Editors: Tom Whipple, Steve Andrews
Quote of the Week
“”My estimate is that about 70% of the good quality drilling locations [in the Bakken and Eagle Ford shale plays] have already been drilled. So you’re left with Tier 2, and Tier 3 quality geologic locations, and there’s a really steep drop-off in the amount of oil you get per well with those locations.” Even though technology and well completion techniques have improved per-well yields, “that doesn’t offset bad rock. I expect by the August [earnings conference] calls, to see some independents temper their 2018 growth forecasts. They’ll couch it in terms of unavailability of service equipment, difficulty getting crews or logistical issues, but that will be code for ‘I’m having disappointing well results because I’m having to drill Tier 2 and 3 geologic locations’.” Mark Papa, former CEO of shale producer EOG Resources and currently CEO of small-cap Centennial Resource Development.
Graphic of the Week
1. Oil and the Global Economy
The price spike continued through last Monday and then collapsed as word spread that Russia and the Saudis were considering phasing out the 1.8 million barrel production freeze that has been in effect for nearly 18 months. From Tuesday on it was all downhill. New York futures collapsed by nearly $5 a barrel going from $72.40 to $67.88. In London the decline started on Thursday but then Brent futures fell by more than $3 a barrel to close at 76.44 Friday. The decline in London took longer as the market was reacting to the news of the US trade war with China. Many analysts are noting the $8.56 spread between US and world prices and that the two oil benchmarks are further apart than they have been since 2015 before US crude could be freely exported.
The price spread is a good indicator of how stretched global oil supplies have become even as US oil production has grown to overtake Saudi Arabia and nearing that of Russia. The spread has contributed to soaring US exports, which have hit a record of nearly 2.6 million b/d.
How long the recent price drop continues in problematic. The global economy continues to grow at a good pace, and the news from Venezuela, Iran, and Nigeria suggest we may be seeing lower exports from these countries in the next six months. Whatever Russia and the Saudis’ decide to do about their production freeze, it is likely to be lifted gradually to forestall another price plunge such as we saw last week. Some in the US Congress are already concerned about so much US produced oil going abroad that will not be available to mitigate possible supply disruptions in the future.
The OPEC Production Cut: Saudi Arabia’s and Russia’s energy ministers said on Friday they are discussing reducing the oil production cut by some 1 million b/d to calm consumer worries about supply adequacy. Saudi Arabia’s Khalid al-Falih added that any such move would be gradual so as not to shock the market. The situation has been complicated by the rapid drop in Venezuelan oil production which now has the cut at 52 percent or 2.7 million b/d more than required by the agreement. The complicated restoration of 1 million b/d would simply bring the cut back to its target level. OPEC and non-OPEC ministers are to meet in Vienna on June 22-23, and the final decision will be taken there.
Dividing up the extra barrels among deal participants could be complicated as only a few members of the coalition, namely Russia, Saudi Arabia, and the Gulf Arab states can increase production and gain the added revenue from higher prices.
In addition to complaints about the higher oil prices coming from the Trump administration, the Chinese have also complained about the danger of higher oil prices according to a Saudi statement issued by Energy Minister Falih.
US Shale Oil Production: The US oil rig count rose by 15 the week before last, the most since February as crude prices climbed to their highest since late 2014. Despite the EIA’s estimate that oil production in the lower 48 states grew by another 24,000 b/d last week, questions about how fast and for how long US shale oil production can continue to abound in the financial press.
Last week the rapid growth of the natural gas supplies in the Permian Basin where there is not enough pipeline capacity to move the gas to market became the latest concern. Producers say that unless the federal government allows increased flaring of the natural gas, then the only option is to shut in production until sufficient pipeline capacity can be built. A new problem for Permian oil and gas companies is handling and disposing of water. Earlier this year the University of Texas of the Permian Basin hosted a conference devoted to the region’s energy industry water usage needs. Once a well is producing, the ratio of water to oil can range from 3:1 to 11:1, and the cost of safely disposing of this growing volume of water has become a significant source of rising operating costs. One approach that Permian drillers are using is recycling and reusing produced water for fracking. This can save drillers the companies’ disposal costs and limits constraints on finding new water supplies.
A veteran shale oil executive, who was CEO of a large shale oil producer, EOG Resources, said US output growth “disappointed” in 2017 and will probably continue to do so near-term. “If you look at each month of the EIA [US Energy Information Administration] production growth, it’s been essentially flat for nine of the past 13 months,” he said. “We had 500,000 b/d versus early predictions of around 650,000 b/d.” He pointed out that US petroleum inventories so far this year have “built hardly at all” relative to the five-year average, he added: “We’re clearly undersupplied on a US basis.” Moreover, in the Gulf of Mexico, where production has grown by roughly 80,000 b/d annually in the last few years, we could see flat or the start of declining production growth in 2019 and further declines in subsequent years. Exploration investment in the Gulf essentially stalled from 2015 to the present, due to the industry downturn when operators turned their attention to onshore shale that brings quicker payback.
Two of the “Big Three” oil plays — the Eagle Ford Shale and Bakken Shale — have largely had their best Tier 1 acreage already drilled, much of it during relatively low oil prices that averaged about $48 per barrel between 2015-2017. “So you’re left with Tier 2 and Tier 3 quality geologic locations, and there’s a really steep drop-off in the amount of oil you get per well in these tiers.” Mark Papa expects that by August some independents will lower their 2018 growth forecasts. “They’ll couch it in terms of unavailability of service equipment, difficulty getting crews or logistical issues, but that will be code for ‘I’m having disappointing well results because I’m having to drill Tier 2 and 3 geologic locations.”
Rising interest rates also are becoming a concern for the future of the shale oil industry. Some observers say the near-zero interest rates that the Federal Reserve has mandated in recent years are mainly responsible for the shale oil boom. One analyst says the low rates allowed drillers to borrow close to $1 trillion between 2006 and 2014 which has resulted in multi-billion dollar losses by the shale oil industry. Some are warning that higher interest rates could bankrupt more shale oil drillers, darkening the prospects for higher production levels ahead.
An updated analysis of the outlook for US shale oil production using EIA output data and average well production data concludes that production will peak and start to decline about 2023 which is in line with what other analysts have been saying. The great US shale oil boom has five years or less to go.
2. The Middle East & North Africa
Iran: Supreme Leader Ayatollah Ali Khamenei on Wednesday sneered at the US demands that his country curb its military ambitions and issued his own set of demands to Europe to remain in the nuclear deal.
As could be expected, Tehran is threatening to pull out of the nuclear agreement unless Europe comes up with an “economic package” that will compensate for any economic harm done to Iran from the new US sanctions. The Iranian official who made the threat noted that hardline forces in Tehran were getting stronger and that the country would have to pull out of the non-proliferation treaty and revisit its nuclear doctrine.
Iran’s market share in Europe has already begun to slip as European refiners have started buying alternatives to Iranian crude well before new US sanctions begin later this year. Europe has been buying just under a third of Iran’s oil exports of around 2.4 million b/d. France is examining the question of whether the European Union could compensate European companies that might be facing sanctions by the US for doing business with Iran. EU rules going back to 1996 could allow the EU to intervene in this manner to protect European companies against any US sanctions.
Despite the rhetoric, however, Iran expects some disruption in its oil industry after the reintroduction of US sanctions that would make it hard to stick to its current production goals. Iranian state news agency Shana quoted Zanganeh as saying achieving its stated daily production target of 4.2 million barrels of crude would be “difficult and although it might take more time, we will not do away with it.” Tehran is relying on its two biggest buyers, China and India, to boost its production despite the sanctions.
Iraq: While waiting for a new government to be formed, a process which could take weeks or even months, little new is happening in Baghdad’s oil industry. Rosneft has discovered a new oil field in southwestern Iraq, the company said. The Russian oil firm acquired the rights to the Salman field when it bought smaller Russian oil producer Bashneft two years ago. Until recently, Rosneft was widely seen as a partner of the Kurdistan Regional Government, which is still fighting Baghdad over its share of the oil revenue.
Iraq signed a 25-year contract last week with the China ZhenHua Oil Company to develop the southern part of the East Baghdad field. “The field is very important for the capital,” said Oil Minister al-Luiebi, speaking at the signing ceremony. “It stayed undeveloped for a long time because of reservoir difficulties we faced working there.”
Saudi Arabia: Most of the news concerns the Kingdom’s discussions with the Russians over modifications to the OPEC oil production freeze. Energy Minister Khalid al-Falih confirmed on Friday that the initial public offering of a 5 percent share in Aramco had been delayed until 2019.
Libya: Agoco, a unit of the Libyan National Oil Corporation, has had to significantly reduce oil production at its fields because the hot weather has caused several turbines to stop working. The decline in production amounted to some 120,000 b/d. This is one of the first signs that high ambient temperatures could someday affect the Middle East and North African oil production.
US Treasury Secretary Mnuchin said there is a “massive opportunity” for US energy exports to China after the US and Beijing reached a hiatus in their threats of a trade war. China has become one of the biggest buyers of US oil since the government lifted an export ban in 2015. Last week Beijing announced that it would take in more natural gas from the US to satisfy growing demand as it tries to reduce the use of coal. Oil, LNG, and foods are the key products that the US has in surplus and the Chinese need. Increases in sales of these products could help mitigate the US deficit in the US-China trade balance.
If US crude exports continue to grow, there will be an increasing number of very large crude carriers loaded for China in coming months. The US Energy Information Administration projects the US will average 11.9 million b/d of crude production next year, surpassing Russia as the world’s biggest producer. The light, sweet crude that comes from shale is ideal for many Chinese refineries who are desperate to import more crude as domestic production declines.
Last week PetroChina, Beijing’s top gas producer, curbed supplies of natural gas to some industrial users in its northern and western regions. This is the first sign of tight supplies only two months after China experienced one of its worst winter gas crunches. To prevent another round of winter shortages, PetroChina has already started limiting gas supplies and hiking prices for major customers, including city gas distributors and inland gas liquefaction plants.
President Putin said on Friday that an oil price of $60 per barrel suited Russia and that high oil prices could create problems for consumers. This is yet another sign that a significant change in the oil production freeze is in the offing. Speaking from the sidelines of the St. Petersburg International Economic Forum, Russian Energy Minister Novak said there could be a gradual increase in Russia’s oil output starting in the third quarter of the year. However, “It is premature to talk about a specific figure.”
The European Union settled its multiyear antitrust case against Gazprom last week, suggesting that cheaper and freer natural-gas flows from Russia are coming. Gazprom pledged to set gas prices in line with open Western European markets. President Trump has been pressuring the EU to buy more US energy and cut its dependence on Moscow.
The political row over Europe’s dependence on Russian natural gas is not hindering preparatory work for the subsea Nord Stream 2 gas pipeline from Russia to Germany, with dredging work starting off the Baltic coast last week. A senior US State Department official threatened sanctions for the controversial project. Washington sees the second Nordstream pipeline as a security threat because it could give Russia the chance to install “undersea surveillance equipment” in the Baltic.
Gazprom said on Saturday it has signed an agreement with the Turkish government on a planned gas pipeline across Turkey and agreed to end to a dispute over the terms of gas supplies. Turkish President Erdogan said earlier on Saturday that Turkey and Russia had reached a retroactive agreement for a 10.25 percent discount on the natural gas Ankara buys from Gazprom. Turkey had delayed issuing a permit for the Russian company to start building the land-based parts of the pipeline which would allow Moscow to reduce its reliance on Ukraine as a transit route for its gas supplies to Europe.
The recent closure of the Trans- Forcados Pipeline following the May 7th explosion may affect the ability of the federal government to fund its 2018 budget. Salvic Petroleum Resources Limited is undertaking the emergency repairs and is said to be working round the clock to bring the pipeline back up in a matter of days. However, FBNQuest Capital has predicted that Nigeria’s the crude production target of 2.3 million b/d proposed in the 2018 budget will not be achieved because of the sabotage that is taking place in the lead-up to the 2019 elections. FBNQuest sees average output this year at 2.07 million b/d, compared with 1.90 million in 2017 and the forecast of 2.30 million in the 2018 budget proposals. Oil production will be helped soon with the opening of Total’s deep offshore Egina oilfield which is due to start production in Q4 at 200,000 b/d.
The Minister of State for Petroleum Resources indicated last week that but for the timely interventions of the government with militants who resumed bombing of oil facilities in the Niger Delta three years ago, the country could have been crippled.
Nigerian oil and gas company Oranto Petroleum will be cooperating with Russia’s Rosneft to develop 21 oil properties across Africa. Rosneft does not have a significant presence in Africa except for a 30-percent stake in the giant Zohr gas field off Egypt in the Mediterranean, as well as some prospects in Mozambique. Oranto Petroleum and its sister company Atlas Petroleum International are Nigeria’s largest privately-held exploration and production firms. The companies together have 22 oil and gas licenses in 11 jurisdictions in Africa, including in producing assets in Nigeria and Equatorial Guinea.
During his inauguration speech, Maduro said he would seek the help of OPEC to double Venezuela’s oil production, which is currently at 70-year lows. Maduro also said the current production rate—about 1.5 million b/d—would need to increase by 1 million by the end of this year. While asserting that Venezuela would defeat the US sanctions and reverse its economy, he admitted that it would be a tough job because of the sanctions and the ruinous state of its oil industry.
The US imposed new economic sanctions after Sunday’s election and 14 countries including Argentina, Brazil, and Canada have recalled their ambassadors from Caracas in protest. In retaliation, Maduro ordered the expulsion of the US chief of mission in Venezuela as the US ambassador was tossed out long ago.
The critical issue remains as to whether Washington will push Venezuela to total collapse. This could happen if the US bans imports of Venezuelan oil cutting off an important source of hard currency or forbids the sale of diluents to Caracas which are vital to preparing heavy oil for export.
7. The Briefs (selections from the press – date of article in Peak Oil News is in parentheses – see more here: news.peak-oil.org)
Industry debt: One of the biggest risks to the world’s financial system is the $2.5 trillion of debt owed by oil and gas firms. After a year from hell, prices of commodities and the shares and bonds of the firms that produce them have bounced back in the past month. But the evidence of financial pain is all around. Last week Energy XXI, an explorer with $4 billion of debt, filed for bankruptcy in Houston. And JPMorgan Chase, Wells Fargo and Bank of America complained of rising energy-sector bad debts in their first-quarter results. (5/25)
The oil majors are increasingly betting their futures on a mix of downstream enterprises. Refineries, processing, petrochemical facilities and retail gasoline stations are gaining in importance, while upstream spending stalls. (5/21)
Investors are upping the ante on big oil companies over climate change, demanding they take more concrete action to help curb global warming. The issue is set to come into focus at Royal Dutch Shell’s annual meeting Tuesday where investors with nearly $8 trillion under management will call on the company to go beyond already ambitious plans to curb emissions. (5/22)
Climate lawsuits? After paying more than $65 billion in legal costs for the Deepwater Horizon catastrophe, BP is wary of the risk of lawsuits related to climate change. Chief Executive Officer Bob Dudley raised the topic of class-action lawsuits twice during the company’s annual general meeting in Manchester, England on Monday. (5/22)
The airline industry is heading for rising fuel costs as crude oil prices surge, and the weakest of the European airlines may not make it through the winter, Michael O’Leary, chief executive at Europe’s largest budget carrier Ryanair, said on Monday. (5/22)
The UK Oil and Gas Authority awarded on Wednesday 123 licenses over 229 blocks or part-blocks to 61 companies in the 30th Offshore Licensing Round in the UK North Sea, expecting the round to lead very quickly to activity and boost exploration. The new program commitments include eight firm exploration/appraisal wells. (5/24)
In the UK, Aurora Energy Research has projected that the adoption of electric cars could wipe out as much as $21 trillion in revenues for the oil, gas, and coal industry by 2040. Further, oil prices could plummet to as little as $32 a barrel. (5/24)
In India, soaring gasoline and diesel prices require urgent action, Oil Minister Dharmendra Pradhan said, and the government is trying to find a solution to the problem, which comes as a result of a substantial increase in benchmark oil prices and India’s excessive dependence on imported crude. (5/25)
Offshore Vietnam, last week sources said Rosneft Vietnam BV, a unit of Russian state oil firm Rosneft, was concerned its recent drilling in one such block could upset Beijing. That prompted Vietnam’s foreign ministry to assert the blocks are “entirely under Vietnamese sovereignty and jurisdiction,” and a warning from Beijing to respect its sovereign rights. (5/23)
The expansion of Asian populations and economies is expected to have unprecedented and unpredictable impacts on world resources. The task of meeting future energy needs is daunting. The Chinese have made the use of renewables their preferred option to increase energy production and availability. What may not be obvious is that their installation rate for renewable energy is exceedingly problematic, if not impossible. (5/25)
In Australia, a cross-country pipeline and gas imports from as far away as the US are on the drawing board as the country races to plug a domestic supply gap that is driving up east coast gas prices and threatening jobs. Although Australia is the world’s No. 2 liquefied natural gas (LNG) exporter, much of its east coast gas is tied up in long-term export contracts while mainstay supplies in the populated southeast are drying up more quickly than expected. Imports will be needed within four years. (5/21)
In Sudan, racketeering is rife in Kassala as reports from the state complain that the fuel crisis has worsened in an unprecedented manner. A gallon of diesel now cost US$21.30 on the black market. A large number of people had to stop using their vehicles because of the fuel crisis, which has caused a severe transportation problem. The queues of vehicles in front of fuel stations continue for days. (5/25)
Libya’s National Oil Corporation shipped its first cargo of propane from Zueitina port, four years after the gas processing plant at the port was closed due to protests. (5/24)
Nigeria’s oil minister stated that government intervention and back-channel negotiations during 2015 prevented a crippling of the nation’s economy. Speaking through a podcast, the minister explained that at the height of the oil militancy, Nigeria’s oil production dropped to about 800,000 b/d, a production volume inadequate to fund the national budget or investments in infrastructure. (5/24)
Angola is halving the tax rates on development of oil discoveries with less than 300 million barrels of reserves as new President Joao Lourenco is trying to incentivize oil and gas investment in the African country to stop the decline in oil production. Angola’s oil fields are maturing and are nearing depletion. Unless new investments are made in new discoveries, things will continue getting worse. (5/23)
Across Africa, ambitious operators are seeing multiple opportunities and seeking out the “elephants” – the remaining big hydrocarbon discoveries across the continent. (5/26)
In Brazil, oil prices have gone up 15 times in May alone. On Monday, truck drivers blocked dozens of roads across 19 Brazilian states. They were protesting the latest rise in diesel prices. Since July 2017, diesel users have been grappling with a 21-percent price increase. These continual price hikes are a consequence of a new pricing policy set by Petrobras, Brazil’s state-run oil and gas company, midway through last year. (5/23)
Mexico, several years on from the semi-privatization of its oil sector, has lined up tens of billions of dollars of potential investment in offshore drilling. But the entire effort is at risk as the political winds shift against it. Mexico’s oil production has been in steady decline since the mid-2000s, having peaked at just over 3.5 million b/d. The country’s oil fields are decades-old and losing production. The losses from Mexico’s aging oil fields accelerated in 2014 during the oil market downturn, and output fell below 2 million b/d last year. (5/24)
Mexico received more than half of all US motor gasoline exports during 2017. Changes to Mexico’s retail gasoline and diesel fuel markets, combined with low utilization of Mexico’s petroleum refineries, resulted in increased gasoline imports from the US (5/25)
The US remained the world’s top producer of petroleum and natural gas hydrocarbons in 2017, reaching a record high. The US has been the world’s top producer of natural gas since 2009, when US natural gas production surpassed that of Russia, and the world’s top producer of petroleum hydrocarbons since 2013, when US production exceeded Saudi Arabia’s. Since 2008, US petroleum and natural gas production has increased by nearly 60%. For the United States and Russia, total petroleum and natural gas hydrocarbon production, measured in energy content, is almost evenly split between petroleum and natural gas, while Saudi Arabia’s production heavily favors petroleum. (5/22)
The US oil rig count increased by 15 while gas rigs increased by two, according to Baker Hughes. The combined rig count now stands at 1,059—up 151 from this time last year. (5/26)
Shell has made a large deepwater exploration discovery in the US Gulf of Mexico, just 13 miles from its Appomattox project that is expected to start production by the end of 2019, the oil major said on Thursday. The Dover discovery is Shell’s sixth in the Norphlet geologic play in the US Gulf of Mexico. (5/25)
Exxon Mobil Corp. plans to reduce the amount of natural gas it burns as waste by a quarter within two years to reduce climate-changing emissions, something long demanded by environmental groups and activist investors. (5/24)
Shale natural gas serves as a bridge to a low-carbon economy, but it’s still a fossil fuel that could contribute to climate risks, a U.N. report found. (5/26)
LNG exports: BP has secured 2 million tons/year of LNG from the Venture Global Calcasieu Pass LNG export facility in Louisiana, under a 20-year sales and purchase agreement with Venture Global, the companies announced Monday. (5/22)
More LNG capacity: Cheniere Energy Inc said on Tuesday it had approved the construction of a third liquefaction unit, known as a train, at its Corpus Christi export terminal in Texas, the first new liquefied natural gas project to go ahead in the United States since 2015. The Houston-based company said it would instruct its contractors to proceed with the full build, which started in a limited fashion in late 2017. The first two trains at Corpus Christi are expected to enter service next year. (5/23)
Subtropical Storm Alberto, the first named storm of the 2018 Atlantic hurricane season, is forcing the evacuation of oil workers from the US Gulf of Mexico as it moves toward a Monday landfall between New Orleans and Florida’s panhandle. (5/26)
Hurricane season: Climate forecasters at the National Ocean and Atmospheric Administration, a division of the Commerce Department, predict a 40 percent chance of an average 2018 hurricane season and a 35 percent chance of an above-normal season. There’s a 70 percent chance for as many as four hurricanes of category 3 or stronger. (5/26)
Total California solar output hit a new record last week, placing sun-driven generation at the top of the overall California generation mix so far this month. (5/21)
In New Zealand, power shortages during winters when there is not enough water, wind or sun, remain the Achilles heel in the nation’s otherwise huge potential to move most of its fossil fuel-driven economy to renewable electricity. A new report suggests fast-starting power stations using natural gas should not be closed “without an energy storage solution” under scenarios that show the gap between supply and demand during winter is likely to balloon as the electricity system moves towards 100 percent renewable generation. None of the existing and emerging technologies for electricity storage solutions are obvious solutions since battery storage will only fill in short-term gaps in supply. (5/24)
In Dubai, MBR Solar Park recently opened. MBR, in the desert some 30 miles south of the city of Dubai, is now a massive array of solar panels that spread for miles and continues to grow. It is the largest solar park in the world that in 2016 achieved the lowest prices for solar-powered electricity in the world. (5/23)
Electric vehicles will become cheaper than the internal combustion engine in a half decade, while electric buses will completely “dominate” its sector by the late-2020s, according to Bloomberg New Energy Finance (BNEF). The firm just published its Electric Vehicle Outlook 2018 report. EV sales will top 1.6 million in 2018, up from just a few hundred thousand in 2014. Sales are expected to continue to accelerate, topping 11 million units by 2025 and 30 million by 2030. By 2040, EV sales will hit 60 million, or about 55 percent of the global market for light-duty vehicles. By 2025, China will account for roughly half of the entire global EV market, thanks to a combination of financial carrots and sticks. What is the upshot for crude oil? The penetration of EVs into the light-duty vehicle market will erase 7.3 million barrels per day of oil demand by 2040. (5/22)
EV barrier: A new study by a team from Aarhus University in Denmark has found that car dealerships pose a significant barrier to electric vehicle adoption at the point of sale. Shopping experiences at 82 car dealerships across Denmark, Finland, Iceland, Norway and Sweden found that those dealers were dismissive of EVs; misinformed shoppers on vehicle specifications; omitted EVs from the sales conversation, and pushed customers towards gasoline and diesel vehicles. (5/25)
EV HD trucks: The German Federal Ministry for the Environment gave the green light for a subsidized pilot project to conduct research and development on the electrification of long-haul trucks. The electricity supply for the heavy goods vehicles is provided by using a pantograph to contact an overhead power line. The two project partners involved are Siemens and Volkswagen Group Research. (5/25)
US EV sales sluggish: The US EIA on Tuesday said US electric vehicle sales have been sluggish, but EV proponents contend the EIA’s focus on market share misses the more important EV sales growth-rate indicator. EIA found the EV share of total light-duty-vehicle sales grew the most since 2012, but only accounted for 0.6% of 2017 sales. (5/23)
Lithium-ion batteries have come to dominate the battery market, and this domination looks like it will be a lasting one despite the numerous reports of breakthroughs in battery technology that attempt to find viable alternatives to lithium-ion technology. The search for an alternative could benefit from new regulations seeking to limit the risk of fire inherent in lithium-ion batteries, which is their biggest problem. (5/22)
Battery booster: BP Ventures has provided $20 million in funding to an Israeli startup that makes ultrafast-charging batteries, which aims to make it possible for electric cars to charge in just five minutes—in a time comparable to filling a tank with gas, the supermajor said today.
Cobalt crunch: The increasing popularity of electric vehicles may create a crunch for supplies of cobalt in the early-to-mid 2020s, miners and analysts say, adding that small operators trying to start up mines outside Africa could play a bigger role over time in satisfying demand for the metal used in rechargeable batteries. The Democratic Republic of Congo produces nearly two-thirds of the world’s cobalt as a by-product of its copper mines and is taking an increasingly confrontational stance toward foreign mining companies. (5/25)
Aussie drought: Asian flour millers are set to buy record volumes of wheat from Black Sea producers in 2018 as traditional supplier Australia faces a second year of drought and as demand continues to grow around the region. (5/23)
Southwest drought: The worst drought to hit the Southwest in decades continues to grow even worse, and many are already comparing this current crisis to the Dust Bowl days of the 1930s. The epicenter of this drought is where the states of Utah, Colorado, Arizona, and New Mexico all come together, but it is also devastating areas of North Texas, Oklahoma and Kansas as well. Portions of seven states are already at the highest level of drought on the scale that scientists use, and summer doesn’t officially arrive for another three weeks.