Category Archives: energy

Record oil output from US, Brazil, Canada and Norway

IEA report finds the United States alone will account for nearly 60% of global supply growth through 2023

The United States is set to put its stamp on global oil markets for the next five years,” said Dr. Fatih Birol, the IEA’s Executive Director. “But as we’ve highlighted repeatedly, the weak global investment picture remains a source of concern. More investments will be needed to make up for declining oil fields – the world needs to replace 3 mb/d of declines each year, the equivalent of the North Sea – while also meeting robust demand growth.

Oil production growth from the United States, Brazil, Canada and Norway can keep the world well supplied, more than meeting global oil demand growth through 2020, but more investment will be needed to boost output after that, according to the International Energy Agency’s latest annual report on oil markets.

Over the next three years, gains from the United States alone will cover 80% of the world’s demand growth, with Canada, Brazil and Norway – all IEA family members – able to cover the rest, according to Oil 2018, the IEA’s five-year market analysis and forecast.

But the report finds that despite falling costs, additional investment will be needed to spur supply growth after 2020. The oil industry has yet to recover from an unprecedented two-year drop in investment in 2015-2016, and the IEA sees little-to-no increase in upstream spending outside of the United States in 2017 and 2018.

Boosted by economic growth in Asia and a resurgent petrochemicals industry in the United States, global oil demand will increase by 6.9 mb/d by 2023 to 104.7 mb/d, according to the IEA. China remains the main engine of demand growth, but more stringent policies to curb air pollution will slow growth. The increasing penetration of electric buses and LNG trucks will have a bigger impact on curbing consumption of transport fuels than the electrification of passenger vehicles.

In the United States, fuel-economy standards for passenger cars will curb gasoline demand with growth coming from the petrochemical sector, which is thriving thanks to low-cost ethane. New global petrochemicals capacity will account for 25% of oil-demand growth by 2023. Meanwhile, a new marine fuel rule with lower sulfur content that will come into force in 2020 is creating uncertainty in the market.

Global oil production capacity is forecast to grow by 6.4 mb/d to reach 107 mb/d by 2023. Thanks to the shale revolution, the United States leads the picture, with total liquids production reaching nearly 17 mb/d in 2023, up from 13.2 mb/d in 2017. Growth is led by the Permian Basin, where output is expected to double by 2023.

The path is clear to get those additional barrels to world markets. As a result of new investments in pipelines and other infrastructure that ease the current bottlenecks, US crude export capacity reaches nearly 5 mb/d by 2020 and Corpus Christi solidifies its position as the primary North American crude-oil outlet.

Virtually all of the OPEC output growth comes from the Middle East. In Venezuela, oil production has fallen by more than half in the past 20 years, and declines are set to accelerate. Sharply falling production in Venezuela will offset gains in Iraq, resulting in OPEC crude oil capacity growth of just 750,000 barrels a day by 2023. Unless there is a change to the fundamentals, the effective global spare capacity cushion will fall to only 2.2% of demand by 2023, the lowest number since 2007.

Oil 2018 also examines a variety of other topics including crude quality issues arising from the rapid increase in US production, changing trade flows and a growing global refining capacity surplus. Global oil trade routes are moving East, as China and India replace the United States as top oil importers. With seaborne oil traveling longer distances, energy security, one of the IEA’s core missions, will remain as critical as ever.


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EU has potential to use more renewables

On Monday 19 February, Commissioner for Climate Action and Energy Miguel Arias Cañete and the Director-General of the International Renewable Energy Agency (IRENA) Adnan Amin will launch in Brussels a new report on renewable energy prospects in the European Union.

Prepared by the International Renewable Energy Agency (IRENA), the report identifies cost-effective renewable energy options across all EU countries, sectors, and technologies, in order to meet – and even exceed – the proposed 27% renewables target for 2030. It also provides an open platform for EU countries to assess the impacts of their national renewable energy plans at an EU level, provides insights into the environmental and economic impacts of further deployment of renewables in the EU, and highlights the role that renewables could play in the long-term decarbonisation of the European energy system. The report also shows that all individual Member States have the potential to deploy more renewables cost effectively, especially by generating more solar and wind energy. Moreover, in the heating and cooling sector, which accounts for about half of the EU’s energy demand, more than two thirds of the renewables options identified in the report are cheaper than the conventional alternative. The report makes a number of recommendations aimed at helping the EU decarbonise its economy and limit global warming to well below 2°, in line with the Paris Agreement, as well as bringing substantial health benefits for citizens. In its “Clean Energy for All Europeans” package the Commission made proposals to stimulate investment in the clean energy transition by putting energy efficiency first, achieving global leadership in renewable energies and providing a fair deal for consumers.

EU €98.2 million for citizens’ quality life

The European Commission has approved an investment package of €98.2 million to support Europe’s transition to a low-carbon, circular economy under the new LIFE funding programme for the Environment and Climate Action.

Today’s investment package will contribute towards improving the quality of life for European citizens in five areas: Nature, Water, Air, Waste and Climate Action. The investment covers 10 projects in Belgium, Denmark, France, Greece, Lithuania, Malta, Spain and Sweden. The EU funding will mobilise investments leading to an additional €2 billion, as Member States can make use of other EU funding sources, including agricultural, structural and research funds, as well as national funds and private sector investment.

EU invests €873 million in clean energy infrastructure

“Once again we demonstrate that cooperation pays off and that the Energy Union is becoming a reality with tangible impact on the ground. These are important projects with major cross-border benefits and by implementing them we strengthen energy resilience of EU Member States. The CEF has yet again shown tremendous added value in our modernisation efforts.” Said Commission Vice-President for Energy Union Maroš Šefčovič.

EU Member States agreed on the Commission’s proposal to invest €873 million in key European energy infrastructure projects. Europe’s transition to a clean and modern economy is the goal of the Energy Union, a priority of the Juncker Commission. It is now becoming the new reality on the ground, and one important building block is adapting the European infrastructure to the future energy needs. Properly interconnected electricity lines and gas pipelines form the backbone of an integrated European energy market anchored on the principle of solidarity. Thus, supporting these 17 selected electricity and gas projects,signals Europe’s willingness to upgrade and make the European energy system more competitive that will ultimately deliver cheaper and secure energy to all European consumers.The EU funding for the chosen projects comes from the Connecting Europe Facility (CEF), the European support programme for trans-European infrastructure.

Commissioner for Climate Action and Energy Miguel Arias Cañete added: “The construction of the Biscay Gulf France-Spain interconnection marks an important step towards ending the isolation of the Iberian Peninsula from the rest of the internal energy market. Only a fully interconnected market will improve Europe’s security of supply, ending the dependence of single suppliers and give consumers more choice. An energy infrastructure which is fit for purpose is also essential for renewables to thrive and for delivering on the Paris Agreement.”

Under the Connecting Europe Facility, a total of €5 billion has been allocated to trans-European energy infrastructure for the period 2014-2020.

Denmark global leader on decarbonisation

IEA’s energy policy review focuses on challenges and opportunities from the growing share of wind power for the Danish electricity and heating sectors.

“Denmark is now widely recognised as a global leader in integrating variable renewable energy while at the same time maintaining a highly reliable and secure electricity system, thanks to a flexible domestic power system and a high level of cross-border connections,” said Paul Simons, the IEA Deputy Executive Director, who presented the report in Denmark.

Denmark remains a global leader in decarbonising its economy and is on track to meet its ambitious goal of becoming a low-carbon economy by the middle of the century, according to the International Energy Agency’s latest review of the country’s energy policies.

Denmark has a long tradition of setting ambitious national energy targets, based on nation-wide Energy Agreements. In 2030, it aims for renewables to cover at least half of the country’s total energy consumption. By 2050, Denmark aims to be a low-carbon society independent of fossil fuels. The IEA’s latest review of Denmark’s energy policies finds it is moving convincingly to meet these world-leading targets.

The growing share of wind power creates new challenges and opportunities for the Danish electricity and heating sectors, as well as for end-use sectors such as transport, buildings and industry. This review of Denmark’s energy policy has a special focus on two interrelated issues: how to increase the share of renewables in the power system beyond its current share of 45%, and how to decarbonise the heating sector. These two areas are critical for further advancing decarbonisation in Denmark and they also offer an attractive potential for energy system integration. The report also offers a series of recommendations.

Electricity generation in Denmark has changed fundamentally over the past two decades. Coal generation has been steadily replaced, and the bulk of power generation now comes from wind and bioenergy. Since the previous in-depth review in 2011, Denmark has made impressive progress towards decarbonising its energy sector while maintaining robust security of supply. Denmark’s energy intensity and carbon intensity are among the lowest of all IEA member countries.

The country has also become a world leader in system integration of variable renewable energy (VRE); it has the highest share of wind power in electricity generation, and electricity supply is stable and secure at both transmission and distribution levels. Denmark is also among the global leaders in using energy-efficient technologies, including combined heat and power (CHP), which provides half the electricity and two-thirds of heat sold in the country.

“It is highly encouraging to see that wind power is becoming market competitive,”  said Mr Simons.  “Tapping into the large offshore wind resource will help Denmark decarbonise even further.”

The heating sector is also critical for Denmark’s low-carbon ambitions. Denmark is already switching from coal to biomass in district heating, and is favouring renewables over oil and natural gas in individual heating. These trends will have to continue in order for Denmark to meet its targets.

Denmark’s large-scale use of combined heat and power plants with heat storage capacity, and the increasing deployment of wind power offer great potential for efficient integration of heat and electricity systems, for example through large heat pumps. Smart policies and measures are essential to realise that potential at least cost. Finding the right levels of taxation for fuels and electricity is particularly important.

Energy-related CO2 emissions are declining overall, thanks to a combination of energy efficiency improvements and fuel switching to renewables. As in all countries, more needs to be done to limit emissions from transport.

Naftogaz against Russia for Crimean assets

 

“Naftogaz of Ukraine and six companies part of the Naftogaz group – Chernomorneftegaz, Ukrtransgaz, Likvo, Ukrgazdobycha, Ukrtransnafta and Gaz Ukrainy – filed a lawsuit with the tribunal formed under the Permanent Court of Arbitration in The Hague on compensation of losses due to Russia’s illegal seizure of the group’s assets in Crimea,” the statement said.

Naftogaz, the Ukraine’s energy giant has filed a lawsuit with The International Court of Justice in The Hague against Russia to recover $5bln for the assets lost in Crimea.

The judgement pronunciation of this case is expected by late 2018.

Gazprom continues to strengthen its positions as supplier for Europe

Alexey Miller Chairman of the Gazprom Management Committee, held in St. Petersburg a conference call marking Oil and Gas Industry Workers Day.

Dear colleagues,

Let me wish you a happy Oil and Gas Industry Workers Day.

As usual, we celebrate our professional holiday with industrial accomplishments and new ambitious plans for the future.

Gazprom continues to strengthen its positions as a reliable supplier for Russian and foreign consumers. We ramp up production, break new export records, and advance toward the implementation of large-scale investment projects.

In the first eight months of 2017, we produced a total of 302.6 billion cubic meters of gas. It is a 20.1 per cent rise from last year, which translates into 50.7 billion cubic meters of gas in absolute terms.

Gazprom successfully fulfills its main purpose by providing Russian consumers with uninterrupted gas supplies. The Company’s gas deliveries to the domestic market grew by 8.4 per cent, or 11.2 billion cubic meters.

This year, we began to take stock of geological exploration in the Tambey group of fields in Yamal. Our gas reserves increased enormously, adding more than 4 trillion cubic meters. The overall amount of gas reserves in the Tambey group reached 6.7 trillion cubic meters.

The Yamal Peninsula is becoming Russia’s main gas production center. New transmission routes are evolving accordingly. We continue to expand the northern gas transmission corridor – the chief and most efficient route of gas supplies from central Russia to northwestern Europe.

As regards southern Europe, construction of the TurkStream gas pipeline is in full swing at the moment. Two microtunnels have been drilled and pipes have been pulled at the onshore section in Russia. As for the offshore section, a total of 220 kilometers have been laid along the two strings.

At the same time, we are building a formidable production complex in the east of Russia. It is the world’s largest investment project in the gas industry. The cornerstone of our strategy in Russia’s east is the Eastern Gas Program. We are actively working to set up new gas production centers in the Irkutsk Region and Yakutia. We are also ahead of schedule in constructing the Power of Siberia gas pipeline and the Amur gas processing plant.

We carry on with our gasification efforts in Russian regions. Access to natural gas dramatically improves the quality of life, especially in rural areas. This year, the Gasification Program covers 68 regions of the Russian Federation. There is no doubt that Gazprom will fulfill all of its obligations under this socially significant project.

Dear colleagues,

Gazprom is the biggest exporter of gas to Europe. In 2016, we delivered a record 179.3 billion cubic meters of gas to the region. Our exports keep growing in 2017. According to estimates, we exported as much as 126.3 billion cubic meters of gas to that market in eight months. It is 12.1 per cent higher than in the same period of 2016, an increase of 13.6 billion cubic meters.

This past winter, we repeatedly set new records for daily gas supplies to Europe. The absolute maximum was registered on January 27, 2017, at 636.4 million cubic meters. These record figures demonstrably show that, during peak loads, the Company can provide consumers on a timely basis with as much gas as they need. This solidifies Gazprom’s reputation as a reliable supplier.

It should be noted that even this summer our export pipelines worked in winter mode. As a matter of fact, last week we set an all-time record for August in terms of daily utilization of the Company’s gas export capacities. The record – 590.3 million cubic meters – exceeds the maximum figure registered during the winter peaks of the 2015–2016 season.

Such excellent results are encouraging. But they also pose a challenge. If we have to work this hard in summer, we will need to put in even more tireless and concerted effort during peak loads next winter. This applies to every single link in our process chain, from production to transmission to supervisory control to marketing. It is extremely important. After all, we work to bring gas, electricity, and heat to the homes of millions of people in Russia and abroad.

Dear colleagues,

Let us celebrate our professional holiday. Happy Oil and Gas Industry Workers Day!

I would like to wish you further success in your work, happiness, good health, prosperity, and all the best. And, as we say here at Gazprom, let us go on with our work!

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