iea – Page 2 – Olduvai.ca

IEA chief Birol said that Europe should prepare for a complete suspension of Russian gas supplies.
Birol advised European governments to keep nuclear power stations running and take other contingency measures.
Germany, Austria, and the Netherlands are restarting coal power plants.

Europe should prepare for a complete suspension of Russian natural gas deliveries, the head of the International Energy Agency told the Financial Times in an interview.

“Europe should be ready in case Russian gas is completely cut off,” Fatin Birol told the FT. “The nearer we are coming to winter, the more we understand Russia’s intentions,” he added. “I believe the cuts are geared towards avoiding Europe filling storage, and increasing Russia’s leverage in the winter months.”

As a means of countering the worst effects of such a scenario, Birol advised European governments to keep nuclear power stations running and take other contingency measures, too. These other contingency measures seem to focus on demand.

“I believe there will be more and deeper demand measures [taken by governments in Europe] as winter approaches,” Birol told the FT, adding gas rationing was a distinct possibility in case of further cuts to Russian gas supplies.

In the past three months, Russia has cut off supply to several European countries that refused to pay for gas in rubles. It has also substantially reduced the flow along the Nord Stream, effectively cutting off supply to France and reducing flows to Germany by some 60 percent.

Gazprom and its equipment maintenance service provider Siemens Energy have blamed the reduction on a turbine delivery delay resulting from new Canadian sanctions against Moscow. Germany has blamed Gazprom.

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Oil markets are pricing in long-term supply deficits and OPEC+ will face historic lows in spare capacity, warns IEA

June 17, 2022

Oil markets are pricing in long-term supply deficits and OPEC+ will face historic lows in spare capacity, warns IEA

Fatih Birol, head of IEA — IEA Executive Director Fatih Birol.

The IEA issued a warning for global oil markets Wednesday, saying supply challenges will persist.
Three million barrels per day of Russian crude will disappear as sanctions set in, the IEA predicts.
“Severely restricted refining capacity is causing markets to price in long-term supply deficits in key refined products,” the report said.

The current turmoil across energy markets is set to worsen in 2023, as OPEC+ will face severe supply challenges while fuel prices will stay high, the International Energy Agency warned in its first forecast for next year.

The Paris-based think tank said Wednesday that global oil supplies will “struggle” to keep up with rising demand.

In particular, it highlighted that Russian barrels will disappear from this year’s market at a rate of 3 million barrels per day as more sanctions set in. That result in overall OPEC+ production falling by 520,000 barrels per day next year.

“OPEC+ would have to further tap into its dwindling capacity cushion, reducing it to historic lows,” the IEA said in its report.

Over recent months, oil prices have skyrocketed thanks to dwindling stockpiles and repercussions from Russia’s invasion of Ukraine. In March, the price of Brent crude briefly hit $139 a barrel. It’s hovering near $120 Wednesday.

US gas prices, too, have surged, recently breaking the $5-a-gallon threshold for the first time ever. And the IEA warned prices will stay high for a while as refineries live “hand-to-mouth” amid low crude and product inventories.

“Severely restricted refining capacity is causing markets to price in long-term supply deficits in key refined products,” the agency said. “This translates into a structurally elevated product price outlook.”

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IEA chief warns of summer fuel shortages and a triple energy crisis that will outstrip the oil shocks of the 1970s

June 1, 2022

IEA chief warns of summer fuel shortages and a triple energy crisis that will outstrip the oil shocks of the 1970s

gas station — International Energy Agency chief Fatih Birol has warned of a triple energy crisis that could be “much bigger” and longer lasting than the 1970s.

The US and Europe face fuel shortages as summer vacations get underway, the head of the IEA told Der Spiegel.
Fatih Birol warned of potential diesel, petrol, and kerosene shortages, and said the current energy crisis was worse than the 1970s.
“We have an oil crisis, a gas crisis and an electricity crisis simultaneously,” he said.

The US could see fuel shortages this summer once people start taking their vacations — and Europe could take a particular hit from the lack of supply, the head of the International Energy Agency has warned.

“When the main holiday season starts in Europe and the US, fuel demand will rise,” Fatih Birol told Der Spiegel. “Then we could see shortages — for example, in diesel, petrol or kerosene, particularly in Europe.”

Birol also told the German newspaper that the energy crisis now underway will be more severe and longer-lasting than the oil price shocks of the 1970s, given it’s applying pressure on three fronts.

“Back then it was just about oil,” he said in the interview published Tuesday. “Now we have an oil crisis, a gas crisis and an electricity crisis simultaneously.”

Oil prices spiked in 1973 and 1979 as the Yom Kippur War and the Iranian Revolution interrupted Middle Eastern crude exports. Geopolitical events have hit the market again in 2022, as western nations impose sanctions on Russia over its invasion of Ukraine.

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IEA: Current Energy Crisis Is “Much Bigger” Than 1970s Oil Crunch

June 1, 2022

IEA: Current Energy Crisis Is “Much Bigger” Than 1970s Oil Crunch

IEA Chief Birol: The world faces a “much bigger” energy crisis than the one of the 1970s.
Back in the 1970s, the crisis was just about oil.
Birol: The world, especially Europe, could face a summer of shortages of gasoline, fuel, and jet fuel.

The world faces a “much bigger” energy crisis than the one of the 1970s, the Executive Director of the International Energy Agency (IEA), Fatih Birol, told German daily Der Spiegel in an interview published on Tuesday.

“Back then it was just about oil,” Birol told the news outlet. “Now we have an oil crisis, a gas crisis and an electricity crisis simultaneously,” said the head of the international agency created after the 1970s shock of the Arab oil embargo.

The energy crisis started in the autumn of last year, but the Russian invasion of Ukraine made it much worse as the markets fear disruption to energy supply out of Russia, while Western governments are imposing increasingly restrictive sanctions on Moscow over the war in Ukraine.

The EU agreed late on Monday to ban most of the imports of Russian oil, leaving pipeline supply exempted from the embargo, for now. This will further tighten already tight crude and product markets.

The world, especially Europe, could face a summer of shortages of gasoline, fuel, and jet fuel, the IEA’s Birol told Der Spiegel.

Fuel demand is set to rise as the main holiday season in Europe and the United States begins, Birol added.

Upended crude oil flows add to reduced global refinery capacity resulting in low inventories of products, including in the United States.

Refinery capacity for supply, globally and in the U.S, that is now a few million barrels per day lower than it was before the pandemic.

The world has a major crude oil problem; expect conflict ahead

May 1, 2022

The world has a major crude oil problem; expect conflict ahead

Media outlets tend to make it sound as if all our economic problems are temporary problems, related to Russia’s invasion of Ukraine. In fact, world crude oil production has been falling behind needed levels since 2019. This problem, by itself, encourages the world economy to contract in unexpected ways, including in the form of economic lockdowns and aggression between countries. This crude oil shortfall seems likely to become greater in the years ahead, pushing the world economy toward conflict and the elimination of inefficient players.

To me, crude oil production is of particular importance because this form of oil is especially useful. With refining, it can operate tractors used to cultivate crops, and it can operate trucks to bring food to stores to sell. With refining, it can be used to make jet fuel. It can also be refined to make fuel for earth moving equipment used in road building. In recent years, it has become common to publish “all liquids” amounts, which include liquid fuels such as ethanol and natural gas liquids. These fuels have uses when energy density is not important, but they do not operate the heavy machinery needed to maintain today’s economy.

In this post, I provide an overview of the crude oil situation as I see it. In my analysis, I utilize crude oil production data by the US Energy Information Agency (EIA) that has only recently become available for the full year of 2021. In some exhibits, I also make estimates for the first quarter of 2022 based on preliminary information for this period.

[1] World crude oil production grew marginally in 2021.

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IEA calls for driving restrictions and air travel curbs to reduce oil demand

March 19, 2022

IEA calls for driving restrictions and air travel curbs to reduce oil demand

Energy agency warns 2.5mn barrels a day of Russian oil exports could cease from next month

The International Energy Agency has called for member countries to adopt “emergency measures” to cut oil demand in the wake of Russia’s invasion of Ukraine, including driving restrictions, lower speed limits and curbs on air travel.

Fatih Birol, head of the energy watchdog, on Friday warned that such steps might be necessary because “oil markets are in an emergency situation . . . and it may get worse”.

As much as 2.5mn barrels a day of Russian oil exports could cease from next month due to the impact of the war and consumer boycotts of Russian crude, he said. Russia is one of the world’s largest oil producers. The IEA has proposed 10 measures to reduce oil demand by 2.7m b/d within the next four months, which it said would help balance potential loss from the Russian market. “As a result of Russia’s appalling aggression against Ukraine, the world may well be facing its biggest oil supply shock in decades,” Birol said. He urged IEA member countries — which include many of the world’s largest energy consumers such as the US, Japan and Germany — to cut demand now, “to avoid the risk of a crippling oil crunch”.

The measures include cutting speed limits on highways by 10kph, which would save 430,000 b/d, reducing business air travel and taking trains instead of planes where possible.

Working from home three days a week would also help cut oil demand, along with making public transport cheaper or even free. Many of the proposals would cut down on driving, including banning private cars from cities on Sundays and limiting private car access to roads in large cities.

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Oilfield Approval Off Newfoundland Coast Would Undercut Climate Commitments, Harm Biodiversity, Experts Warn

February 20, 2022

Oilfield Approval Off Newfoundland Coast Would Undercut Climate Commitments, Harm Biodiversity, Experts Warn

U.S. Orders Containment, Cleanup for 14-Year Gulf of Mexico Oil Spill

Berardo62/flickr

Nuclear Power Is No Solution For the World’s Energy Problems

February 18, 2022

NUCLEAR POWER IS NO SOLUTION FOR THE WORLD’S ENERGY PROBLEMS

Nuclear power is no solution to the world’s energy problems. Not even close.

It’s important for electric power but electric power is not even 40% of the world’s energy supply—nor is it expected to increase much over the next 30 years.

IEA projects that nuclear power will account for only 5.5% of world energy supply in 2050 (Figure 1). That’s an increase of only 0.5% from 2020.

Figure 1. IEA most-likely scenario is for nuclear to account for 5.5% of world energy supply in 2050—an increase of 0.5% from 2020. Source: IEA & Labyrinth Consulting Services, Inc.

Nuclear power has limited application beyond electric power generation and some heating capability. Yet the outlook is not much better for nuclear to increase as a major source of electric power either. IEA’s most-likely scenario is for nuclear to account for only 12.5% of electric power supply in 2050 (Figure 2).

Figure 2. IEA most-likely scenario is for nuclear to account for 12.5% of electric power supply in 2050. Source: IEA & Labyrinth Consulting Services, Inc.

Electric power currently accounts for about 39% of world energy supply (Figure 3). IEA estimates that it will only increase to about 41% by 2050.

Figure 3. Electric power will increase from 39% to 41% of world energy supply by 2050. Source: IEA & Labyrinth Consulting Services, Inc.

EIA’s International Energy Outlook 2021 is largely in agreement with IEA’s assessment of both electric and nuclear power. Unlike IEA, however, EIA provides data to account for the considerable energy losses during power generation, transmission and distribution. The losses amounted to 64% in 2020 (Table 1).

Table 1. EIA electric and nuclear net power to the electric grid and energy losses. Source: EIA and Labyrinth Consulting Services, Inc.

When losses are included, net electric power to the grid is expected to increase from 19% in 2020 to 28% in 2050 (Figure 4) instead of 41% in IEA’s evaluation shown above in Figure 3.

…click on the above link to read the rest of the article…

Peak oil is here!

February 2, 2022

Peak oil is here!

Preface. Peak oil is here! The global production of crude oil happened in November of 2018 (EIA 2020), and has declined for four years, enough time to officially declare global peak oil production. Conventional crude oil production leveled off in 2005, and peaked in 2008 at 69.5 million barrels per day (mb/d) according to Europe’s International Energy Agency (IEA 2018 p45). The U.S. Energy Information Agency shows global peak crude oil production in 2018 at 82.9 mb/d because they included unconventional tight oil, oil sands, and deep-sea oil. Below is a chart created by Tad Patzek from EIA data:

Nor will we ever reach “peak oil demand” because heavy-duty transportation (trucks, locomotives, ships), manufacturing, the 500,000 products made out of petroleum, and natural gas fertilizer that keeps 4 billion of us are utterly dependent on fossil fuels. Even the electric grid depends on fossil fuels to provide two-thirds of the energy, and nearly all of the energy to construct ReBuildables (they are NOT renewable). This is explained in great detail in my latest book “Life After Fossil Fuels: A Reality Check on Alternative Energy” and previous book” When Trucks Stop Running: Energy and the Future of Transportation”

The IEA forecast a supply crunch by 2025 in their rosy and very unrealistic New Policies scenario, which assumes greater efficiencies and alternative fuels and electric cars are adopted (Figure 1). By 2025, with 81% of global oil declining at up to 8% percent a year (Fustier 2016, IEA 2018), 34 mb/d of new output will be needed, and 54 mb/d if facilities aren’t maintained. That is more than three times Saudi Arabian production. The 15 mb/d of predicted U.S. shale isn’t likely — indeed, the IEA shows it declining in the mid-2020s (IEA 2018 Table 3.1).

…click on the above link to read the rest of the article…

Germany To Become Net Power Importer For The First Time Since 2002

January 15, 2022

Germany To Become Net Power Importer For The First Time Since 2002

Europe’s largest economy, Germany, is expected to become a net importer of electricity in 2023 for the first time since 2002 due to retiring coal plants and the nuclear phase-out, the International Energy Agency (IEA) said on Friday.

Germany plans to switch off all its remaining nuclear power generators by the end of 2022, while it will also retire a large portion of its coal-fired capacity fleet between 2022 and 2024.

Recently, the country has said it would aim to phase out coal by 2030 – eight years ahead of earlier plans. The coal exit for Germany could be more difficult than in other European economies, because the country plans to phase out nuclear power generation by the end of this year.

The new coalition’s agreement in Germany includes, for example, the accelerated phase-out of coal—if possible by 2030—and the faster expansion of renewable energy, the IEA said in its Electricity Market Report – January 2022 published today.

Germany’s remaining nuclear capacity, which provided about 12 percent of total generation in 2021, is due to be phased out by the end of 2022. At the same time, some coal capacity is due to be retired according to the approved coal phase-out plans. Coal capacity is set to decline from 35 GW at the end of 2020 to 30 GW in 2022 and less than 26 GW in 2024, the IEA noted.

The timing of Germany’s nuclear phase-out and accelerated coal phase-out coincides with the ongoing energy crisis in Europe, where natural gas and power prices have jumped to record amid insufficient supply of gas and uneven wind power generation in northwest Europe, including in Germany.

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Global Coal Power Demand On Track For Record As Green Energy Transition Crumbles

December 17, 2021

Global Coal Power Demand On Track For Record As Green Energy Transition Crumbles

There’s no question that the ‘greenification’ of the global economy has returned many industrial countries to coal in 2021. New data from the International Energy Agency (IEA) shows that the amount of electricity generated worldwide from coal is on track to hit a record high.

IEA’s Coal 2021 report says global power generation from coal soared 9% in 2021 to an all-time high of 10,350 terawatt-hours. The rebound comes amid a rash of green policies and stupid political choices, such as decommissioning oil and gas-fired power plants and fossil fuel exploitation projects, ironically resulting in an energy crisis worldwide.

“The rebound is being driven by this year’s rapid economic recovery, which has pushed up electricity demand much faster than low-carbon supplies can keep up,” IEA said. Also, the dramatic rise in natural gas prices forced power plants to source coal as a cheaper alternative.

Overall coal demand, including energy-intensive industries such as cement and steel, is expected to increase 6% this year. Though it shouldn’t surpass the record consumption levels of 2013/2014, IEA said. It added coal demand could hit a new record high in 2022.

IEA Executive Director Fatih Birol said the increase was “a worrying sign of how far off track the world is in its efforts to put emissions into decline towards net zero.”

The IEA said that China is responsible for half of the coal-fired power generation worldwide and will increase by 9% year-on-year increase.

“The pledges to reach net zero emissions made by many countries, including China and India, should have very strong implications for coal – but these are not yet visible in our near-term forecast, reflecting the major gap between ambitions and action,” said Keisuke Sadamori, Director of Energy Markets and Security at the IEA.

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Here’s the Fracking Truth About America’s Last Fossil-Fueled Hurrah

December 9, 2021

Here’s the Fracking Truth About America’s Last Fossil-Fueled Hurrah

In order to recover the abundance of these fuels that the EIA claims will be there for the taking, between now and 2050 the industry will need to drill something on the order of 700,000 new wells at a total cost of over $5 trillion.

As global leaders struggle to tackle the climate crisis, and as ordinary people worldwide are increasingly whiplashed by high fuel costs, the US government is promising policymakers, industrialists, and investors that there will be decades of growing supplies of fracked oil and natural gas. However, an independent earth scientist with 32 years of experience with the Geological Service of Canada is using the industry’s and government’s own data to show why that’s a dangerous fallacy.

Hughes has just issued his latest, Shale Reality Check 2021, and it provides an invaluable, comprehensive, yet detailed view of the past, present, and future of tight oil and shale gas.

During the past decade, Post Carbon Institute has published a series of reports by earth scientist J. David Hughes on the status of US shale gas and tight oil resources and production (i.e. natural gas and oil that are extracted using hydraulic fracturing, also known as fracking). These reports are remarkable for their technical depth and thoroughness, and are frequently referenced by climate activists, energy investors, and industry insiders. Hughes has provided a necessary counter to the US Energy Information Administration’s (EIA) typically over-optimistic projections, which often echo hyperbolic claims by the industry. Indeed, Hughes’s reports, which address forecasts contained in the widely-cited EIA Annual Energy Outlook, may justify calling him “the people’s shadow EIA.” Hughes has just issued his latest, Shale Reality Check 2021, and it provides an invaluable, comprehensive, yet detailed view of the past, present, and future of tight oil and shale gas.

…click on the above link to read the rest of the article…

One Bank Crunches The Numbers On Oil Supply/Demand Dynamics, Reaches A Shocking Conclusion

October 20, 2021

One Bank Crunches The Numbers On Oil Supply/Demand Dynamics, Reaches A Shocking Conclusion

With oil prices surging amid a broader global energy crisis, many are hoping that this particular price spike is truly transitory as incremental supply – whether from OPEC+ or shale – kicks in and resets the market lower.

But maybe not so fast: as Morgan Stanley’s chief commodity strategist Martijn Rats writes, on current trends, global oil supply is likely to peak even earlier than demand. And as prices search for the level at which demand erosion kicks in, he is increasing his Q1 2022 Brent forecast to $95/bbl, while also lifting his long-term forecast from $60 to $70/bbl.

As hinted by the bold text above, the note from the Morgan Stanley commodity strategist (available to pro zero hedge subs in the usual place) focuses on arguably the two key drivers in the oil market: peak demand and peak supply. As Rats explains, while tThe planet puts boundaries on the amount of carbon that can safely be emitted – and therefore, oil consumption needs to peak – this is such a well-telegraphed prospect that it has solicited its own counter-response already: low investment (especially in conjunction with ESG pressures to curb fossil fuels). The question has therefore become: which will actually peak first? Supply? Or demand?

According to MS, the second scenario would materialize if demand were to decline very sharply, say along the trajectory of the IEA’s ‘Net Zero by 2050’ study.

This assumes that oil demand falls by ~29% between 2019 and 2030, driven by technological improvements, a change in end-user behaviour and other factors (recent event have shown just how much of a pipe dream this is). The sum of all oil future oil demand in this scenario amounts to ~700-900 bn barrels, roughly half the estimate of proved oil reserves in the BP Statistical Review of World Energy of 1.7 trillion barrels.

…click on the above link to read the rest of the article…

Europe’s Soaring Natural Gas Prices To Persist For “Weeks To Come,” IEA Warns

September 18, 2021

Europe’s Soaring Natural Gas Prices To Persist For “Weeks To Come,” IEA Warns

IEA Executive Director Fatih Birol delivered some unwelcoming news for commercial and residential natural gas buyers during an interview on Bloomberg TV Friday morning. He said European natural gas prices might push higher in the coming weeks as the heating season begins.

“We may still see gas prices a bit high for the next days and weeks to come,” Birol said in the interview. The “most important factor here will be in the short term — how the winter conditions will be.”

He said if the European winter season is “harsh.” This would suggest natgas prices may remain elevated and or even accelerate higher. So far, European gas prices have more than tripled this year.

Birol said, “very strong demand” due to the economic rebound has been a driver in higher natgas prices. There’s also the issue of declining flows from Russia, which have failed to replenish European stockpiles ahead of the heating season.

Natural gas supplies are below average for this time of year.

For Central Europe, maximum average temperatures have already slipped from around 80F in mid-August to about 70F. By the end of the month, maximum high temps are slated to drop between the 55F to 60F range. This means the heating season is beginning.

Another way to quantify increasing heating demand in Central Europe is through heating degree days, which measure the energy needed to heat a building. The index rises when daily average temperatures are below 65F.

Uncertainty looms over the replenishment of European natgas supplies as colder weather has arrived. Russia’s Nord Stream 2 pipeline to Germany could be Europe’s saving grace, but regulators could take months to certify before taking shipments.

…click on the above link to read the rest of the article…

IEA, OPEC Slash Oil Demand Outlook Amid “Headwinds” From Spreading Delta Variant

August 12, 2021

IEA, OPEC Slash Oil Demand Outlook Amid “Headwinds” From Spreading Delta Variant

The International Energy Agency and Goldman Sachs are both warning that global oil demand is facing headwinds due to the spread of the COVID-19 Delta variant: “Growth for the second half of 2021 has been downgraded more sharply, as new COVID-19 restrictions imposed in several major oil-consuming countries, particularly in Asia, look set to reduce mobility and oil use,” the IEA said in its monthly report.

“We now estimate that demand fell in July as the rapid spread of the COVID-19 Delta variant undermined deliveries in China, Indonesia, and other parts of Asia,” the IEA said.

Since July, NYMEX West Texas Intermediate (WTI) futures have fallen at least 10% as the Delta variant spreads worldwide. Traders are worried renewed lockdowns and or stricter social distancing measures in China, Europe, and the US may continue to weigh on oil demand and result in lower prices.

The “recent rally has lost steam on concerns that a surge in Covid-19 cases from the Delta variant could derail the recovery just as more barrels hit the market,” the IEA said.

The agency said global oil demand “abruptly reversed course” last month, after surging by 3.8 million barrels a day in June, adding that it lowered consumption estimates for the second half of this year by 550,000 barrels a day.

However, the IEA projects in the last quarter of this year, the global economic recovery should regain steam as world fuel should reach an average of 98.9 million barrels a day.

Similar to IEA’s forecast is a report from Goldman Sachs’ Damien Courvalin, who told clients that “transient demand headwinds” have developed and there is “growing evidence of structural supply tailwinds.”

Courvalin already lowered his emerging market demand expectations last month due to the Delta spread but at the time “omitted” China from the downgrade.

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