Quote of the Week
“Our goal is to increase pressure on the Iranian regime by reducing to zero its revenue from crude oil sales.”
Brian Hook, US State Dept, director of policy planning
Graphics of the Week
Contents
1. Oil and the Global Economy
2. The Middle East & North Africa
3. China
4. Russia
5. Nigeria
6. Venezuela
7. The Briefs
1. Oil and the Global Economy
Oil prices dropped suddenly last Wednesday on the news that yet another dispute in Libya had been settled so that the traditional Libyan National Oil company was back in business exporting oil from its major terminals. New York futures fell by $3.50 a barrel on the news, and the London price decreased by $6.50, with New York closing out the week at $71 and London at $75.33.
The underlying forces moving the oil markets are still firmly in place. Demand still seems fairly strong supporting the estimates that the demand for oil will increase by circa 1.5 million b/d for 2018 and at least through 2019. Russia, Saudi Arabia, and the Gulf Arab states are increasing production again as the production freeze seems to be of less interest now that oil is selling in the $70’s again. Most OPEC members have peaked out and can do little to increase oil production in the immediate future, if ever.
Production from the US’s Permian Basin, which has been increasing rapidly in recent years, seems to be topping out due to the lack of pipeline capacity to move the oil from new wells to market. The pipelines should be close to full by the end of summer, and it will be another 18 months before new pipelines are ready to move oil out of the Permian Basin. Any significant increases in world oil production in the next year or so will have to come from Russia and the Gulf Arabs, although production from Iraq is moving up steadily.
The most important downside to global production in the immediate future is Iran, which will come under sanctions from Washington, and those states with problems of political instability – Venezuela, Nigeria, and Libya. Flare-ups in any or all of these counties could cut global oil exports by 1 or 2 million b/d in the next year or so. If the IEA is to be believed, then three or four years from now the lack of sufficient investment in finding and developing more oil production will lead to shortages. This is about the timeframe when independent observers say US shale oil production will be peaking and begin a rapid plunge.
The big unknown, however, is the course of the trade wars that Washington has launched with China, North America, and Europe. The dispute with China is particularly troublesome as many believe that it could result in a measurable drop in global GDP and demand for oil if the dispute continues indefinitely.
The IEA’s Warning: The International Energy Agency warned on Thursday that spare oil production capacity risks being “stretched to the limit” as supply disruptions and US sanctions against Iran tighten the market. “Rising production from Middle East Gulf countries and Russia comes at the expense of the world’s spare capacity cushion, which might be stretched to the limit.” The agency sees no sign of higher production from elsewhere that might ease market tightness. Indeed, the problems in Venezuela, Nigeria, and Libya could easily take additional oil off the market.
The IEA says there are only 2.1 million b/d of quickly available spare capacity in three OPEC members: Saudi Arabia, Kuwait, and the United Arab Emirates. If the Saudis increase output towards record levels of near 11m b/d this summer, as it has indicated, it would cut the kingdom’s spare capacity to “unprecedented” levels.
In the past low spare global oil production capacity has led to spikes in oil prices as was last seen in 2008 when prices touched $140 a barrel. There are so many forces in play today that it is nearly impossible to predict whether or not we will see a large price spike in the next two years.
US Shale Oil Production: In last week’s Petroleum Status Report, the EIA estimated that US oil production remained steady the week before last at 10.9 million b/d after having grown by 1.5 million b/d during the last 52 weeks. As these weekly production figures are estimates rather than actual reported production, it is difficult to say whether or not problems moving oil out of the Permian Basin have brought the rapid growth in US oil production to at least a temporary halt.
Increasing crude oil and natural gas production in the Permian Basin and not enough pipeline capacity to move the products to market has widened the discounts at which oil and natural gas produced in the basin are trading relative to the US benchmarks. Pipeline companies continue to announce plans for more oil and natural gas pipeline projects in the area to ship oil and gas from the Permian to the Gulf Coast. However, many of those pipelines will not come on stream before late in 2019 and 2020. Analysts believe that the WTI vs. Midland, Texas price discount and the Waha natural gas discount to Henry Hub prices will become worse before they become better, at some point in 2020.
Analysts at Morgan Stanley are saying that crude oil production growth in the Permian could shrink by nearly two-thirds next year because of limited pipeline capacity that will increase the already wide price differentials in the region. At the same time, the EIA is saying that US oil production will average 11.8 million b/d next year, up from the current 10.9 million.
If these analysts are right, pipeline constraints will cap 2019 output growth in the Permian at 360,000 b/d, well below Wall Street expectations of about 634,000 b/d, and down from this year’s projected 960,000 b/d growth. The inability to move oil to market will push 12-month forward Midland-to-WTI differentials to a discount of $25 to $30 a barrel, from the prompt month $15.50 a barrel discount now.
A side effect of the Permian shale oil boom is the voracious demand for fracking sand to prop open the cracks in the shale made by high-pressure water. In the last twelve months, 11 firms that dig and supply fracking sand have opened within sight of each other in West Texas, and another 10 or so are hustling to get started.
Together, these new firms will mine and ship some 22 million tons of sand this year to shale drillers all around them in the Permian Basin. This amount of sand is equal to almost a quarter of the total US supply. Within a couple of years, industry experts say, the figure could climb to over 50 million tons, provided the boom continues and there is as much oil that can be economically extracted from the Permian as the industry and EIA predicts.
2. The Middle East & North Africa
Iran: Washington government continues its attempts to shut down Iran’s oil exports, and there are indications that it may be having some success. In recent week, the general consensus of how much Iranian exports will be hurt by the US sanctions has been changing from a loss of around 500,000 b/d by the end of the year, to something more like 1 million b/d, or even as high as 2.0 million in a worst-case scenario in which all countries comply.
There are several reasons why the Trump administration may not succeed in cutting Iran’s exports by a significant amount, say 1 million b/d or more. These mostly center on the EU, Russia, and China seeking to shield Iran from the US sanctions, but only the Chinese government has the ability to decree purchases from Iran should exports slow elsewhere.
Last week, the US restated its intentions to drive Iranian oil from the market, when Treasury Secretary Steven Mnuchin told Congress that the United States intends to impose sanctions on all customers of Iranian oil, including China, the EU, and Russia. Washington initially said that it might refuse to issue waivers, but later clarified that position by saying that it would “work with those countries importing Iranian crude oil to get as many of them as possible down to zero by Nov. 4.”
During the past week, there were indications that South Korea, Japan, India, and some European refiners and associated companies are already cutting back on dealings with Tehran. French-based CMA CGM, one of the world’s largest cargo shippers, announced it would be pulling out of Iran for fear of being entangled in US sanctions. CMA CGM operates the third largest container shipping fleet in the world, with 445 ships, capturing 11 percent of global container ship capacity. The French company’s move comes as international firms have left Iran amid pressure from Washington. It seems that harshly enforced sanctions may have more impact than many initially believed.
The sanctions are having repercussions in Iran where hopes for a brighter economic future have been curtailed. President Rouhani based his presidency on the nuclear treaty and more investment from the West so his political survival is now in question. Rouhani is sounding a lot like Iran’s hard-liners. During a visit to Switzerland he threatened to disrupt the flow of Middle Eastern oil through the Persian Gulf.
Iran, which has few places to turn these days, has been touting $50 billion worth of potential Russian investments in its oil and gas sector as it seeks to deepen its relationship with Moscow amid mounting US pressure. Ayatollah Ali Khamenei’s top diplomat used a media interview during his visit to say that a Russian oil company had already signed a $4 billion deal with Iran that “will be implemented soon.” He added that: “Two other major Russian oil companies, Rosneft and Gazprom, have started talks with Iran’s oil ministry to sign contracts worth up to $10bn.” Moscow is hard pressed for cash these days, and it seems unlikely that it would be investing large amounts of money in Iran unless the terms were very favorable.
Iraq: In Basra, security forces fired on protestors frustrated by a lack of jobs and services, as well as the salty water that shut down the Basra refinery. One demonstrator was confirmed dead, and at least two others and five members of security forces were injured outside the West Qurna 1 oil field last week. The lack of steady work, electricity, and potable water have been compounded by 120 degrees Fahrenheit heat and the reduced quantity and quality of water flowing from the Euphrates and Tigris rivers and tributaries. Increased salinization in the Shatt al-Arab – the confluence of the Tigris and Euphrates Rivers – shut down the country’s largest operational refinery.
Five days of protest came to an end on Thursday after the government promised jobs, electricity and clean water. Oil production stayed normal, and ExxonMobil, Lukoil, and BP remained in control of the respective fields, according to Oil Ministry and Basra Oil Company officials.
In the north, production has fully resumed at the Bai Hassan field outside Kirkuk. The field is part of a complex of oilfields in Northern Iraq that were shut down mid-October 2017 after the Kurdistan Regional Government unilaterally voted for independence from Baghdad, causing Iraqi troops to move in on the oil facilities in the Kirkuk area under Kurdish control.
Saudi Arabia: Oil and gas analysts at BMI Research say “The Kingdom has reaffirmed that it holds 2 million b/d of spare capacity”, which implies a total production capacity of around 12 million b/d. “However, bringing all its spare capacity into play would incur a significant cost, while production would take time to bring fully online.” “Increasing crude output from 11 million to 12 million b/d would likely take on the order of six to 12 months.” BMI added that it was unclear that there will be a market for the additional barrels, and how sustainable that market would be.
In early 2016, Crown Prince Mohammed bin Salman said he planned to sell shares in Saudi Aramco, the company that produces 10 percent of the world’s oil and finances the Saudi state. The initial public offering—planned for 2018—would raise more than $100 billion for a new sovereign wealth fund, creating the world’s most valuable listed company, and funneling hundreds of millions of dollars in fees to Wall Street’s elite banks. The company would be worth at least $2 trillion and perhaps as much as $2.5 trillion.
However, Saudi Arabia’s willingness and preparedness for a stock market listing of Saudi Aramco is now in doubt amid concerns about legal exposure and an inability to generate the $2tn valuation sought by crown prince bin Salman. “It is a sovereign decision.” Amin Nasser, chief executive of Saudi Aramco, said that Riyadh had yet to determine whether an IPO would take place.
For some time now the Saudis have reiterated what the IEA has been saying about the future of the global oil industry — there is not enough investment going on and shortages will develop. Amin Nasser, chief executive of Saudi Aramco, said rising investment into a short-cycle output, which ebbs and flows faster than conventional projects, would not be enough to meet rising crude demand. “Something like shale oil . . . it is not going to really create a major dent in total global supply requirements up until 2040.”
International energy majors are prioritizing cutting costs and returning money to investors through dividends and share buybacks after the industry downturn. “It is an indication that companies are worried about meeting shareholder requirements,” said Mr. Nasser of a reluctance to invest in projects that are costly and take more time to develop but tend to last longer.
Libya: On Wednesday Libya lifted its force majeure on the Ras-Lanuf, Es Sider, Marsa, El Hariga, and Zueitina oil terminals, according to a statement by National Oil Corporation Chairman Mustafa Sanalla. Libya’s oil production slowed significantly at the beginning of July after the Tripoli-based NOC declared force majeure on crude oil loadings at the Hariga and Zuetina oil terminals, adding to the force majeure at the Ras Lanuf and Es Sider terminals. The NOC said on July 2 that the total daily production loss amounted to 850,000 b/d of crude oil.
After the ports reopened, the NOC said that the company and its subsidiaries “are concentrating on managing the buildup of operations, to maximize production, and overcome obstacles and losses incurred during the crisis of the last four weeks.”
The NOC also lifted the force majeure at the El-Feel oil field, which had been in place since February 23, 2018, over a dispute over pay and benefits. Oil pumping at the field—operated by a joint venture of Italy’s Eni and NOC—is expected to resume to 50,000 b/d within two days, and to 72,000 b/d three days later. With these announcements, Libya’s oil production should be back over 1 million b/d.
3. China
The trade war between Washington and Beijing remains the top issue affecting the world oil market. Last week China warned it would hit back after the Trump administration raised the stakes in their trade dispute, threatening 10 percent tariffs on $200 billion of Chinese goods. US officials on Tuesday issued a list of thousands of Chinese products to be hit with the new duties. The top items by value were furniture at $29 billions of imports in 2017, network routers worth $23 billion last year and computer components to the amount of $20 billion. The list is subject to a two-month public comment period.
As the US does not sell China a sufficient quantity of goods to fully retaliate, Beijing is looking at ways to harass US firms doing business in China by withholding licenses and audits. Beijing has already cut back on imports of US crude oil but is leaving LNG imports from the US alone because of its desperate need for more natural gas.
China’s crude oil imports fell for the second month in a row in June to the lowest since December, as shrinking margins and volatile oil prices led some independent refiners to scale back purchases. Beijing has always been patient in waiting for lower crude prices before making purchases for its strategic reserves.
How the Chinese economy will fare if exports to the US are substantially curbed due to the new US tariffs is another great unknown. In recent weeks Beijing seems to have relaxed its efforts to keep a lid on debt as it faces a softening economy and the trade tensions with the US. The State Council has started urging local governments speed up already approved investment projects to re-energize growth.
An air monitoring report last week by the Chinese government showed particulate matter in the air of major urban areas declined by nearly 23 percent last year when compared with 2013. The report attributed the change in part to an 8.1 percent decline in the use of coal and the 6.3 percent increase in clean energy consumption over the last five years.
The Chinese government recognizes that controlling air pollution is one of its tougher goals as it looks to continue industrialization and economic growth at the same time. Last week, legislators held a two-day extraordinary session to consider additional air pollution controls. The reduction in the use of coal has been largely confined to cities, and its use continues to grow elsewhere to provide the electric energy needed for economic growth.
4. Russia
Moscow’s energy minister, Alexander Novak, was busy last week holding press conferences and prognosticating on the state of the oil markets. On Friday Novak said that Russia and other leading oil producers might boost oil output further if supply shortages hit the global oil market. He also said Russia might surpass the 200,000 b/d production increase that is currently underway if there is a need for it. Novak said higher crude prices this year would add $40.14 billion to Russian state revenues this year.
Novak is also concerned that higher oil prices brought on by the US sanctions on Iran and various production shortfalls around the world will be negative for the global economy. Russia’s Finance Ministry also warned last week that if prices remain at their current level, another collapse could be coming soon.
5. Nigeria
For the foreseeable future, Nigeria is likely to remain a concern to the global oil markets because of the volatility of its roughly 2 million b/d of oil production. The country’s population is projected to grow from more than 190 million today (50 million greater than that of Russia) to 392 million in 2050. The country is composed of more than 250 ethnic groups and has developed a tradition of government corruption since gaining independence in 1960. Very little of the revenue from 2 million b/d of oil sales makes its way down to Nigeria’s villages, and every year billions in oil revenue paid by foreign oil purchasers disappear so that not even the world’s best auditors can track it.
Nearly every day attacks by thieves, vandals, and dissidents take place along some portion of thousands of miles of pipelines carrying crude, natural gas, and finished oil products. Last week the Nigerian National Petroleum Corporation issued a rare report outlining the cost to the country of the “vandalism” to the pipelines and the lack of money to perform necessary maintenance on oil facilities. The company says that last February Nigeria’s oil sector lost over 754,000 b/d due to production shut-in occasioned by pipeline vandalism.
Not all of this loss is due to thieves drilling holes in pipelines to steal oil or militants blowing them up to pressure the federal government for a larger share of the revenue, but simply from lack of timely maintenance on facilities. According to the report, about 160,000 b/d were shut-in throughout February due to the aging facilities/integrity issues at the Qua Iboe Terminal. This situation of constant oil theft, insurgent sabotage, and lack of maintenance is unlikely to end soon. In recent years, the major international oil companies have been quietly selling off their interests in onshore Nigerian oil production in favor of offshore production which is relatively secure from thieves and dissidents.
Last week The British Foreign and Commonwealth Office issued a warning to Nigerian states in the delta region ahead of the coming elections. The head of the Africa research program at Verisk Maplecroft told UPI that “The multibillion-dollar question is whether militant groups in the Niger Delta will resume their pipeline bombing campaign to hurt the Buhari government ahead of the elections,” he said. “Some of these groups are capable of carrying out highly sophisticated attacks, and in 2016 they succeeded in slashing Nigeria’s oil production by at least one third.”
6. Venezuela
Venezuela’s oil production fell by another 47,500 b/d in June, compared to a month earlier. An exodus of workers and field shutdowns were reported for the month, pointing to a grim near-term future that could see total production dip below 1 million b/d by the end of the year. Officials from state-owned PDVSA said unofficially that workers are fleeing operations. “More production wells are being shut down, the skilled oilfield labor force declined in all upstream divisions by at least a combined 1,000 workers in June, and scheduled maintenance continues to be postponed.”
A separate official said that production continued to fall in the first 11 days of July as more rigs were scrapped and more wells were shut down. PDVSA is “dying operationally,” the official said. While OPEC’s secondary sources estimated average output at 1.34 million b/d in June, the Venezuelan government reported production figures at 1.531 million, the same as May levels.
“Output from Venezuela’s aging conventional oil fields is in rapid decline and upgraders operated by foreign joint-venture partners in the Orinoco heavy oil belt are malfunctioning and running below capacity,” the IEA said in its latest Oil Market Report. “In total, upgrading projects in Venezuela can turn roughly 600 kb/d to 700 kb/d of extra-heavy Orinoco crude into export grades. Recently they have been largely out of action due to bottlenecks at loading facilities.”
More than $9 billion in bond payments fall due this year; inflation is set to top some 13,000 percent this year, and GDP could shrink by a further 15 percent. By the end of the year, GDP will have contracted by nearly 50 percent since 2013.
Venezuela has been losing around 50,000 b/d of its oil production each month so far this year, which means it could lose another 300,000 b/d before the end of 2018. The losses are tightening the oil market; others will have to increase production to make up for the declines.
7. The Briefs (date of article in Peak Oil News is in parentheses)
International shipping owners may, in 18 months, be instructing their ship captains to slow their vessels down. The reason? A rule to combat the merchant fleet’s emissions of sulfur oxides starting in January 2020. While such a slowdown might shave billions of dollars off shipowners’ single largest expense — fuel — it would also effectively limit the number of available vessels, risking an upward spiral in freight costs. (7/13)
Dire freight rates are pushing shipowners to scrap a record number of the biggest oil tankers this year, making it a bumper period for recycling yards in South Asia. Very large crude carriers, or VLCCs, move much of the world’s oil across the oceans. But there are far too many in operation in a shrinking market. Major oil producing countries have curbed production in recent years, and the US is importing less crude as it increasingly covers its needs with local oil. (7/9)
India’s oil products demand rose almost 9 percent in June on the year to 17.99 million tons, or 4.7 million b/d, primarily driven by higher consumption of diesel (+7.8%) and gasoline (+15%). The higher demand is a reflection of buoyant local consumption for oil and oil products due to the Indian government’s thrust on infrastructure development and surging auto sales. India’s oil demand is set to grow by 300,000 b/d in 2018, compared with only 120,000 b/d in 2017. (7/13)
In northeast China, the expansion of underground gas storage could alleviate distribution network bottlenecks in the country’s key winter demand centers, and help stabilize seasonal demand and price fluctuations in the wider Asian LNG markets. (7/13)
Vietnam exported 1.88 million tons of crude oil in the first six months, down 49.9 percent from a year ago, mostly to China, Thailand, and Australia. State-owned PetroVietnam has said that production from major aging fields will continue to shrink this year while complex geographical conditions at the remaining marginal fields are creating difficulties for the company. (7/12)
In Egypt, a new oil discovery in the Western Desert could unlock a new area for productivity gains in the country, Italian energy company Eni said Monday. Eni said it made its second oil discovery in the B1-X exploration area in the Western Desert. (7/11)
In Sudan, a fuel crisis has returned to the three states of Kordofan, affecting transportation within towns and travel to other states. Rationing is common. Black market prices for fuel are high. (7/12)
Offshore Mozambique, liquefied natural gas will be processed from a field by 2024 now that the government has the development plans, partners Exxon Mobil and Italian energy company Eni said. (7/10)
Mexico’s President-elect Andres Manuel Lopez Obrador will seek to end the country’s massive fuel imports, nearly all from the US, during the first three years of his term while also boosting refining at home. The winner of the country’s recent election told reporters that he will also prioritize growing crude oil production domestically, which has fallen sharply for years. (7/9)
In Canada, Syncrude on Friday told buyers it would cut crude deliveries in August by about 35 percent after an outage last month at its oil sands site in northern Alberta. Canada is the world’s fourth-largest oil producer and Syncrude’s nameplate capacity of up to 360,000 barrels per day represents about 10 percent of the country’s supply. (7/14)
Canadian energy company Suncor said its Syncrude oil sands facility, crippled by a June power outage, will be back at full capacity by September. The company said a preliminary investigation indicated a transformer tripped. (7/10)
The US oil rig count stayed flat at 863 while the gas rig count increased by two to 189, according to Baker Hughes. The combined oil and gas rig count now stands at 1,054—up 102 from this time last year, with the number of oil rigs accounting for 98 of that 102. Canada gained 15 oil and gas rigs for the week, 13 of which were oil rigs. Canada’s oil and gas rig count is now up just six year over year. Oil rigs are up by 33 year over year in Canada, while the number of gas rigs is down by 27. (7/14)
The US Gulf of Mexico has begun to stir recently after three years of low prices, attracting private equity money alongside a new set of players. The US Gulf — which had been expected to fade silently into the background — continues to grind forward and will reach a peak this year. Currently, total US Gulf production is projected at 1.725 million b/d of crude in July, nearly 18 percent of current domestic production. The figure is expected to rise to a peak of 1.874 million b/d in January 2019 before declining slightly and ending that year at 1.825 million b/d. (7/14)
GOM mega-lease: The US government put millions of acres on the table for drillers looking to tap into the billions of barrels of oil yet to be discovered offshore. Deputy Interior Secretary David Bernhardt said the next lease in a five-year plan includes 79 million acres off the coast of Alabama, Florida, Louisiana, Mississippi and Texas. All told, the US waters of the Gulf of Mexico hold about 48 billion barrels of undiscovered technically recoverable oil and 141 trillion cubic feet of natural gas. (7/14)
LNG futures: CME Group Inc said on Tuesday it would develop the first physically deliverable US liquefied natural gas futures contract as growing worldwide demand has made the US a key LNG exporter. Overall world LNG consumption has risen to a record 39.0 billion cubic feet per day (bcfd) in 2017 from just 29.1 bcfd in 2010 and is expected to keep growing by about 3 percent a year through 2050. (7/11)
So-called “orphan” oil and gas wells, which have been abandoned by defunct companies that can no longer pay to plug them, are a growing problem in many states thanks to a recent slump in energy prices that has forced marginal operators out of business. (7/11)
Exxon Mobil faces many challenges, including investigations of its accounting and tax practices as well as lawsuits by cities and states seeking funds to pay for the effects of climate change. Its biggest problem is one the giant has seldom faced in its 148-year history: It isn’t making as much money as it used to. (7/14)
Gas vs. coal: EIA expects natural gas-fired power plants to supply 37 percent of US electricity generation this summer (June, July, and August), near the record-high natural gas-fired generation share in summer 2016. EIA forecasts the share of production from coal-fired power plants will drop slightly to 30% in summer 2018, continuing a multi-year trend of lower coal-fired electricity generation. (7/12)
Wind costs: Between 2010 and 2016, the capacity-weighted average cost (real 2016$) of US wind installations declined by one-third, from $2,361 per kilowatt (kW) to $1,587/kW, based on analysis by the US DOE. The reasons for this decline include improving technology and manufacturing capability and an increasing concentration of builds in the regions of the US with the lowest installation costs. (7/14)
China imported 146 million tons of coal and lignite in the first half of 2018, up 9.9 percent from the previous year and a three-year high. This rebound in coal demand is underpinned by tight supply stemming from ongoing safety and environmental checks at major coal mines amid firm summer electricity demand. (7/13)
China’s dominant role in electric vehicle manufacturing and sales has yet to be curtailed by the trade war launched by President Donald Trump. The lack of impact can be demonstrated by Tesla CEO Elon Musk’s trip to Shanghai this week to sign a factory deal. (7/13)
China’s BYD recently delivered five electric buses to the Vineyard Transit Authority (VTA) in Martha’s Vineyard, Massachusetts; a sixth is scheduled to be delivered by the end of the July. VTA had placed the order for the buses in August 2017. The BYD buses will replace six diesel buses as part of the VTA’s plan to convert its fleet. VTA is the first transit agency in Massachusetts to commit to going all-electric. (7/12)
EV leader: A policy adviser to Washington Gov. Jay Inslee said the state wants to be as prolific as low-carbon Norway when it comes to electric vehicle deployment. There are around 28,000 electric vehicles on state roads now. The goal is to nearly double that to 50,000 by 2020. The Norwegian government said electric vehicles make up about 5 percent of the passenger fleet, compared with 3.7 percent at the end of 2016. Norway is a global leader in oil and gas production but leans on renewable resources for the domestic market. (7/13)
Downfall of US nukes? A new, shocking report by researchers at four universities discovered that the US nuclear power industry could be on the verge of collapse — a reality that many have yet to realize. Published in Proceedings of the National Academy of Science (PNAS), “US nuclear power: The vanishing low-carbon wedge” examined 99 nuclear power reactors in 30 states, operated by 30 different power companies. As of 2017, there are two new reactors under construction, but 34 reactors have been permanently shut down as many plants reach the end of their lifespan. (7/13)
The UK should back renewables and support only one more nuclear plant after Hinkley Point C before 2025, because renewable energy is the safest bet for a low-cost energy system for Britain in the long-term, the National Infrastructure Commission—an independent advisory group set up in 2015 to give recommendations to the UK government—said in its first report on Tuesday. (7/11)
The Uzbekistan government and Rosatom have reached an agreement to build the first nuclear power plant in the country, with commercial operations targeted to start by 2028, to free up natural gas for export. The nuclear power plant would comprise two 1,200-MW units. Uzbekistan needs the nuclear power plant to decrease the share of natural gas used in the domestic power generation industry. Currently, 85% of the country’s estimated 69 billion kWh of demand is met by coal- and gas-fired generators, the statement added. (7/12)
Germany’s RE: For the first time in history, renewable power sources have overtaken coal in Germany’s energy mix, the German Association of Energy and Water Industries reports, saying the share of wind, solar, hydro, and biomass in the country’s energy production mix reached 36.3 percent as of end-June this year, versus a combined 35.1 percent for hard coal and lignite coal. (7/13)
CA erosion nightmare: Like an ax slowly chopping at the trunk of a massive tree, waves driven by sea-level rise will hack away the base of cliffs on the Southern California coast at an accelerated pace, a recent study says, increasing land erosion that could topple some bluffs and thousands of homes sitting atop them. California officials from Santa Barbara to San Diego will face an awful choice as the sea rises: save public beaches enjoyed by millions, or close them off with boulders and concrete walls to armor the shore and stop the waves in a bid to save homes. (7/13)
Western drought: Arizona is the odd state out in agreeing to dramatically curtail water use from the Colorado River, raising tensions in the Southwest as extreme drought conditions return. At issue are falling water levels at the West’s biggest reservoir, Lake Mead. Having already dropped by more than 150 feet over the past two decades to 1,077 feet, the Nevada reservoir is two feet shy of falling below a federal threshold that can trigger mandatory cutbacks by US officials. (7/9)
Future climate impacts worse: A recent assessment of past warm periods shows that future global warming may be twice as warm as projected by climate models and sea levels may rise six meters or more with 2°C of warming. (7/9)
Climate research finding: Thirteen thousand years ago, an ice age was ending, the Earth was warming, the oceans were rising. Then something strange happened – the Northern Hemisphere suddenly became much colder and stayed that way for more than a thousand years. Based on new research—from measurements taken off the northern coasts of Alaska and Canada in the Beaufort Sea–scientists say they detected the signature of a huge glacial flood event that occurred around the same time. The research underscores that as the Earth warms and its ice melts, major changes can happen in the oceans. And could happen again. (7/13)