Quote of the Week
“While Exxon invested $12.5 billion on international upstream capital expenditures (CAPEX) to produce 1.7 million barrels a day of total liquid oil production in 2018, it spent a staggering $7.7 billion in US upstream CAPEX to supply only 551,000 b/d of oil. Thus, Exxon spent nearly double the amount of CAPEX for each barrel of US oil production versus its international oil supply… ExxonMobil’s US oil and gas sector is heading toward a financial disaster. It’s US oil and gas CAPEX spending will choke the living hell out of its profits. While some may think I am fermenting hype, the financial results shown above point to a pretty clear trend… and it ain’t good. If one of the world’s largest oil companies can’t make money producing US shale, then what does that say for the rest of the industry?”
Steve St. Angelo, independent precious metals and energy researcher
Graphic of the Week
1. Oil and the Global Economy
2. The Middle East & North Africa
7. The Briefs
1. Oil and the Global Economy
Brent crude futures briefly touched $67.73 a barrel on Friday, their 2019 high. The London contract then fell 5 cents to settle at $67.12 a barrel while US futures US gained 30 cents to settle at $57.26 per barrel, after hitting $57.81 earlier in the day. Despite forecasts that US shale oil production will continue to increase rapidly next month, supply disruptions in Venezuela and Libya, the 1.8 million-barrel OPEC+ production cut, and hopes that the US-China trade dispute may be settled soon, were enough to push prices higher last week. Prices have now gained about $5 a barrel since mid-February but are still some $20 a barrel below the recent highs set last October.
Fears of a global economic slowdown appear to have waned for the minute in hopes that a settlement of the US-China trade dispute will result in a period of faster global economic growth. While European oil consumption has been flat a long time, demand has declined year-on-year in the past few months, which suggests a slowdown is underway in the European economy. While China seems to be settling into a planned growth of around 6.5 percent, many observers note that in China, economic growth, and the statistics to back it up, is more a political target than a reflection of the actual state of the economy. For years, Chinese officials at all levels of government cooked statistics to meet those political objectives. For now, China’s economy seems to be perking along, but many are warning of problems ahead.
The OPEC+ Production Cut: The monitoring committee for the OPEC+ supply reduction deal on Wednesday found compliance with the cuts at 83 percent. Just what they are measuring remains to be seen. Libyan production is down about 300,000 b/d due to unrest at its largest oilfield, and Venezuelan production is likely down hundreds of thousands of barrels a day due to the US sanctions. While Caracas’ production is likely to fall in the foreseeable future, Libyan could pop back to around 1 million b/d at any time.
The Saudis are undertaking the bulk of the production cut on behalf of OPEC and have pledged to cut production further in March. In contrast to the Saudis, Moscow is saying it is impossible to reduce output during the frigid Russian winter months and that they will be in full compliance with their pledge by May.
The lack of enthusiasm for the cuts, coupled with reports that a major Russian oil firm is saying that the cuts are unnecessary, is raising questions as to whether the alliance between the Saudis and Moscow will hold. Reports that the relationship will be formalized by a treaty are being denied in Moscow as unnecessary. A complete collapse of the Venezuelan oil industry would produce much the same results as the OECP+ production freeze.
According to President Muhammadu Buhari, Nigeria could start reducing its crude oil production in line with the output cut. This time the country was not exempted from the cuts and was assigned a reduction of about 40,000 b/d. However, instead of reducing its production, Nigeria boosted it with the start of production at the giant Egina offshore field, operated by French Total.
US Shale Oil Production: The EIA’s February Drilling Productivity Report, which was released last week, has spawned a raft of analysis and commentary as to just where US shale oil production is headed and at what costs. The EIA expects US shale production will grow by 84,000 b/d in March 2019. The gains are forecast to be led by the Permian (+43,000 b/d), followed by smaller contributions from the Niobrara (+16,000 b/d), the Bakken (+13,000 b/d), the Eagle Ford (+9,000 b/d) and Appalachia (+3,000 b/d).
There are some interesting numbers showing up in the EIA’s Drilling Productivity Report. The report says that new-well production by rig is around 1,400 b/d in the older Bakken and Eagle Ford shale oil deposits, while only about 600 b/d in the Permian shale oil deposits. This discrepancy seems to imply that it takes more than twice as many wells in the Permian to end up with the same amount of oil at the end of the first month. The large difference in initial productivity needs some explanation if we are to accept that the Permian Basin is to drive the US increase in oil production in the coming years.
While still impressive, the growth of US shale oil production is slowing. EIA forecasts US crude oil production will average 12.4 million b/d in 2019 and 13.2 million b/d in 2020, with most of the growth coming from the Permian region of Texas and New Mexico. The EIA currently projects February Permian growth at 23,000 b/d and March at 43,000 b/d. By contrast, a year ago, EIA forecasted February 2018 basin growth at 76,000 b/d and March 2018 increase at 75,000 b/d, so there is quite a decline in expectations.
Expenditures in the shale oil industry are starting to contract as investors put increased pressure on drillers to make money and not just increase money-losing production. The rig count for February fell by nine. That was the first-time drillers removed rigs for three months in a row since October 2017. The rig count declined by two in December and 23 in January. Financial services firm Cowen & Co said last week that early indications from the exploration and production companies it tracks point to a 6 percent decline in capital expenditures for drilling and completions in 2019.
Whether the industry will live up to the EIA’s projections remains to be seen. Many firms are saying they will be producing more oil this year with fewer resources. Frigid weather in the Bakken this winter is likely to slow production considerably.
The problem of moving the associated natural gas from the Permian to market may become a limiting factor in the next year to two. The startup of Plains All American Pipeline’s 350,000 b/d Sunrise expansion at the end of 2018 marked the start of a period that should bring higher prices and more takeaway capacity for Permian crude and problems of what to do with the associated gas. According to Platts Analytics, about 3 million b/d is expected online in the next 18 months, bringing total takeaway capacity from the Permian to market to approximately 6 million b/d by 2020.
According to Platts Analytics, Permian gas production becomes fully constrained around 9.4 billion cf/d, considering that effective takeaway capacity on pipelines exiting the basin is about 8.7 billion cf/d, with local demand capable of absorbing another 700 million cf/d. Until Kinder Morgan’s 2 billion cf/d Gulf Coast Express expansion comes online in October, price volatility is likely to increase as the available capacity for production growth remains limited.
2. The Middle East & North Africa
Iran: Iranian crude exports in January were higher than expected, while February shipments may be even higher. According to tanker-tracking data from Refinitiv Eikon, Iran’s exports in February have averaged 1.25 million b/d so far, while the January exports were between 1.1 million b/d and 1.3 million b/d. These are considerably higher than the 1-million-b/d level, which was seen in December. Higher Iranian shipments would weigh on oil prices and work against the effort to cut supply in 2019 led by the OPEC+ alliance. Much of the recent increase may be due to the US waivers to the most important of Iran’s customers. These waivers are due to expire at the end of March.
Oil Minister Bijan Zangeneh said last week that Iran had completed the third phase of the new Persian Gulf Star Refinery, making the country self-sufficient in gasoline production. Tehran has been importing gasoline for its domestic needs for years. Under the previous Western sanctions, Tehran couldn’t buy spare parts for refinery maintenance, and had reduced gasoline production capacity in the wake of the Iran/Iraq war. Most of Iran’s fuel imports have been coming from refiners in India, Southeast Asia, and North Asia. According to the minister, Tehran could export some of the gasoline, but it will not do so as it wants to boost its domestic stockpiles.
Tehran is holding its annual naval drill in the Strait of Hormuz. The three-day exercise with maneuvers extending as far as the Sea of Oman and the Indian Ocean began last Friday with warships, submarines, helicopters, and surveillance aircraft taking part.
Iraq: Negotiations between Kurdistan’s two leading political parties have broken down in their efforts to form a new government in Erbil and elect a new governor of Kirkuk. The setback further extends a period of political uncertainty and lame-duck administration of the semi-autonomous region, although officials from both the ruling KDP and the PUK expressed hope that they can regenerate some forward momentum.
Saudi Arabia: Saudi Arabia’s crude oil exports fell by nearly 550,000 b/d to 7.687 million b/d in December, as the Kingdom started to limit supply after the US granted waivers to eight Iranian customers. Saudi oil production also dropped in December to 10.6 million b/d from an all-time high of 11.09 million b/d the month before. During November, Saudi Arabia’s crude oil exports had jumped by 534,000 b/d month on month to 8.24 million bpd—the highest level in two years as the Kingdom moved to offset supply losses from Iran with the return of the US sanctions.
Saudi Arabia’s Energy Minister Khalid al-Falih told CNBC in January that Moscow had moved “slower than I’d like. In response, Russian Energy Minister Alexander Novak said Russia was “completely fulfilling its obligations in line with earlier announced plans to gradually cut production by May this year.” However, the numbers say Russia is not shouldering its part of the new deal. The OPEC+ members agreed to cut supply by 1.2 million barrels per day.
Saudi Arabia agreed to make up for most of the cut among OPEC members and has also said it will drop its crude oil production by a further 400,000 b/d to 9.8 million in March. If that output cut is reached, it would mean that since December (one month before implementation of the deal), Saudi Arabia has become responsible for 70 percent of the total OPEC+ target.
State-owned Saudi Aramco has signed an agreement to form a joint venture with Chinese conglomerate Norinco to develop a refining and petrochemical complex in Panjin city, saying the project is worth more than $10 billion. Aramco and Norinco, along with Panjin Sincen, will form a new company called Huajin Aramco Petrochemical Co as part of a project that will include a 300,000 barrels per day refinery with a 1.5 million metric tons per annum ethylene cracker, Aramco said on Friday.
Over the weekend Saudi Arabia appointed Princess Reema bint Bandar as ambassador to the US, making her the first woman envoy in the country’s history. The kingdom seems to be trying to repair its image in the US media and Congress.
Libya: There was no news last week as to whether the 300,000 b/d Sharara oilfield has reopened after General Haftar’s Libyan National Army took control of the region two weeks ago.
After months of concerns that the global economy and oil demand would suffer from a US-China trade war, renewed hopes that an agreement could be reached buoyed optimism last week. China’s Vice Premier Liu He was in Washington last week and if progress is made these discussions might be followed by a Trump/Xi meeting in March. US officials note that there are still significant issues outstanding. In the meantime, the US has eased off the plan to impose tariffs on Chinese imports beginning on March 1st.
PetroChina achieved production rate of 733 b/d, from the Jimsar oil field in the western Xinjiang province, which suggests that shale drilling could finally have commercial potential in China, according to Morgan Stanley. China has been attempting to find commercial shale oil and gas deposits for the past ten years will little result. Much of China’s oil has been found in geology that is not conducive to forming shale oil deposits.
Saudi Crown Prince Mohammed bin Salman concluded a $10 billion deal for a refining and petrochemical complex in China on Friday while meeting Chinese President Xi Jinping. The Saudi delegation, including top executives from Saudi Aramco, arrived on Thursday on an Asia tour that has already seen the kingdom pledged to invest $20 billion in Pakistan and seek to make additional investments in India’s refining industry. Saudi Arabia signed 35 economic cooperation agreements with China worth a total of $28 billion at a joint investment forum during the visit. The Saudis are looking for or trying to buy, new friends in the wake of the Khashoggi murder which has soured relations with the US, Europe, and other countries.
The country, which now has a population of 191 million, voted for president over the weekend. Organizing for an election where 73 million are supposed to vote in an underdeveloped nation is some undertaking and the election was delayed for a week as officials got their act together. The ruling party, represented by Muhammadu Buhari, a 76-year-old former army general, whose health is not good, is likely to win as the incumbent rarely loses in Nigeria. Buhari has a reasonably good reputation in a country noted for corruption while his opponent Atiku Abubakar has a long history of involvement in crime even in the US where he has been the subject of FBI investigations.
Both candidates are from the northern part of the country and are disliked in the oil-producing south. The Delta Avengers, who did a respectable job of shutting down several hundred b/d of Nigeria’s oil production a few years back are talking about renewing attacks on the oil infrastructure if Buhari is re-elected. Whoever wins will have many problems, including the Boko Haram insurgency, which is reported to be killing more people each year than the wars in Yemen or Afghanistan.
The government is trying to develop a new source of revenue from suing international oil and financial companies that have been working in Nigeria for decades. Last week, a High Court in London granted Nigeria’s plea to allow it to proceed with the trial of JPMorgan Chase. The bank is alleged to have enabled the misappropriation of state funds totaling $875 million during the procurement of an oil drilling license.
Even more lucrative could be a new government effort to collect “back taxes” from the oil companies doing business in Nigeria, including Royal Dutch Shell, Chevron, Exxon Mobil, Eni, Total and Equinor. Each of the firms has been ordered to pay the government between $2.5 billion and $5 billion for a total of around $20 billion. Sending out tax bills is a lot easier than suppressing insurgencies to maintain oil production.
Nigeria is currently producing about 1.8 million b/d. Production has been going up recently due to the opening of a new offshore oilfield, which is a lot less vulnerable than oil coming from the Niger Delta. The country is supposed to cut 40,000 b/d as part of the OPEC+ production agreement, but so far seems to be increasing production despite occasional claims that it plans to comply with the deal.
Troops loyal to President Maduro violently drove back foreign aid convoys from Venezuela’s border on Saturday, killing at least two protesters and prompting opposition leader Juan Guaido to propose that Washington consider “all options” to oust him. Trucks carrying US food and medicine that was not torched by Venezuelan troops returned to warehouses in Colombia after opposition supporters failed to break through lines of soldiers.
The opposition had hoped Venezuelan soldiers would balk at turning back supplies desperately needed in the country, where a growing number of its 30 million people suffer from malnutrition and treatable diseases. But while some 60 members of the security forces defected on Saturday, the lines of National Guard soldiers at the frontier crossings held firm. During the confrontation, President Maduro addressed thousands of his supporters in Caracas warning that any US effort to use military force against his government would result in another Vietnam.
The state of Venezuela’s oil production is mired in confusion. Oil production in January was around 1.1 million b/d but has declined rapidly in the last three weeks. PDVSA is partnered with several international oil companies in heavy crude projects in the Orinoco, ranging from the US’ Chevron to Russia’s Rosneft and China National Petroleum Corp. Together, those joint ventures produced just over half of Venezuela’s total oil output. A decline of as much as 400,000 b/d due to the US embargo on diluent exports to PDVSA is currently underway. PDVSA oil production, in conventional assets outside the Orinoco, is likely to drop to minimal levels, if not shut down completely, as US sanctions take hold.
Some are saying that Caracas’s production could be as low as 500,000 b/d by the end of the year. If there is a total collapse of Venezuela’s economy, it could be close to zero. The withdrawal of foreign oil workers from the country would likely hasten the collapse. As Venezuelan refineries are barely working, widespread fuel shortages are emerging. Moscow and Europe continue to sell fuels to Caracas but at very high prices.
The long-term prospects for Venezuela’s oil industry are not good. Most of Venezuela’s future oil production will likely come from the Orinoco tar sands. This crude is extremely heavy and requires considerable processing and diluting with imported hydrocarbon liquids before it can be shipped. Most Orinoco operations are in partnership with foreign operators who can do little if diluents are not available in quantity.
Given the country’s current economic, political, and humanitarian state, it is doubtful that international oil companies will want to invest much money in Venezuela for a while. There are better opportunities elsewhere and given concerns about climate change and dirty oil, there may not be much of a future for Oronoco oil. Should a new anti – “socialist” government emerge in Caracas, it may not be interested in paying off the billions of dollars that Moscow and Beijing have loaned their fellow “socialist” country in recent years. Reviving the Venezuelan oil industry after the current troubles may find few friends.
Pemex produced 1.62 million b/d in January, less than any month in almost three decades, the state-owned oil company said on Friday. The company’s crude output for the month was the lowest since at least 1990, when Pemex’s publicly available records begin. The company’s crude oil exports also fell in January to total 1.07 million bpd, down nearly 10 percent from 2018.
President Lopez Obrador, who took office in December and ran on a promise of strengthening the ailing company, said he will grow its output to around 2.5 million b/d by the end of his six-year term in 2024. Lopez Obrador has yet to fully outline how Pemex alone would be able to reverse the long-standing slide, but he did push through a larger budget for the company this year, in addition to a fresh capital injection from the government and a lower tax bill.
Pemex burned through $665 million at its fertilizer unit, ignored consultants and made high-risk investments with no discernible business strategy, according to a government audit of its 2017 operations. The report, published on Wednesday, offers insight into how Pemex ended up creaking under $106 billion of debt during the six-year term of former President Enrique Pena Nieto.
In addition to its oil production, Mexico is looking for ways to reduce its dependency on US natural gas imports, which currently satisfy over 50 percent of its demand. This is the highest foreign gas dependency rate in the world. That’s especially true because Mexico uses natural gas for over 60 percent of its power generation: a much higher portion than other gas import-dependent countries.
7. The Briefs (date of the article in Peak Oil News is in parentheses)
2019 overview: The number of greenfield oil and gas projects to get their final investment decision could rise threefold on 2018, Norwegian energy consultancy Rystad Energy has forecast. Most of these will be offshore projects. The number, which only covers conventional oil and gas deposits, could open up production reserves to the tune of 46 billion barrels of oil and gas, including around 14 billion barrels of oil equivalent in deepwater blocks, some 20 billion barrels in shallower waters, and the rest in onshore deposits. (2/23)
BP Outlook 2019: BP forecasts that the global war on plastics will be the main factor in cutting global oil demand faster than previously expected. As such, for the first time BP’s outlook predicted a “peak” in oil use. At 13 million b/d, global petrochemical feedstock is 13% of total oil demand. This is part of a growing trend in recent years where BP continues to see “much slower” growth in new oil demand going forward. (2/23)
Decommissioning obligations in the global oil and gas industry rose to $11.7 billion last year and are projected to hold steady at an average of about $12 billion per year from 2019 through 2021, according to Rystad Energy. (2/22)
Plastics: The oil industry appears to have spent little time thinking about a change in demand for oil that could have just s large an effect as electric vehicles: the war on plastic. As businesses eliminate plastic straws and bags, and governments act to reduce disposable packaging, this will have profound implications on demand for crude oil. Plastics make up 15% of crude oil demand, far less than transportation’s over-50% share, and were expected to create major demand growth through 2040. (2/18)
Egypt’s oil and gas future looks very bright. The large-scale concessions awarded during the recent EGYPS 2019 conference in Cairo shows the appetite of IOCs, such as Shell, BP and ENI in this emerging energy hotspot. After years of a major slump, partly due to continuing payment and security issues, the Pharaohs are again back in the top league. Continuing concerns about security in Egypt’s Western Desert or the Sinai no longer seem to be a breaking point for investors. (2/18)
Offshore Somalia, Norwegian consultancy firm Spectrum Geo says that it only gathered data in Somali territory regarding Mogadishu’s oil stock in the Indian Ocean. It avoided studying the regions contested by Kenya. The information was used to market the blocks to investors in London. (2/21)
The Kenyan government has warned that it will not cede an inch of its soil in the disputed maritime border with Somalia even as it affirmed that it is committed to a peaceful resolution of the row. The Cabinet discussed and agreed on a roadmap for resolving the maritime border dispute with Somalia and measures for safeguarding Kenya’s territorial integrity, and marine resources including offshore oil and gas exploration acreage in the Indian Ocean. (2/23)
In Guyana, when ExxonMobil begins oil production next year–mining crude from its seven new deep-water wells–life may change dramatically in this small South American country. The mega deal is expected to increase Guyana’s gross domestic product from US$3.4 billion in 2016 to US$13 billion by 2025. (2/23)
Brazil is second in terms of production growth among non-OPEC nations, where several new start-ups and production ramp-ups are set to deliver the country’s highest annual oil output growth in at least two decades. (2/22)
Canada’s National Energy Board recommended approval of the government-owned Trans Mountain pipeline expansion, clearing one of the major obstacles for the project to move forward. The Trans Mountain expansion would roughly triple the capacity of the more than 60-year-old line, helping carry almost 600,000 more barrels of oil and fuels a day from Edmonton to a shipping terminal near Vancouver. (2/23)
Heavy Canadian crude prices widened to the biggest discount against New York futures this year as pipeline-operator Enbridge Inc. reported that rationing on its heavy oil lines would increase next month. Western Canadian Select, an oil sands benchmark, traded at $15 a barrel below West Texas Intermediate futures Tuesday, $1.50 wider than on Friday and the biggest discount this year. (2/21)
The US oil rig count fell by 4 to 853 and the number of gas rigs stayed at 194, according to Baker Hughes. For the month, the rig count fell by nine. That was the first-time drillers removed rigs for three months in a row since October 2017. The oil and gas rig count is now 69, up from this time last year, 54 of which is in oil rigs. (2/23)
Chevron Phillips Chemical may build a steam cracker and at least one derivative unit in far southeastern Texas. The company is evaluating whether to buy a 1,700-acre project site near Orange, Texas, as the location for a cracker, one or more derivative units, administrative buildings, utility and logistics infrastructure and other improvements necessary to operate the production facilities. The complex is estimated to cost about $5.8 billion. (2/23)
Federal fight w/ CA: The Trump administration is moving ahead with a planned rollback of vehicle fuel economy standards after breaking off talks with California, which wants to continue to follow stricter targets along with a dozen other states. The policy would increase US oil demand by 500,000 b/d, according to the EPA and Dept. of Transportation. (2/22)
The Three Mile Island nuclear power plant will be closing its door on September 30th of this year unless the state of Pennsylvania can pull it out of its financial hole, according to the Chicago-based owner Exelon Corp. The TMI plant would soon be followed by Beaver Valley nuclear power plant in western Pennsylvania and two nuclear plants in Ohio, which Ohio-based owner FirstEnergy Corp. said they will close within the next three years if Pennsylvania can’t pass a financial package to save them. (2/22)
Coal squeeze: Glencore has become the latest energy heavyweight to succumb to climate change pressure and has announced it will stop raising its coal production capacity, CNBC reports. The Swiss company’s current thermal coal production capacity is 150 million tons annually, which makes it the biggest single exporter of the commodity. Glencore plans to use the capital that will be freed thanks to the capacity cap to increase its production of basic metals such as copper, cobalt, nickel, vanadium, and zinc, all of them used in EV batteries and other technology that enables the shift to cleaner energy generation. (2/22)
India’s demand for electricity is expected to double in the next two decades, and coal has been long forecast to be the fuel of choice for power generation. But this may no longer be the case. Yes, India is still a large producer of coal. Yet the main reason coal may battle to fuel India’s future energy needs is that it’s simply becoming too expensive relative to renewable energy alternatives such as wind and solar. (2/20)
Wind power capacity additions in Europe fell in 2018 to their lowest level since 2011, according to a report Thursday from industry group WindEurope. “Europe installed 11.7 GW (10.1 GW in the EU) of gross additional wind power capacity in 2018. This is a 32% decrease compared to 2017,” it said. Growth in onshore wind capacity additions fell by over half in Germany and collapsed in the UK. (2/21)
“HES” generation: Thanks to continuously declining costs, a hybrid renewable electricity generation system that combines wind, solar, and storage could become competitive with the cheapest fossil fuel electricity in the U.S.—combined-cycle natural gas generation—according to John Deutch, an Institute Professor at MIT. Last year, renewable energy—including hydropower—provided 18 percent of total US power generation, up from 11 percent back in 2009. Wind and solar capacity has more than quadrupled since 2009—from 36.2 GW to 164.6 GW (2/21)
Big battery: Borden County, Texas, is set to become the home of the world’s largest battery storage system in 2021. IP Juno has recently outlined plans to build a 495-MW storage system together with a solar farm of the same size in Borden County, a small community in West Texas in the very heart of the most important US oil field, the Permian. The pairing will relieve ever-growing demands for electricity in the US most prolific oil field. (2/21)
Shell moves on batteries: Last week, Shell became the latest supermajor to make a big bet on battery storage with the announced acquisition of German energy storage startup Sonnen. Sonnen focuses specifically on household energy storage, a nascent market but one with a huge potential if ambitious renewable power plans by governments around the world work out. (2/19)
Wave energy 4.0? Engineers from Scotland and Italy have developed a new wave energy technology that could generate low-cost electricity. Few wave energy converters have moved past pre-commercial stage because of the high costs and the often harsh marine environment. So the team designed the so-called Dielectric Elastomer Generator (DEG) using flexible rubber membranes. The device is cheaper than conventional designs, has fewer moving parts, and uses durable materials. (2/19)
Battery tech: BMW is seeking alternative cooling technologies for vehicle batteries to further improve peak cooling capacity during fast charging while reducing cooling components’ vibration and noise emission. Faster charging creates more heat to be dissipated within a short period of time. Current technologies use electric refrigerant compressors. Rising cooling capacities would generate significantly higher vibrations through fans and other moving components, and thus more noise. (2/19)
E-plane: Bye Aerospace’s electric Sun Flyer 2 successfully completed the first official flight test with a Siemens electric propulsion motor 8 February at Centennial Airport, south of Denver, Colo. The Sun Flyer family of aircraft, including the 2-seat Sun Flyer 2 and the 4-seat Sun Flyer 4, aims to be the first FAA-certified, practical, all-electric airplanes to serve the flight training and general aviation markets. Siemens will provide electric propulsion systems for the Sun Flyer 2 airplane—the 57 lb. SP70D motor with a 90 kW peak rating (120 HP), and a continuous power setting of up to 70 kW (94 HP). The all-electric operation requires no aviation fuel and results in zero emissions and significantly lower noise pollution compared to conventional aircraft. (2/19)