Insights from the ground up

By Scott Nyquist

How will the world satisfy its need for energy? McKinsey research offers a perspective. 

When it comes to energy, there is one matter everyone agrees on. For the near future, at least, the world will need more of it—and how it is produced and used will be a critical factor in the future of the global economy, geopolitics, and the environment. With that in mind, McKinsey took a hard look at the data, modeling energy demand from the bottom up, by country, sector, and fuel mix, with an analysis of current conditions, historical data, and country-level assessments. On this basis, McKinsey’s Global Energy Insights team has put together a description of the global energy landscape to 2050. 

It is important to remember that this is a business-as-usual scenario. That is, it does not anticipate big disruptions in either the production or use of energy. And, of course, predicting the future of anything is perilous. With those caveats in mind, here are four of the most interesting insights from this research. 

26 November 2016

The complicated geopolitics of renewable energy

04 Oct 2016


A recent UN climate agreement has the potential to shift global energy consumption from a mix dominated by fossil fuels to one driven by low-carbon technologies. It is clear that if this happens, fossil-fuel-producing countries will have to adjust their economies to reflect lower export earnings from oil, coal, and natural gas. The rise of renewable energy may also create new centers of geopolitical power. As renewable resources become widely distributed, supply-side geopolitics are expected to be less influential than in the fossil-fuel era. Instead of focusing on just two major resources, oil and natural gas, low-carbon energy geopolitics may depend on many additional factors, such as access to technology, power lines, rare earth materials, patents, storage, and dispatch, not to mention unpredictable government policies. Despite uncertainty, there is no question that the balance of power in energy geopolitics is shifting from fossil-fuel owners to countries that are developing low-carbon solutions. 

Meeting the goals set at the 2015 climate conference in Paris calls for dramatic changes in the global energy mix. One-hundred and ninety-five countries agreed on the objective of limiting the global average surface temperature to “well below” 2°C above preindustrial levels (United Nations 2015United Nations. 2015. “Adoption of the Paris Agreement.” Accessed September 22, 2016. To achieve this target, a shift to zero- and low-carbon energy-producing technologies will be required in the near future (IPCC 2014IPCC (Intergovernmental Panel for Climate Change). 2014. “Climate Change 2014 Synthesis Report, Summary for Policymakers.” Accessed September 22, 2016., with wide deployment of negative-carbon technologies – those that remove carbon dioxide from the atmosphere – in the second part of the century.

8 November 2016

*** The future is now: How to win the resource revolution

By Scott Nyquist, Matt Rogers, and Jonathan Woetzel

Although resource strains have lessened, new technology will disrupt the commodities market in myriad ways.

A few years ago, resource strains were everywhere: prices of oil, gas, coal, copper, iron ore, and other commodities had risen sharply on the back of high and rising demand from China. For only the second time in a century, in 2008, spending on mineral resources rose above 6 percent of global GDP, more than triple the long-term average. When we looked forward in 2011, we saw a need for more efficient resource use and dramatic increases in supply, with little room for slippage on either side of the equation, as three billion more people were poised to enter the consumer economy.

While our estimates of energy-efficiency opportunities were more or less on target, the overall picture looks quite different today. Technological breakthroughs such as hydraulic fracturing for natural gas have eased resource strains, and slowing growth in China and elsewhere has dampened demand. Since mid-2014, oil and other commodity prices have fallen dramatically, and global spending on many commodities dropped by 50 percent in 2015 alone.

Even though the hurricane-like “supercycle” of double-digit annual price increases that prevailed from the early 2000s until recently has hit land and abated, companies in all sectors need to brace for a new gale of disruption. This time, the forces at work are often less visible and may seem smaller-scale than vertiginous cyclical adjustments or discovery breakthroughs. Taken together, though, they are far-reaching in their impact. Technologies, many having little on the surface to do with resources, are combining in new ways to transform the supply-and-demand equation for commodities. Autonomous vehicles, new-generation batteries, drones and sensors that can carry out predictive maintenance, Internet of Things (IoT) connectivity, increased automation, and the growing use of data analytics throughout the corporate world all have significant implications for the future of commodities. At the same time, developed economies, in particular, are becoming ever more oriented toward services that have less need for resources; and in general, the global economy is using resources less intensively.

Energy 2050: Insights from the ground up

By Scott Nyquist

How will the world satisfy its need for energy? McKinsey research offers a perspective. 

When it comes to energy, there is one matter everyone agrees on. For the near future, at least, the world will need more of it—and how it is produced and used will be a critical factor in the future of the global economy, geopolitics, and the environment. With that in mind, McKinsey took a hard look at the data, modeling energy demand from the bottom up, by country, sector, and fuel mix, with an analysis of current conditions, historical data, and country-level assessments. On this basis, McKinsey’s Global Energy Insights team has put together a description of the global energy landscape to 2050. 

It is important to remember that this is a business-as-usual scenario. That is, it does not anticipate big disruptions in either the production or use of energy. And, of course, predicting the future of anything is perilous. With those caveats in mind, here are four of the most interesting insights from this research. 

Global energy demand will continue to grow. But growth will be slower—an average of about 0.7 percent a year through 2050 (versus an average of more than 2 percent from 2000 to 2015). The decline in the rate of growth is due to digitization, slower population and economic growth, greater efficiency, a decline in European and North American demand, and the global economic shift toward services, which use less energy than the production of goods. For example, in India, the percentage of GDP derived from services is expected to rise from 54 to 64 percent by 2035. And efficiency is a forthright good-news story. By 2035, McKinsey research expects that it will take almost 40 percent less fuel to propel a fossil-fueled car a mile than it does now. By 2050, global “energy intensity”—that is, how much energy is used to produce each unit of GDP—will be half what it was in 2013. That may sound optimistic, but it is based on recent history. From 1990 to 2015, global energy intensity improved by almost a third, and it is reasonable to expect the rate of progress to accelerate.