Quote of the Week

“Despite the welcome improvements in efficiency and innovation from companies operating in the North Sea, the ongoing decline in our offshore gas production has meant that the UK has gone from being a net exporter of gas in 2003 to importing over half (53%) of gas supplies in 2017 and estimates suggest we could be importing 72% of our gas by 2030.”

Greg Clark, Secretary of State for Business, Energy and Industrial Strategy, and James Brokenshire, the Secretary of State for Housing, Communities, and Local Government, in a joint statement

Graphic of the Week


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

Brent crude traded briefly at $80.18 a barrel on Thursday before slipping back to close the week at $78.51. This was the highest that London oil futures have traded since November 2014.  New York futures closed the week at $71.28 which is more than $7 a barrel lower than London giving another push to US crude exports. The price jump came amidst a burst of bullish news including a larger-than-expected drop in US petroleum stocks of 1.3 million barrels of crude and a drop of 3.8 million barrels of gasoline. The short-lived spike also came just after a new Goldman report saying the US shale oil production can’t possibly make up for the potential loss of oil from the new Iran sanctions and that prices are likely to move higher.

However, while futures markets are pushing 4-year highs, spot crude prices are at their steepest discounts to futures in years due to weak demand from refiners in China and a backlog of cargoes in Europe. Sellers are struggling to find buyers for West African, Russian and Kazakh crude.  Many see the physical oil markets as a better gauge of short-term fundamentals than futures which are partly driven by geopolitical concerns.

As usual,  there are divergent opinions on where oil prices are going in the next year or so. The CEO of Total says that a combination of the Iranian sanctions and the collapse of Venezuelan oil production will likely push oil to $100 a barrel. However, the CEO of BP says that growing US shale oil production and the relaxation of the OPEC production freeze could send prices back down to $50-65. The IEA is warning that high oil prices are going to cut into demand, while Morgan Stanley warns that the new international shipping regulations requiring cleaner fuel will drive oil to $90 a barrel by 2020.  The UK’s Westbeck Capital predicts $100 crude shortly, with $150 coming later as the world faces a crunch similar to July 2008.

The OPEC Production Cut: The cartel’s production was up 12,000 b/d in April, but that was after February production had been revised down by 74,000 b/d and March by 39,000 b/d. Most of the recent cuts have come from Venezuela.  Since September 2017, the decline there has averaged 63,000 b/d per month as compared to about a 20,000 b/d each month for the first nine months of 2017. With the likelihood of a near total collapse in Venezuelan oil production increasing, there is less need for restraint by other OPEC members who can increase production.  In addition to Venezuela, other OPEC members such as Angola, Nigeria, Ecuador have been having problems keeping up production in recent weeks.

The cartel says oil’s current rally to the vicinity of $80 a barrel is a short-term spike driven by geopolitics rather than any supply shortage. This may be a sign the group is not yet ready to rethink the supply-cutting agreement.  The Saudis Arabia believe that a speculator-driven jump in oil prices is not sufficient grounds for producers to boost output.  For such a decision to occur, the rally would need to be driven by news data pointing to a supply crunch.

OPEC and its collaborators are meeting next month to discuss the progress of their production cut and what they should do next. Publicly, all the parties to the deal are committed to its continuation until the end of the year.  However, there are signs that the situation could change in the next seven months.  Russia pumped more than its allotment in March and April and Energy Minister Novak recently hinted that Moscow might like to see the deal terminated earlier now that the global oil glut is eliminated.

Citigroup analysts estimate that Russia currently has 408,000 b/d in idled capacity, about 4 percent of its estimated 11.3 million b/d total productive capacity.  That is a lot less than Saudi Arabia’s idle capacity, of 2.12 million b/d; however, most Russian oil producers are eager to expand production. Thanks to the new pipelines to China, Russian oil companies will soon be able to sell China all the oil they can produce. Rosneft has said that it is in a position to restore its production to pre-cut levels within two months.

US Shale Oil Production: The Wall Street Journal reports that US  shale oil drillers are still spending more money than they are making, even with higher oil prices. The top 20 shale oil drillers by market capitalization collectively spent almost $2 billion more in the last quarter than they took in from operations. This was largely due to bad bets hedging crude prices, as well as transportation bottlenecks, labor and material shortages that raised costs.  Despite the higher selling prices, the drillers spent about $1.13 for every $1 they took in. Oasis Petroleum spent $3.27 for every $1 it made in cash, while Parsley Energy spent almost $2 for every $1 it made in cash, according to the Journal.

This is not a new story; most drillers were losing money when oil was selling above $100 a barrel. Although the 2014 price drop saw lower production costs, most of these came from lower wages and service company fees and not from the much vaunted “technological improvements.”

According to the Energy Information Administration’s latest Drilling Productivity Report, US shale oil production is slated to rise by a record-breaking 144,000 b/d from May to June, hitting 7.178 million b/d. The Permian Basin will lead the way with a 78,000-b/d increase in production, from 3.199 million b/d this month to 3.277 million b/d in June. The Permian will be followed by Eagle Ford, with a 33,000 b/d increase and the Bakken with a 20,000 b/d increase.

It is interesting to note that recent North Dakota figures on the Bakken’s actual oil production show it falling by 13,000 b/d between February and March, although some of the Bakken’s production comes from Montana. The rig count in the Bakken has grown by only eight rigs since last December and now stands at 60 as compared to 218 back in 2012.  North Dakota also reports that last week oil producers were only getting $59 a barrel at the well-head as compared to the $71 futures price. A similar situation obtains in the Permian Basin where there is not enough pipeline capacity to move all the oil that is being produced to market.

The financial press reported last week that shale drillers are ramping up production in regions other than the Permian as higher oil prices might make it more profitable to drill in less productive oil fields. This move has been sparked by high lease costs,  congested pipelines and shortages of labor and materials in the Permian region where production has surged to roughly three million b/d from just below two million in early 2016. Although rig counts in the smaller shale oil basins have more than doubled in the two years, they are still well below where they were at the peak of the shale oil boom four years ago.  There are good reasons to be skeptical that there will be significant increases in production in the older shale oil basins as most of the sweet spots have already been drilled.

2.  The Middle East & North Africa

Iran: Most of the discussion last week focused on how much oil Washington’s new sanctions on Iran will remove from the markets after they are implemented later this year. The White House memo issued last week said that global oil supplies are plentiful enough to withstand a “significant reduction” in petroleum exports from Iran.

Many types of US sanctions have been announced and there is a “wind down” which is intended to allow companies doing business with Iran to finish up that varies between 90 and 180 days. Also, the Treasury is to re-list Iranian individuals and entities in the Specially Designated Nationals (SDN) list, thus revoking special licenses and exceptions previously granted to individuals and companies to deal with Iran.  This is intended to make it all but impossible for foreign firms with a US presence to deal with Tehran. The measures were drawn up by the US Treasury to cover shipping, insurance, and the gamut of financial and logistical support for Iran’s oil industry. Any European or Asian company that falls afoul of this will be shut out of the US capital markets and the international payments system transacted in dollars. Many believe that no European company with major operations in the US would dare cross such a line.

There are two sides to the sanctions issue:  How much Iranian oil exports will be slowed and how much foreign investment will be cut? Estimates of how much Iranian oil exports drop range from nearly zero to as much as a million b/d.  The median current guess is that Tehran will lose exports of 500,000 b/d by the end of the year with more later. The cut in investment, especially from the EU, is likely to be more significant.

Total SA has announced it will not go ahead with its South Pars Gas Project in Iran unless it is granted a specific project waiver by the United States. The contract for the SP11 contract was signed in July 2017, and Total will unwind all operations related to the project by November 4, 2018, unless the waiver is granted.

The EU announced a package of measures last week to counter US sanctions on Iran. Analysts say there will be limits to the effectiveness this action, and European leaders have said they do not want a trade war with the US over Iran. “As long as the Iranians respect their commitments, the EU will, of course, stick to the agreement of which it was an architect,” said Jean-Claude Juncker, European Commission president. “But the American sanctions will not be without effect. So we have the duty, the commission and the European Union, to do what we can to protect our European businesses.”

As long as Europe continues to comply with the nuclear agreement and does its best to bypass the US sanctions Tehran will probably adhere to the deal. The Iranians still see political and economic benefits from the deal and as long as the US sanctions do not become too onerous will continue to let the agreement stand.  Iranian Oil Minister Zanganeh reiterated over the weekend that President Trump’s decision to quit a multinational nuclear deal would not affect Tehran’s oil exports if the EU could salvage the pact.

Iraq: A bloc led by Shi’ite cleric Moqtada al-Sadr has won the country’s parliamentary election.  Sadr himself, a long-time adversary of the United States who also opposes Iranian influence in Iraq, cannot become prime minister because he did not run in the election. There are concerns that the election of a new government will delay further development of Iraq’s oil industry until after new coalitions are formed. Forming a new government will likely take months to be negotiated, and this will impact Iraq’s new oil contracts and leave international oil companies waiting to see what the investment and contract climate will be like.

Russia’s Lukoil has signed a development plan for the West Qurna-2 oil field with the local Basra Oil Company, targeting to increase oil production from the field from 400,000 b/d to 800,000 by 2025.  Lukoil holds a 75 percent interest in West Qurna-2 where the first commercial oil was produced in March 2014.  Current production is about 9 percent of Iraq’s total oil output.

Saudi Arabia: On Friday Energy Minister al-Falih said he is consulting other oil producers in and outside OPEC to ensure the world has adequate supplies to support economic growth after prices hit $80 a barrel.  The minister also said he had reassured the executive director of the International Energy Agency of “commitment to the stability of oil markets and the global economy” and that he would contact others over the next few days.

The Houthis launched yet another ballistic missile at Saudi Arabia’s state-run oil company Saudi Aramco last week. While no damage was reported, it is unlikely that the Saudis permit such news to be reported. The Houthis targeted an Aramco facility in the Jizan province that has a 400,000 b/d refinery. That is close to the Yemeni border and an easy target for shorter-range missiles.

3.  China

China’s oil demand growth has so far this year exceeded expectations, and could be even “higher than currently estimated”.  According to Goldman Sachs, global oil demand growth in the first quarter of 2018 is likely to have seen the strongest yearly growth since the fourth quarter of 2010.  China’s domestic crude oil production has been languishing near 2011 lows, prompting higher imports to meet growing demand. Crude oil production in March was around 3.76 million b/d, about the same as in January and February.

In 2017, China expanded refining capacity and reduced restrictions on oil imports and refined oil product exports.  Chinese refineries processed 12.13 million b/d in March, beating the previous record of 12.03 million b/d.  Refinery runs in April and May are expected to be lower due to maintenance. China is crucial to global oil demand growth, and if it keeps its current growth pace, it could be a major factor in forcing higher prices.

PetroChina has begun cutting natural gas deliveries to some industrial clients suggesting that the tight supply situation that caused rather severe shortages in northern China last winter is still a major concern. In preparation for next winter, state-run PetroChina has already started to limit gas supplies and is hiking prices for major customers, including city gas distributors. In the first quarter, China’s gas consumption increased by 14 percent to 71.1 million tons, which has driven LNG prices even higher on the spot market.

Gazprom is moving quickly on the construction of its Power of Siberia pipeline to China, which is now 83 percent complete.  This pipe will supply cheaper pipeline natural gas to the Chinese market, where demand is expected to surge in the coming years due to the switch from coal to gas for winter heating and industrial production.

China’s thermal coal futures rose to a six-week high on last week as traders anticipate a supply crunch due to lower hydro-power output and forecasts of a summer heat wave. China’s air quality problems take place during the winter heating season when thousands of coal warmed buildings spew particles across urban areas making them nearly uninhabitable. Burning of more coal in the summer months to support increased air conditioning is not yet seen as a problem.

Rosneft earlier this week announced that it had started drilling a production well off the coast of Vietnam in the South China Sea. However, there are concerns there about China’s possible reaction to the drilling. The well is located in the Lan Do gas field and falls within the territory that Beijing claims in the South China Sea. The Lan Do field is estimated to contain 23 billion cubic meters of natural gas. Whether Beijing is ready to mess with Russia over Vietnam-claimed waters remains to be seen. Considering that China is becoming increasingly dependent on Russian gas and oil, this seems unlikely.

4. Russia

Despite speculation that major changes were afoot, President Putin approved a new government little changed from the previous one, signaling he is sticking to a course that has delivered weak growth and sent relations with the West to post-Cold War lows.  Energy Minister Aleksandr Novak, who negotiated the deal with the OPEC to lower oil production, was reappointed. Speculation that former Finance Minister Aleksey Kudrin would be appointed to a senior position to spur Russia’s weak economy and improve ties with the West does not seem to be happening.

The fuss over the Nord Stream 2 pipeline that is to bring still more Russian gas to Germany, bypassing Ukraine, continues. The existing Nord Stream pipeline extends from Russia through the Baltic Sea and then makes landfall in Germany.  Gazprom plans to double the existing Nord Stream and its partner in the project, Austrian energy company OMV, said the network is “of critical strategic importance … as it will secure consistent, long-term gas supplies to Europe.” A German official warned the US  about the risks of placing “America First”, accusing Washington of seeking to block the expansion of the Nord Stream gas pipeline to shore up its own exports.  The expansion is opposed by many East European countries as well as the US, who say that by circumventing Ukraine the pipeline will increase Russia’s leverage over the EU.

It was announced last week that Ukraine would offer Gazprom discounted fees for natural gas transit to ensure a flow from Russia to Europe after 2020. Several years ago a dispute over the fees and the prices Moscow is charging Ukraine for gas resulted in shortages across the EU.

5. Nigeria

Shell has declared force majeure on Bonny Light exports because of the shutdown of the Nembe Creek pipeline, which transports 150,000 b/d of crude to the Forcados terminal.  The reason for the shutdown of the pipeline was not disclosed; however, the Nigerian government has a long-standing policy that damage caused by insurgent attacks not be disclosed. The situation is further complicated by delays be related to the shutdown of another large pipeline, the Trans-Forcados which also brings oil to the Forcados terminal. This pipeline, which can transport between 200,000 and 240,000 b/d, was shut down earlier last week after a “leak.”

Since militant attacks on oil facilities in the Niger Delta slowed in the second half of last year, Nigeria has gradually ramped up production, but its oil and condensate output dipped in March due to what officials attributed to illegal tapping of pipelines in the oil-producing region. Nigeria’s oil production, including condensates, increased to 2.07 million b/d in April from 2.02 million in March.  This is up by more than 200,000 b/d from April 2017.

Another problem for Nigeria is that at least half of the 60 cargoes available at the Forcados terminal have still not been sold because of higher shipments of low-cost US shale oil to Europe and slower demand from China and India.

The Nigerian National Petroleum Corporation, that dominates Nigeria’s energy industry, has recorded losses for at least three years, culminating in a total loss of US$1.5 billion in the last three years. This is likely due to a combination of mismanagement and the need to import expensive petroleum products due to the near-collapse of the country’s four main oil refineries.

6. Venezuela

The most important issue for Venezuela’s future this week is how the US will react after the official results of the Venezuelan Presidential election are known. According to one observer, “if US refineries are forbidden from buying Venezuelan crude then you’d have to imagine the country is in trouble.” The US has so far refrained from slapping sanctions on Venezuelan oil because US refineries along the Gulf Coast import large quantities of oil from there; however, Washington is saying there is enough oil supply on the global market to make up for potential fuel disruptions. “The US Department of State remains in contact with our partners in the Caribbean to reduce the risk of supply disruptions.”

Last week ConocoPhillips embargoed two cargoes of crude oil and fuel at a storage terminal in Aruba operated by Venezuelan PDVSA’s US subsidiary Citgo.  The embargo included one tanker loaded with 500,000 barrels of crude oil and another carrying 300,000 of jet fuel, gasoline, and diesel. Citgo went to court in an attempt to remove the embargo, arguing the cargoes belong to it and not its parent company.  The courts on Curacao and Bonaire decided that the attachments must be lifted to the extent that this is necessary for the fuel and/or electricity supply on both islands. The proceeds from the fuel sales to local distributor must be transferred to a specially designated account, where the money will remain until it is established who will be entitled to it.

With Venezuela’s exports close to falling below 1 million b/d, the prospect for higher energy prices improves as creditors of PDVSA threaten to seize more overseas assets. A drop in both Venezuelan and Iranian supply could provide the “perfect cocktail” for oil at $100 a barrel next year or sooner. Venezuela’s foreign oil sales fell 40 percent from a year ago to 1.1million  b/d in April, according to data from tanker trackers. The country’s exports are expected to drop further as troubles, such as “an avalanche” of lawsuits over unpaid bonds, continue.

7.  The Briefs(date of the article in Peak Oil News is in parentheses)

Sixty large global investors—representing a combined US$10.4 trillion worth of assets under management—urged oil and gas companies on Friday to start acting responsibly in tackling climate change, putting pressure on Big Oil ahead of several upcoming annual general meetings. (5/19)

Spain’s oil and gas company Repsol will stop pursuing production growth in its upstream oil and gas division as it is getting ready for the energy transition in what would be a first such move by a primarily oil and gas company. Bloomberg reports that Repsol will unveil a revised business plan in June that would cap its future oil and gas production at the current levels and would prohibit it from keeping more than eight years of oil and gas reserves on its books. The eight-year reserve life would be shorter than those of many of the bigger oil companies. Rosneft has 21 years of reserves life, Exxon 15 years, BP 14 years, Total and Chevron 12 years, and Shell 9 years of reserves life. (5/17)

Brussels is to propose a 15 percent cut to trucks’ emissions within seven years, rejecting calls from companies, campaigners and some EU member states for more ambitious targets to help meet climate change commitments. Transport produces a quarter of EU carbon emissions and is the only area of the bloc’s economy in which emissions are still growing, after cuts in sectors such as electricity and agriculture. (5/14)

An oil cost factor: The International Maritime Organization has new rules coming into effect at the start of 2020 requiring shipowners to dramatically lower the concentration of sulfur used in their fuels from 3.5 percent to 0.5 percent. The switchover will have enormous ramifications for the oil market. The shipping industry represents about 5 percent of the global oil market, using about 5 million barrels of oil per day. Swapping out one form of oil for others will have ripple effects across the refining industry, rewarding some and dealing losses to others.  Diesel fuel will likely spike during 2020, possibly by as much as 20-30 percent; US shale oil, at the light end of the distillation spectrum, won’t be able to help.  (5/17)

The UK government announced on Thursday plans to facilitate timely decisions on shale gas exploration planning applications in England as part of a plan to reduce dependence on gas imports amid an ongoing decline in the UK North Sea’s conventional gas production. The British economy could also get a major boost by tapping into domestic resources of shale natural gas. (5/18)

In the UK, a gas distribution company, Cadent, announced it will invest more than $1.2 billion in the construction of the first large-scale hydrogen fuel station network in the country.  The UK wants to reduce its dependence on oil and gas.   Hydrogen could be made using the excess energy produced by wind and solar installations and then stored in the national gas grid. (5/14)

In Norway, the ticker symbol for energy major Statoil, STL, leaves the market this week when the company officially changes its name to Equinor, it said Monday. A vote is expected Tuesday in favor of the name change, which would then take effect Wednesday. (5/15)

The Eastern Mediterranean will face a security threat should Cyprus continue its unilateral operations of offshore oil and gas exploration in the region, Turkey’s President Recep Tayyip Erdogan said. Tensions in the area flared up earlier this year, after Turkish Navy vessels threatened in February to sink a drilling ship that oil major Eni had hired to explore for oil and gas offshore Cyprus—the divided island whose northern part is run by Turkish Cypriots and is recognized only by Turkey. (5/15)

India is set to receive its first crude oil consignment for storing in the newly built strategic oil reserve at Mangaluru.  It will take three very large crude carriers to first fill the strategic oil storage facility at that site. India has built a strategic reserve capacity of 5.3 MT across three different locations, with a total capacity of over 41 million barrels. (5/14)

Mexico has auctioned off more than 100 contracts to foreign and local companies since President Enrique Pena Nieto started opening the nation’s oil fields to foreign investment in 2013. A new oil regulatory framework, much of it adapted from existing rules, has kept most of that oil in the ground. That’s delaying potential benefits to Mexico and could make the reforms that much easier to unwind if voters elect an anti-reform candidate for president. (5/18)

Mexico’s Pemex expects to begin testing light crudes as soon as July for possible import, looking to boost margins at its domestic refineries. Pemex has for decades exported crude oil but has hardly ever imported the commodity, preferring to process domestic crudes at its six refineries in Mexico. Pemex CEO Carlos Trevino said the company would likely seek imports resembling its proprietary Isthmus grade of light crude, the production of which has been declining in Mexico. (5/16)

In Canada, construction on TransCanada Corp’s Coastal Gaslink pipeline will start in early 2019, pending a positive investment decision on the LNG Canada liquefied natural gas project, the head of the pipeline project said on Wednesday. (5/17)

In Canada, US investors’ difficulties in financing a second wave of LNG export projects have given Western Canada the chance to prove it can be more competitive than the Gulf Coast as a supply source to Asia and able to satisfy domestic producers’ demand for new outlets. The market’s eyes have turned north to see if one or two export projects may reach a positive final investment decision later this year. (5/16)

In Canada, Justin Trudeau’s pipeline nightmare may be only getting started. As Kinder Morgan Inc. drives a hard bargain in Canada’s attempt to save the Houston-based company’s embattled Trans Mountain project, the prime minister could end up fighting for an asset that hardly anybody wants. Pipeline giant Enbridge Inc., for one, signaled it doesn’t. (5/19)

The US oil rig count held steady at 844 this week after rising for six weeks in a row even as crude prices soared to multi-year highs.   So far this year, the total number of oil and gas rigs active in the US has averaged 987, up sharply from 2017’s average of 876. (5/19)

April saw the US produce a record 10,543,000 barrels of oil, according to data from the American Petroleum Institute. The first four months of this year also saw US petroleum demand average 750,000 b/d over the same period in 2017 despite higher prices. This was the strongest April monthly demand since 2007. (5/18)

US crude export constraint: Last year, exports more than doubled to reach an average of 1.1 million b/d. Already this year, total US crude oil exports are at 1.6 million b/d. But there may be limitations for US crude oil exports to long-distant economies because of limited port access for large carriers. (5/18)

Alaska, a major oil and gas producer, is crafting its own plan to address climate change. Ideas under discussion include cuts in state emissions by 2025 and a tax on companies that emit carbon dioxide. While many conservative-leaning states have resisted aggressive climate policies, Alaska is already seeing the dramatic effects of global warming firsthand, making the issue difficult for local politicians to avoid. The solid permafrost that sits beneath many roads, buildings, and pipelines is starting to thaw, destabilizing the infrastructure above. (5/16)

US drivers might be feeling flush after getting tax cuts as they embark on the summer driving season, but road trips will cost more this year. Drivers are already paying an average of $2.90 for a gallon of regular gasoline. There may be no relief in sight as oil in London topped $80 a barrel Thursday on tightening global supplies. (5/19)

SUVs + trucks still strong: Oil analysts predict the price per barrel will continue to rise in months ahead, but market dynamics in new vehicle sales aren’t expected to change course anytime soon. Trucks and SUVs are expected to continue doing quite well. (5/18)

Tectonic shift in autos: with the money that Asia and in particular China is putting behind the EV revolution, it may mean that Europe’s dominance of the car sector is nearing an end. (5/19)

China’s EV boom: China’s government is driving up electric car sales.  The nation’s annual EV sales are on track to hit a one-million-unit milestone this year. Chinese EV sales doubled in April and dealers sold 225,310 EVs in the first four months of this year, for a whopping 149-percent increase over the same period in 2017. In terms of EV sales worldwide, China’s sales accounted for nearly 50 percent of all EV sales in the first quarter of 2018. (5/16)

Mercedes EV: Mercedes-Benz Cars is expanding its production capacities for electric cars in Europe. Mercedes plans to launch more than ten electric cars by 2022 throughout all segments, from smart cars to large SUVs. The company assumes that unit sales of electric models will represent a share of somewhere between 15 and 25 percent of total Mercedes sales by 2025. (5/19)

In Cornwall, Cornish Lithium has partnered with the state-backed Satellite Applications Catapult to use satellite imaging to detect the signatures left by lithium deposits deep underground. Lithium is present in brines up to 1 kilometer underground, according to a Telegraph article. Cornwall Cornish Lithium hopes the survey will identify economic deposits, and Innovate UK agrees, investing well over a $1 million in a pilot that could eventually help meet battery power needs for the expanding European EV market. (5/14)

The new era of big home batteries has already drawn scrutiny after fiery electric-car crashes across America and Europe. Now, US city planners are worried about the same risk of hard-to-control blazes as these power-storage units make their way into basements and onto rooftops. (5/19)

The world’s energy mix in the power production sector has evolved substantially over the past 20 years. Since 1997, global cumulative installed solar photovoltaic (PV) and wind power have climbed from less than 8 GW to nearly 800 GW, according to the BP Statistical Review of World Energy. According to the International Energy Agency (IEA), renewables were responsible for almost 165 GW of new global power capacity in 2016—nearly two-thirds of the global total. (5/14)

The spread of air-conditioning in hot countries is set to create a huge increase in demand for electricity, threatening efforts to curb greenhouse gas emissions, according to the International Energy Agency. Over the next 30 years, air-conditioning could increase global demand for electricity by the entire capacity of the US, the EU and Japan combined, unless there are significant improvements in the efficiency of the equipment. (5/16)

Arctic stop sign: An architect of the Paris climate agreement urged governments on Tuesday to halt oil exploration in the Arctic, saying drilling was not economical and warming threatened the environmentally fragile region.  (5/15)

In Finland, a research group from the University of Turku has discovered an efficient way for transforming solar energy into the chemical energy of biohydrogen through the photosynthesis of green algae that function as cell factories. Molecular hydrogen is regarded as one of the most promising energy carriers due to its high energy density and clean, carbon-free use. (5/14)

Emissions of CFC-11, one of the chemicals most responsible for the Antarctic ozone hole, are on the rise despite an international treaty that required an end to its production in 2010. Once widely used as a foaming agent, production of CFC-11 was phased out by the Montreal Protocol in 2010. A new study, published in Nature, says the unexpected increase in emissions of this gas is likely from new, unreported production. (5/17)

Peak gold: Ian Telfer, chairman of Goldcorp Inc., is the latest industry magnate to predict the world has reached “peak gold,” saying that from here on out, mine production will continue to decline because all the major deposits have been discovered. He said gold produced from mines has gone up fairly steadily for 40 years but that either this year or during the next two years production will start to decline or may already be declining. (5/17)

Compressed air energy storage is the sustainable and resilient alternative to batteries, with much longer life expectancy, lower life-cycle costs, technical simplicity, and low maintenance. Over their lifetimes, chemical batteries store only two to ten times the energy needed to manufacture them.  Small-scale CAES systems do much better than that, mainly because of their much longer lifespan. (5/19)