Quote of the Week

[About climate-related class action lawsuits against Big Oil:] “It’s sort of bizarre that the users of our [petroleum] products say: ‘Well actually we didn’t want your product. So why did you force it on us?’ I don’t think also that in the end it will solve anything other than maybe redistributing wealth to a certain class of the economy.”

Ben van Beurden, CEO of Royal Dutch Shell  [Environmentalists counter that this resembles the reaction of Big Tobacco to class action lawsuits decades ago.]

Graphic of the Week

Updated graphic by Mike Mushalik, Australian petroleum engineer, and commentator.  He shows actual production by Saudi Arabia vs. forecast production in 2004 by Saudi Aramco, as shown in a CSIS presentation and then published in the Oil & Gas Journal.  Mushalik also shows how far off Saudi production is today from an EIA forecast of 2005 (figures include NGLs).

Contents

1.  Oil and the Global Economy
2.  The Middle East & North Africa
3.  China
4.  Russia
5.  Nigeria
6.  Venezuela
7.  The Briefs

1.  Oil and the Global Economy

Oil prices traded in a narrow range last week, between $73-$74 a barrel in New York, and $77-78 in London. A surprise increase in the US crude stocks balanced off the uncertainties of the US-China trade war that began on Friday. The announcement that the Saudis had increased production by 500,000 b/d in June helped keep the lid on prices despite the worsening prospects for global trade.

The US-China trade war is showing no signs of a settlement, and comes at a time when global trade is slowing, raising threats to global economic growth. As China moves to put tariffs on US crude, refiners are looking elsewhere for oil imports. China is expected to import around 400,000 b/d from the US in July.

The most notable development last week was that fears are rising among Wall Street analysts that inadequate investment in finding and developing new oil fields will soon lead to shortages.  According to Sanford C. Bernstein & Co. analysts, “any shortfall in supply will result in a super-spike in prices, potentially much larger than the $150 a barrel spike witnessed in 2008.”

Heretofore, most observers have assumed that continuing rapid increases in US shale oil production will be sufficient to offset the global depletion of oil production from existing fields. However, bottlenecks on moving oil out of the Permian Basin suggests that any additional growth in supplies from the area will be limited for the next 18 months.

The OPEC Production Cut: A highlight of the news last week came when President Trump tweeted that the Saudis had agreed to increase their oil production by 2 million b/d replacing most of the Iranian crude that Washington is trying to force from the market.  Many observers noted that the Saudis probably had told the president only that they had 2 million b/d of spare capacity, but that it was highly unlikely that they told him they would start producing that amount short of a major shortage. The Saudis later clarified that they would not be producing an additional 2 million b/d, and most observers believe that 600,000 b/d is a more likely figure.

On Wednesday, President Trump tweeted that OPEC should lower oil prices and that this would be the quid pro quo for the US security ties that many OPEC members enjoy. This threat raised the hackles of some OPEC members as it comes at a time when the President is trying to kill Iranian oil exports. Iran’s oil minister later accused Trump of insulting OPEC by ordering it to increase production and reduce prices, adding Iranian oil production and exports had not changed as a result of US pressure.

US Shale Oil Production:   According to updated EIA data, US crude production fell by 2,000 b/d to 10.467 million in April from the highest on record in March. US monthly crude oil exports jumped to a record 1.76 million b/d in April compared with 1.67 million in March. Weekly US crude exports surged to a high of 3 million b/d  the week before last, but Chinese tariffs on US crude may reduce this number until the trade dispute is settled.

BP has joined a handful of US geologists in pointing out that future growth of oil production from the Permian Basin may not be as rosy as the EIA and industry sources have been claiming. BP’s chief economist, Spencer Dale, said last Wednesday that as US shale oil and natural gas liquids production increased by almost 2 million b/d since late 2016, drillers have been forced to move out from the most productive areas, or “sweet spots.”

Tight oil well productivity has now flattened out in the Permian Basin based on initial output per completed well. But tight oil productivity from the basin fell last year when measured by output per lateral foot of each completed well. “It does perhaps suggest that the very rapid increases in tight oil productivity that characterized much of the initial phase of the shale revolution may be beginning to fade,” Dale said.

BP predicted in February that US tight oil would grow by around 5 million b/d to 2040, peaking at close to 10 million b/d in the early 2030s. The forecast, however, is consistent with the number of rigs remaining around current levels and productivity levels improving by around 40% over the next ten years.

The growing number of supply outages around the world makes the infrastructure bottlenecks in West Texas a global concern. There already is a debate about what’s going on in the Permian, and whether or not the shale industry will be able to keep up with production forecasts. The IEA predicts the US will add 1.7 million b/d in 2018, followed by another 1.2 million b/d in 2019. The bulk of this increase is expected to come from the Permian, and while the IEA acknowledges pipeline bottlenecks there, it has not significantly altered its supply forecast.

2.  The Middle East & North Africa

Iran: Iranian officials spent last week denouncing the impending US sanctions on Tehran’s oil exports and trying to line up support for their side of the issue. President Rouhani visited Europe to line up support and reiterated that Tehran would remain in the 2015 nuclear deal with world powers as long as its interests are guaranteed by other signatories.  On July 6th, the foreign ministers of Iran and the five world powers still party to the nuclear deal — Britain, France, Russia, China, and Germany — met in the Austrian capital to discuss ways to preserve the agreement in the wake of the US withdrawal.  However, the next day the Iranian president said the European package of support for the U.N-backed nuclear agreement was disappointing and offered nothing beyond general commitments.

As more oil importers, including many in the EU, India, and South Korea succumb to Washington’s threat to cut economic relations with anyone buying Iranian oil,  Tehran is becoming increasingly desperate. While Russia and China will stand behind Iran, Moscow can do little except swap some oil with the Iranians, and Beijing is unlikely to put too many of its eggs in the Iranian basket by buying up all the oil Iran has to offer.

While in Switzerland last Tuesday President Rouhani stated that his country could block the Strait of Hormuz for all Arab shipping traffic if Washington fully implements its zero oil export targets for Iran in the coming months.  The next day Iranian Revolutionary Guards commander said Tehran will block oil shipments through the Strait of Hormuz in the Gulf if the United States bans Iranian oil sales. “If they want to stop Iranian oil exports, we will not allow any oil shipment to pass through the Strait of Hormuz.”

While Tehran may have few threats left to make against the new US policy, blocking nearly all oil shipments leaving the Gulf, some 17 million b/d, is way over the top. The US navy signaled it was ready to confront Tehran militarily in response and even Beijing chided the Iranians over their threats. Saudi Arabia, Iraq, and Kuwait are among China’s most important oil suppliers, while Qatar supplies liquefied natural gas to China, so any blockage of the strait would have severe consequences for its economy. If there is one issue that every country in the world with a gas station, excepts perhaps for Russia, can agree on, it is that the Straits of Hormuz will not be closed.

Concerns are rising about the stability of the Iranian government. With the economic promises of the nuclear deal melting away and the collapse of its currency, many see the beginning of an economic death spiral that will bring political upheaval.

Iraq: Oil exports were virtually flat in June from a 2018 peak in May, with the largest monthly tanker loadings of the year offset by a multi-day outage in the pipeline sending Kurdistan oil to Ceyhan. The mandate for Iraq’s parliament has expired – with no new leadership confirmed.  The country’s still waiting for the results of a manual recount of suspect ballots from last month’s election that’s due to get underway in some regions on Tuesday. The recount will take about two weeks – leaving the country in political limbo until a new government is confirmed.

The future of Iraq, however, may have more to do with the amount of water flowing down the Tigris and Euphrates Rivers than political maneuvering in Baghdad or the amount of oil the country can produce each day. This month, engineers are scheduled to start filling the reservoir behind the giant Ilisu dam in southern Turkey. The Ilisu is one of a decades-long project to build 22 dams due to be completed by the end of next year along the Tigris and the Euphrates that will produce energy and jobs.

Water that stays in Turkey does not make it into Iraq where water is critical. Over 80 percent of Iraq’s water goes to agriculture which provides a livelihood for more than a third of its 37 million people. Even before the filling of Ilisu, Iraq’s water ministry reported that inflows had this year dropped 40 percent below the median. Ministers limited the planting of rice and other water-intensive crops to minimize the damage.

Researchers estimate that Middle East temperatures are rising twice as fast as the world average, due to the amplifying effect of desert conditions, which could make swaths of the region uninhabitable by the end of the century.

Saudi Arabia: Saudi Arabia told OPEC it pumped 10.488 million b/d of crude oil last month, an increase of 458,000 b/d from the level it said it produced in May.  Consultants Kpler estimated the kingdom’s oil exports rose by 407,000 b/d in June to 7.62 million b/d compared with May.

OPEC agreed with Russia and other oil-producing allies last month to raise output from July, with Saudi Arabia pledging a “measurable” supply boost but giving no specific numbers.

After months of reporting on how the Saudis would reboot their economy by selling off 5 percent of Saudi Aramco to raise cash for economic development, it seems that the IPO may not happen after all.  Last week, a senior Aramco executive told the Wall Street Journal that “everyone is almost certain it (IPO) is not going to happen.”

Initially touted as the biggest IPO in history, the Aramco listing was to be twofold—a listing at home on the Saudi stock exchange, Tadawul, and abroad, in New York, London, or Hong Kong. However, problems with these locations have emerged since then.  New York has become an unlikely listing destination because of post-9/11 legislation allowing US citizens to sue Saudi citizens for the attacks.  London, which has been particularly active in promoting itself as the best listing destination, has failed as of yet to win a commitment from Riyadh, as has Hong Kong.
Saudi Arabia has turned its oil market fortunes around over the past 1 ½ years. From facing potential financial collapse due to a historic supply overhang of crude, Riyadh cleverly formed a new partnership with Russia to force oil prices higher.  Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices. Arab Light Crude had already been trading near three-year highs, even as the state-owned oil giant had lowered official selling prices for medium and heavier crude grades.

Saudi Aramco said on Wednesday that the move represents the first change to benchmarks for its Official Selling Price since the mid-1980s. The new Asia price marker will replace the Platts Oman marker with Dubai Mercantile Exchange marker effective Oct. 1, 2018, creating a hybrid between two major Asian price benchmarks.

Months after the start of an anti-corruption crackdown, Saudi authorities are still holding a senior prince and several dozen businessmen and former officials in detention and recently have made new arrests.  Hundreds of prominent Saudis were arrested last November and detained at the Ritz-Carlton hotel in Riyadh. Most were released after agreeing to make payments Saudi officials say totaled more than $100 billion.

Those still in custody include some of Saudi Arabia’s wealthiest men and some who once held influential government positions until their arrests last November.  Among them are the chairman of the construction giant Saudi Binladin Group; the former head of Saudi Arabia’s investment agency; and a former economy minister and once a trusted aide to Prince Mohammed. Also detained is a senior royal, Prince Turki bin Abdullah, who served as governor of Riyadh and is a son of the previous monarch, King Abdullah.

Critics of the government say the new arrests and continued detentions are an effort by Prince Mohammed to consolidate power and sideline potential opponents one year after his father installed him as the country’s de facto ruler in a precedent-breaking move.  They also serve as a reminder that Saudi Arabia remains an absolutist monarchy subject to the course of family politics.

Libya:   There was little new information on the status of Libyan oil production last week with some reports saying production has nearly ground to halt and others talking about production remaining around 300,000 b/d.  After General Haftar’s Libyan National  Army turned control over the five eastern export terminals, which handle 75 percent of the country’s exports, to the newly established eastern rival to the Libyan National Oil Company, there has been little reliable news. The Tripoli-based company, which has been exporting oil for decades, and has all the contracts is forbidding foreign customers from buying oil from the new company.

Last Thursday, a joint venture between the NOC and Italian energy company Eni announced the start of natural gas production from the second phase of the Bahr Essalam project off the coast of Libya. More offshore production of oil and gas which is far less vulnerable being taken over by groups seeking a bigger share of the pie is what Libya needs today.

Britain’s National Crime Agency reported that there are 700,000 migrants waiting in Libya to cross the Mediterranean to Europe. Over the weekend, Italy and Libya have agreed to reactivate a friendship treaty signed in 2008 with the Gadhafi government that allowed migrants to be returned to Libyan territory. The original agreement envisaged unlocking 4.2 billion euros of Italian investment in Libya as compensation for colonization by Rome.  In exchange, Libya would work to stop illegal migrants embarking from its shores — and receive those sent back to it.  The two ministers did not say if the text of the reactivated treaty had been amended.

3.  China

The trade war between China and the US officially began on Friday morning as the Trump administration followed through with its threat to impose tariffs on $34 billion worth of Chinese products. The penalties, which went into effect at 12:01 a.m., prompted quick retaliation by Beijing.  As part of a wave of retaliation for Friday’s US tariffs, China has threatened a 25 percent duty on imports of US crude which had reached 300,000 b/d.

Beijing’s omission of LNG from its list of US products that face import duties underscores its desire to ensure supplies of gas as it pushes to switch millions of households and businesses away from using coal as a critical part of its ‘war on pollution’.

India and China are in talks about forming an oil buyers’ club. The boom in US oil and gas production gives the two, which account for a combined 17 percent of global oil consumption, greater leverage against OPEC. The two countries are the ones that would be the hardest hit if prices rise as a result of OPEC’s actions, and would have massive leverage if they forced oil exporters to bid for their business.

China’s independent refineries were awarded a second batch of crude import quota allocations for 2018 totaling 9.68 million tons, bringing the total quota allocated to the independent sector to 129.23 million for the year to date.  So far the allocation is about 31.4 percent higher than the 98.34 million tons allocated last year.

This year’s selloff in China’s stocks and currency is reviving memories of the rout in the summer of 2015. Shares in Shanghai are the world’s worst performing among major markets this year, tumbling 17 percent. The yuan has slumped 3.6 percent against the dollar since the start of June due to selling by nervous investors and the central bank’s efforts to guide the currency lower as a trade conflict with the US escalates.

4. Russia

Moscow’s oil companies are preparing to boost crude output significantly this summer. Alongside Saudi Arabia, Russia is one of just a few countries that can quickly ramp up production. Russian Energy Minister Alexander Novak said his country could add about 175,000 barrels of oil per day to the market in the second half of the year.

“I would like to note that in the first five months of this year the macro-economic situation has been generally stable,” Russian President Vladimir Putin said Thursday, “Positive trends are being posted in key areas.”  Russia’s economy was in recession in 2016 and the ruble, declined in value after crude oil prices dipped below $30 per barrel. In June, however, the Central Bank of Russia maintained its key rate at 7.25 percent per year, adding it wasn’t concerned about volatility in the price of oil.

5. Nigeria

Nigeria was recently rated as the poorest country in the world, ahead of India, despite several hundred billion dollars in oil earnings over the last decade. The Nigerian Extractive Industries Transparency Initiative, as quoted by local media, said Nigeria had earned some $484 billion from oil in the previous ten years, but the state of its population and infrastructure has only deteriorated. According to the organization, the oil earnings were sufficient to meet the need for an annual $15-billion investment in infrastructure for the next 33 years, but the funds were not used to do that. In its latest report on poverty, the Brookings Institution estimated that the number of people living in extreme poverty in Nigeria had grown to 87 million people, versus 73 million in India.
The Nigerian National Petroleum Corporation said the country would increase crude oil reserves by one billion barrels yearly from the current 37 billion barrels to 40 billion barrels by 2020 and also increase national oil daily production to three million b/d  by 2020.

The 650,000-b/d refinery being built in Nigeria will not be at its full capacity until the middle of 2020, which would be one and a half years later than originally planned. When complete, the refinery would aim to meet all of Nigeria’s daily demand for fuels of up to 550,000 b/d and the remainder would be exported. Currently, the country is importing nearly all of its requirements for oil products.

6. Venezuela

The China Development Bank is to invest $250 million in Venezuela’s Orinoco Belt to stave off further the decline of the country’s heavy oil production. China is also mulling a $5 billion investment plan in Venezuela, where oil production has fallen by more than half in the last few years, with output down to around 1.36 million b/d in June. Venezuela has been sending China several hundred thousand barrels per day of oil for several years as repayment for past loans; however, the catastrophic decline of Venezuela’s oil production has curtailed those shipments. China is in danger of never being paid back for the tens of billions of dollars it loaned to Venezuela.

Whether an additional $5 billion of Chinese money can come in time or do any good in a country that is slowly starving and is only months away from a total collapse remains to be seen. It seems more likely that Beijing will resist throwing good money after bad.

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

Leaders of the world’s largest oil companies want everyone to know it won’t do anyone any good to make them pay for the damages of climate change. Executives have been making the argument after a series of US states and municipalities filed class action lawsuits against Royal Dutch Shell, Exxon Mobil, and others in recent months, arguing it should be the companies that pay for the sea walls, levees, and other infrastructure climate change is sure to require. A judge in California dismissed suits from Oakland and San Francisco arguing climate change was too broad a topic for a single court to decide, and that it should be left to legislators. He also argued the world has prospered because of fossil fuels and it didn’t make sense to now turn against the companies that provide products in high demand. (7/6)

Seismic on uptick: A growing fleet of ships is scanning oceans in search of new oil and gas fields as energy companies, now with more cash thanks to stronger crude prices, gradually resume spending on seismic services after a four-year downturn. A doubling in the area contracted for seismic work in the first quarter this year from the last three months of 2017 has injected optimism into surveillance firms, with a global fleet of about 24 vessels, most of whom struggled to survive in the past years. (7/5)

Offshore UK, the international majors are sharpening their UK focus on the more prospective west of Shetland area, with BP raising its stake in the Clair field and Chevron hoping to sell its legacy North Sea fields as it plans the West of Shetland Rosebank deepwater project. The announcements Wednesday by BP and Chevron follow Shell’s purchase in May of a 30 percent stake in another West of Shetland project, Cambo, thought to hold “in place” 600 million barrels. The West of Shetland area is characterized by some of the harshest sea conditions faced by the industry anywhere and has mostly been the preserve of the majors due to higher costs. (7/5)

In the UK, efforts by opponents of shale gas are diminishing the national significance of British shale natural gas work, and they create unnecessary delays for developing the fledgling industry, a trade group said. (7/6)

French consultancy Cedigaz sees global gas demand growing by 1.4 percent/year between 2016 and 2040, a major reduction cumulatively from last year’s 1.8 percent compound annual growth rate. It does, however, see the fuel playing a growing role in the energy mix at the expense of the other fossil fuels. (7/5)

Russian Novatek-led Yamal LNG project has sent two Arc7 ice-class LNG carriers destined to China via the Northern Sea Route in just nine days with no ice-breaking support, marking the start of regular LNG shipments without an ice-breaking escort. (7/6)

Offshore the Gaza strip, Greek oil and gas company Energean is ready to buy and operate a 45 percent stake in the offshore gas field Gaza Marine as soon as both the Israeli and Palestinian authorities give their green light. Gaza Marine, located about 30 km off the Gaza coast between the giant gas fields Leviathan and Zohr, is estimated to hold over 1 trillion cubic feet of natural gas. But plans to develop it has been put off several times over the past decade. (7/6)

Asian “buyers’ club”: When reports emerged that India and China were in talks about forming an oil buyers’ club, OPEC was probably too busy with its upcoming June 22 meeting to concern itself with that alliance. Now, it may be time for it to start worrying. The boom in US oil and gas production gives India and China greater leverage against OPEC, the Times of India quoted an Indian official as saying last month after the formal start of said talks. The two countries account for 17 percent of global oil consumption. (7/4)

In Egypt, the World Bank supports the country’s efforts to be a regional oil and gas trading hub, the Egyptian Ministry of Petroleum said on Monday. Following the start-up of the giant gas field Zohr, along with several other projects, Egypt has become an important player in the Mediterranean. (7/3)

South African motorists are in for another shock. Minister of Energy Jeff Radebe has announced a 23 cents price increase for 93 octane while 95 octane will cost 26 cents more per liter. Diesel prices are also set to go up, increasing by 26 cents per liter. The price hikes will take effect on Wednesday and comes after an 82 cents increase introduced in June.  The spikes are attributed to a weaker rand. (7/3)

For offshore Guyana, services company SBM Offshore said Tuesday that an Exxon Mobil subsidiary in Guyana gave it a contract to start front-end engineering and design work on a second floating production, storage, and offloading vessel for the giant Liza field. (7/4)

In Cuba, a window for drilling at an oil prospect near the northern shore could open up as early as December. The Cuban government gave Australian energy company Melbana Energy the environmental license for planned activities at its Alameda-1 exploration well on the north shore in April. The company is targeting a reservoir with more than 2.5 billion barrels of oil in place, and the environmental license is part of the regulatory requirements needed before the company can start drilling. The company has completed a tender for a drilling rig that could be deployed later this year. (7/3)

The Mexican people, fed up with widespread corruption, poverty, and violence, have handed Andrés Manuel López Obrador (AMLO) a stronger mandate than any Mexican president in decades. AMLO has long supported a nationalistic outlook on energy and spent years criticizing the liberalization of Mexico’s energy reform. (7/3)

In Mexico, Alfonso Romo, Lopez Obrador’s future chief of staff, told Bloomberg that the incoming president wouldn’t use his vast legislative powers to reverse energy reforms. If any modifications end up being made, they wouldn’t harm private participation in Mexico’s energy sector. (7/7)

The US oil rig count increased by five rigs in the week to July 6, bringing the total count to 863, according to Baker Hughes’s weekly analysis.  With gas rigs flat at 189, the total oil and gas rig count stood at 1052.  So far this year, the total number of oil and gas rigs active in the United States has averaged 1,005. That keeps the total count for 2018 on track to be the highest since 2014, which averaged 1,862 rigs. (7/7)

US oil exports: Two and a half years after the US removed export restrictions on its crude oil, its exports hit 3 million b/d —the latest all-time high set in recent months. The volume of US exports last week was higher than the individual country exports of 12 out of 14 OPEC members. Only Saudi Arabia and Iraq export more than 3 million b/d of crude oil to international markets. (7/3) (NOTE: the US is still a net importer of crude oil and petroleum products, recently around 2.5 million b/d.)

Methane leaks: Environmentalists, regulators, and many in the industry itself warn of a dirty underbelly to natural gas. Before it is burned, it is one of the most potent greenhouse gases—up to 80 times more impactful than CO2 emissions—and can reach the atmosphere through leaks in wellheads, compressor stations, and chemicals plants. A study published in the scientific journal Nature last week put methane emissions from the US oil and gas industry at about 13 million metric tons per year, 60 percent higher than the official US EPA estimate. Carbon dioxide emissions from US energy sources, meanwhile, are around 5 billion tons. While some have challenged the methane study’s conclusions, energy executives at the triennial natural gas summit said the industry should instead review them and learn. (7/3)

The US Dept. of Energy has abandoned plans to build petroleum product reserves on the West Coast and in the Southeast, citing high costs and the potential for market distortion, according to Steven Winberg, the agency’s assistant secretary for fossil energy. (7/3)

Refinery comeback: Owners of an idled oil refinery in St. Croix, US Virgin Islands, that was once among the world’s largest, plan to invest $1.4 billion to refurbish and restart a portion of the plant.  ArcLight Capital Partners, a private equity firm, expects the former Hovensa refinery on St. Croix to be able to process 200,000 barrels per day of crude and deliver fuels to market by January 2020. (7/3)

Suing big oil: Rhode Island on Monday sued several major oil companies, including Exxon Mobil Corp and BP, accusing them of contributing to climate change that is damaging infrastructure and coastal communities in the state.  The lawsuit announced by Rhode Island was the first by a state seeking to hold oil companies responsible for costs associated with climate change and followed similar cases by several local governments nationally. (7/3)

When it comes to big paychecks, Big Oil now looks like the best bet for US workers. Spurred partly by the shale boom, energy companies paid their median workers $123,000 last year, according to data newly mandated by the US That topped all sectors, including utilities, tech, and healthcare. (7/6)

US biodiesel production fell to 140 million gallons in April from 147 million gallons a month earlier, the US EIA said in a report. Soybean oil remained the largest biodiesel feedstock at 48%, with 520 million lbs. used in April. (7/3)

China’s ambitious push to use biofuel in cars nationwide by 2020 is in doubt amid concerns about supplies of raw material such as corn, complicated by an escalating trade dispute with Washington, producers and analysts say.  (7/6)

Peak sand? It seems odd to talk about Peak Sand. The problem is that concrete is 26 percent sand, and we are still making huge amounts of concrete—about two cubic meters every year for every man, woman, and child on the planet. China leads the charge in today’s sand-fueled construction boom, consuming half the world’s supply of concrete. Between 2011 and 2014 it used more concrete than the US did in the entire 20th century. Desert sand has been wind-blown and eroded and smoothed out, so that huge potential resource doesn’t make good concrete.  And fracking requires growing amounts of high-quality sand as well. (7/3)

Offshore wind race: The Trump administration wants to fire up development of the US offshore wind industry by streamlining permitting and carving out vast areas off the coast for leasing – part of its ‘America First’ policy to boost domestic energy production and jobs. The Europeans have taken note. The drive to open America’s offshore wind industry has attracted Europe’s biggest renewable energy companies, who see the US East Coast as a new frontier after years of success across the Atlantic. Less experienced US wind power companies, meanwhile, have struggled to compete in their own backyard. (7/6)

Fully cost-competitive electric vehicles will be on European roads by 2024-25 if battery costs continue to fall at current rates, according to speakers at Oxford City Council’s EV Summit 2018. Lithium-ion battery costs in China, which meets a major tranche of global demand, are falling at around 10% a year. That meant battery-driven electric vehicles were on course to reach cost parity with diesel and gasoline cars by 2024 at the earliest, and 2030 at the latest depending on take-up of EVs and nickel and cobalt costs. (7/5)

EV news: US and especially global demand for the Chevrolet Bolt EV have been strong in 2018, with global sales estimated to be up more than 35 percent year over year in the second quarter and up more than 40 percent in the first half, according to GM. In response, GM is increasing fourth-quarter production by more than 20 percent compared to the average of the first three quarters. (7/7)

A red-hot electric vehicle market has triggered a face-off between Big Oil and utilities. Oil majors, who’ve sold fossil fuels to cars for a century, are now moving into an electricity sector that’s preparing for exponential growth. The problem is that utilities, the primary power suppliers for a century, have the same idea. BP predicts electric vehicle sales will surge by an eye-watering 8,800 percent between 2017 and 2040, making it an attractive business for oil companies as demand for gasoline and diesel are forecast to slow. (7/5)

EV players: Oil companies and utilities won’t dispute that electric vehicles are on the cusp of becoming mass market. Their battle will be more over which business will dominate the booming charging infrastructure that will go along with it. BP and Shell have charging company acquisitions in the works, with Europe being a key market for EV infrastructure growth. (7/5)

BP + EV: BP’s acquisition of Britain’s largest electric vehicle charging company gives the supermajor an edge in a changing retail segment, an analytics company said. The British energy company announced Thursday it reached an agreement to purchase EV charging company Chargemaster and rebrand it as its own. Chargemaster operates more than 6,500 charging points across the United Kingdom. (7/3)

Self-driving bus: Chinese tech giant Baidu announced that its newly developed self-driving bus would begin mass production as the 100th bus came off the production line Wednesday.  The bus, which lacks a steering wheel, driver’s seat and brake, is instead equipped with a Baidu Apollo autonomous driving system, which can perceive its surroundings, predict the movements of vehicles and pedestrians, and plan optimized routes based on high-definition maps and intelligent sensing capability. (7/5)

Fuel cell cars: The global race to reduce carbon emissions and use sustainable energy has rekindled the debate on whether fuel cell electric vehicles can carve out a niche in the ‘green mobility’ market and overcome the cost and scale challenges to become a player in the energy transition. (7/5)

Fusion update: There may be lingering disagreements among China, the European Union, India, Japan, South Korea, Russia and the U.S., but there is one complex project these seven entities have in common that is on track – the world’s largest nuclear fusion facility. This first global collaboration on building a nuclear fusion reactor is taking place at Cadarache in the south of France. Construction of the reactor began in 2017 and is now 55 percent complete. (7/5)

Last year, hurricane season disrupted a lot of oil production and refining capacity along the US Gulf Coast, sending oil prices soaring. This year, however, oil bulls may be in for a disappointment as forecasts are for a quieter hurricane season. Colorado State University recently revised its forecast for the number of named storms this season to 11 from 14. (7/5)

The European commissioner for climate action said Friday it’s time to start looking beyond the horizon outlined in the Paris climate agreement. The European Commission said it was setting a new bar for renewable energy use with a 32 percent target for 2030, with additional consideration for further revisions in 2023. The governing body said this step puts more strength behind European President Jean-Claude Juncker’s ambition for Europe to become the world leader in renewable energy use. (7/7)

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