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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.

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.

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

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.

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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.

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

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.

…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.

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

A bombshell report from closely followed International Energy Agency

July 4, 2021

A bombshell report from closely followed International Energy Agency

Members of the IEA discuss climate change — (Photo: Courtesy of IEA)

Climate researchers and policy experts around the world are singing praise of a study just released by the stodgy International Energy Administration in Paris. “Quite amazing,” said one. “Heartening,” said another. A third one called it, “one of the most important climate analyses ever published.”

The report offers a blueprint of how the global community might still manage to accomplish the 2015 Paris Agreement’s goal of preventing the planet from warming more than 1.5°C (2.7°F) above the preindustrial temperature. It requires a complete halt to prospecting for new fossil fuels and a breathtaking acceleration of wind and solar energy development. Of course, even analysts gobsmacked by the study have tossed some brickbats. Paul Hawken, editor of Drawdown, his own plan for combating climate change, acidly asked, “Where were [they] for the last 20 years?” He and others remind us that IEA had soft-peddled renewable energy long after it could well have supported it. Still, climate insiders predict the report will help speed up the replacement fossil fuel with wind, solar and other climate-friendly energy.

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Since it was founded in 1974, IEA and its cadre of highly regarded analysts have focused almost exclusively on fossil fuels. Industrialized nations – including the U.S., Japan, Turkey, Canada, and a dozen Western European countries, formed the organization after the oil crisis of the early 1970s. Peaking oil supplies in major producing countries, and fears about the Arab Oil Embargo of 1973, had disrupted oil supplies. Fuel prices soared. To ensure future energy security, the IEA founding nations needed credible statistics on supplies and uses of energy.

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

The Unmistakable Impact Of The IEA’s ‘Fantasy’ Report

June 20, 2021

The Unmistakable Impact Of The IEA’s ‘Fantasy’ Report

In an effort to adapt to Trudeau’s recent green policies and owing to pressure from the International Energy Agency (IEA), Canadian oil sand producers have formed an alliance to achieve net-zero emissions by 2050. This would see a huge shift from current practices as, at present, oil sands producers extract some of the most carbon-intense crude oil. However, as the cost of carbon increases to meet environmental objectives in Canada, oil companies face increasing pressure to shift practices towards achieving net-zero.

The alliance will include Canadian Natural Resources (-1.77%), Cenovus Energy (-0.10%), Imperial Oil (-1.91%), MEG Energy, and Suncor Energy (-2.58%), which together operate around 90 percent of the country’s oil sands production. They will be working alongside both the federal and Alberta governments to make operations less carbon-intensive.

The companies are expected to invest in several areas in order to reduce their carbon emissions including, carbon capture and storage (CCS) technology, repurposing waste into hydrogen energy, fuel switching, as well as innovative technologies such as direct air capture and small modular nuclear reactors.

The alliance aims to maintain its oil production, which will contribute an estimated $3 trillion to Canada’s GDP over the next 30 years while creating jobs and advancing clean energy practices.

Significant actions towards achieving net-zero have been taken across the oil and gas sector over the last month, as companies have felt the mounting pressure from governments, regulators, and stakeholder activists.

Last month, an activist investor managed to oust two Exxon (-2.56%) directors from its board in a push for a greater response to climate change. The small hedge fund, Engine No. 1, demonstrated its dissatisfaction with the poor financial performance of Exxon during the pandemic, as well as its limited effort to introduce climate change initiatives.

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

Oil Markets Baffled As The IEA Calls For More Production

June 15, 2021

Oil Markets Baffled As The IEA Calls For More Production

In its latest Monthly Oil Report, the IEA called on OPEC+ to increase production in order to counter higher demand in 2022.

The agency claimed that, based on current global economic growth expectations, demand for crude oil and petroleum products will be reaching pre-COVID levels by 2022. The Paris-based energy watchdog, which has come under fire after its shocking Net-Zero by 2050 report called for no more investments in oil and gas, stated that “OPEC+ needs to open the taps to keep the world oil markets adequately supplied”. At the same time, the IEA has also reiterated that market realities are at odds with its proposed strategies to reach net zero-emission levels by 2050. Criticism will likely be harsh for the “former” leading oil and gas agency, as the agency has called upon the world to double down on renewables and commit to the Paris Agreement while admitting that the global economy continues to demand vast amounts of hydrocarbons.

The relevance of some of these reports will have to be reassessed, especially when looking at the high-profile “Golden Age of Gas” report and the “Net Zero by 2050” roadmap. When asked what needs to be done, the IEA indicated that the call on OPEC+ will be very strong, as the international oil and gas producers group will need to increase crude oil supply to the market by 1.4 million bpd in 2022. Which would mean a significant increase over its current July 2021-March 2022 targets.

The demand expectations of the IEA fall in line with some others, as OPEC, the EIA, and independent consultants, have stated before that demand for oil is going to increase substantially. Some even expect volumes in 2022 to be higher than 2019 levels, even as prices are increasing substantially.

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

Saudi Arabia And Russia Warn Of Major Oil Supply Crunch

June 11, 2021

Saudi Arabia And Russia Warn Of Major Oil Supply Crunch

The debate about emissions reduction and the path forward for oil companies moved to a whole new level since the International Energy Agency (IEA) dropped last month the bombshell report suggesting no new investment in oil and gas would be needed if the world is to reach net-zero emissions by 2050.

Environmentalists and activist shareholders intensified pressure on large public oil firms to align their businesses with a net-zero scenario, while some of the international majors acknowledged they have a part to play in the energy transition.

But the leaders of the OPEC+ group, Saudi Arabia and Russia, will continue to invest in oil and gas because, they say, the world will still need those resources for decades, despite the growing push against fossil fuels and investment in new supply.

Chronic underinvestment in oil and gas supply while operational oilfields mature would lead to a supply crunch and a spike in oil prices down the road, analysts and Big Oil top executives such as TotalEnergies’ Patrick Pouyanné say.

While international oil majors were somewhat more contained in their views on the IEA report—those that commented on it anyway—Saudi Arabia and Russia didn’t beat around the bush and said outright that the suggestion of no new oil and gas investments ever is “unrealistic,” “simplistic,” and taken out of a “La La Land” script.

BP’s chief executive Bernard Looney wrote that forecasts of much lower investments in oil and gas were “in many ways consistent with our approach – to reduce our oil and gas production by 40% in the next decade.” Eni’s CEO Claudio Descalzi commented on Looney’s post that “We are now at a historic turning point, where each of us needs to play an active role.”

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

Not Just Energy, but Everything.

May 28, 2021

Not Just Energy, but Everything.

The criticality of the global energy situation is emphasised by the release, on schedule (18-5-21), of the eagerly awaited “Net Zero by 2050” roadmap (NZE) from the International Energy Agency (IEA).

Not only does this document delineate the gargantuan quantities of energy currently used by humans on Earth, mainly from the fossil fuels, but the enormity of change necessary to bring their emissions to net zero by 2050. [It is thought this would give a 50:50 chance of limiting the rise in global average temperature to 1.5°C above pre-industrial levels by 2100].

Although NZE is a guide, not a mandate, it fully identifies the steepness of the terrain that must be negotiated, with no new oil or gas fields to be approved, as of 2021. Instead, oil and gas producers would concentrate on output from existing fields, and in reducing any associated emissions. New coal mines and additional unabated coal fired power plants are also ruled out.

Given that various governments, including that of the UK, who commissioned the report, are set to endorse various new fossil fuel projects, and oil companies continue to invest in new production, this particular criterion may prove difficult to meet.

The publication of the roadmap is timed in anticipation of the 26th Conference of the Parties (COP26) of the United Nations Climate Change Framework Convention in Glasgow in November, whose high-level discussions it aims to inform. Even if the climate pledges made to date by the world’s governments were entirely fulfilled, the resulting reduction in global energy-related CO2 emissions would be insufficient to bring them to net zero by 2050; hence, more drastic and urgent action is essential.

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

No new oil, gas or coal development if world is to reach net zero by 2050, says world energy body

May 23, 2021

No new oil, gas or coal development if world is to reach net zero by 2050, says world energy body

Governments must close gap between net zero rhetoric and reality, says International Energy Agency head

An oil rig in the North Sea. — The UK is licensing new oil and gas fields in the North Sea. Photograph: Jonathan Nackstrand/AFP/Getty Images

Exploitation and development of new oil and gas fields must stop this year and no new coal-fired power stations can be built if the world is to stay within safe limits of global heating and meet the goal of net zero emissions by 2050, the world’s leading energy organisation has said.

In its strongest warning yet on the need to drastically scale back fossil fuels, the International Energy Agency (IEA) also called for no new fossil-fuel cars to be sold beyond 2035, and for global investment in energy to more than double from $2tn (£1.42tn) a year to $5tn (£3.54tn) The result would not be an economic burden, as some have claimed, but a net benefit to the economy.

Fatih Birol, the IEA’s executive director and one of the world’s foremost energy economists, told the Guardian: “If governments are serious about the climate crisis, there can be no new investments in oil, gas and coal, from now – from this year.”

He said strong new policies were needed from governments around the world: “More and more countries are coming up with net zero commitments, which is very good, but I see a huge and growing gap between the rhetoric [from governments] and the reality.”

The IEA has released its most comprehensive report yet into what is needed to achieve the world’s climate goals, the implications of which will be felt around the world. Few governments intend to halt fossil-fuel exploration. The UK is licensing new oil and gas fields in the North Sea, China is building coal-fired power plants, and oil companies are still investing in new output.

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

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