Editors:   Tom Whipple, Steve Andrews

Quote of the Week

“Weekly data had shown a strong 324,000 b/d output rise [in US oil production] from March to May. The revised data shows that this rise was a mirage: output actually fell 19,000 b/d over the period. It is time to deal with the statistical gorilla on the oil trading floor. We think US crude oil production has not reached the 11 million b/d shown in recent weeks in the Energy Information Administration weekly data, and that it is significantly below 11mb/d, with growth slowing.” Paul Horsnell, head of commodities research at Standard Chartered

Graphic of the Week

1.  Oil and the Global Economy

Oil prices fell last week mostly on concerns that the looming US-China trade war would stifle demand. There was a short-lived rally on Thursday after the stocks report showed a 3.8 million barrel increase in total crude stocks mostly due to lower exports, but a 1.1 million drop in the inventory at Cushing, Okla. For now, the markets seem well supplied with production by Russia, the Saudis and the Gulf Arabs increasing after the relaxation of the market cap, and there has not yet been a significant reduction in Iranian exports in response to the new US sanctions. The week ended with New York oil futures down to $68.49 and London down to $73.21.

U.S. crude prices rose in 13 of last month’s trading 21 sessions, while London was up in 13 of the 22 trading days. However, most of the gains were moderate, and the drops more severe.  Brent lost nearly $11 over three sessions spread throughout the first four weeks of July.  U.S. crude lost almost $8 over as many days during the same period.  A final day of heavy losses last Tuesday left both markets with their worst monthly drop since July 2016 with London futures trading at close to $79 a barrel in late June and ending up around $73 at the beginning of August.  Several of the down days clearly were due to comments from the White House such as on July 2nd when the President announced on Twitter that Saudi Arabia’s king had agreed to pump up to 2 million more barrels per day to tame fuel prices.

A new market assessment from S&P Global Platts concludes that two-year production highs from Saudi Arabia and other OPEC producers are more than offsetting declines from Iran, Libya, and Venezuela.  According to Platts, production from Iran last month averaged 3.72 million b/d, its lowest level in a year and a half. US sanctions on Iran have hit its oil sector, and some European customers are already curtailing purchases of Iranian crude.

Libya’s production average of 670,000 b/d in June was its lowest since April 2017 as Africa’s largest producer struggles with national security problems.  Venezuela, meanwhile, is coping with what the International Monetary Fund said was a “profound” economic crisis and aging infrastructure, pushing oil production to the lowest level since Platts started keeping track 30 years ago.  Outside of Saudi Arabia, meanwhile, Kuwait and the United Arab Emirates produced the most oil since December 2016, the month before OPEC and other non-member states, including Russia, agreed to curtail production to balance an oversupplied market.

US Shale Oil Production: The most interesting news of last week came when the EIA published its revisions to US oil production for May revealing that US crude output actually fell by 30,000 b/d during the month rather than increasing by over 100,000 b/d.  The monthly total of 10.442 million b/d for May is considerably lower than what EIA itself thought at the time.  EIA weekly estimates for May have production increasing from 10.703 million b/d in early May to 10.769 million at the end of the month.  The weekly assessments are known to be less accurate than the retrospective monthly numbers. That involves a lot of guesswork. Yet, the discrepancy is a major one. Not only did the EIA estimate that production in April and May was much higher than it actually was, but the agency also thought production was rising quickly. If the weekly estimates were to be believed at the time, production would have climbed from 10.525 million b/d in early April to 10.769 million b/d by the end of May, an increase of 244,000 b/d over an eight-week period.

The main reason for the decline in overall US output was a 75,000-b/d decline in production from the Gulf of Mexico. But Texas production only rose by 20,000 b/d, a figure far below what the EIA and most analysts had expected. It has been known for some months that rapidly increasing production from the Permian Basin was running into troubles.

Most of these troubles concern shortages of pipeline capacity to move increasing quantities of oil and gas production to market. While new pipelines are under construction, it will be another 18 months to two years before the capacity problem is mitigated. The basin also is seeing increasing costs of production, shortages of labor and limited capacity to rapidly frack newly drilled wells. This is leading to a large increase in drilled but uncompleted wells in the Permian.

A more subtle problem is the issue of whether developers are running out of the most productive “sweet spots” to drill in the Permian.  While the EIA continues to tell us that newly drilled wells are producing more oil in the first few months than ever before, some observers note that these more productive wells are considerably longer and more expensive to drill than those being brought online a few years ago. At some point, albeit months, years, or decades away, the cost-effective places to drill for shale oil will be gone and the great US shale oil boom of the early 21stcentury will be over.

Most forecasters still see rapidly increasing production from the Permian Basin as the key to sustaining global oil production in the face of severe declines in capital expenditures on finding and developing new sources of oil elsewhere in the world.  Other US shale oil fields are believed to be at or close to peak production and are no longer capable of significant growth. While there have been several large new deepwater discoveries in the last two years, these discoveries are many years away from producing large quantities of oil and global demand for crude still seems to be increasing at the rate of circa 1.5 million b/d each year.

It is still too early to tell if the unprecedented increases in production from US shale oil fields that we have seen in the last ten years is coming to a close. If monthly US production figures continue to fall substantially short of expectations, that would have serious global ramifications. The oil market could end up being a lot tighter than we all expect and oil prices could be considerably higher.

2.  The Middle East & North Africa

Iran: President Trump said last Monday he was willing to meet the leaders of Iran without any preconditions, opening the door to possible negotiations with Tehran.  Senior Iranian officials and military commanders replied on Tuesday by rejecting President Trump’s offer as worthless and “a dream,” saying his words contradicted his action of re-imposing sanctions.  Iranian President Rouhani added that Trump’s repudiation of the international nuclear deal was “illegal” and Iran would not readily yield to Washington’s renewed campaign to strangle Iran’s oil exports.

An Iranian naval commander again threatened hostilities by saying, “The cruel sanctions being imposed on Iran will affect the Strait of Hormuz functions.” The US says Iran has started carrying out naval exercises in the Gulf, apparently moving up the timing of annual drills due to the heightened tensions.

The issue now is which oil importers will follow Washington’s demands and stop or cut back on purchases of Iranian oil. US officials are attempting to persuade Washington’s allies to suspend imports of Iranian crude, but analysts doubt the push will be ultimately successful, as Iran’s return on international oil markets provided a welcome diversity of oil supplies for buyers from Asia to Europe.  Beijing already has declined the request by US officials to stop importing crude oil from Iran; however, the critical question is whether the Chinese are willing to increase their imports of Iranian oil to make up for any loss of sales to other countries.

Ahead of the impending US sanctions, India’s state refiners boosted their Iranian oil purchases, pushing up Indian oil imports from Iran by 30 percent from June to a record 768,000 b/d in July.

Iran is also said to have started to offer Indian cargo insurance for tankers operated by Iranian companies as some Indian insurers have refused to cover oil cargoes from Iran in the face of the returning U.S. sanctions on Tehran. However, Indian oil refiners reduced their orders for Iranian crude oil in June by 12 percent compared to May.  Some large Indian refiners worry that their access to the US financial system could be cut off if they continue to import Iranian oil, and have started to reduce purchases. It will be several months before we know how this confrontation turns out.

In the meantime, Iran’s economy is not doing well, and Iranians are taking to the streets in protest. The country’s currency hit another record low against the US dollar last week on concerns about new American sanctions. The rial traded at 119,000 to the US dollar last Monday and has almost halved since early May. Iranian officials clearly are concerned with the head of the Central Bank saying “Enemies are out to destroy the country’s assets and instill disappointment in public through sanctions.” Over the weekend sporadic protests took place in several cities.

Iraq: Iraq’s oil exports hit an annual high in July as the country sold 3.87 million b/d – an increase of more than 70,000 b/d compared to June.  Baghdad exported 3.54 million b/d via the Basra Gulf, earning $7.597 billion – its largest monthly revenue figure since July 2014.  All the oil Baghdad shipped in July came from the southern fields. and there were no exports during the month from the Kirkuk fields, located in northern Iraq but under the control of the federal government.

Protests continued around Basra last week, as demonstrators threatened to shut down all roads leading to the super-giant West Qurna 1 oil field. Outraged protesters have flocked back to several oil sites in Basra following a message Friday from Grand Ayatollah Ali al-Sistani, who encouraged his followers to express their displeasure about the Iraqi government’s failures to address problems of corruption, unemployment, and lack of basic services.

As protests spread in southern Iraq, there have been renewed demands for autonomy for the governorate.  The concept of autonomous regions is a thorny issue among Iraqis, many of whom resist the idea of the division of Iraq. However, it may be argued that calls for an autonomous Basra governorate are merely an attempt to pressure the central government to disburse the governorate’s budget allocation and provide better services.

Basra is economically the most important province in Iraq, the third largest governorate with a population of more than 1.5 million people, situated between Iran and the Gulf states. The governorate contributes a major part of Iraq’s federal budget.  In June 2018, the central government exported 105 million barrels of oil from Basra, which produces 2.8 million barrels on a daily basis.  However, the governorate’s residents do not benefit much from the revenue.

Saudi Arabia:  The Aramco IPO was put on indefinite hold several weeks ago, but Saudi Arabia’s funding needs have never been greater. Now Crown Prince Mohammed bin Salman has come up with a scheme to raise tens of billions for the government by forcing Aramco to issue debt to buy a controlling stake in a petrochemical company from the country’s sovereign-wealth fund. Should the deal go through, it would give the Public Investment Fund (PIF) between $50 billion and $70 billion for all or part of its stake in Saudi Basic Industries, or Sabic. Controlled by the state, Sabic is also the country’s largest publicly listed company, with a market cap of about $100 billion.

The Aramco IPO with its required disclosures would have shed light on the inner workings of the company for the first time since it was nationalized in 1980 and lead to the independent verification of its oil reserves and other assets. It would be a significant step in unmasking the murky world of national oil companies, whose reserves are thought to represent 90 percent of global reserves of oil and natural gas according to one estimate. Some are saying that an international sale of bonds to finance the purchase of the Sabic petrochemical company would also require disclosure of the company’s financial information, but many doubt the new scheme to finance the Saudi government will ever take place.

3.  China

The impending Sino-American trade war continues to be one of the world’s top issues.  Last week US President Trump sought to ratchet up pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports. US Trade Representative Robert Lighthizer said Trump directed the increase from a previously proposed 10 percent duty because China refused to meet US demands and has announced retaliatory tariffs on US goods. On Friday, China proposed retaliatory tariffs on $60 billion worth of US goods ranging from liquefied natural gas (LNG) to some aircraft, as a senior Chinese diplomat cast doubt on prospects of talks with Washington to solve the trade conflict.

China’s proposed tariffs on US liquefied natural gas and crude oil exports opens a new front in the trade war. China included LNG for the first time in its list of proposed tariffs at the same time that its biggest US crude oil buyer, Sinopec, suspended US crude oil imports.

The first official data reflecting the impact of US tariffs on China’s economy was released last week with surveys of factories and service providers pointing to sluggish domestic demand.  The official manufacturing purchasing managers’ index fell to a five-month low of 51.2 from June’s 51.5, slightly lower than economists’ expectations.  The import sub-index of the PMI slipped to a 23-month low, while the export sub-index held steady thanks to a weaker yuan. An official measure of activity outside China’s factory gates, also released Tuesday, declined to an 11-month low in July, as cooling manufacturing and construction activities weighed on the sector.

A meeting of the Politburo last week highlighted the challenges Beijing faces. Without mentioning the trade conflict with the US, a statement issued after the meeting made it clear that the dispute is a threat to China’s growth and stability.

4. Russia

Russia’s crude oil and condensate output during July rose by 148,000 b/d, to 11.215 million b/d, in line with Russia’s pledge to boost output under the OPEC agreement.  Under the original deal in force since January 2017, Moscow had agreed to cut 300,000 b/d from its October 2016 output of 11.247 million b/d.  On Wednesday, Energy Minister Novak said his crude and condensate output in July was 40,540  b/d below the October 2016 level.  The October 2016 level of 11.247 million b/d came as the result of an unusual monthly surge in production from 10.7 million b/d meaning that after the supposed “cut” Moscow’s production was still close to pre-agreement levels.

Production may remain around the 11.2 million barrels a day level for the remainder of the year, a government official said, citing the oil ministry’s most recent calculations. Supply could even increase if there are further agreements with OPEC+ to change current output policy and boost supplies, though there haven’t been any detailed talks on this yet.  OPEC+ may discuss whether a bigger production increase is needed when they meet in September, Novak said last month.

5. Nigeria

Between March 2017 and March 2018 the Nigerian National Petroleum Corporation incurred a loss of US$663 million as an under-recovered expenditure in importing gasoline at the international market price and selling at the federal government’s regulated pump price of $.40 per liter. The report, which showed that 80.26 million liters of gasoline were consumed in March 2018, also indicated that in February 2018, Nigeria’s oil production volumes declined by about 7.588 million barrels on account of many production shut-ins mostly on crude oil export terminals and pipelines.

The Minister of State for Petroleum Resources says that new and upgraded oil refineries in Nigeria would place a lot of demand on the country’s oil production, so that it may find it difficult to meet the needs of the soon-to-be-completed refineries. The imminent recovery of refining capacity of the four refineries owned and operated by the Nigerian National Petroleum Corporation is part of the expected pressure on the country’s oil production which is currently around 2.3 million b/d.

Government’s statistics had indicated Nigeria currently has a 445,000 b/d refining capacity in the NNPC’s four refineries. This number is however projected to rise with the coming on stream of refineries such as the 650,000 b/d Dangote refinery; the Omsa Pillar Astex Company (OPAC) refinery in Delta; as well as the 12,000 b/d Azikel refinery, amongst others.  At a recent meeting in Abuja, where Nigeria and Niger Republic penned agreements to build a 150,000 b/d refinery in Katsina, the Minister predicted that Nigeria could have challenges providing crude oil for the refineries when they all become operational.

Nigeria’s crude oil production is expected to rise further if Shell and its partners, next year, decide whether to go ahead with the development of the nation’s Bonga Southwest offshore oilfield. The project, one of the country’s largest with an expected production of 180,000 b/d, is expected to generate a profit above $50 a barrel.  Shell is negotiating a production sharing contract with the Nigerian government which will determine the viability of the project,

6. Venezuela

According to the Miami Herald, a US probe into the laundering of $1 billion from Venezuela’s state-owned oil company PDVSA has involved President Maduro. Although Maduro was not named in the criminal complaint filed earlier this month, the president along with other senior Venezuelan officials are being investigated for their alleged participation in the scheme that involved channeling hundreds of millions of dollars from PDVSA into US and European banks.

As the economic crisis continues to deepen, President Nicolas Maduro is promising a new policy on gasoline which is currently generously subsidized by the government.  Given the rate in inflation in Venezuela, it is difficult to put a meaningful price on anything, but the current authority on world gasoline prices puts the price of a gallon in Venezuela at $.01(1 cent). Maduro promised last week a new plan to ease the economic crisis and hyperinflation. The president didn’t elaborate on the gasoline policy plan, but said: “I’m committed and with a new national hydrocarbon policy we’ll have enough money, cash, in this country to invest in everything our people need.  We’ll have money to spare.”

Maduro didn’t say that gasoline prices would be increased but warned that people who don’t take part in a nationwide car census that began last Friday would not be eligible to receive state subsidies for gasoline. It sounds a lot like rationing of that one cent gasoline is on the way.

7.  The Briefs (selections from the press – date of article in Peak Oil News is in parentheses – see more here: news.peak-oil.org)

In Yemen, despite a worsening humanitarian crisis amid a war between the Houthi rebels and a coalition of Saudi Arabia and the UAE, the poorest Arab country has found a way to restart oil production and has even exported the first cargo: 500,000 barrels sold to a Chinese company. This is the first outbound shipment of crude oil from Yemen since 2015 when a civil war broke out. (8/4)

India’s cabinet approved a policy to allow companies to explore and exploit unconventional oil and gas resources such as shale oil and gas and coalbed methane under the existing production sharing contracts, as it aims to reduce its dependency on energy imports. (8/2)

In China, reductions to subsidies for hybrid and battery-powered vehicles that came into effect mid-June are already having a dramatic impact. According to government data, some 64,000 battery-electric vehicles rolled off production lines in June 2018, a drop of 16 percent compared to May. June sales of BEVs fell by 23 percent. (8/3)

South Korea is planning to cut taxes on LNG by 74 percent and raise taxes on coal for power generation by 27 percent next year in an effort to cut the country’s heavy reliance on coal for power production and shift towards gas. (7/31)

The Indonesian government has moved to reclaim its prolific Rokan oil block from Chevron in 2021. When Chevron’s contract is set to expire, the government will then turn it over to state-run Pertamina. Chevron Pacific Indonesia is just the latest oil major casualty in Indonesia’s determination to nationalize its natural resources, including oil. (8/2)

In Argentina, energy industry participants are set to meet August 13 in Neuquen with labor leaders and politicians to discuss the future of the Vaca Muerta, as issues mount that could slow development of one of the world’s largest shale oil plays. (8/1)

Offshore Mexico, the outcome from a potential $1.9 billion commitment by Italy’s ENI could realize 90,000 barrels of oil per day from 2021.  The so-called Area 1 basin is located in the shallow waters of the Campeche Bay. (8/2)

Canada’s gross domestic product grew at a faster pace than forecast in May, led by the oil and gas industry and more specifically, oil sands. Statistics Canada reported that the national GDP expanded by 0.5 percent in May, with 19 out of 20 industries booking improved results compared to April, with oil and gas posting a 2.5-percent improvement and the oil sands industry recording growth of 5.3 percent. (8/3)

Canada secondary? Like most other elements of President Trump’s America First policy, there should be little expectation that Mr. Trump has any commitment to Canada when it comes to energy. Reaching non-US global markets directly is clearly in the strategic interest of Canadian energy producers, for both expanded sales opportunities and capturing better prices. But without adequate pipeline and shipping infrastructure, Canadian energy producers will remain dependent on a single buyer, the U.S., with a fickle and self-absorbed energy agenda. (8/1)

Canadian heavy oil prices are the weakest in almost five years, leading Canada’s largest producer—Canadian Natural Resources Ltd.—to focus on drilling for lighter crude. Western Canadian Select’s discount to benchmark West Texas Intermediate widened to $31 a barrel Friday, the biggest gap since December 2013. Prices have tumbled amid constraints on pipeline and rail capacity out of Western Canada and as the US Midwest’s biggest refinery prepares for maintenance later this month on its largest crude distillation unit. (8/4)

The US oil rig count declined by two to 859, the second such decline in three weeks, according to Baker Hughes.  Gas rigs dropped by three to 183.  The rate of oil rig growth has slowed over the past couple of months with recent declines in crude prices. So far this year, the total number of oil and gas rigs active in the US has averaged 1,010, the highest since 2014 but well below that year’s average of 1,862 rigs. (8/4)

BP’s $10.5 billion move to acquire most of BHP Billiton’s shale acreage in North America “signals a bold return by the UK oil giant to the lower 48 states,” according to Rystad Energy. The energy research company said the action gives BP a prominent position in the North American tight oil play and secure access to new projects that can contribute on a large scale to growing its production. (8/1)

Oil export tools: Tallgrass Energy on Wednesday joined a growing list of midstream companies that plan to load US crude directly onto supertankers by building an offshore pipeline. The company said it will build an 800,000 b/d crude pipeline that will carry oil from the Cushing, Oklahoma, hub to the St. James, Louisiana, refining complex and then link that line to an export-capable liquids terminal being built near the mouth of the Mississippi River. The proposed terminal will then be linked to a separate offshore pipeline extension that would allow for the loading of VLCCs that can transport about 2 million barrels of oil. (8/2)

US natural gas demand is rising on a structural basis, as coal plants shut down and more gas-fired generation comes online. In addition, gas exports in the form of LNG are steadily on the rise. That means that while demand continues to follow a cyclical pattern, both the peaks and the valleys of this pattern are rising steadily over time. (8/3)

Gasoline prices: The AAA warned that consumer gasoline prices in the US could be on the rise given signs in government data of robust demand. The EIA reported earlier this week that demand for gasoline for the week ending July 27 was 1,000 b/d short of setting an all-time record. So far, consumer demand for gasoline is about 1.5 percent higher than last year, while gasoline supplies have moved lower. (8/3)

US energy expenditures declined for the fifth consecutive year, reaching $1.0 trillion in 2016, a 9 percent decrease in real terms from 2015. Adjusted for inflation, total energy expenditures in 2016 were the lowest since 2003. Expressed as a percent of gross domestic product (GDP), total energy expenditures were 5.6 percent in 2016, the lowest since at least 1970.(8/3)

Oil + drugs: The fastest-growing oil region in the US is fueling not only the second American shale revolution—it’s fueling a subculture of drug and alcohol abuse among oil field workers. The Permian shale play in West Texas is once again booming with drilling and is full of oil field workers, some of whom are abusing drugs and alcohol to help them get through long shifts, harsh working conditions, and loneliness and isolation. (7/30)

Miners’ $$ doldrums: Brent crude prices are up 40 percent in the past year, cheering oil industry executives but causing concern among their customers in the mining sector. Miners use heavy fuel oil to generate electricity at remote sites; they also use it for transport, with large trucks and other equipment guzzling down millions of gallons each day across the industry. (8/4)

Electric power sector coal consumption in 2017 was 36 percent (376 Million ton) lower than in 2008 when US coal production reached its highest level. The 661 million tons of coal consumed in the electric power sector in 2017 was the lowest amount of coal consumed since 1983, and 2017 was the fourth consecutive year that US coal consumption and coal shipments by all transport modes declined. (8/4)

US coal exports totaled 9.2 million tons in June, up 5.1% from May and up 38.6% from the year-ago month, according to US Census data out Friday. Relatively high seaborne prices for both metallurgical and thermal coal, in addition to a possible ban on petcoke in India, have opened the door for US exports. (8/4)

State-owned Coal India Ltd increased its production to 40.56 million tons in July, up 10.6 percent on the year. (8/2)

Nordic nuke slow-down: This year’s unusually warm summer in the Nordic region has increased sea water temperatures and forced some nuclear reactors to curb power output or shut down altogether, with more expected to follow suit. The summer has been 6-10 degrees Celsius above the seasonal average so far and has depleted the region’s hydropower reservoirs, driving power prices to record highs, boosting energy imports from continental Europe and driving up consumer energy bills. Reactors need cold sea water for cooling but when the temperature gets too high it can make the water too warm for safe operations. (8/2)

Germany has added over 2 GW of new solar capacity over the past year as the rebound for the sector accelerates and annual additions are on track for the strongest growth since 2013, the latest monthly data from the federal grid regulator showed Tuesday. Additions in the first six months of 2018 are up by over 40% on the year at 1.3 GW. Overall solar growth is still well below levels seen during the boom years 2010-12 when Germany added some 20 GW in just three years. (7/31)

Offshore Maryland, Deepwater Wind, which operates a wind farm in waters off Rhode Island, wants to build another wind farm. But before its proposal can go forward, the company needs to know what lies on the sea floor here. So, geologists, marine biologists, and archaeologists will spend the next couple of months seeking answers, scouting the potential footprint of a wind-energy project planned near the mouth of the Delaware Bay. (8/1)

Hoover Dam for pumped storage? The Los Angeles Department of Water and Power, an original operator of Hoover Dam when it was erected in the 1930s, wants to equip it with a $3 billion pipeline and a pump station powered by solar and wind energy. The pump station, downstream, would help regulate the water flow through the dam’s generators, sending water back to the top to help manage electricity at times of peak demand.  The net result would be a kind of energy storage — performing much the same function as the giant lithium-ion batteries being developed to absorb and release power. (7/30)

EV push needed? A new report by the progressive policy institute Center for American Progress estimates that the US needs to add 14 million new PEVs and more than 330,000 new public charging outlets by the end of 2025 in order to meet its Paris Agreement targets. According to the authors, the existing state and VW funds can provide only about 50% of the funding needed to deploy adequate public charging infrastructure through 2025. (7/31)

CA pushing ZEVs: California Governor Jerry Brown has directed the California Air Resources Board (ARB) to assess possible regulatory requirements to ensure greater inclusion of zero-emission vehicles in public and private light- and heavy-duty vehicle fleets. California is looking for ways to meet a 5-million zero-emission vehicle target by 2030. (8/4)

EV deliveries: UPS announced a collaboration with Thor Trucks to develop and to test a fully-electric class 6 delivery truck in Los Angeles, Calif. The truck is expected to be ready for deployment later this year. The Thor medium-duty truck will have a driving range of approximately 100 miles powered by a Thor-designed and built battery that will be lightweight, durable and allow long-range driving distances. (8/2)

EV solution: Honda is introducing a new Honda SmartCharge beta program that allows electric vehicle customers to reduce the environmental footprint of charging their car while earning monetary rewards. Honda SmartCharge computes the best time to charge a vehicle from the electric grid, dynamically taking into account the driver’s daily schedule, the amount of renewable energy being generated, and the amount of CO2 emitted from power plants on the grid. (8/1)

Tesla goes to China: Tesla plans to build a $5-billion car-manufacturing plant near Shanghai in China, and is weighing possibly raising part of the funds for the factory from local partners, Bloomberg reported on Wednesday. Tesla expects to begin production of its Model 3 in the new Chinese plant by 2020. (8/2)

Recycling EV batteries: While scores of research labs around the world look for ways to replace lithium-ion batteries with cheaper and more reliable alternatives, China has started a pilot EV battery recycling program in anticipation of a boom in EV adoption in the next few years. Seventeen cities and regions will work to encourage car producers to build battery recycling facilities and join forces with battery makers, used car dealers, and scrap traders to set up recycling networks. (8/1)

H2 status in CA: The California Air Resources Board has released the 2018 issue of its annual report on fuel cell vehicles and fueling stations. The report describes an uptick on both fronts. There are 4,411 FCEVs registered to the Department of Motor Vehicles as of 4 April. Industry estimates a total of 4,819 vehicles deployed through May of 2018. The hydrogen fueling network has gained seven additional Open-Retail stations for a total of 36 locations. (8/1)

Hot as Hades: In Northern Europe, this summer feels like a modern-day version of the biblical plagues. Cows are dying of thirst in Switzerland, fires are gobbling up timber in Sweden, the majestic Dachstein glacier is melting in Austria. In London, stores are running out of fans and air-conditioners. In Greenland, an iceberg may break off a piece so large that it could trigger a tsunami that destroys settlements on shore. Temperatures in Spain and Portugal are expected to reach 105-110 degrees F this weekend. The preliminary results of an Oxford study found that, in some places, climate change more than doubled the likelihood of this summer’s European heat wave. (8/4)

Emissions targets: The EU’s energy chief is pushing for member states to adopt a more aggressive carbon reduction target ahead of UN climate talks later this year. The EU already has some of the most ambitious carbon emission reduction targets in the world but Miguel Arias Cañete, the EU energy commissioner, wants the bloc to go further. To reach the new energy and climate change targets will require a mixture of public and private investment of €379bn a year between 2021 and 2030, as well a 50 percent increase in the number of new renewables installed each year. (7/30)