Blowout Week 159

This week’s lead story features Germany’ faltering Energiewende. Written by the prominent German economist Heiner Flassbeck, the former Director of Macroeconomics and Development at the UNCTAD in Geneva and a former State Secretary of Finance it challenges “fundamental assumptions of the Energiewende” and states that “a recent period of extremely low solar and wind power generation shows that Germany will never be able to rely on renewable energy, regardless of how much new capacity will be built.”

GWPF: The End Of Germany’s Energiewende?

This winter could go down in history as the event that proved the German energy transition to be unsubstantiated and incapable of becoming a success story.

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Can Hawaii go 100% Renewable?

Hawaii’s Renewables Portfolio Standard commits it to obtaining 100% of its energy from renewables by 2045, and Hawaii proposes to do this by wholesale replacement of fossil fuel generation with solar. This approach is theoretically possible, but only if there is enough energy storage (approximately 10GWh) to match day-night solar fluctuations of over 3GW to a substantially flat ~800MW load curve and if grid stability can be mantained with dominant solar generation. The Renewables Portfolio Standard also covers only electricity generation, which presently supplies only about a third of Hawaii’s energy needs, so even if it’s met Hawaii will still fall well short of its 100% renewable energy target.

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Oil Production Vital Statistics December 2016

Global total liquids production hit yet another record high of 98.24 Mbpd in November led by OPEC and Russia! Libya’s drive to restore production is a significant factor with production up 280,000 bpd from recent lows. The US oil rig count has risen for 32 consecutive weeks and US oil production has stopped falling. Production from the North Sea and Asia are in decline as the past low price and drive to restore profitability works through the system.
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Blowout Week 158

The signatories to the the Paris Climate Agreement, who include just about every country in the world, agree that the world must cut its fossil fuel emissions drastically if global climate catastrophe is to be avoided. Yet according to Exxon’s just-released Energy Outlook (the IEA and EIA outlooks are similar) the world will be burning more fossil fuels in 2040 than it is now. Does this mean that the world is doomed? Or is somebody missing something?

Oil Price: Exxon’s 2040 Outlook: Fossil Fuels Aren’t Going Anywhere

The global energy mix will not look that much different for oil and gas in 2040, according to Exxon Mobil’s recently released 2017 Outlook for Energy: A View to 2040.

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El Hierro end 2016 performance update

Because of generally low wind strengths the Gorona del Viento (GdV) plant achieved only 28.2% renewables generation in November and December 2016. Percent total renewables generation since full operations began in June 2015 stands at 37.7% at the end of 2016, down slightly from 38.7% at the end of October 2016. Renewables generation for the calendar year 2016 was 41.1%. Minor improvements are apparently being made in wind turbine performance but hydro generation remains negligible overall. Data on GdV plant layout, operation and capacities are given in the September 2015 review. Previous posts on GdV are accessible through the El Hierro portal.

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Energy Prices in Europe

A few days ago a link to a UK government report called Quarterly Energy Prices landed in my in box. At the end was a series of interesting charts comparing liquid fuel, natural gas and electricity prices across Europe. This post presents these charts alongside some simple but rather interesting observations.
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Blowout Week 157 – New Year’s Edition

This New Year’s week we feature an important aspect of Europe’s energy supply that often gets ignored. Despite its thorny relations with the EU, Russia continues to supply rapidly increasing amounts of natural gas to Europe. One has to wonder at what point Europe will draw the line and begin to seek alternative and more secure sources of supply. Or maybe Gazprom is in fact Europe’s most secure source , as the Russians claim ….

Vestnik Kavkaza: EU’s gas dependence on Russia hits new record

The share of Gazprom’s gas in the balance of non-CIS countries receiving Russian gas in 2016 reached 33.5%, after (reaching) 31% in 2015.

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Oil Price Scenario for 2017

Every year around this time I make an oil price “forecast” for fun and have a bet with a friend. A year ago my BAU scenario for Brent was $37 for December 2016. The current front month is $55.80.  My friend wagered on $64 leaving $50.50 as the break-even point. It is time to concede defeat and examine why I did so badly?

To cut to the quick, my wag for December 2017 is $60 but we may see $80 some time during the year. Light tight oil (LTO) production has disturbed the historic price-supply dynamic adding uncertainty to predictions.

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Latest El Hierro reservoir images

Rainer Strassburger is back on El Hierro and has downloaded more Gorona del Viento reservoir images on his Cloud site, which is now accessible via the El Hierro portal . Here we take a quick pictorial look at what has changed since he took his last photographs in April. The main changes are a) two flexible pipelines are now delivering water to the Upper Reservoir from the island pipeline network and b) three long graduated poles presumably intended to measure water levels have been installed in the Upper Reservoir, suggesting that GdV may finally be planning to fill it. Otherwise GdV has continued to work with the ~100,000 cu m of water that the reservoirs contained in April.

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Blowout Week 156 – Christmas Eve

This week it’s back to OPEC, which recently agreed to cut its output by 1.2 million bpd in an attempt to increase oil prices supplemented by an additional 0.5 million bpd from Russia + other non-OPEC producers. What does this portend for the oil market? Industry opinion is unanimous. No one knows:

ETF Daily News:  Oil Is Going To $10 Or $90 In 2017, Depending On Who You Ask

In a Reuters poll of 29 analysts and economists carried out after the OPEC deal, Raymond James had the highest 2017 forecast for Brent price, at US$83 per barrel, while the poll saw Brent averaging US$57.01 next year.

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The Bingham Canyon pumped hydro project – by far the world’s largest, but still much too small.

Some of the larger-scale options (pumped hydro, CAES, FLES etc.) presently being considered for storing intermittent renewable energy rely on the existence of holes in the ground, often man-made ones, to make them work. In this post I take as a hypothetical example the world’s biggest man-made hole (the Bingham Canyon Copper Mine, Utah, shown as viewed from space in the inset) and fill it with water from the Great Salt Lake 25km to the north to get an idea of how much untapped hydro storage potential Bingham and other holes like it might offer. I find that Bingham has the potential to store about 3TWh, which would make it by far the largest pumped hydro facility in the world. 3TWh of storage, however, is nowhere near enough to support an all-renewables world, and there just aren’t that many more big man-made holes like Bingham around.

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The State of the Blog and Sponsorship Appeal 2016


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Blowout week 155

This week we kick off with the good news that the Antarctic sea ice area has changed little since the time of Scott and Shackelton. All those who have feared for the worse can breathe a huge sigh of relief. We continue with a number of stories on nuclear power – is it clean, is it dirty or is it even renewable? And then we move onto coal – are we using less or more of it?

Telegraph: Scott-Shackleton logbooks prove antarctic sea ice not shrinking.

Antarctic sea ice had barely changed from where it was 100 years ago, scientists have discovered, after poring over the logbooks of great polar explorers such as Robert Falcon Scott and Ernest Shackleton.

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Solar power on the island of Ta’u, a preliminary appraisal

A 1,400kW(p) solar PV array backed up by 6,000kWh of battery storage and a smart grid has been installed on the island of Ta’u in American Samoa. It’s reported that this system already allows Ta’u to obtain 100% of its electricity from renewable sources for 100% of the time, and this brief review suggests that it will in fact be capable of delivering 100% electricity for almost 100% of the time if and when it reaches full operation. However, the operator Solar Power (recently acquired by Tesla) foresees potential problems in integrating 100% solar energy with the grid and plans on a “phased approach” to identify and resolve them. Consequently the system will not supply 24/365 renewable electricity immediately, and its ability to deliver it in the future will be dependent on whether a grid fed by 100% solar energy can be made to work.

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The Glenmuckloch Pumped Storage Hydro Scheme

Scotland is to get a new pumped storage hydro scheme, not in the Highlands but in the Scottish Borders. With a capacity of 400 MW and an estimated 1.7 GWh of storage this plant can make a meaningful 4 hour contribution to peak generation every day. But wooly arguments made about smoothing intermittent renewables makes it unclear if this commendable strategy is the intended use.

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Blowout week 154

This week we kick off with the controversial appointment of Scott Pruitt to head the US Environment Protection Agency. Else where in the news non-OPEC exporters agree to cut production by 500,000 bpd; Glencore and Qatar buys a stake in Rosneft; Shell moves into Iran; National Grid sells a majority stake in the UK gas transmission system and 9 Yak herders are killed by an avalanche in Tibet to join the lengthening list of those killed by climate change.

Image: Leonardo DiCaprio failed to persuade Donald Trump to appoint Al Gore to lead the EPA 😉 Roger should be back next week.

The Guardian:  Donald Trump picks climate change sceptic Scott Pruitt to lead EPA

Scott Pruitt, attorney general of Oklahoma and a sceptic of climate science, has been chosen by Donald Trump as the next administrator of the Environmental Protection Agency.

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Oil Production Vital Statistics November 2016

In October, global total liquids production hit a new record high of 97.84 Mbpd led by OPEC and Russia! This was caused largely by the scramble to boost production ahead of production cuts with a datum on October 2016. The US rig count continues to rise and US production has stopped falling. The rest of the oil production world outside of OPEC, N America and Russia continues to suffer under the weight of low oil price.

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OPEC Production Data and the Feeble Deal

OPEC largely wrong-footed markets and expectations by announcing their first production cut since the financial crisis of 2008 last week. This sent Brent front month “soaring” toward $55 / bbl. This is certainly good news for producers and at face value bad news for consumers everywhere. But the deal and the way it is structured is far from straight forward. For example there is a 285,000 bpd “typographical error” in the record of Iranian production in October in the OPEC press release, equivalent to about one quarter of the whole feeble deal. This is the stuff of dispute and of feeble deals unwinding.

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Oil and Gas UK 2016 economic report: “a sobering picture”

Guest post by Alan Foum who is a geophysicist with 26 years industry experience with a major operator.  He has a BSc in geology  from Imperial College London, and an MSc in geophysics from Birmingham University.

The 2016 Oil and Gas UK 2016 economic report is a sobering picture of the current state of Britain’s oil and gas industry. The full report is available here . A distillation and commentary on its key points is posted below.
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Blowout week 153

There are two major stories this week. First, the agreement within OPEC to cut production in concert with some non-OPEC countries, notably Russia sent the oil price soaring, but it has so far failed to break resistance at $54. Second, 50% of the 2 GW England-France inter-connector was severed by a dragged anchor during storm Angus.

Roger will be away for a couple of weeks, hence this abridged blowout from Euan. Chart courtesy Oilprice.com.

Bloomberg:  OPEC Confounds Skeptics, Agrees to First Oil Cuts in 8 Years

OPEC confounded its doubters and sent crude oil prices soaring by agreeing to its first production cuts in eight years.

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