Tom Whipple and Steve Andrews, Editors
Quotes of the Week
“Losses this year will be the biggest in aviation history. There is no comparison for the dimensions of this crisis.” Alexandre de Juniac, Int’l Air Transportation Assoc.’s CEO
“It remains unclear if oil demand will ever return to pre-pandemic levels. From the destruction of the aviation industry to the transformation of workplace dynamics reducing daily travel and governmental pushes for renewable energy, oil demand is being attacked on all sides due to COVID-19. The oil majors seem to have recognized this global shift and are determined to make their operations as lean and sustainable as possible. 2020 is shaping up to be the most dramatic year in the history of oil markets, with a decade’s worth of change seeming to be taking place in just 365 days.” Charles Kennedy, Oilprice.com
Graphic of the Week
1. Energy prices and production
Oil futures fell by some 8 percent last Thursday, before closing out a quiet Friday at $36.26 in New York and $38.73 in London. Over the previous six weeks, prices have been climbing due to the OPEC+ and US shale production cuts, and the easing of pandemic lockdowns in China, Europe, and North America. The sharp price drop on Thursday was caused, in part, by an increase in US crude stockpiles to record highs, a grim Federal Reserve outlook for the US economy, and reports that the coronavirus epidemic is spreading rapidly in some parts of the US.
Despite the return to work of many laid-off employees, the economy is still in trouble. US unemployment is at record highs. The massive federal stimulus expenditures are running out during the next few months, and the easing of the lockdowns is contributing to an increase in virus cases.
US commercial crude inventories climbed to a record high last week amid tepid refinery demand and falling US crude exports. US crude inventories grew by 5.72 million barrels to 538 million during the week ended June 5th. The build pushed stocks to 13.5 percent above the five-year average and put commercial inventories at the highest in records dating back to 1982.
OPEC: Prodded by the pandemic and oil market meltdown to implement an unprecedented 9.7 million b/d in cuts, the 23-country OPEC+ coalition mostly delivered. OPEC’s 13 members dropped their output to 24.32 million b/d, with their prescribed cuts, for a compliance rate of 82 percent. Russia and nine other OPEC+ partners performed better, pumping a combined 13.89 million b/d and making 91 percent of their cuts. They brought the whole OPEC+ group’s collective compliance to 85 percent, according to Platts’ calculations. Recent reporting suggests that Iraq and Nigeria are making efforts to comply with their allocated cuts for June and July.
However, Saudi Arabia shocked the markets last week when it said it would not keep up with its pledge to cut some 1 million b/d beyond the official OPEC+ agreement. The news came the day after the group agreed to extend the current OPEC production quota agreement through July. Opposition is brewing within OPEC+ for more frequent consultation after it agreed on June 6 to extend a record 9.6 million b/d of output cuts through the end of July. The current plan requires its influential nine-country Joint Ministerial Monitoring Committee — co-chaired by Saudi Arabia and Russia — to meet monthly.
The EIA forecasts that demand for global petroleum and liquid fuels will average 83.8 million b/d in the second quarter of 2020, 16.6 million b/d lower than at the same time last year. As stay-at-home orders are eased, EIA expects liquid fuels consumption will rise to an average of 94.9 million b/d in the third quarter (down 6.7 million b/d year over year). Finally, the EIA forecasts that consumption of petroleum and liquid fuels globally will average 92.5 million b/d for all of 2020, down 8.3 million b/d from 2019.
Given that the spread of the coronavirus continues apace across much of the world, and that large sectors of the global economy are showing few signs of recovering to anywhere near pre-pandemic levels, these EIA estimates seem optimistic. Reliable information on oil production and demand usually takes about six weeks to accumulate, so that we are only getting a good picture of what happened in April.
Shale Oil: In its June Short-Term Energy Outlook, the EIA estimated last week that US crude oil production fell from a record 12.9 million b/d in November 2019 to 11.4 million b/d in May 2020. This decline came as Baker Hughes reported the fewest active drilling rigs in the US in their records which go back to 1987. The EIA expects US crude oil production will continue to decline, to 10.6 million b/d in March 2021 as prices are still below breakeven for most producers, exports of US crudes are drying up, and large sectors of the economy are not returning to normal. EIA forecasts that US crude oil production will average 11.6 million b/d in 2020, down by 0.7 million b/d from 2019. This seems highly optimistic as investment in new production is way below normal. Without a steady supply of newly drilled wells, US shale production is likely to fall by some 2 million b/d or more this year.
North Dakota oil production averaged 1.219 million b/d in April, down about 211,000 b/d or 15 percent from March, the North Dakota Pipeline Authority reported last week. The state lost another two drilling rigs since last month, bringing the current count to just 10 — down from 52 in March. Low oil prices and weak demand related to the coronavirus pandemic have hammered operators in North Dakota, where oil output set a record high of 1.52 million b/d in November.
Prognosis: Unless oil prices move back to the levels before the pandemic, the US shale industry could collapse, the Institute for Economics & Peace, an Australian think-tank, warned in a new report on Wednesday. Moreover, the oil price plunge will likely affect the political stability of some of OPEC’s largest producers, including Saudi Arabia and Iraq, as well as Iran, the think-tank said.
Fitch Ratings said in a new report that the pandemic and the resulting oil price crash are set to wipe out as much as $1.8 trillion from the revenues of oil and gas exploration and production companies this year. “This is six times greater than the impact on the more visibly affected retail sector,” Fitch Ratings noted. Globally, the COVID-19 pandemic is set to destroy as much as $5 trillion in revenue for corporations which Fitch tracks in all sectors.
Global natural gas markets are facing the largest demand shock in recorded history. According to the International Energy Agency’s new Gas 2020 report, consumption of natural gas is expected to drop by twice the amount it did after the 2008 financial crisis. The pandemic and an exceptionally mild winter in the northern hemisphere are setting the stage for the historic demand shock. Global natural gas demand is expected to drop by 4 percent year on year, or by 150 billion cubic meters, in 2020.
2. Geopolitical instability
Iran: The Trump administration is preparing sanctions on as many as 50 oil and fuel tankers as part of an effort to cut off trade between Iran and Venezuela. The sanctions would be imposed through the Treasury Department and are intended to avoid a US military confrontation. Washington is trying to deter Iran’s support for Venezuelan President Nicolas Maduro, who last month defended the right to “freely trade” with Iran.
Iran expects gas exports to Turkey to resume by mid-July at the latest following an explosion on a pipeline in Turkey that forced supplies to be suspended at the end of March. Mehdi Jamshidi-Dana, the caretaker of its Gas Transfer Company, said Iran rejected Turkey’s claim that the suspension of supplies represented a force majeure event. “We predict that the repair of the Iran-Turkey gas pipeline will end in the month of Tir (June 21-July 21) and gas flow will resume.”
Iraq: Baghdad’s nationwide oil production fell in May to 4.17 million b/d – a reduction of nearly 200,000 b/d compared to April. Nonetheless, the cut left the country well above its OPEC quota. Following an agreement of the OPEC-plus coalition in early April, the Oil Ministry outlined plans to bring nationwide production just below 4 million b/d in May – but many of those cuts were not fully implemented. However, Iraq’s new oil minister affirmed last week the country’s commitment to the OPEC+ deal quota despite the economic and financial challenges.
Last week, Iraq’s State Oil Marketing Organization asked some of the Asian buyers of its Basrah crude if they could give up delivery of some already contracted cargoes for loading this month and next. The request for buyers to forgo some shipments for those months suggests that Iraq may be earnest in its attempt to play ball in the OPEC+ production cuts. Until now, Iraq was the biggest cheater in all previous pacts. Iraq’s (as well as Nigeria’s) non-compliance with the record OPEC+ cuts in May nearly wrecked last week’s meeting of the pact.
Iraq asked BP to cut crude production at the nation’s most significant field of Rumaila by 10 percent as part of a push to comply with the OPEC+ quotas. The deposit, near the southern oil hub of Basra, produces almost 1.5 million b/d. “Iraq’s decision to comply with OPEC+ agreement is good and sound, and we are committed to it until its expiry,” Finance Minister Ali Allawi said. “But we also want to have new future rules to distribute this burden on countries, taking into consideration the economic conditions of these countries and living standards when these amounts of cuts are implemented.”
Oil production in Iraq’s semi-autonomous Kurdistan region has fallen 10 percent so far this year, as oil companies respond to shrinking cash flows by reducing capital expenditures and laying off staff. The contraction of Kurdistan’s oil sector follows two years of steady growth resulting from relatively high oil prices and a government commitment to make timely payments to companies. Now, however, the Kurdistan Regional Government has fallen behind on its invoices, and oil prices are so low that many fields can barely turn a profit.
The growing pressure on the United States to reduce its military presence in Iraq comes as attacks by the Islamic State are on the rise. The new Islamic State has not carried out attacks on the scale that it did a few years ago, but its number has begun to grow again. As American and Iraqi negotiators began a new round of strategic talks on Thursday, the question of how to respond to the Islamic State’s resurgence — and how much American help is required to do so — will be at the center of the discussion.
Libya: Last week, the Turks were still celebrating a “victory” in Libya after General Haftar lost territory in and around Tripoli, and the National Oil Company went as far as to restart production at two giant oilfields – Sharara and El Feel. The restart lasted a day, with Haftar immediately responding through his control of the Petroleum Facilities Guard – the militia forces tasked (and paid by the Libyan state) to guard the country’s oil facilities. Production at Sharara went online on Sunday, June 7th, while output at El Feel went online the following day. El Feel started with only 12,000 b/d and was supposed to return to full capacity in 14 days. Late on June 8th, the oilfields were attacked by militias loyal to Haftar, and production was stopped again on the 9th.
Turkish President Erdogan said he discussed the conflict in Libya with US President Trump in a phone call last Monday and that the two leaders agreed on “some issues” related to developments there. “A new era between Turkey and the US may start after our phone call. We agreed on some issues,” Erdogan said in an interview, adding that he would also discuss Libya with Russian President Putin.
Venezuela: The state-run oil company PDVSA lowered its production estimates to 374,000 b/d as of Wednesday, a level not seen since 1945. The recent slide shows US sanctions have scared most of the world’s oil buyers away from Venezuelan crude, resulting in a storage glut that forced it to shut fields.
3. Climate change
Oceans have absorbed almost 40 percent of the carbon dioxide the world has emitted from fossil fuels since 1750, considerably slowing global temperature rise. However, the forces that govern how much CO₂ disappears into the oceans every year are mostly unknown. The early 1990s saw a jump in this sponge-like capacity, followed by a significant slowdown until 2001, raising concerns that the ocean may not be able to help absorb carbon forever.
New research published last week in the journal AGU Advances identifies two significant influences on how much CO₂ the oceans absorb every year — the rate of industrial emissions, and the global impact of volcanoes. The pace of fossil-fuel combustion itself helps determine how much CO₂ is absorbed.
This finding presents a challenge to countries managing pollution. As the world attempts to cut emissions to zero by 2050, the ocean’s ability to store CO₂ will diminish. This finding complicates estimates of how quickly emissions will have to fall. “We’re stuffing all this carbon into the ocean. Every year we’re pushing harder and harder and harder. And so, the ocean in response is taking it up,” said Galen McKinley, professor of Earth and environmental sciences at Columbia University and the study’s lead author. “But when we stop pushing so hard, the ocean is going to stop taking it up.”
A period of punishing heat may envelop much of the US and potentially extend to parts of Canada and Alaska. The higher temperatures could swallow much of the contiguous US toward the end of June, arriving just in time for summer and potentially lingering for weeks. The above-average temperatures are part of a significant pattern change that would bring anomalous warmth to some parts of the nation that have seen a colder than average spring.
4. The global economy and the coronavirus
The World Bank said last week the world is facing an unprecedented health and economic crisis that has spread with astonishing speed and will result in the most significant shock the global economy has witnessed in more than seven decades. Millions of people are expected to be pushed into extreme poverty. The Bank projects that global economic activity will shrink by 5.2 percent this year –the deepest recession since a 13.8 percent global contraction in 1945-46 at the end of World War II.
Fears of a second wave of coronavirus infections shut six major food markets in Beijing on Friday. At the same time, India, which opened up this week, recorded a record daily increase, and half a dozen US states say their hospital beds were filling up fast. Health officials worldwide have expressed concerns in recent days that some countries grappling with the devastating economic impact of lockdowns may lift restrictions too swiftly, and that the coronavirus could spread during mass anti-racism protests.
The international shipping industry warned of a threat to global trade from a mounting crisis on board merchant vessels. Up to 400,000 crew members are stranded either at sea or home by travel restrictions because of the pandemic. Many crew members have worked several months beyond their contracts, exceeding regulatory limits, and ship owners, unions, and captains have sounded the alarm over safety.
LNG spot prices have been on the slide since April, reaching an all-time low of $1.85 per million BTUs at the end of May. As with crude oil, the wide gap between supply and demand was already substantial before the coronavirus lockdowns made it even wider. Cargos were canceled, too, notably from the United States to Asia and Europe. This dampened demand then pushed gas flows into LNG export facilities to a 13-year-low.
United States: Arizona, Texas, and Florida are reporting their highest case numbers yet. As of Saturday, coronavirus infections were climbing in 22 states amid reopenings. Since the start of June, 14 states and Puerto Rico have recorded their highest-ever seven-day average of new coronavirus cases since the pandemic began.
On Thursday, Wall Street fell on renewed fears of a pandemic resurgence and pessimistic economic forecasts from the US Federal Reserve. All three major US stock indexes were down about 5 percent, posting their worst day since mid-March when markets were sent into freefall by the abrupt lockdowns put in place to contain the virus.
US retailers will shutter 20,000 to 25,000 stores this year, according to projections released Tuesday, with as much as 60 percent of those closures occurring in malls. That marks a sharp increase from the 15,000 forecasts earlier this year and raises the stakes for a sector already in turmoil before the coronavirus pandemic catapulted the country into recession.
China: Beijing reported on Sunday 57 new confirmed infections, its highest single-day tally in two months, renewing fears that the country’s grip on the pandemic is not yet secure. Of the 38 locally transmitted cases, 36 were in the capital, where the authorities are conducting mass testing at a significant seafood and produce market that appears to be the source of a new outbreak. It is the most cases the city has reported in one day since the coronavirus first emerged. Beijing had gone eight weeks without a locally transmitted infection until seven were detected on Thursday and Friday. The other 19 cases China reported on Sunday involved travelers arriving from overseas, mostly in the southern province of Guangdong.
Nearly all of the dozens of people who tested positive in Beijing in recent days worked or shopped at a wholesale market on the south side that sells seafood, fruit and vegetables, according to the Beijing health commission. The market has been shut down, and several nearby residential complexes are on lockdown. Concerns are growing that a second wave of the pandemic may be coming even in many countries that seemed to have curbed its spread.
An apparent surge in traffic outside Wuhan hospitals from August 2019 may suggest the coronavirus hit the area earlier than reported. Harvard researchers say satellite images show an increase in traffic outside five hospitals in the Chinese city from late August to December. The traffic spike coincided with a rise in online searches for information on symptoms like “cough” and “diarrhea.” Beijing says the study was “ridiculous” and based on “superficial” information.
Growing geopolitical tensions with Washington makes it tough for Chinese LNG importers to commit to more US LNG cargoes when US LNG is already facing challenges to bring LNG to Asia due to uneconomic arbitrage and oversupplied Asian markets.
In May, China’s crude oil imports jumped to the highest ever, at 11.34 million b/d. The data also confirms that China’s economy is at least temporarily on track to recovery from the coronavirus crisis. The May daily average of oil imports was up by 15 percent from April and 150,000 b/d more than the previous import record set last November. Among the reasons for the substantial jump in oil imports are bargain-hunting while crude is cheap, but also developments on the futures market. Chinese hedge funds have been betting big on an oil price recovery on the Shanghai crude futures market.
Last week, China gave the go-ahead to plans for a massive $20-billion refinery and petrochemical complex in the Shandong province. The mega petrochemical complex has been years in the planning. The province of Shandong has had plans since 2018 to shut down 500,000 b/d of refining capacity by independent refiners.
China’s industrial deflation worsened in May, with factory-gate prices falling at their fastest pace in more than four years as the pandemic reduces global demand. The country’s producer-price index dropped 3.7 percent in May from a year earlier. May’s fall was more significant than April’s 3.1 percent decline and slightly sharper than expected by economists.
Sluggish demand from the US and Europe weighed on exports, dragging down prices offered by China’s industrial wholesalers. Steeper industrial deflation will eat into the profitability of Chinese factories, which showed improvement in April after China eased pandemic controls and moved to restart its economy. Food prices rose 10.6 percent last month, while non-food prices increased 0.4 percent, the same as in April. Of the non-food items, fuel costs dropped 22 percent in May compared with April’s 20.5 percent decrease.
Europe: Eurozone industrial production plunged by a record 17.1 percent in April, as the pandemic caused significant disruption to businesses across almost all manufacturing and construction sectors of the European economy. The figures were slightly better than most analysts had expected, but still underline how many factories and building sites were forced to close or drastically scale back their activities due to the strict lockdowns. The decline was the biggest fall since records started in 1991, according to Eurostat.
Russia: The mishandling of the biggest Arctic oil spill ever infuriated Russian President Putin and could boost the country’s environmental regulation. The president publicly scolded Vladimir Potanin, Nornickel’s biggest shareholder and the country’s richest man, for not upgrading the firm’s oil tank before it leaked. The company says melting permafrost and soil subsidence damaged the tank. If true, that means infrastructure across Russia’s north may be at risk as the ground warms.
Saudi Arabia: The Saudis shocked the markets last week when they said they would not keep up the voluntary portion of their production cuts, an extra 1 million b/d beyond the official OPEC+ agreement–past June. The news came the day after the group agreed to extend the current OPEC production quota agreement through July to continue to draw down global inventories.
Saudi Arabia’s export revenue was $52.69 billion in the first quarter, down 20.7 percent from the same quarter in 2019. The decline came despite forward sales mitigating the oil price crash’s full impact on the country’s quarterly revenues. Oil still makes up 77 percent of Saudi exports, little changed year on year, and showing little progress in diversifying the economy.
Saudi Arabia made some of the biggest price increases for crude exports in at least two decades, doubling down on its strategy to bolster the oil market after OPEC+ producers extended historic output cuts. According to a pricing list seen by Bloomberg, the steepest jump will hit July exports to Asia, state producer Saudi Aramco’s largest regional market. Overall, the increases for Saudi crude erase almost all of the discounts the kingdom made during its brief price war with Russia. The sharp price increases show that Saudi Arabia is using all the tools to turn around the oil market after prices plunged into negative territory in April. As the price setter in the Middle East, the increases in its official prices may be followed by other Gulf Arab producers.
The number of coronavirus cases in Saudi Arabia now exceeds 128, 000 with the official death toll at 972. The government is considering canceling the hajj pilgrimage season for the first time since the kingdom was founded in 1932. “The issue has been carefully studied, and different scenarios are being considered. An official decision will be made within one week,” a senior official from Saudi Arabia’s hajj and umrah ministry said last week. The annual ritual held in late July is one of the largest religious gatherings globally, attracting about 2 million people to the kingdom every year. But after the organizers of global events, including the Olympic Games in Tokyo, were forced to delay or cancel due to the coronavirus pandemic, Saudi officials have faced growing pressure to do the same.
India: India is struggling to suppress the coronavirus pandemic in Mumbai, one of the world’s most densely populated cities, as its hospitals are pushed to the brink. Mumbai has become the epicenter of India’s outbreak and is a potential springboard for the virus to spread into the country’s rural regions. The city of 20 million, out of India’s 1.3 billion people, currently accounts for almost one in five of India’s more than 320,000 coronavirus infections and over 9,000 deaths.
India’s oil demand has rebounded from levels seen during the lockdown, prompting refiners to raise throughput. Still, consumption will struggle to recover to year-ago levels and keep overall demand numbers for 2020 in the red.
5. Renewables and new technologies
Hydrogen as a substitute for fossil-based motor fuels is rapidly gaining more prominence in plans to reduce carbon emissions. Some 95 percent of hydrogen currently is produced by the steam reforming of natural gas, which unfortunately results in 9 to 12 tons of CO2 for every ton of hydrogen produced. There are numerous other ways to produce hydrogen out of water. However, these processes use either electricity or solar power for energy. Laboratories across the world are working on ways to produce hydrogen at cost-competitive prices. Hardly a week goes by without an announcement of a new or more cost-effective or cleaner way of producing hydrogen. The term “green hydrogen,” which is produced without the use of fossil fuels, is coming into everyday use.
Last week, the German cabinet approved a $7.8 billion national hydrogen strategy focused on support for electrolysis and targeting 14 TWh of renewable “green” hydrogen production by 2030. Energy and Economic Minister Peter Altmaier says hydrogen is essential to decarbonize critical industries such as steel and chemicals and transport. The government estimates German demand for hydrogen could increase as much as double from a current 55 TWh to a range of 90 TWh-110 TWh by 2030.
Natural Resources Canada announced it is developing a national hydrogen strategy, joining several countries in doing so. The federal agency said it is working with governments at all levels as well as academia and the private sector to form the strategy.
According to the China Hydrogen Alliance, a government-supported industry group that promotes the use of hydrogen, China built 38 new hydrogen refueling stations in 2019. This means that by the end of the year, China had a total of 66 hydrogen refueling facilities, 46 of which were operational. The government is targeting 300 hydrogen refueling stations across the country by 2025.
6. The Briefs (selections from the press – date of article in the Energy Bulletin Weekly is in parentheses – see more here: daily.energybulletin.org/ )
In UK’s offshore North Sea, ExxonMobil is considering moving forward with its sale of some assets after months of delays, industry and banking sources told Reuters on Thursday. The deal initially had the potential to generate as much as $2 billion, but this may have declined to as little as $1 billion. It represents a total exit from the UK North Sea for the oil major, who has operated in that area for more than fifty years. (6/12)
UK to boost EVs? British Prime Minister Boris Johnson is considering giving drivers up to $7,609 to swap their diesel and petrol cars for electric vehicles, under plans to relaunch the economy, The Telegraph reported on Sunday. Johnson is said to be looking at July 6 as a potential date for an announcement on the new car scrappage scheme, which is designed to provide a shot in the arm for UK electric car manufacturing. (6/8)
Gulf oil states target foreign workers: Declines in energy prices have dented Gulf states’ coffers just as local economies struggle under pandemic-driven lockdowns. Most are bridging the gap with a combination of spending cuts and debt issuance. Qatar will reduce monthly costs for non-Qatari employees by 30 percent from June 1, either by cutting salaries or laying off workers with a two-month notice. Qatar is joining its neighbors from Oman to the United Arab Emirates by introducing cuts targeting foreign workers or support programs that exclude them. Meanwhile, Kuwait’s prime minister said the country’s expatriate population should be cut to 30 percent of the total. (6/11)
In Pakistan, cities like Karachi and Quetta are seeing long queues of vehicles waiting to gas up their vehicles. Prices of petrol and diesel have tripled. The Pakistani government has blamed oil marketing companies for creating artificial shortages. Companies blame the Directorate General of Oil under the Petroleum Division. (6/8)
In Venezuela, the collapse in oil prices and the tightening US sanctions have accelerated the decline of the oil industry in a country sitting on the largest crude oil reserves in the world. As of May, Venezuela’s rig count plunged to just two as production slipped by 16 percent to 645,700 barrels per day. (6/12)
Mexico’s economic and financial outlook has worsened amid the coronavirus pandemic, and temporary measures to shore up the financial system will remain in place, the central bank Banxico said on Wednesday. In its latest financial stability report, Banxico wrote, “The outlook for Mexico’s economy and financial system has deteriorated and become more uncertain.” (6/11)
The US oil rig count dropped another seven rigs to 199 compared to 788 last year at this time, Baker Hughes reported on Friday. Gas rigs edged up to 78, compared to 181 rigs one year ago. (6/13)
The cancellation of dozens of US LNG cargoes this summer is a “wake-up call” for the industry that new LNG projects will not automatically be profitable, CEO Philippe Sauquet of France’s Total said. Spot LNG prices have slumped to record lows in 2020 due to an oversupplied market and the demand hit from the coronavirus pandemic. Sauquet noted that while the oversupply was not a surprise given the wave of new capacity coming online, the scale of the glut triggered by the coronavirus crisis was more intense than could have been reasonably expected. (6/13)
US natural gas pipeline exports to Mexico surged to a new single-day record high this week. It was propelled by warming summer weather and a soft opening of Mexico’s economy earlier this month. On June 10, US exports jumped to nearly 5.9 Bcf/d. (6/13)
Exxon Mobil Corp. will delay the startup of its Beaumont refinery expansion on the Texas Gulf Coast by a year as the company weathers low demand for petroleum products and seeks to save cash amid the pandemic. The project will make Beaumont the biggest refinery in the US and will now be up and running sometime in 2023, compared with a previous target of 2022. (6/12)
Greenhouse gas emissions in the US are poised for a record plunge this year, resulting from coronavirus lockdown orders that have shuttered factories, closed stores, and left cars and jets sitting idle. According to data released Tuesday by the EIA, energy-related carbon dioxide emissions, which include electricity generation and transportation fuel, will fall 14 percent. That’s almost double the decline the agency had forecast in April. (6/11)
The natural gas industry is rapidly losing ground in the US Northeast, beaten back by renewable energy, environmentalists, and stricter climate policy. Massachusetts Governor Charlie Baker, a Republican, signed an executive order at the start of 2020, which was aimed at net-zero emissions by 2050. Massachusetts Attorney General Healey recently called on the state’s Department of Public Utilities to begin an investigation into a phase-out of natural gas. (6/10)
California will allow PG&E Corp. to use diesel-powered mobile generators, despite environmental concerns, to keep some electricity flowing when the utility proactively cuts power to prevent live wires from sparking fires in high wind. State regulators signed off on PG&E’s plan to use about 450 megawatts of diesel generators to power homes, businesses, hospitals, and other critical facilities as part of the utility’s effort to reduce disruptions during the shutoffs. (6/12)
Nukes missing deadlines, exceeding costs: A monitor tasked with independently evaluating Southern Co.’s already delayed Alvin W. Vogtle Nuclear Plant nuclear expansion project has found that the utility is “highly unlikely” to meet the most recent November 2021 and November 2022 in-service dates for the two new reactors. Approved by regulators in 2009, units 3 and 4 at the Burke County, Ga., facility were initially expected to enter service in 2016 and 2017 at a combined cost of $14 billion. After multiple setbacks and delays, the Georgia Public Service Commission approved the continued construction of units 3 and 4 in December 2017 after Georgia Power said it would have the units online in November 2021 and November 2022, respectively. (6/10)
Proposed nuke fuel stockpile? The US has built next to zero new nuclear reactors in the last three decades, and those reactors that are managing to stay above water are mainly doing so thanks to government subsidies. And then there is the crushing cost of maintaining nuclear waste, which is falling on the shoulders of US taxpayers. So will a proposed uranium stockpile provide help or innovation? Not in any significant way. (6/11)
Another bone for nukes: International Development Finance Corp., a US federal agency, will end its ban on financing nuclear power plant projects in developing countries, a move that follows the Trump administration’s support for US reactor exports. (6/11)
Floating wind towers: Offshore is now the fastest-growing segment of the wind business, but marine wind farms have been limited to water shallow enough to allow turbines to sit on piles or other supports on the sea bottom. About 200 feet in depth is the outer limit for such devices. A floating wind tower 600 feet tall could change that. Jose Pinheiro’s machine floats on three partly submerged columns, each about 100 feet long. Steel catwalks bridge the gaps between the giant cylinders. Sensors signal to pumps to add or remove water from the columns to keep the platform at the right optimal wind generation level. (6/10)
Crown Estate Scotland has launched the first round of offshore wind leasing in Scottish waters for a decade, with a draft target of up to 10 GW installed. The round, called ScotWind Leasing, forms a significant part of Scotland’s green recovery program and could attract a total investment of more than $10.2 billion, the estate said. (6/10)
RE in Japan: The renewable power unit of Japan’s biggest utility plans to spend more than $18 billion over the next ten years to boost its green generation by as much as 70 percent. Offshore wind and hydro generation are the unit’s primary focuses as it seeks to develop 7 gigawatts of green power capacity in Japan and overseas in partnership with other companies. (6/9)
Mega-hydro: Sudan, Egypt, and Ethiopia on Tuesday resumed talks on the giant Blue Nile hydropower dam after the failure of a US-led mediation effort earlier this year. The three countries have been at odds over the filling and operation of the $4 billion Grand Ethiopian Renaissance Dam, under construction near Ethiopia’s border with Sudan on the Blue Nile, which flows into the Nile River. (6/10)
Britain just passed a significant landmark: at midnight on Wednesday, it had gone two full months without using electricity from coal-fired power stations for the first time since the industrial revolution. The new record is partly a result of the coronavirus pandemic. The halting of manufacturing and increased levels of homeworking has seen the demand for electricity drop by an average of 15 to 20 percent. Generation from renewables (28 percent), biomass (9 percent), nuclear (23 percent), and natural gas (30 percent) covered the bulk of Britain’s needs. (6/11)
Carbon capture in the US, the fossil-fuel industry’s favorite weapon against climate change, has never really caught on because of the cost. That may be about to change. The Internal Revenue Service recently issued crucial guidance to help developers take advantage of tax credits for the systems. Supporters say it could usher in a new era for the controversial technology. (6/13)
Post-lockdown, India is not booming: Businesses from car dealers to clothing retail chains are ready for customers as the economy reopens, but shoppers are holding back. “While the supply situation seems to be nearly normal, so far, purchases are need-based,” analysts at Mumbai-based Anand Rathi Shares and Stockbrokers Ltd. wrote in a note to clients, after speaking to more than 200 distributors, dealers, and retailers across the nation. (6/11)
Will tourism return? The world faces the worst global recession in nearly a century, a critical economic body warned Wednesday, while in Europe, restrictions to fight the spread of coronavirus portended a bleak summer tourism season even as more nations announced plans to welcome visitors again. (6/11)
Russia’s push for vaccine: From state-run Siberian labs where scientists experiment with rats to military garrisons where service members are isolating ahead of participation in a clinical trial, Russia’s top scientists are racing to answer a daunting demand from President Vladimir Putin: Develop a coronavirus vaccine by the fall. The global pursuit of a vaccine against the respiratory coronavirus disease Covid-19 has been likened to the 1960s space race. (6/11)
Airline losses are surging to unprecedented levels expected to be more than three times those following the 2008 global economic slump, according to the industry’s leading trade group. The International Air Transport Association on Tuesday predicted carriers would lose a combined $84 billion this year and almost $16 billion in 2021, its first estimate of the hit to earnings since the Covid-19 crisis began. That compares with $31 billion during the 2008-2009 recession. (6/10)