And eclectic mix of energy and climate news stories from around The World
This week’s lead article features the “imminent end of cheap finance” – does this mean disaster for the renewable energy sector? We follow up with our usual mix of stories from around the world – OPEC; oil in California; Europe’s gas supplies and the “Beast from the East”; India needs 300 more nuclear reactors; Trump wants to sell off BPA; South Australia ramps up its renewable target; CCS in South Dakota; Elon Musk’s virtual power plant; a new offer on Swansea Tidal; Jacobson withdraws his defamation lawsuit; solar-powered rail for the UK and how CO2 dissolves Scottish starfish.
Blowout 217
Also last week:
Is Volatility in Oil Price on the Way, Again?
Oil price volatility exhibits periodic characteristics which correlate to that of general stock market volatility.
I’m thinking oil price volatility might not be as predictable now in the Trump economic expansion era as opposed to 8 years of economy killing Democrat controlled gov’t in the U.S. Not only have voluntarily tanked economies of the U.S. and E.U. cooled off demand growth but subsidies into so-called “renewables” replaced a piece of the energy mix with expensive energy. I predict the money taps to the renewables will be tightened a lot further and renewable contribution overall will flatten or even contract until, or even if, renewables are able to present economic non-subsidy solutions to energy supply. Meanwhile Trump’s competitive America will kick the rest of the World into compete mode including a begrudging EU worried about being left out of the party. Given that global exploration efforts for new oil reserves has spent 3 years pretty much in purgatory and oil rich places like Canada are under anti-oil gov’t controls the supply side of the equation is going to become more challenged. The Permian is a large growth resource but it is unconventional and I wonder about production capacity once the “sweet spots” have been developed. So I’m thinking supplies are going to continue to shrink and that the voluntary OPEC cuts will at some point not be cuts at all but simply maximum production capacity trying to keep up with demand.
One thing Euan – a few weeks ago there was a chart attached to a couple of your posts predicting future global energy supplies for oil, gas, coal, nuclear, renewables, etc. The oil supply curve makes a peculiar sudden concave dip after 2019 instead of a smooth continuation of the 1.7mm bbls/d annual demand growth that’s existed since 2009. Is there an explanation for such a sudden change to global oil supply? War or revolution? Large volumes of natural gas being converted to diesel? It does seem to be a huge unexplained trend reversal.
Hi Martin, thanks for your comment. I agree that the energy world has changed. And that because of that past trends may not be such good predictors of the future. The guest post on volatility was written by an American professor.
I’m not sure what oil supply chart you mean. If you click the chart you will get a URL for it. If you want to post that here, then I’ll try to explain.
Hi Euan – I believe a chart that I’ve seen with a couple of your posts was from the EIA’s Annual Energy Outlook. The EIA’s last update was Feb 6th of this year. https://www.eia.gov/outlooks/aeo/pdf/AEO2018_FINAL_PDF.pdf
The energy mix forecast trend for Oil and Liquids (Page 20) shows a peculiar dip right around the “History/Projections” dashed line. I think I understand that dip is from OPEC & Russia’s production cuts. But what I don’t understand is that the EIA flattens oil production not long after 2018. Why would that be when World Oil demand has experienced very consistent annual growth of about 1.7mmbbls/d since 2009? It seems like the assumptions used in forecasting are linked to something that is believed by the EIA that will limit either demand growth or the ability to grow production much further. Any idea on what’s behind that dramatic oil trend flattening?