Editors: Tom Whipple, Steve Andrews
Quote of the Week
“There will be not a slow progression toward electric cars, but an inflection point in the late ’20s when the infrastructure is there. We are pushing to modernize and again reposition Bentley for a new generation.”
Adrian Hallmark, CEO of Bentley Motors Ltd
Graphic of the Week
| Contents 1. Energy prices and production 2. Geopolitical instability 3. Climate change 4. The global economy and the coronavirus 5. Renewables and new technologies 6. Briefs |
1. Energy prices and production
Expectations over OPEC+ delaying its planned output increase in January and a post-election rally in equities helped crude prices with a strong start last week. But a string of renewed lockdowns in Europe and record case counts in the US kept any upward price momentum in check. Brent crude settled down $1.48, or 3.62 percent, at $39.45 a barrel on Friday and West Texas Intermediate dropped $1.65, or 4.25 percent to $37.14 a barrel.
The recent spike in coronavirus cases in Europe and the US could undercut oil demand in the fourth quarter and into 2021. According to Standard Chartered, demand could fall by 2.17 million b/d to 90.51 million b/d in November, primarily due to the European situation. Global demand could be down 8.73 million b/d in the fourth quarter, year-on-year, a 1 million b/d larger decline than the investment bank estimated two weeks ago. Standard Chartered says its numbers are more pessimistic than the EIA and IEA as the agencies have not yet factored in reduced mobility across the EU.
The energy sector has emerged as the worst-performing of the United States’ 11 market sectors in the current year, dropping to its lowest point relative to the S&P 500 since 1931.
Natural Gas: Winter’s approach and a lot of working from home have lifted natural-gas prices to more than double their summer lows. The EIA estimates that average daily gas consumption will be 5 percent more this winter than last due to colder temperatures and people consuming more than usual to heat and power their homes.
A split is emerging for US shale drillers. Those that drill for oil are still struggling to survive, while those that produce natural gas are slowly seeing signs of recovery. Oil-focused fracking companies are under an extreme financial strain as renewed concerns about the coronavirus pandemic weigh down crude prices. But gas-focused drillers are getting a long-awaited reprieve. Natural-gas prices are climbing ahead of winter and are less sensitive to lockdowns that erode demand for transportation fuels.
The demand for LNG feedgas has topped 10 billion cf/d for the first time as exports surge amid robust Asian end-user prices. The milestone for gas deliveries to major liquefaction terminals was recorded Oct. 31st and Nov. 1st. Freeport LNG in Texas recently loaded and exported its 100th cargo since starting up in 2019. Currently, US LNG production continues to recover from a series of unplanned outages and hurricane disruptions. Shipments are likely to target Asia increasingly.
To reduce economy-wide emissions in Massachusetts to net-zero by 2050, the state will face a significant obstacle. More than 1.3 million of its households make it through those cold New England winters by burning natural gas. Roughly one-third of the state’s emissions come from the fuels burned in buildings for heating, hot water, and cooking.
OPEC: The cartel’s effort to shore up world oil markets during the pandemic faces a new threat — from the group’s rising production. Oil futures have sunk below $40 a barrel in London to their lowest since May. But a fresh challenge is emerging from within the organization’s ranks, just weeks before Saudi Arabia and other oil heavyweights meet to draw up plans for the year ahead. OPEC production increased significantly last month. Libya, a member exempt from the pact to restrain output, is now producing 1 million b/d as its political turmoil eases. Meanwhile, Iraq and Nigeria are once again reneging on pledges to rein in their shipments.
OPEC+ is considering deeper oil output cuts early next year to strengthen the oil market. The alliance is scheduled to reduce output cuts of 7.7 million b/d by around 2 million bpd from January. But the downward impact on energy demand of movement restrictions because of the COVID-19 pandemic is forcing a rethink. “It looks like we will have to cut deeper in Q1,” the source familiar with Russian thinking said.
Shale Oil: A Rystad Energy analysis reveals that drilling and fracking has accelerated, recovering from the trough touched in May and June. Meanwhile, Baker Hughes’s data shows that the US oil rig count increased to 226, rising for an eighth straight week to reach its highest level since May. The Texas Alliance of Energy Producers said this week that its Texas Petro Index (TPI) – a cyclical measure of the health and vitality of the state’s oil and natural gas economy – shows that exploration and production activity fell for the 19th straight month in September. However, the organization says the TPI also reflects potential early signs of recovery on the horizon.
The long-awaited consolidation in the US shale patch is well underway, with several high-profile multi-billion-dollar deals announced in the last few weeks. Analysts say that the mergers and acquisitions frenzy was inevitable; smaller oil firms with manageable debts are trying to survive the pandemic-driven industry downturn, and bigger firms are looking to add top-quality assets to their portfolios. During this consolidation drive, what is also inevitable is the loss of jobs as companies combine to reduce fixed cost and administrative expenses and benefit from synergies.
President Trump signed an order aimed at protecting the shale oil and gas industry. The president referred to a memorandum from Saturday, October 31, titled “Memorandum on Protecting Jobs, Economic Opportunities, and National Security for All Americans,” in which he mandates the Secretary of Energy to prepare a report on “the economic impacts of prohibiting, or sharply restricting, the use of hydraulic fracturing and other technologies.”
The popularity of light sweet crude oil among refiners is growing. The push to combat climate change and ever stricter regulations over fuel emissions forces refiners to reduce gasoline and other fuels’ sulfur content significantly. Western Europe, the US, and Canada have long placed significant limits on gasoline’s sulfur content. By 2018 fuels in those regions were only allowed sulfur content of fewer than ten parts per million. There are moves to further reduce that content because of the significant environmental risks posed by sulfur emissions.
Prognosis: The Presidential election results, the surge in the coronavirus pandemic in Europe and the US, and the increasing damage being done by climate change leave us with many variables in the coming year. The US election did not result in the “blue wave” which would have left the in-coming Biden administration free to make significant changes in US energy, environment, and spending policies on its own. However, as we have seen in recent times, US presidents have accumulated considerable powers in the oval office. If compromises can be reached, a split government in Washington under the Biden administration may be able to move the country forward.
For the immediate future, the course of the pandemic and the consequent controversy over jobs vs. shutdowns will have an impact on policy. The recent election showed that roughly half the people in the US would rather risk covid-19 infections than face unemployment, reduced incomes, and closed schools. At some point, the pandemic may cause compromises in Washington on relief packages, tighter restrictions, and long-term infrastructure programs. Europe, Russia, and the Middle East may be forced into similar changes.
While many would like to see economies return to 2019, this seems highly unlikely. Too much has been changed by the pandemic. A lot of remote working and virtual business travel will likely remain after the virus. The transition to electric vehicles will accelerate. The massive downturn in recreational and optional travel seems likely to remain for a while, displacing millions of jobs around the world. For now, it seems unlikely that global oil consumption will recover to 2019 levels anytime soon.
2. Geopolitical instability
(These are the situations that reduce the world’s energy supplies or have the potential to do so.)
Iraq: Oil exports from Kurdistan to the port at Ceyhan, Turkey have resumed after an attack on the pipeline had halted flows a week earlier. The pipeline is now functional and the oil is flowing like before, an official with the Kurdistan Regional Government said. Another official confirmed the reopening of the pipeline, which has a capacity of 600,000 b/d. Neither would provide any details on throughput levels or whether production facilities had been damaged by recent fighting between militia groups. The KRG exports the majority of its approximately 450,000 b/d of crude production via the pipeline to Ceyhan. Iraq’s federal government also ships about 100,000 b/d of crude from its Kirkuk fields to Ceyhan through the pipeline.
The Kurdistan Workers’ Party (PKK) is suspected of causing the Oct. 28th explosion on the Turkish section of the pipeline, which temporarily shut down oil flows. If confirmed as an act of PKK sabotage, the incident would represent a significant new threat to the KRG’s oil sector, which depends on the export pipeline to Ceyhan to export almost all its production.
Hostilities between the dominant party of the Kurdistan Regional Government (KRG) and the Kurdistan Workers’ Party (PKK) looked set to break out into open fighting following an alleged attack Wednesday near two oil fields in Dohuk province that produce 15 percent of the oil under KRG control. Multiple KRG security officials said an explosion was followed by shooting at Peshmerga, which PKK officials denied.
Iraqi security forces killed at least one anti-government protester and wounded at least 40 others in the southern city of Basra on Friday. It was the first killing of a protester by Basra’s security forces since Prime Minister Mustafa al-Kadhimi took office in May.
BP is in talks with Iraq’s oil ministry over boosting the crude production capacity of Rumaila, the country’s biggest oil field. BP, a lead contractor for the field with state-owned Basra Oil Co., PetroChina, and state marketer SOMO as partners, is currently producing 1.4 million b/d from Rumaila.
Libya: The Libyan National Oil Corporation said in a statement on its website it is pumping over 1 million b/d, up from 800,000 b/d last week. The country’s oil production was under 100,000 b/d in early September. The company however, warned that it would not be able to continue pumping at the current levels because of what it said were work obstructions caused by “entities” it did not name. Since the lifting of the blockade, however, the National Oil Corporation has been restoring production rapidly. Within a month, production rebounded to 500,000 b/d, with the largest field in Libya, Sharara, restarting in October.
Venezuela: Crude oil exports last month fell further to a low of 359,000 b/d. The decline resulted from the expiration of a grace period given by Washington to trading companies to wind down their business with PDVSA. This business most recently took the form of oil-for-fuel swaps, which were allowed under the US sanction regime for humanitarian purposes. As traders stopped taking Venezuela’s crude, PDVSA saw its inventories swell. Two weeks ago, inventories at the port of Jose—Venezuela’s main oil export hub— reached 11.8 million barrels, the highest since August.
President-elect Biden has expressed his desire to resume diplomacy with Venezuela and Iran, which could eventually lead to the return of their oil exports if certain conditions are met. “We are not seeking to dismantle the sanction policy but to apply sanctions intelligently,” Leopoldo Martinez, a strategist for Biden campaign focusing on the Latino vote, told Reuters.
Nagorno-Karabakh: On Friday, Azeri rockets and artillery shells hit Nagorno-Karabakh’s regional capital, Stepanakert, killing three people. Azeri forces were closing in on Shusha, the enclave’s second-largest town less than 10 miles away. Several other nearby Armenian settlements had already fallen to Azerbaijan. Communications between Armenian military units and their command have been cut in several places, according to Azeri military officials.
Analysts following the conflict warned that although Azerbaijan reported significant advances, its forces were far from claiming victory over the disputed province. It’s no secret that the Azerbaijani army is numerically superior and better armed. That superiority was going to be more consequential on the flat and open terrain where the Azerbaijani Army has made advances,” said Arman Grigoryan, a professor of International Relations at Lehigh University. “But it seems like once they have entered Karabakh proper where the terrain is somewhat different and more difficult for the exploitation of numerical advantages and exploitation of their air superiority, I think fighting has become more difficult.” Grigoryan said. “This is not over yet.”
3. Climate change
President-elect Biden says he will rejoin the Paris climate accord and issue new Presidential directives on his first day in office. With the potential for split government, lobbyists and administration advisers say clean energy technology is ripe for bipartisan legislative action. However, limits on carbon emissions are still seen as a possible dividing line. A freeze early on the issuance of new regulations would give the new policy team time to review what is in progress. Biden would likely pause a recent White House directive that agencies align their National Environmental Policy Act procedures. A slew of Trump regulatory executive orders also could be reversed, and a burst of activity on enforcement at the EPA is expected. Under the Biden administration, you’re probably going to see an aggressive start on robust enforcement of environmental regulations.
The state and local election results showed a lack of a Democratic “blue wave” to sweep in a new national climate policy. Even two states hard-hit by recent severe weather events, Florida and Texas, reaffirmed support for Republicans who oppose climate legislation. Texas voters rejected stricter limits on natural gas flaring in statewide ballot measures, and New Mexicans revamped utility oversight. Nevada voters appeared set to adopt a 50 percent renewable power mandate by 2030. Louisiana voters tied oil and gas wells’ property taxes to production. Democratic hopes of flipping state legislatures, with important energy policy implications, were not realized.
Polling about climate change helps explain why that’s happening. Most Americans understand the basics of climate change, and many would support policies to address it. Yet a dichotomy between economic and environmental health persists in US political rhetoric. Environmental protection has long been seen as a kind of luxury good. It’s great to protect endangered species we’ll never see, conserve lands we’ll never visit, and slash emissions for a future only our kids will know, but only as long as Americans can put food on the table and meet other basic needs like housing, health care, and education.
Resources for the Future, however, published the analysis of recent polling, which found that clear majorities in all states favor federal action on climate change regardless of what other countries do. When asked whether the government should limit private-sector pollution, the numbers in support were very high.
Airbus won an $18.6 million contract to help build a European Space Agency satellite designed to help scientists predict the pace of climate change more accurately. The mission will enlarge the constellation of satellites being launched to track the impact of global warming on the Earth’s economies.
4. The global economy and the coronavirus
The US became the first country to top 100,000 coronavirus cases in one day. In Europe, the UK put Denmark on its quarantine list. Surging new infections in Russia puts a massive strain on hospitals in certain regions. Poland broke the threshold of the government’s daily cases for a full lockdown, and Austria reported a record number of deaths over the last 24 hours. In Asia, Japan recorded over 1,000 coronavirus infections on Thursday, the highest level the country has seen since August. South Korea reported 145 new coronavirus cases in 24 hours, the biggest gain in two weeks. China will temporarily halt entry by non-Chinese nationals who have been in Russia and India, after doing so for those coming from the UK and Belgium.
United States: The coronavirus is surging out of control across the country. On Saturday the US reported a record increase in coronavirus cases for a fourth consecutive day with at least 131,420 new infections, bringing the country’s total caseload to about 9.91 million. Seventeen states reported a record one-day increase on Saturday while 14 states reported record daily numbers of hospitalized patients. The number of deaths nationwide was more than 1,000 for a fifth consecutive day.
The number of Americans seeking unemployment benefits fell slightly last week to 751,000, a still-historically high level that shows that many employers keep cutting jobs in the face of the accelerating pandemic. A surge in viral cases and Congress’ failure so far to provide more aid for struggling individuals and businesses are threatening to deepen Americans’ economic pain. Seven months after the pandemic flattened the economy, weekly jobless claims still point to a stream of layoffs.
The Federal Reserve kept its benchmark interest rate at a record low near zero Thursday. It signaled its readiness to do more if needed to support an economy under threat from a worsening coronavirus pandemic. The Fed announced no new actions after its latest policy meeting but left the door open to provide further assistance in the coming months.
China: In October, exports rose 11.4 percent from a year earlier, beating analysts’ expectations of a 9.3 percent increase and quickening from a substantial 9.9 percent increase in September. The surge in exports pushed the trade surplus for October up to $58.44 billion, compared with the poll’s forecast for a $46 billion surplus and a $37 billion surplus in September. China’s trade surplus with the US widened to $31.37 billion in October from $30.75 billion in September.
China signed its first term deal to buy LNG from an American exporter since the trade war disrupted deliveries, a sign of confidence that relations with the US could be normalizing. Foran Energy Group said it signed an agreement with US LNG exporter Cheniere Energy to purchase 26 cargoes between 2021 and 2025. Prices will be linked to the US Henry Hub benchmark. Chinese firms had stopped signing longer-term supply contracts with US exporters after Beijing slapped tariffs on shipments in retaliation to US levies on Chinese goods in 2018.
Beijing’s central bank again raised the topic of exiting its monetary easing policies, in sharp contrast to the US and Europe, where a resurgence in virus cases has forced governments to consider more stimulus. China’s economy has regained all the losses made in the first half, with the recovery first driven by exports and industrial output and strengthening as consumption picked up.
China’s Ministry of Commerce said that qualified refineries could apply for up to 4.86 million b/d of crude oil import quotas. The 2021 import quota ceiling volume of 243 million mt is 41 million mt, or 20.3 percent, higher than the 202 million mt for 2020 and 2019. Refinery sources said the incremental volume of 41 million mt should cover the feedstock requirements for the new 20 million mt/year phase 2 project of Zhejiang Petroleum & Chemical in Zhejiang province.
The Privately owned Mengtai Group will soon add more smokestacks to its sprawling complex in an expansion that is the group’s most significant investment in its 20-year history. The new unit will burn coal to provide heating to nearby neighborhoods as part of a regional policy unveiled in March that will add 5 gigawatts of coal power to western Inner Mongolia this year. “Coal is just so important in China from an energy supply and security point of view, that local governments don’t believe it is possible to get rid of coal immediately,” says Yang Yingxia, at Boston University. “I don’t think the Chinese government has a crystal-clear sense of how to get to carbon neutrality by 2060.”
China has ordered traders to stop purchasing at least seven categories of Australian commodities, ratcheting up tensions with a key trading partner in its most sweeping retaliation yet. According to people familiar with the situation, commodities traders in China won’t import products including coal, barley, copper ore and concentrate, sugar, timber, wine, and lobster. The order represents a dramatic deterioration in ties strained since Australia barred Huawei Technologies from building its 5G network in 2018 on national security grounds. Relations have been in free fall since Prime Minister Scott Morrison’s government in April called for an independent probe into the coronavirus’s origins.
European Union: More Europeans are seriously ill with the coronavirus than ever before. New hospital data for 21 countries shows the number of hospitalizations surpassing the worst days in the spring and threatening to overwhelm stretched hospitals and exhausted medical workers. New lockdowns across the continent have not yet stemmed the influx of patients, which has only accelerated since it began growing in September, according to official counts of current patients.
More than twice as many people in Europe are hospitalized with Covid-19 than in the US, adjusted for population. In the Czech Republic, the worst-hit nation in recent weeks, one in 1,300 people is currently hospitalized with Covid-19. And in Belgium, France, Italy, and other countries in Western Europe, a new swell of patients has packed hospitals to levels last seen in March and April.
The euro zone’s economic recovery stalled last month as the second wave of coronavirus cases and restrictions imposed to contain it slowed activity in the bloc’s dominant service industry, pointing to a double-dip recession. Alongside their peers, Germany and France — the 19-country bloc’s two biggest economies — have reimposed strict lockdown measures, likely dealing a heavy blow this month as restaurants, gyms, and shops remain closed, and citizens stay at home. The eurozone economy is expected to shrink by 2.3 percent in the fourth quarter of this year – a worse performance than they had predicted before the restrictions were announced.
The EU is likely to impose tariffs on $4 billion of US imports, including planes and plane parts, in retaliation over US subsidies for aircraft maker Boeing. A majority of EU governments have already backed the tariffs. They are expected to be put in place after a meeting of EU trade ministers on Monday.
Middle East: Saudi Aramco left its third-quarter dividend unchanged at $18.75 billion even as it failed to generate enough cash to cover the payout and reported a 45 percent drop in profit. The world’s biggest oil company generated a free cash flow of $12.4 billion between July and September, down from $20.6 billion a year earlier as coronavirus lockdowns hit demand for energy and refining margins. Aramco’s dividends are a vital source of cash for the Saudi Arabian government, whose budget deficit is expected to widen to 12 percent of gross domestic product in 2020 amid a severe economic contraction.
Yet the company, 98 percent owned by the government, probably won’t be able to continue paying out such high dividends unless oil prices, down almost 40 percent in 2020, rise. By reporting a 44.6 percent decrease in profits in Q3 2020, Aramco has put a significant damper on Saudi Arabia’s economic diversification strategies and overall stability.
Oil and gas producer Qatar will base its budget on an oil price of $40 a barrel—lower than the actual expected price—to protect its finances from volatility in oil prices. The economies of all oil and gas producers in the Middle East have been hit this year by the coronavirus crisis and the oil price crash.
The US State Department notified Congress that it plans to sell 18 sophisticated armed MQ-9B aerial drones to the United Arab Emirates in a deal worth as much as $2.9 billion. The move comes on the heels of last week’s notification of potential sale of F-35 fighters to the middle eastern country. This would mark the first armed drone export since the Trump administration reinterpreted a Cold War-era arms agreement between 34 nations to allow US defense contractors to sell more drones to allies.
India: With some of the most polluted cities on the planet and more than 8 million confirmed coronavirus cases, India is facing a medical calamity. Temperatures are falling, while infections and pollution are spiking in major cities, including the capital New Delhi, one of the worst-affected areas for smog.
Delhi’s 28 million people haven’t had a single day of clean air since early September. In the past two weeks, readings for particulate matter of 2.5 microns or smaller, or PM2.5, have risen to more than 400 in some parts of Delhi, eight times the safe level. PM2.5 is closely watched because the particles are small enough to journey deep into the lungs and do the most damage. “Covid-19 and air pollution are a dangerous combination,” said K. Srinath Reddy, president of the Public Health Foundation of India. Air pollution causes damage and inflammation in the lungs and other body tissues, reducing the body’s ability to resist the virus, resulting in more severe forms of the infection.
5. Renewables and new technologies
The maritime industry is considering nuclear power as it tries to meet decarbonization targets that the International Maritime Organization has mandated. Nuclear power ships have been ignored for decades because of safety, geopolitical security, and economic reasons, but it is an established technology in which new and cheaper reactors are being developed.
France’s Neoen will partner with Tesla to install one of the world’s biggest lithium-ion batteries in Australia after reaching a grid connection deal with the power market operator. The 300-megawatt Victorian Big Battery will be located in the southeastern city of Geelong and use Tesla’s Megapack technology. It will be double the size of Neoen’s Hornsdale site in South Australia, which was the largest facility when it began operation in 2017.
Germany is looking at using ammonia and methanol to deliver hydrogen as part of its effort to make Europe’s biggest economy climate-neutral by 2050. The government will finance a feasibility study to evaluate transporting hydrogen and focus on the two chemicals as a possible solution. Industries like steel and glass making need temperatures above 1,000 degrees Celsius. Currently, polluting fossil fuels like coal and natural gas feed those processes.
Using hydrogen, however, brings its challenges. Transporting large amounts of the lightest element is difficult because its density is so low that it needs containers with huge volumes or has to be condensed to move efficiently. That means storing it under high pressure or at minus 253 degrees Celsius, both of which bring their problems.
Ammonia — a common chemical comprised of one nitrogen atom surrounded by three hydrogen — is another option. Hydrogen can be converted into ammonia liquid and back again for transport anywhere. Germany is looking at supply deals from Chile to Canada and Australia as the country will need to import 80 percent of its projected need for hydrogen if the industry takes off.
Ammonia, which itself contains 17.6 percent hydrogen by weight, is the cheapest way to move hydrogen by ship, according to BloombergNEF. Currently made at fossil-fuel-powered chemical plants, the compound is a critical component in fertilizers for agriculture, so shipping it is well established. One commercial hurdle is the cost of making hydrogen into ammonia and then converting it back again. It’s also toxic. Besides transporting hydrogen by ships, Germany also plans to expand its pipeline network to reach countries offering cheap hydrogen from green sources like solar panels and wind farms.
The California Energy Commission sent out an offer to fund research projects for long-duration energy storage that can help decarbonize the electricity sector by 2045. Lithium-ion batteries were excluded from the solicitation. The CEC selected four energy storage projects incorporating vanadium flow batteries. The four are all commercial or industrial facilities that want to self-generate power from solar or wind.
Vanadium is an element that can commonly exist in four different oxidation states. That just means that it can exist as an ion with additional charges. If you add an electron to it, it converts to a V2+ ion. This transfer of electrons back and forth makes vanadium batteries charge and discharge, as the vanadium ions in the battery swing from V2+ to V5+. Vanadium batteries shine in long-duration applications such as making wind and solar energy available on-demand around the clock.
6. The Briefs (date of the article in the Peak Oil News is in parentheses)
BP is in talks to sell its London headquarters to help cover its debt, punctuating the British oil giant’s crisis as it navigates a pandemic that has decimated oil demand. BP bought the office block in the tony Mayfair section of London almost two decades ago when the company was riding high and had purchased ARCO. (11/5)
Offshore Turkey, Turkey has started drilling for gas at a second location in the sea. Turkey plans to deploy a third drillship to explore for natural resources in the Black Sea. Turkey’s third drillship, Kanuni, will begin exploration in the Black Sea in early 2021 and will operate alongside the drillship Fatih, which made earlier this year a natural gas discovery in the Black Sea, which Turkey says is its largest-ever gas find. (11/6)
In Nigeria, production from the Anyala – Madu field development project has started and is expected to reach 60,000 b/d, providing a much need boost to Nigeria’s oil output. This is Nigeria’s newest oil development since the start-up of the giant 200,000 b/d Egina field in late 2018. (11/4)
In Nigeria, the new Petroleum Industry Bill before the National Assembly is proposing revoking licenses for oil and gas companies that neglect their obligations to host communities. (11/5)
African peace? Testifying to the purifying effects of market downturns, Sudan and South Sudan, countries that share the painful experience of the Second Sudanese Civil War, are edging closer to increasing cooperation by making shared hydrocarbon reserves a joint venture instead of two separate ones. (11/3)
Argentina is growing increasingly desperate to restart the burgeoning oil boom underway before the COVID-19 pandemic hit. Argentina has been one of the worst affected countries in South America, despite moving early and decisively to curb the virus’s spread through a nationwide lockdown. This is because the Latin American country was already facing a significant economic crisis, sky-high inflation, and fiscal weakness. (11/3)
In Canada, bids for blocks offshore Newfoundland and Labrador were disappointing. Of the 17 parcels offered up in the Eastern Newfoundland Region, only one received any bids, committing $27 million in exploration work. That’s a crushing disappointment, on top of last year’s auction, which took in only $38.6 million, compared to $1.3 billion as recently as 2018. (11/6)
Canadian oil producers plan to start ramping up production after the Alberta government said it would remove oil production limits at the end of the year. Heavy oil demand is rising while supply remains tight because of US sanctions on Venezuela and Iran. This will benefit Canadian producers who have been booking significant losses so far this year. (11/3)
The US oil rig count increased by 5 to 226 while the gas rig count slipped by one according to the weekly Baker Hughes tally. (11/7)
Royal Dutch Shell will shut down its Convent refinery in Louisiana after failing to find a buyer for the facility. The move is in line with Shell’s plans to reduce the number of refineries it operates from 14 to 6 over the next four years. In turn, the plans are part of its strategy to shift away from its core business and into alternative energy. (11/7)
Louisiana voters approved a change to the state constitution to allow the presence or production of oil or gas to be taken into account when assessing the fair market value of an oil or gas well for ad valorem property taxes. Supporters said the measure would ensure that owners will pay more taxes when wells are more valuable, but when they are less useful, they will pay lower taxes. (11/4)
In Texas, Jim Wright, a Republican, gained a seat on a board that regulates the Texas energy industry. He knows the agency intimately; he has paid the board $181,000 in fines. He’ll join the three-member Railroad Commission of Texas with lawsuits hanging over his head from a 2014 business deal that went bad, ending with his accepting responsibility for more than 255 environmental violations at a waste recycling facility. (11/3)
Coal vs. gas: Competition from record-low natural gas prices and reduced power demand in the lockdown in the spring sent coal consumption in the US power sector down by 30 percent in the first half of 2020 compared to the same period last year. The US natural gas benchmark Henry Hub spot price hit $1.63 in June due to depressed demand from the pandemic plus a mild winter early in the year. (11/7)
Offshore wind: The Massachusetts Department of Public Utilities late Nov. 5 issued an order approving long-term contracts for 804 MW of offshore wind capacity from the Mayflower Wind project to supply the state’s electric distribution companies. Uncertainty remains over the project’s completion timing. (11/7)
In parts of Norway, electricity prices fell below zero for the second time in history early on Monday. In southern Norway, residents ‘got paid’ for using electricity as power; producers have to pay to sell electricity when prices are negative. Electricity prices in and around Oslo and Kristiansand were negative for four hours in Monday’s early hours. This was the second time in history that electricity prices in Norway have dropped below zero. Causes included high rainfall, high winds, warm temperatures, and extra nuclear production from Sweden. (11/3)
EV heavy trucks: A Kenworth T680 fuel cell electric vehicle and a battery-electric Peterbilt Model 579EV became the first Class 8 zero-emissions vehicles to drive the racecourse 14,115-foot summit of Pikes Peak in Colorado. Both vehicles displayed substantial power and drivability over 156 twisting turns and switchbacks during the 4,700-foot elevation gain. (11/6)
Volvo Trucks will offer a complete heavy-duty range with electric drivelines starting in Europe in 2021. Volvo Trucks is now running tests of electric heavy-duty FMX trucks, which will be used for regional transport and urban construction operations in Europe. These trucks will have a gross combination weight of up to 44 tons. Depending on the battery configuration, the range could be up to 300 km (180 miles). (11/6)
EU plug-ins gaining: In the third quarter of 2020, 9.9% of passenger cars sold in the EU were electrically chargeable vehicles, compared to 3.0% during the same period last year, according to data from the European Association of Automobile Manufacturers. Support measures introduced by various countries to stimulate car demand amid the COVID-19 pandemic disadvantaged conventionally powered vehicles. (11/7
Bentley Motors will ax the roaring 12-cylinder combustion engines that shaped much of the British luxury-car maker’s 100-year history to focus on electric vehicles, the latest seismic automotive shift driven by stricter emissions rules. Bentley will offer only hybrid and electric cars by 2026 and switch its entire lineup to fully electric vehicles four years later. (11/6)
Glass shortage in China: The world’s biggest solar power company says a lack of glass is raising costs and delaying new panels’ production, throwing a wrench into China’s plans to accelerate its shift to clean power. Prices for glass that coats photovoltaic panels have risen 71 percent since July, and manufacturers are struggling to produce it fast enough to keep more than a week’s worth of sales in inventory. Glass demand has also been rising within the solar industry because of the increasing prominence of bifacial panels, which coat both the top and bottom with glass, allowing for a slight uptick in power generation from sunlight reflected off the ground. Such panels are expected to make up half the market in 2022. Because glass factories take so long to build, the solar industry could be 20 percent to 30 percent short of the glass it needs next year, with the market not being back in balance until 2022. (11/6)
Low-carbon ammonia: CF Industries’ Board of Directors has approved a green ammonia project in Louisiana at the company’s flagship Donaldsonville Nitrogen Complex to produce approximately 20,000 tons per year of green ammonia. CF Industries is a leading global manufacturer of hydrogen and nitrogen products for clean energy, emissions abatement, fertilizer, and other industrial applications. (11/6)
The Chilean government has set itself ambitious targets to become one of the world’s leading exporters of green hydrogen by the end of the decade, taking advantage of its vast renewable potential. Record levels of radiation mean that Chile could be the world’s most efficient green hydrogen producer, more than compensating for the country’s distance from major markets. (11/4)
Last month was the warmest October for Europe on record, with Arctic sea ice retreating as northern regions, in particular, felt the effects of rising air temperatures. Europe was 1.6 degrees Celsius (2.9 deg F) above its 30-year historical average. October was also the fourth consecutive month with ice-free or almost ice-free conditions along the Northern Sea Route. (11/6)
Climate study: The next National Climate Assessment, the federal government’s most definitive and comprehensive report on climate change and its consequences for the US, will be directed by atmospheric scientist Betsy Weatherhead, currently a senior scientist at Jupiter Intelligence, a company that helps businesses and governments prepare for the impacts of climate change. Weatherhead, who has decades of experience as a climate scientist in the academic and private sectors, accepts human-induced climate change is happening. (11/5)
Carbon capture: Baker Hughes Co., one of the world’s most significant oilfield services, bought technology that enables companies to capture carbon emissions to store them underground. The industry faces growing pressure over its contribution to climate change. Baker Hughes acquired a company called Compact Carbon Capture (11/4)
The cruise industry has jettisoned hopes of restarting operations this year. Days after both Carnival and Norwegian extended a halt on cruises through the end of the year, the group representing cruise lines with 95% of global ocean-going capacity said Tuesday that its members have agreed to extend the suspension of US sailing operations for the rest of 2020. (11/4)
A nasal spray that blocks the absorption of the SARS-CoV-2 virus has completely protected ferrets. If the spray, which the scientists described as nontoxic and stable, is proved to work in humans, it could provide a new way of fighting the pandemic. (11/6)
Plastic waste in the oceans: According to a new study in the journal Science Advances, the US is actually a much more significant part of the global plastics problem than an earlier study indicated. In 2016, the US produced more plastic waste than any other country on Earth. Taking into account illegal dumping, littering, and scrap plastic exports, the country could take the bronze medal for its contributions to marine plastic pollution, lagging behind India and Indonesia. (11/4)