Quote of the Week

“I am resolved that not a single drop from Trump’s new oil plan ever makes landfall in California.”

Lt. Governor Gavin Newsom, chair of the State Lands Commission and a Democratic candidate for governor (2/8)
Graphic 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

It was a volatile week with stock markets crashing and oil prices falling by nearly $7 a barrel from recent highs. Behind the price collapse was a stronger dollar, the break in the equity markets, ever increasing US shale oil production, and an unexpectedly large jump in the rig count the week before last. At Friday’s close New York oil futures were slightly below $60 a barrel and London’s Brent was not far behind at $62.79. With the Brent/WTI price spread below $3 a barrel, there will be less incentive to buy US crude when shipping costs are considered.

After two months of steady oil price increases, many observers were talking about oil continuing to climb to $80 or even $100 a barrel, although a few were saying that price was in a speculative bubble not supported by fundamentals. Last week the CEO of France’s Total told the papers that the supply-demand balance is still delicate and there is nothing that guarantees oil prices will stay in the vicinity of $70 a barrel. Even before last week’s price crash, Total was looking at the possibility that oil would soon be back to $50 a barrel.

Analysts are starting to talk about the possibility that the Brent benchmark for world prices will not last much longer. As production from the North Sea declines, Brent has been redefined to include a blend of oil from five different fields. All of these fields are well past their peaks, and the original Brent field is now producing only 20,000 tons per year. The next step will probably include the newly opened Norwegian Johan Sverdrup field. As US production surges, some are saying that WTI should become the global benchmark, now that it can be freely exported. The opening of a Chinese oil futures exchange next month is complicating the problem of what is the proper world oil price benchmark.

The OPEC Production Cut: With the next meeting to consider the production cut still several months away there has not been much news. Thanks to the collapse of Venezuelan oil production the cut is still keeping pressure on prices and until last week was considered a success. Most participants to the agreement were doing their part to keep production down and as oil prices and revenues increased there was little incentive to cheat on the quotas. Last week’s developments, however, could change the situation. If world prices fall into the $50s, several oil exporters will be in financial difficulty again. For now, there seems to be no end to how far Venezuelan production could collapse. Some are forecasting that Caracas could suffer another 600,000 – 700,000 b/d drop in production this year.

US Shale Oil Production: As total US oil production surges past 10 million b/d and, according to the EIA, on the way to 11 million later this year, many voices are starting to call this rapid production increase a bubble that will not last for long. In January the EIA estimated that the US would surpass 10 million b/d at some point in February. Recently published data shows that the US reached that milestone last November. The administration now says the US averaged 10.2 million b/d in January. On an annual basis, the US produced 9.3 million b/d in 2017. This is set to jump to 10.6 million b/d for 2018 and in 2019, the country is on course to produce 11.2 million b/d.

In recent months leaders of the shale oil industry came under pressure from their lenders and investors to concentrate on making a profit and not continue to increase production at a loss. It is becoming clearer that all vows of restraint were nothing but hot air and that the industry is continuing to increase production no matter what the cost. Last week’s $7 a barrel price drop is not going the help the situation.

If the EIA is even remotely correct, it seems there is little to stop US shale oil production from growing rapidly in the next two years. Only a complete collapse in prices to or below $40 a barrel will reverse the situation, but given continued growth of the global economy, and the growing troubles in the Middle East, this is unlikely to happen.

While few outside observers have trouble with the forecasts that US oil production could be over 11 million b/d  in the next 18 months, many have serious disagreements with the EIA’s assertion that US oil production can remain close to this level into the 2040’s. In a recently released report, the Post Carbon Institute lays out the case in great detail as to why the government is seriously overestimating the potential of the US shale oil industry in the decades ahead.

The arguments put forth in the new study are familiar to all who have been following the shale oil industry. Shale oil wells typically see production deplete by 70 to 90 percent in the first three years; drilling is being concentrated in the most productive “sweet spots” that are unlikely to last for more than a few years; and most importantly, the EIA envisions production of oil that has not been discovered.

The Post Carbon Institute is not alone in its concerns that the EIA is seriously overestimating the long-term potential of the US shale industry. In recent months MIT and other organizations have issued reports expressing similar concerns about the EIA’s forecast. Even the EIA has admitted in response to questions that some of its forecasts are on shaky ground.

Given the current political atmosphere in the US, critics are likely to be ignored until obvious trouble comes such as falling production or much higher oil and gas prices.

2.  The Middle East & North Africa

Iran: Oil Minister Zanganeh said Iran can quickly increase production of crude if OPEC decides to end the output agreement when the group meets in June.  Daily production can be increased by at least 100,000 barrels within “five or six days.” The Minister said Iran is always adding to production levels, “from West Karoun and Azadegan,” in western Iran near the Iraq border.

Tehran says it will soon be selling liquefied natural gas to Baghdad. Iran has some of the largest deposits of natural gas in the world in its South Pars field, which it shares with Qatar.  Iran is already sending piped natural gas to Iraq and beginning in late March 21, the official Islamic Republic News Agency says that exports of liquefied natural gas could start arriving in Iraq.

Syria/Iraq: In the last few weeks the level of violence in Syria has been increasing as the Syrian government with Russian help has stepped up attacks on the remaining rebel held areas. The Syrian war is a tangle of separate conflicts with a rotating cast of combatants. The collapse of the Islamic State’s caliphate last year has cleared the way for the war’s underlying conflicts to resurface with a vengeance. With so many foreign powers involved in Syria, there is great potential for misunderstandings and a wider conflict. Israeli airstrikes on Syrian and Iranian positions across Syria is an example of the troubles that may lie ahead.

Iraqi forces launched a security operation along a planned oil transit route to Iran on Wednesday, saying it was clearing and “destroying sleeper cells” in the mountainous border area where two armed groups operate. Iraqi oil officials announced in December plans to transport Kirkuk crude by truck to Iran’s Kermanshah refinery. The trucking was to start last week. While ISIS no longer holds much territory in the area, attacking convoys of oil trucks in mountainous terrain is not difficult for experienced insurgent groups.

Iraq is looking to attract $100 billion worth of foreign investment that would help it rebuild its oil refining and petrochemicals sectors and reconstruct crucial infrastructure. Ahead of a conference on Iraq’s reconstruction that will be held in Kuwait this week, Iraq’s National Investment Commission published a list of major strategic projects available for investment. Eighteen investment opportunities are being offered in the chemicals, petrochemicals, fertilizers, and refinery sectors.  The US does not plan to contribute any money at the Kuwait conference to fund Iraq’s reconstruction,  a move critics say could deal a new blow to American standing in the region.

Saudi Arabia:  The Saudi government has started a campaign of damage control after the detention of some 350 of its wealthiest businessmen scared off the foreign investors the Saudis needs to diversify their economy and sell off 5 percent of Saudi Aramco.

Crown Prince bin Salman is planning a trip to France, the U.K. and the US later this month, during which he hopes to drum up foreign interest in billions of dollars in business opportunities, including in the aerospace, internet technologies, and entertainment sectors.

There has been much discussion of Saudi Arabia’s relationship to the US Permian shale oil basin and whether the US has replaced the Saudis as the world’s “swing producer.”  The Permian Basin has at least 500,000 b/d of spare production capacity; there could even be as much as 1 million, Nansen Saleri, former head of reservoir management at Saudi Aramco, told Bloomberg. Historically, Saudi Arabia has had the greatest spare capacity in the world, and usually kept 1.5-2 million b/d of spare capacity available for market management. According to Saleri, the Permian is capable of turning on the taps to respond to higher demand in three to four days, faster than any other field in the world — except for those operated by Saudi Aramco.

Libya:  Libya’s oil production averaged more than 1 million b/d in January, for the first time topping the million-b/d-mark since July 2013.  Economists at OPEC, of which Libya is a member, reported production last year averaged 817,000 b/d, far less than its Gadhafi-era level of around 1.5 million b/d. Despite the recent success, widespread corruption and injustice are getting dangerously close to strangling the Libyan oil industry. Theft of company property is rife, while communities seeking employment or payoffs resort to blockading oil fields, pipelines and export terminals.

Terrorists from the Islamic State tried to attack the Dhara oilfield last week, according to sources in the Libyan National Army. The army confronted the terrorists before the attack occurred, seizing a car that contained explosive belts and improvised explosive devices, the sources said. UK-based, Saudi-funded Asharq Al-Awsat said the news confirmed some information it had received from LNA sources last November that told of ISIS plans to strike targets in the Oil Crescent. A US Africa Command spokeswoman Robyn Mack said, “At the moment, we believe that ISIS-Libya is likely to give priority to the restructuring of security forces and infrastructure, and to launch strikes, which may include targets in the Libyan oil crescent.”

3.  China

Crude imports hit another record last month, reaching 9.57 million b/d. This is 400,000 b/d more than the previous record from March last year. Natural gas imports also continued to rise, hitting 7.7 million tons – the second-highest monthly import rate on record. The increase in oil imports was driven by independent refiners who rushed to utilize their higher crude oil quotas that Beijing issued late last year. In addition, a pipeline from Russia began operating at an expanded capacity on January 1, which increased the flows of crude into the country. China’s demand for both oil and gas is usually higher ahead of the Spring Festival, which starts this week.

China has entered its first long-term contract to import US LNG, following a push by the Trump administration to open the market to US. suppliers. Cheniere Energy which has already exported LNG to China, said Friday it had signed two purchase agreements with China National Petroleum Corp. to export 1.2 million tons of LNG a year through 2043 from the US Gulf Coast.

China plans to launch its long-awaited crude oil futures contract on March 26, the country’s securities regulator said on Friday.  This move could potentially shake up pricing of the world’s largest commodity market. The launch will mark the end of a years-long effort by the Chinese to create Asia’s first oil futures benchmark, and is aimed at giving China more clout in pricing crude sold to Asia as it could give the Shanghai International Energy Exchange, which will operate the new contract, a share of the trillions of dollars each year in oil futures trading.

While eastern and central China have been hit by heavy snow or even blizzards this winter, around Beijing only a few mountainous areas received a light sprinkling. Downtown, the very slight snow on Jan. 21 was barely noticeable. According to Beijing’s climate observatory, the city has recorded 108 consecutive days without “effective precipitation” since Oct. 23, 2017, the longest dry spell for ten years.  The longest period without effective precipitation recorded by the station was 114 days between 1970 and 1971 nearly 50 years ago. Since November 2017, under the influence of the La Nina, the Siberian high-pressure area and the East Asian trough have intensified, leading to colder air in northern China. However, the Subtropical high in the West Pacific is in a position which is not conducive to wet, warm air from China’s south moving northward to meet the cold air.

The unusually cold and, except for Beijing, snowy winter is continuing to cause problems across much of the country. China’s natural gas production is rising at the fastest pace in four years but that will not be enough to meet the demand for the fuel caused by a government program to raise gas usage in order to clean the country’s polluted air. Gas output in China rose to a record 147.4 billion cubic meters last year, up 8.5 percent from 2016 and gas production is forecast to climb by between 6 percent to 8 percent per year through 2020. But China’s war against smog has spawned voracious demand for the fuel that will keep it reliant on growing imports of liquefied natural gas or piped gas.

Work has resumed on the troubled Turkmenistan-China pipeline. This pipeline has a designed capacity of 25-30 billion cubic meters of gas per year and will become the fourth and last planned strand of a network of routes carrying the fuel from Turkmenistan to China. The project began in 2014 amid promises construction would be done within three years. However, media outlets last year reported that work had been suspended, leading them to speculate that the project would be canceled.  Once completed, the pipeline would put China in a position to import up to around 65 billion cubic meters of Turkmen gas annually.

China plans to increase its high-quality coal supply by allowing mines to boost capacity if they shut outdated production processes.  Coal companies will be encouraged to close inefficient and polluting mines and replace them with larger ones if they meet certain standards, the National Development and Reform Commission said in a statement on Friday. Companies that agree to sign long-term contracts with power plants or to set up joint ventures with power companies will be allowed to expand their capacity by 130 percent to 300 percent. The NDRC would give those allowed to boost capacity less than a year to shut outdated production.

4. Russia

Moscow saw its heaviest snowfall in a day since records began, with more than 2,000 trees brought down and air travel disrupted, officials say. More than half the monthly average snow of 15 inches fell the week before last, beating the previous record from 1957. The Kremlin has always expressed little interest in climate change on the theory that warmer weather in its Arctic regions would be good for its economy.

The Saudis and the Russians are finding common ground on a number of issues besides the OPEC production freeze. The trigger for a rapprochement was a common enemy: US shale oil. The collapse in oil prices from 2014, as hydraulic fracturing unlocked a flood of US crude that caught other producers off guard, set their collaboration in motion as both countries were suffering from low oil prices. The low-oil-price-situation was enough to overcome the Saudi concerns about Russian meddling in Syria.

Last week the Saudi oil minister attended the inauguration of the $27 billion LNG plant on Moscow’s Arctic coast. The Russians are hoping that the Saudis will start importing their LNG and stop wasting so much valuable crude keeping cool in the summer.

For what it’s worth, the arrival of a tanker in Boston containing liquefied natural gas coming from the recently inaugurated Russian project grabbed a lot of media attention. The news stirred controversy over Russians skirting US sanctions and the US being unable to meet its own natural gas needs despite the American natural gas boom stemming from the shale revolution. In this case, the demand for natural gas became so high due to very cold weather that the pipelines supplying the region were unable to keep up with demand. The only recourse was the spot market which happened to have cargoes of Russian gas available.

With the best quality Russian oil now being piped to China, European importers are being left with the dregs. The quality of Russia’s Urals crude grade has deteriorated so much in recent months that some refiners are considering renegotiation of supplies and prices. The Urals grade exported to Europe is a blend of different oils, and that blending is taking place inside the pipeline system in Russia. The quality of the Urals blend that is being exported to Europe in February is near the bottom of the standard range set by the Russian government.  “We can’t refine this oil,” a trader at a European company told Reuters. “There is only one way out, which is to cut Urals purchases and get supplies of lighter grades for blending.”

5. Nigeria

The fuel shortage that has plagued Nigeria for the last two months continues to get worse. Insufficient supply of premium motor spirit (gasoline) has continued to compel many fuel stations in different parts of the country to ration the product causing a queue of vehicles at retail stations to soar. The  Nigerian National Petroleum Corporation seems to have no ideas on any immediate solution other than to announce it will try to import more fuel.  The scarcity has continued despite proclamations by the petroleum minister, President Muhammadu Buhari; the minister of state for petroleum, Ibe Kachikwu; the NNPC chief, Maikanti Baru; and other officials. A committee set up by the president and headed by Mr. Kachiwku has also failed to put an end to the crisis

While the demand for aviation fuel continues to increase and is estimated to have reached one billion liters last year, 100 percent dependence on fuel importation amid foreign exchange challenges met only half of the potential demand in 2017. Limited supply has pushed up the cost of fuel for local operators. To beat the shortage and cost, foreign airlines top up at Accra, Lomé, and Abidjan airports, after dispatching or picking up passengers in Nigeria.

6. Venezuela

Oil production continues to fall at a frightening clip and was about 1.6-1.7 million b/d in December. On an annual basis, Barclays predicts that Venezuela’s output will fall from 2.18 million b/d in 2017 to just 1.43 million this year, a decline of roughly 700,000 b/d. Economists at the Organization of Petroleum Exporting Countries said member state Venezuela produced on average 1.7 million barrels of oil per day in December, down from the 2016 average of around 2.1 million barrels of oil. Commodity pricing group S&P Global Platts reported January production from Venezuela declined another 60,000 barrels per day.

The steep declines will increasingly be felt worldwide given that oil demand is growing and the OPEC/non-OPEC coalition continues to keep 1.8 million b/d of supply off the market. Global inventories have declined so steeply that unexpected geopolitical surprises carry more influence than they used to.

PDVSA has restarted imports to its Isla Curacao facility after a seven-month hiatus as Venezuela tries to staunch the bleeding of its dwindling fuel output. The Isla refinery, capable of receiving VLCCs, is a hub for oil destined for the Asian market, but is struggling with a lack of crude oil to refine.  PDVSA is due to receive two cargoes of American crude from China and two other vessels full of Russian Urals crude from Glencore in the coming weeks. PDVSA has agreed to barter fuel oil and heavy crude in exchange for the imported oil.

The US government is weighing the potential negative impacts of placing sanctions on Venezuelan oil or oil-related products. On a tour of Latin America, US Secretary of State Tillerson expressed mounting concerns about the political affairs in Venezuela. President Nicolas Maduro, widely criticized from Washington for his stance on democracy, is up for re-election this year and Tillerson said early this week that “obviously” sanctioning oil or prohibiting the sale of Venezuelan oil in the United States was something to consider. Targeting Venezuelan oil carries a risk for the United States. For the week ending Jan. 28, it was the seventh-largest exporter of oil to the United States, behind Nigeria.

Colombia’s government has opened its first shelter for Venezuelans who are pouring across the border in increasing numbers to escape their nation’s economic crisis. The facility, opened Saturday near the border city of Cúcuta, is expected to provide shelter of up to 48 hours for 120 people a day. In recent weeks, an increasing exodus of Venezuelan migrants has overwhelmed Cúcuta, with many sleeping on the streets. Crime in the city has grown as gangs recruit and take advantage of the desperate migrants. Some 35,000 Venezuelans cross into Colombia each day, many of them settling in with relatives or making short trips to buy food and medicine that has been scarce back home.

7.  The Briefs (selections from the press – date of article in Peak Oil News is in parentheses – see more here: news.peak-oil.org)

The liquefied natural gas market is growing every year, but the terminals that ship and receive the fuel are shrinking. The booming sector’s next-generation infrastructure is being designed for emerging-market buyers that want smaller volumes on shorter, more flexible contracts. (2/5)

Europe will soon experience a gas shortage and price spike if it tries to rely on US gas imports to cover rising demand instead of increasing purchases from Russia, Kremlin energy giant Gazprom told Reuters. The West has accused Russia of using gas as a political weapon. Moscow has responded by blaming the West for blocking its new pipeline projects for political rather than economic reasons. (2/9)

Members of the European Union were falling short of their energy consumption targets for 2020, data from the EU’s statistics office show. Members of the EU are committed to reducing energy consumption by 20 percent by 2020 and were 4 percent off their target in 2016, the last for which Eurostat published data. (2/6)

In Norway, most of the metrics have improved at one of the nation’s most promising fields—the Johan Sverdrup, partners said. Phase 1 of the field’s development is currently underway and about 70 percent completed. All told, Johan Sverdrup could represent a quarter of total Norwegian production and first deliveries from the field are expected to begin in late 2019. (2/8)

Netherland’s Groningen gas field was hit by an earthquake with a magnitude of 2.0 late Thursday, the second-biggest tremor this year after the January 8th 3.4 tremor, according to the Royal Netherlands Meteorological Institute (KNMI). The quake was confirmed by the KNMI to have been triggered by gas extraction. (2/9)

BP’s profits more than doubled in 2017 to $6.2 billion powered by higher prices and output of oil and gas, allowing the company to resume share buybacks as it recovers from a three-year downturn. The London-listed company saw one of the strongest production increases in its history last year, lifting output to levels not seen since the deadly 2010 Deepwater Horizon spill. (2/6)

Offshore Cyprus, Eni and Total have made a promising gas discovery that confirms that the Zohr-like play where Eni found the biggest gas deposit in the Mediterranean offshore Egypt extends into the Cyprus Exclusive Economic Zone. (2/6)

While Russia is sending its top-quality crude oil to China in its battle for market share on the prized Asian market, European refiners are left with lower-quality imports from Russia and are now reviewing how much Russian crude they would buy and at what price. The quality of Russia’s Urals crude grade has deteriorated so much that some refiners are considering renegotiation of supplies and prices. (2/6)

In Tajikistan, construction work has resumed on a natural gas pipeline running from Turkmenistan to China. Funding for the building work is being provided by China. This pipeline has a designed capacity of 25-30 billion cubic meters of gas per year and will become the fourth and last planned strand of a network of routes carrying the fuel from Turkmenistan to China. Once completed, the pipeline would put China in a position to import up to around 65 billion cubic meters of Turkmen gas annually. (2/5)

In Colombia, the Cubiro oilfield was shut down on Monday after a series of threats and attacks against the facility’s workers. The National Liberation Army recently restarted attacks on Colombia’s oil infrastructure as peace talks with Bogota fall apart.  Cubiro produces 3,600 barrels per day. (2/7)

Offshore Guyana, French energy company Total said Monday it has expanded its footprint off the South American coast by taking exploration rights. Total’s partners offshore Guyana include Exxon Mobil and African-focused explorer Tullow Oil. The broader Guyana−Suriname basin is estimated to hold around 12 billion barrels of oil. (2/6)

Canada unveiled sweeping new rules aimed at toughening oversight of energy projects and instilling confidence in a system criticized by companies as too cumbersome and environmentalists as too lax. The wholesale makeover to the country’s environmental review process is an effort by Prime Minister Justin Trudeau’s Liberal Government to strike a balance between its pledge to implement a more robust climate-change policy while fostering investment in the energy sector, which is a major driver of economic growth. (2/9)

In British Columbia, Australian energy company Calima said it’s closer to drilling into the emerging Montney oil and gas basin in British Columbia. Calima operates more than 70,000 acres in the Montney shale formation in BC. The company said it’s received authorization from the provincial oil and gas commission to build, maintain and operate a road into its holdings. (2/7)

The US oil rig count increased by 26 this week, boosting the count to 791, according to the Baker Hughes weekly report.  More than half of the US’s oil rigs were located in the Permian Basin in west Texas and eastern New Mexico where the number of active units increased by 10 this week to 437. (2/10)

SPR sales: The US budget deal reached by Congress on Wednesday includes the sale of 100 million barrels of crude oil from the country’s emergency petroleum stash starting in 2022, or about 15 percent of the reserve, according to the text of the agreement. (2/9)

In the Gulf of Mexico, a Chinese partner at the Stampede oil field said production started Tuesday. US energy company Hess Corp. is the operator with a 25 percent stake. Processing is completed using infrastructure with a capacity of around 80,000 barrels of oil and 40 million cubic feet of natural gas per day. Three production wells are currently completed, and production is expected to ramp up through 2018. (2/7)

Exxon Mobil Corp said on Thursday its oil and gas reserves surged 19 percent last year, thanks to growth in US shale, the United Arab Emirates and Guyana, with a portfolio large enough to pump for the next 14 years at least. Exxon said it added 2.7 billion barrels of oil equivalent (boe) to its proved reserves last year, bringing the total to 21.2 billion boe. (2/10)

ExxonMobil’s mea culpa: the company was forced to finally acknowledge the possibility that future climate change policy could lead to peak oil demand, a serious threat to the company’s operations over the long-term. In response to a shareholder resolution passed last year, the oil major just released a report that recognizes the danger of peak oil demand. By 2040, climate change policies and regulations could cut into oil demand, leading to a drop in consumption by 20 percent. It’s a rather bleak picture for oil. (2/8)

Halliburton Co. is waging an aggressive campaign to persuade the US Patent and Trademark Office to cancel some of Schlumberger’s fracking-related patents, telling the agency they’re not inventions but old ideas repackaged. At the same time, Halliburton is pursuing more patents and was awarded 35 percent more in 2017 compared to the previous year. (2/7)

Florida hot seat: The US Bureau of Ocean Energy Management, a division of the Interior Department, is holding state hearings on a proposed five-year lease plan that would open nearly all of the US territorial waters to oil and gas drillers. Industry supporters in Florida kicked back against opposition to offshore drilling, saying the state has emerging opportunities to capitalize on US momentum. (2/10)

California hot seat: Environmental activists in California on Thursday plan to protest a Trump Administration proposal to vastly increase offshore oil drilling in the United States. The protest was planned to immediately precede a public meeting by the US Interior Department’s Bureau of Ocean Energy Management in Sacramento. (2/9)

California’s threat to deny pipeline permits for transporting oil from new leases off the Pacific Coast is the latest step by states trying to halt the biggest proposed expansion in decades of federal oil and gas leasing. Officials in Florida, North and South Carolina, Delaware and Washington, have also warned drilling could despoil beaches, harm wildlife and hurt lucrative tourism industries. (2/8)

Democratic senators from US coastal states said they’re still waiting for clarification on a five-year drilling plan given the ambiguity over Florida. (2/8)

Windy NYC: New York Governor Andrew Cuomo just launched the 60-page New York State Offshore Wind Master Plan, detailing the state’s commitment to wind power and the expected gains from seeing it through: 2,400 MW offshore energy will power in excess of 1.2 million homes. The industry will employ up to 5,000 people. The industry will be worth $6 billion in a decade. (2/8)

In booming Colorado, utility Xcel Energy asked for proposals to construct big power plants using wind turbines and solar panels. The bids have come in so low that the company will be able to build and operate the new plants for less money than it would have to pay just to keep running its old, coal-burning power plants. You read that right: In parts of the country, wind and solar plants built from scratch now offer the cheapest power available, even counting old coal, which was long seen as unbeatable. (2/7)

RE beats coal: For the first time, the European Union generated more electricity from wind, solar and biomass than from coal in 2017, according to new analysis from two think tanks. The reports says “This is incredible progress, considering just five years ago coal generation was more than twice that of wind, solar and biomass.” (2/6)

Tesla-Aussie again: After building the world’s largest lithium battery in Australia ahead of schedule, Tesla has announced plans to build the world’s largest “virtual power plant” by outfitting 50,000 homes in South Australia with solar panels and Tesla battery storage units over the next four years, slashing participants’ energy bill by 30 percent. Beginning with a trial of 1100 Housing Trust properties, a 5kW solar panel system and 13.5kWh Tesla Powerwall 2 battery will be installed at no charge to the household and financed through the sale of electricity. (2/9)

China’s E-bus push: Within the next seven years, nearly half of the buses used by municipal transit districts will be electric, with China playing a leading role. A new study from Bloomberg New Energy Finance predicts that last year’s sale of 386,000 electric buses will go up to 1.2 million by 2025. The BNEF study found that all-electric buses can offer lower total cost of ownership through their vehicle lifecycles. The cost of fuel and maintenance expenses can be much lower. Electric buses are much easier to maintain and require less parts replacement than diesel- or natural gas-powered buses. (2/9)

In China, drone-maker EHANG has posted footage of the latest test flights of its model 184, a passenger-carrying all-electric autonomous aerial vehicle. The company claims the EHANG 184 series is the world’s first passenger drone capable of carrying a single person.  It does so at up to 130 km/h and through force 7 typhoon conditions. (2/7)

Part of Earth’s protective ozone shield may be thinning over the most heavily populated regions of the globe, even as an ozone hole over Antarctica continues to mend, international researchers said Tuesday. Unfortunately, the decline is larger than the rise measured at higher altitudes over Antarctica. The global ozone layer, protected by an international treaty, absorbs hazardous ultraviolet radiation from the sun that can damage DNA and heighten the risk of cancer and other health problems. (2/6)

Scott Pruitt, head of the US EPA; has repeatedly questioned the scientific consensus that rising levels of carbon dioxide from human-fueled activity are warming the planet. He’s now taking a different tack: Even if climate change is occurring, as the vast majority of scientists say it is, a warmer atmosphere might not be so awful for humans. (2/8)

In Pakistan, beneath the international headlines a massive water crisis is unfolding, that has profound implications for the country’s stability and security. Rapid urbanization and conflict combined with corruption, crime and years of mismanagement have left a massive proportion of the population without access to clean water. And now, this long-festering crisis threatens to upend Pakistan’s politics. (2/8)

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