Editors: Steve Andrews
Tom Whipple
Quotes of the Week
Since the beginning of the shale revolution a decade ago, the world has discovered 110 billion barrels of oil. Meanwhile, consumption has totaled 360 billion barrels. This 250-billion-barrel deficit between discoveries and consumption seems sure to grow in the years ahead, given recent oil discovery trends.
It is understandable why people would be complacent about this scenario. After all, didn’t the world face similar risks a decade ago, only to have shale oil save the day? But it isn’t clear that there is another “shale oil miracle” that is ready to save the day. There are indeed more high-cost oil resources out there that can be developed, but these projects take a long time to complete. That’s why we can look out two to three years and see an impending supply crunch. The longer investments in the industry remain depressed, the more unavoidable this scenario becomes.
Robert Rapier, oil industry writer/commentator (4/3)
Graphic of the Week
The graphic below is from a recent analysis by David Hughes: The Problem with EIA Shale Gas and Tight Oil Forecasts.
“Given an analysis of play fundamentals based on current drilling data, there is no credible basis for the high to extremely optimistic forecasts offered by the EIA. Actual production is likely to be far less. Assuming the EIA forecasts are accurate in a long-term energy plan is likely to end very badly. And yet these forecasts are uncritically accepted by policy-makers and the media, the consequences of which will be borne by all of us.” David Hughes spent 32 years with the Geological Survey of Canada as a scientist and research manager.
1. Oil and the Global Economy
Oil futures have fallen about $3 a barrel from two weeks ago when London prices were close to $70. New York futures closed out last week circa $62 and London $67. Prices held steady until Thursday when President Trump announced another round of the tariff war with China sending prices down $1.50 a barrel on Friday. So far neither side has actually imposed any new tariffs, leaving observers to wonder whether Washington and Beijing are simply posturing before negotiations, or a major trade war is in the offing. Other than the possibility of a trade war, the trashing of the Iran nuclear treaty, increasing tensions in the Middle East, and the Korean situation, most of the news lately has suggested higher prices are in the offing.
Demand for oil seems relatively strong. The US stocks report showed the crude inventory down by 4.6 million barrels the week before last and US production up by another 27,000 b/d. If this pace of growth continues, US oil production will be some 800,000 b/d higher by the end of the year. However, as discussed below, more observers are starting to question whether this pace of growth which is coming mostly from the Permian Basin can continue. In the past 12 months, US production has increased by some 1.3 million b/d.
The head of the International Energy Agency, Fatih Birol, recently gave a presentation as to the overall state of energy in the world today. Most of Birol’s points are well known: the world will need 30 percent more energy in the next 25 years; renewables are booming-but there is a critical need for electricity storage; LNG exports are becoming more important as the world attempts to diversify sources of energy; and global warming will drive the demand for more electricity for cooling. Birol noted that the world is making little progress in slowing the use of fossil fuels. In the 1980’s some 83 percent of the world’s energy came from fossil fuels. Last year the number was only down to 81 percent.
The OPEC Production Cut: The cartel’s oil output in March fell to 32.14 million b/d, its lowest level in 11 months, led by declines in seven out of the 14 member countries. Supply disruptions in Venezuela and Angola along with steady smaller decreases in Saudi Arabia, Libya, Algeria ,and Nigeria took March output down by 250,000 b/d from February. The only countries to see a production rise were the UAE, Iraq, and Ecuador.
Angola’s onshore oil fields are mature and in March production declined to an 18-month low of 1.55 million b/d. This decline coupled with a lack of recent upstream investment has dragged output down by 250,000 b/d in the past two years. The country’s oil production is expected to remain low for the next few months until the startup of the 230,000 b/d deepwater Kaombo field in July or August.
As the oil markets grow tighter, OPEC and its non-OPEC allies face the question of how to manage oil supplies to keep prices in a satisfactory range. They want prices that will keep their economies functioning but not so high that they will damage the world economy or encourage another US boom in production. There is much talk of longer-lasting cooperation between OPEC and its allies. Russia has already expressed its willingness to work with the OPEC coalition indefinitely to regulate global oil supplies with energy minister Alexander Novak even advocating the creation of a new global body to monitor crude markets. Key ministers from the 24-country pact will meet in India and Saudi Arabia in the next two weeks to discuss a permanent framework for oil market cooperation.
In the meantime, Saudi Arabia’s Energy Minister al-Falih said he expected the OPEC+ production cut will be extended into 2019.
US Shale Oil Production: The boom continues with drillers adding 11 more oil rigs in last week’s report bringing the count up to 808, the highest since 2015. With lower 48 state production up by 25,000 b/d the week before last things seem to be going well for the US shale oil industry. There are two questions to be answered before the new shale oil boom with its expectations for much higher and protracted oil production can be declared a success. The first is whether the geology of the Permian Basin will cooperate and allow billions of barrels (some say 35 billion) to be produced at an affordable cost. The second and more immediate issue is whether the infrastructure of West Texas will allow oil production there to grow as quickly as predicted, or will constraints force a slower pace of growth in the next year or so.
Permian drillers forecast a 40 percent increase in production this year, a mammoth jump of about 850,000 b/d. Rystad Energy says it isn’t just that drillers are spending more to produce more, but that many are “optimizing their acreage portfolio” by discarding less attractive acreage by selling it off to other companies and using the proceeds to drill faster in the more desired locations.
Last week a new constraint on Permian production emerged. It seems that to keep costs under control, drillers are replacing the expensive diesel-powered and natural gas-powered generators for powering compressors by hooking up to the local electric grid. Power demand in and around the Permian basin is expected to rise to 1,000 megawatts by 2022, up from just 22 megawatts in 2010. Whether the local power companies can meet this demand remains to be seen.
The EIA estimates that production in the Permian will hit a record 3.15 million b/d in April, nearly a third of overall US production of 10.4 million b/d, but this level of output is causing bottlenecks as pipelines transporting the crude have filled up more quickly than expected. Pipeline utilization from the Permian to the Gulf Coast averaged about 89 percent this year and 96 percent in the last four weeks. With few new pipeline projects scheduled for completion this year, producers may be forced to slow drilling, or even shut in active production.
The bottlenecks are forcing prices lower. Midland light sweet crude currently trades at more than $8 a barrel below West Texas Intermediate at East Houston, a key delivery spot for export markets – the biggest discount on record. Given the numerous reports that costs of producing oil in the Permian are rising rapidly due to all sorts of shortages, lower prices are not helping producers who are pledging to start turning a profit and paying dividends this year. These, however, are short-term problems even though they suggest that we may not be seeing weekly production increases of 25,000 b/d much longer.
The geology question is more important and more controversial. Can the Permian produce as much oil in the next 20 years as the EIA and some in the industry are forecasting? It is important to keep in mind that the growth of US oil production accounts for almost all projected non-OPEC growth in 2018 and 2019 and that roughly 70% of US production growth is to come from the Permian Basin. If production in the Permian does not meet growth expectations of growing around 80,0000 b/d each month or even begins falling, there likely will be shortages and much higher prices before the early 2020’s.
In addition the issue of how much oil is left in the Permian’s sweet spots where the “profitable” oil is found remains. A recent analysis points out two major concerns as to how much longer Permian oil production will keep growing. It has long been known that production from a shale oil well can decline rapidly. In some cases output can fall as much as 60 percent from the first month’s rate of production. In the case of the Permian Basin, the rate at which production from “legacy” wells (those that have been in production for more than a month) is falling appears to be accelerating. The annualized monthly decline rate is currently at around 2.34 million b/d or 75 percent of total current production. A year ago, this ratio was just 62 percent.
The EIA is currently projecting that production from the Permian’s legacy wells will fall by 195,000 b/d this month, but that this will be offset by 275,000 b/d of new production coming online leaving production from the basin 80,000 b/d higher on May 1st. It is worth noting that the decline of legacy oil well production in North Dakota’s Bakken fields is about 720,000 b/d or 59 percent of production. The Bakken is forecast to lose 59,000 b/d from legacy well production this month, while new wells produce 71,000 b/d. The net gain of 12,000 b/d for the month is very nice but is way below the forecast for the Permian and contributes little to satisfy growing global demand.
The reasons behind faster-than-expected declines are unknown or have not been made public, but there is some speculation that it may be due to drilling wells too close together – which will obviously accelerate depletion if they are both trying to extract the same oil.
Another issue that could affect Permian production is the gas/oil ratio developing in the Permian. As oil is extracted from a shale well, the pressure in the reservoir it is tapping will fall, and once it falls below a certain point (the bubble point), the natural gas that was initially saturated in the oil will separate from the oil and flow to the surface as a separate product. Permian wet gas production of 10 billion cf/day, which is five times more than Bakken wet gas production at 2.2 billion (despite the fact that the Permian only produces three times more oil than the Bakken), may indicate troubles ahead.
Several analysts have noted that while initial well performance has been steadily improving over the past 10 years, this has come at least somewhat at the expense of later well performance as some of the more recently drilled wells are now on a path to decline faster than wells drilled in earlier years. For example, the average 2013 well is now on course for a lower recovery than the average 2008 well, despite starting better. As the Permian accumulates an ever increasing inventory of “legacy” wells drilled with the “new technology” of longer laterals, more fracking stages, and more fracking sand, there would seem to be the possibility that production from these wells will be lower than anticipated.
2. The Middle East & North Africa
Iran: The most important issue facing Tehran these days is what happens if President Trump refuses to certify that Tehran is abiding by the nuclear deal of 2015 and imposes new sanctions. While other countries, including Europe, Russia, and China are unlikely to follow the US lead, the US still has the economic power to delay foreign investment in the country. Moscow could move into the void. Last week there was talk that Russian energy companies may be willing to invest as much as $50 billion in developing Iranian oil.
Iran and Iraq are among the last places on earth where conventional oil can be produced cheaply provided the political situation remains stable. The tension between Iran and the Saudis remains high due to the situations in Yemen, Bahrain, Gaza, and Syria. Some believe these tensions could endanger the possibility of the OPEC production cut continuing on into next year.
Syria/Iraq: March exports from Iraq averaged 3.4 million b/d, slightly higher than the previous month. The Iraqi cabinet has approved a plan to raise oil output capacity to 6.5 million b/d by 2022. Oil Minister al-Luaibi said in January capacity was currently close to 5 million b/d but that the country is producing only 4.4 million in line with the OPEC agreement.
Prime Minister Al Abadi announced a new plan to end Iraq’s dependence on oil through building up industry and agriculture. Currently, 90 percent of Iraq’s revenue comes from the oil exports. Five years ago a similar plan was announced but never got off the ground. Like other oil exporters, Iraq has been badly hurt by lower oil prices in the last few years.
Study of documents captured after the fall of ISIS revealed the larger source of income for the “caliphate” was heavy taxation of the people and businesses under its control and not the sale of oil as was widely believed. ISIS ledgers show that the ratio of income earned from taxes compared to proceeds from oil sales was 6:1.
Saudi Arabia: While the Saudi government remains upbeat about prospects for the future of their oil industry, some observers are worried about the country’s overdependence on oil exports. These observers note that Saudi Arabia is still unable to meet its budget, even with today’s higher oil prices. If oil prices fall again or hostilities with Iran break out, the Kingdom would have difficulty subsidizing its society to maintain stability.
The crown prince currently is engaged in ambitious plans to remake the Saudi economy. Some US officials say everything around the reforms is proceeding smoothly. Others are saying the Kingdom is running on fumes that will soon evaporate.
A Saudi oil tanker moving through the Red Sea suffered only minor damage after it was attacked by Houthi rebels firing from Yemen. The Saudi-led operation, called Decisive Storm, which aims to dislodge Houthis from power in Yemen has been going on since 2015.
In an unexpected move, Saudi Aramco lifted the official selling price of its Arab Light crude to Asian customers for May loadings. The price was increased by $0.10 a barrel, to a premium of $1.20 to the Oman/Dubai Middle East benchmark.
Saudi Aramco and France’s Total plan to sign an agreement this week for the expansion of their joint venture refinery in Saudi Arabia. The agreement would include an extension of the petrochemical complex at Saudi Arabia Total Refining and Petrochemical refinery in Jubail in which Total owns a 37.5 percent stake.
Libya: The National Oil Corporation announced last Wednesday it had signed a deal to build an office complex in the eastern city of Benghazi that will house the company’s headquarters. With Libya divided between two governments, the issue of where the national oil company is located has been controversial for some time. Whether the company ever moves to Benghazi remains to be seen.
3. China
The possibility of a trade war between the US and China is the top issue at the minute. For now, no new tariffs have been imposed by either side, but the rhetoric and threats grow louder every day. Last Friday US equity markets fell sharply, taking oil prices down too on the possibility that a global economic downturn was in the offing. While some believe all the harsh words are simply establishing negotiating positions, others are concerned that the situation could get out of control.
The Global Times, the unofficial Chinese government newspaper, ran a story last week about how the ‘petroyuan’ had the potential to topple the US Dollar as the global reserve currency. The debut of China’s first yuan-denominated crude futures trading market proved a great success. Total turnover amounted to $2.9 billion on the first trading day.
China took the next major step in the challenging the Dollar’s supremacy as the global reserve currency when it announced it would start paying for crude oil imports in its own currency instead of US Dollars. A pilot program could be launched as soon as the second half of the year and regulators have already asked some financial institutions to “prepare for pricing crude imports in the yuan.” The new plan would start with purchases from Russia and Angola – good friends of Beijing.
China invested a total of $126.6 billion in renewable energy in 2017 which was 45 percent of global green energy investment. Total global investment in renewables last year increased by 2 percent to $279.8 billion, taking cumulative investment since 2004 to $2.9 trillion.
In response to a coming mandate, a California-based energy company said it installed a battery storage system for wind power in the Chinese capital at the Beijing campus of Etechwin, a subsidiary of Chinese wind turbine manufacturer Goldwind. When tied into variable energy resources like wind and solar, batteries can ensure stable output.
4. Russia
Energy Minister Novak said on Friday that Russia’s oil companies invested $23 billion in oil production in 2017, up by 10 percent compared to the 2016 investments of $21 billion. Despite the OPEC/non-OPEC deal, Russia’s average daily crude oil production inched up again last year, to a 30-year-high of 10.98 million b/d.
Russia’s pledge in the production cut deal is to shave off 300,000 b/d from the October 2016 level, which was the country’s highest monthly production in almost 30 years—11.247 million b/d. Novak said all parties to the oil production cut agreement are in favor of continuing some form of cooperation to bring the oil market back to balance. “I did not hear from a single minister who was against such cooperation.” The minister also said that an arrangement under which Moscow cooperates with the OPEC oil group could become indefinite once a current deal to curb oil production expires at the end of the year.
Last week the German government issued a permit for the twinning of the Nord Stream natural gas pipeline running under the Baltic Sea from Russia. With the permit, the German government has issued all of what’s necessary for the project in its territory. The project still needs approval from the governments of Denmark, Finland, and Sweden. Denmark stills seem reluctant to issue the necessary permits. Many Europeans believe that the doubling of a natural gas pipeline from Russia would only cement the continent’s dependence on Moscow for its fuel supply at a time when the Russians are not behaving very well.
According to the CEO of Gazprom, the transit of Russian natural gas via Ukraine will be reduced to just about 10-12 billion cubic meters annually after the completion of two new pipelines—Turkish Stream and Nord Stream2. This confirms Kiev’s fears that the new pipelines will deprive it of a lot of income in the form of transit fees. Last month Gazprom sent 8.1 billion cubic meters of gas to Europe via Ukraine, a 21.3-percent increase on the year. When the Turkish Stream and Nord Stream 2 are ready, Ukraine will receive something like a 12th of its current annual gas transit revenues from Gazprom.
Currently, more than half of the energy consumed in the EU is imported. Of that share, Russia supplies 37.4 percent of the gas consumed by the member states. With the decline of domestic resources, this amount is likely to increase leading many to fear that Europe’s energy security is threatened as Moscow has a record of using energy exports as a weapon.
5. Venezuela
Venezuela’s oil production fell by 80,000 b/d in March. Output is expected to continue downward; the only uncertainty is over the pace of decline, but some estimates suggest it could be as much as another 300,000 b/d by the end of the year. Crude output has fallen 840,000 b/d since March 2015.
According to a new report from the Center for Strategic & International Studies, Venezuela will hand over more and more control over its natural resources to China. The report says that while large foreign investment may have seemed beneficial, in reality Venezuela’s economic predicament has been made much worse by China. Over the past decade, Beijing has sent an estimated $62 billion to Venezuela in one form or another. In return, Venezuela has been sending oil shipments to China as repayment, and last year it sent roughly 330,000 b/d to China, earning Caracas little or no revenue.
US imports of Venezuelan crude have fallen to near historic lows. During January, just five US Gulf Coast refineries imported 92 percent of all Venezuelan crude oil that came into the US. The five refineries—which include Chevron’s Pascagoula refinery, Citgo’s Lake Charles and Corpus Christi refineries, and Valero’s Port Arthur and St. Charles refineries—are therefore particularly vulnerable to disruption of their oil supply. As the Trump administration talks about sanctions on Venezuela’s oil sector, these refineries have begun importing more crude from unusual sources, including Chad, Colombia, and Iraq, and are working on contingency plans as the possibility of a US embargo looms.
6. The Briefs (selections from the press – date of article in Peak Oil News is in parentheses – see more here: news.peak-oil.org)
New low-sulfur fuel: In about 20 months, the shipping industry is going to start burning a fuel that is new to the industry. The International Maritime Organization has set a January 2020 deadline for a new 0.5% sulfur limit on marine fuels. (4/3)
In the UK, the first-ever hydraulic fracturing effort is set for the third quarter following completion of the first horizontally-drilled natural gas well, in Lancashire. (4/4)
First O&G robots: In a world-first, French Total is set to deploy groundbreaking autonomous robots to a North Sea oil platform to test the machines in operational inspections at the facility. It will be an 18-month trial project. The effort aims to tap the potential of robotics in enhancing the safety of offshore oil platforms, improving productivity, and lowering costs. (4/4)
Europe’s biggest gas field–Groningen in the north of the Netherlands–has been pumping gas for more than half a century and supplies gas to 98 percent of the Dutch population. But the field has been causing earthquakes that have become a growing concern for residents and authorities. After years of debates and measures to curb production at the field, the Dutch government decided this week that output at Groningen will be terminated by 2030, with a reduction by two-thirds until 2021-2022 and another cut after that. (4/2)
Offshore Palestine, Anglo-Dutch major Shell will sell its entire 90 percent stake and operatorship of the 1 Trillion cf Gaza Marine gas project to a local investment company, which plans to bring in a new international partner to help develop the long-delayed project. For Shell, which inherited the project through its acquisition of the UK’s BG Group in 2016, the disposal is part of its $30 billion asset disposal program. (4/4)
Bahrain, the smallest energy producer in the Persian Gulf, discovered its biggest oil field since it started producing oil in 1932. The shale oil and natural gas discovered in a deposit off the island nation’s west coast, dwarfs the nation’s current reserves, according to a report by Bahrain National News agency. (4/2)
In India, BP says natural gas operations in the country, one of the fastest growing economies in the world, is part of a long-term strategy. BP expects about 10 percent of its global earnings will come from India. By 2022, three new gas projects will be in operation. (4/7)
In Sudan, the fuel crisis has hit the capital and all the states doubling the suffering of the residents in all the markets in the countryside, towns and cities. Nyala, capital of South Darfur, has been living in total darkness for three consecutive days with total water cuts and lack of fuel that have exacerbated the suffering. (4/6)
Latin American opportunities: For decades, many Latin America’s oil-producing nations shunned investment from foreign firms, instead keeping their vast reserves under the tight control of governments and state-run oil companies. They aimed to protect profits to feed public budgets, but in practice have seen some major breakdowns, as with the corruption scandals and heavy debts at Brazil’s Petroleo Brasileiro. Now, an unprecedented wave of free-market energy reforms is gaining traction across the region, setting up a fierce competition to attract billions of dollars in investment from the likes of Exxon Mobil, BP, and Royal Dutch Shell. (4/3)
Offshore Brazil oil basins are among the best prospects in the world, German energy company Wintershall said after the latest auction. The Brazilian government offered nearly 50 licenses in the latest round of auctions for rights to drill offshore. Wintershall will serve as the operator at four of the license areas and has a participating role in three others. (4/4)
Canada’s oil producers had just started to slowly recover from the oil price crash when they began to face increased constraints in marketing and monetizing their heavy crude oil. Transportation bottlenecks widened the discount to which Western Canadian Select (WCS) trades relative to West Texas Intermediate (WTI), weighing on Canadian producers’ revenues and profits, increasing their debts, and battering their share prices. Some Canadian producers are trying to dispose of heavy oil portfolios that they can’t monetize efficiently with WCS at some $20 or higher discount to WTI. (4/5)
Record US oil in 2018: Annual average US crude oil production reached 9.3 million b/d in 2017, an increase of 464,000 b/d from 2016 levels after declining by 551,000 b/d in 2016. In November 2017, monthly US crude oil production reached 10.07 million b/d, the highest monthly level of crude oil production in US history. EIA projects that US crude oil production will continue to grow in 2018 and 2019, averaging 10.7 million b/d and 11.3 million b/d, respectively. (4/5)
Big oil is starting to think small. Once defined by massive spending and ambitious exploration, some of the world’s biggest energy companies have begun to preach frugality. Investors increasingly favor producers that promise to increase cash payouts, rather than boosting spending to drill for more oil. (4/3)
New oil and gas projects to be approved this year will likely have a 15-percent lower breakeven level than last year’s, at US$44 per barrel of oil equivalent, Wood Mackenzie analysts said. They see as many as 30 new projects coming on stream this year but note that most will be small-scale ones, signaling the lingering wariness among oil and gas players of major investments. This is a continuation of a trend started after the 2014 price crash. (4/7)
Lease bust: The Trump administration heralded the government’s sale last month of US drilling leases in the Gulf of Mexico as a bellwether. If that is the case, a Reuters analysis of the sale’s results shows reason to worry about demand in future offshore auctions. The sale brought in $124.8 million, as just 1 percent of the 77 million acres (31.2 million hectares) offered found bidders. (4/4)
Non-combustion consumption of petroleum products accounted for 13 percent of total petroleum products consumed in the US during 2017. Petroleum products can be consumed, but not combusted, when they are used directly as construction materials, chemical feedstocks, lubricants, solvents, waxes, and other products. (4/7)
Cyber shutdowns: Four gas pipeline operators in the US have had to shut down their communications systems after breakdowns caused by cyberattacks, fueling fear of more hostile cyberactivity to come. The Department of Homeland Security is still collecting data on the occurrences. A third-party provider said it did not believe any customer data had been compromised in the attack. (4/5)
The US pipeline shutdowns come after US officials warned in March that Russian hackers are conducting a broad assault on the nation’s electric grid and other targets. (4/5)
Philadelphia Energy Solutions, which had its bankruptcy plan approved a week ago, was forced to file in large part because of the onerous payouts it had to make to comply with the Renewable Fuel Standard, the rules that mandate the use of ethanol in gasoline. Those rules, which took their current form in 2007 under the George W. Bush administration, act as a gigantic subsidy for the Farm Belt and agribusiness companies that turn crops into motor fuel. (4/3)
Biofuels pullback: The US EPA has approved the request of 25 small refineries to be exempted from the nation’s biofuels laws, marking a big increase from previous years and triggering an outcry from farm groups worried the move will hurt ethanol demand. The expansion of the waiver program represents the Trump administration’s latest clash with the powerful corn lobby, as it seeks to help merchant refiners that claim the US Renewable Fuel Standard costs them hundreds of millions of dollars a year. (4/5)
Prices of renewable fuel credits slumped 35.7 percent in the first three months of 2018, their biggest quarterly loss in a year, on uncertainty over the future of US biofuels policy. This has been the second straight year of uncertainty for the Renewable Fuel Standard (RFS), a 2005 law requiring fuel producers to blend increasing volumes of renewable fuels like ethanol with petroleum-based counterparts. Those who cannot blend these fuels are required to purchase credits, known as Renewable Identification Numbers (RINs). (4/3)
Industrial agriculture is now getting hit on two fronts by the Trump administration – the EPA is undermining the biofuels market with exemptions from biofuels requirements, and Trump’s rapidly escalating trade war has resulted in threatened Chinese tariffs on US soybeans, a major US export commodity. (4/5)
Conundrum from utility bankruptcy: The Trump administration’s commitment to coal is under its stiffest test yet after an Ohio energy company made a plea to favor coal over its many rivals, including oil and natural gas. FirstEnergy Corp.’s fleet of coal- and nuclear-power plants filed for bankruptcy just days after the company asked the federal government for an emergency declaration that would keep many of them open. That forces the Energy Department into a decision on whether to intervene under a seldom-used 83-year-old law and compel the nation’s largest electric-grid operator to dispatch power from FirstEnergy’s coal and nuclear plants before any other. (4/2)
RE growth: The global renewable energy generation capacity increased by 167 gigawatts (GW) to reach 2,179 GW by the end of 2017, representing an average annual growth of 8.3 percent for seven consecutive years. The Abu Dhabi-based International Renewable Energy Agency (IRENA) said in an e-mailed statement that solar photovoltaics (PV) grew by 32 percent in 2017, followed by wind energy, which grew by 10 percent. (4/6)
CA offshore wind? A consortium of power and engineering firms are advancing on what could be the first wind farm off the coast of California. The Redwood Coast Energy Authority, a local government powers agency in northern California, said a selected a group of companies would help drive the development of a possible 100 to 150 megawatt floating wind farm off the coast of Humboldt County. (4/5)
Prices for solar, wind, and battery storage are dropping so rapidly that renewables are increasingly squeezing out all forms of fossil fuel power, including natural gas. The cost of new solar plants dropped 20 percent over the past 12 months, while onshore wind prices dropped 12 percent. (4/3)
Wind and solar have become so cheap on a levelized cost of electricity (LCOE) basis, that they are increasingly representing the go-to source of new electricity generation projects. More surprising, however, is the sudden challenge of batteries in the market for “dispatchable power,” where generators must respond to grid demands by ramping up or down power generation. (4/4)
An EV long-term trend: A recent study by a Swiss and a Dutch university projects future EVs will have 30-70 percent lower environmental impacts that current EVs when changes to electricity generation are considered. The researchers found that the source of electricity used for charging is the largest source of variability in results, though vehicle size, lifetime, driving patterns and battery size also contribute to variability in results. (4/1)
Better battery? What would you think about a battery that sports five times the capacity of the average lithium-ion one? And then what if this batter was cheaper, and even more environmentally friendly? This is not a hypothetical battery—it exists—and researchers are working to make it suitable for wide adoption. This new battery has a lithium-sulfur reaction, and like any new technology, it comes with problems such as the poor conductive properties of sulfur and the instability of the chemical. Experimenters are using molybdenum, which is usually used to improve the strength and hardness of steel; but in the lithium-sulfur battery, moly could be combined with sulfur to create a nano-level layer of a substance that improves the conductivity of sulfur and improves the stability of the battery. (4/3)
Battery breakthrough? A research team led by the National University of Singapore (NUS) has developed an economical and industrially viable strategy to produce graphene. The new technique addresses the long-standing challenge of an efficient process for large-scale production of graphene. Graphene can potentially be employed for a wide range of applications including fast-charging batteries. (4/6)
An internal Shell report from 1988 has revealed Shell was aware of the effect of its business on climate. The report, uncovered by Dutch journalist Jelmer Mommers, has been published in the Climate Files and might make life that much more difficult for the Anglo-Dutch company. The document suggests that the company was interested in researching climate change at least since 1981. Some parts of a document could be seen as a slap in the face of not just Shell, but the whole oil industry. (4/6)
