Super-Spiked 07.22.23 | FAQ: Peak demand? Peak Permian? What About Africa?.

NAVIGATING THE ENERGY CRISIS ERA

Question: Isn't the peaking of oil demand inevitable?

It is now well documented that the energy sector is still trying to shake off memories of last decade's poor profitability and the resulting diminution of investor interest and appetite for new CAPEX. We recognize that the period of structurally improved ROCE has not yet been long enough to give investors confidence the 2020s will not be a repeat of the 2010s. The other big overhang on the sector has been broad-based calls from leading Western institutions that have forecast a near-term peak/plateau/decline in oil demand.

The International Energy Agency’s (IEA) infamous May 2021 Net Zero By 2050 report showed a scenario where global oil demand peaked in 2019, pre-COVID. Other macro forecasters have expected oil demand to peak somewhere in the mid-2020s. It is noteworthy that despite a generally choppy global GDP environment—particularly in the largest oil consuming regions of China, Europe, and the United States—global oil demand is on-track to obliterate the doom-sayers.
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July 3, 2023, 9:00 AM CST - Oil and Gas growing demand and supply while CA tries to eliminate oil and gas
Sean Wallentine..

Lee Ying Shan reported that, "Oil and gas will continue to be leading sources of energy for decades to come on the back of a lagging energy transition, major industry players said at the Energy Asia conference held in Malaysia's capital Kuala Lumpur this week." So, while California policymakers continue to press forward with eradicating all production and usage of fossil fuels,

most of the world's population, which is in Asia, is planning to increase production and use of fossil fuels. California's leaders continue to claim they are "leading the world" on climate mitigation by, among other things, shutting down oil production. Yet, no other states in America are following California's lead, let alone the rest of the world. California is going backwards, not transitioning forward.

In fact, what was highlighted at Energy Asia was that Asia is planning to increase oil exploration and production due to future increase demands, including expanding refinery capacity. The California Legislature is going backwards. Refineries are shutting their doors and the state is adopting arbitrary and unscientific "setbacks" falsely claiming they are protecting peoples' health. Yet, Californians demand more oil and natural gas in 2023 than ever before.

While the rest of the world is moving forward with an all-of-the-above approach to energy and an energy transition, California is stumbling and bumbling its way into a manufactured energy crisis in the name of saving a world from climate change that is more interested is adaption and opportunity than being saved from fossil fuels.

"We think the biggest realization that should come out of this conference ... is oil and gas are needed for decades to come," said John Hess, CEO of U.S. oil company Hess Corporation. "Energy transition is going to take a lot longer, it's going to cost a lot more money and need new technologies that don't even exist today," he continued.

Asia will continue to spur the demand for oil and gas, as the region's growth is set to overtake the U.S. and Europe by the end of the year. "This is the region [Asia] where the growth in energy demand will be, and more to come," S&P Global's Vice Chairman Dan Yergin said at the energy conference. He said Southeast Asia's population alone is 50% greater than the European Union's.

California policymakers would do well to listen closely to what the rest of the world is planning regarding fossil fuels, and particularly Asia. It is not possible to "save the planet" by stopping oil production in California alone, especially when Asia is going in the opposite direction.

If California leaders want to continue bragging about the state being the 5th largest economy in the world, they should start acting like they know how to run the 5th largest economy in the world from a global perspective. And that starts with keeping local oil production high to meet high demand for crude oil in California.

May 10, 2023, 9:00 AM CST - One Medium-Size Oil Platform vs. a Giant Wind Farm
By Harvest Petroleum, Inc.

Both installations would produce approximately 12 billion kilowatt hours of energy annually — enough electricity for 2 million European homes or one million U.S. homes annually.

One oil platform produces approximately 20,000 barrels of oil per day, and is the size of one football field.

A comparable windfarm with minimum batterybackup would require 146 Giant GE Haliade-X 12-Megawatt Wind Turbines, covering 110 square miles of ocean.

The all-in costs for both energy sources for installation, maintenance, and the daily cost of producing the energy over 10 years would be as follows:

• Oil Platform: $3.5 Billion
• Wind Farm: $128 Billion
Read more...

Aug 01, 2022, 5:00 PM CDT - How China Could Send LNG Prices Into The Stratosphere
By Irina Slav - OilPrice.com
*Six years ago, China suffered a severe natural gas shortage and has since been very careful to ensure it has as much gas as it needs before winter.
*One of the few things keeping a lid on natural gas prices this year has been a significant reduction in Chinese LNG imports.
*If China has a colder than expected winter or if there is a change in its Covid strategy, then global LNG markets are sure to get even tighter. Read more...

October 22, 2022 - 5 Trends Shaping the Future of Energy. - Alex Epstein.
Today I gave a 90-minute presentation + Q&A to a group of executives interested in my perspective on the future of energy. I focused on 5 trends shaping the future of energy that I believe most commentators underestimate or overlook. Read more...

August 2, 2022 - The U.S. Energy Information Administration predicts that the global oil surplus will decline from 3.05 million barrels per day this year to 2.92 million barrels per day in 2023. Read more...

July 27, 2022 - California's oil and gas workers send warning to states about Newsom's devastating energy policies. California Globe. Read more...

June 30, 2022 -The State of California consumes 1.8 million barrels of oil per day, yet the Sacramento State Assembly continues to push green initiatives at $6.00+ per gallon gas in the State.

June 10, 2022 - The world must brace itself for a further surge in oil prices. Financial Times

JPMorgan"s chief executive Jamie Dimon thinks oil prices could surge to $175 a barrel later this year. Jeremy Weir, the head of commodity trader Trafigura, says oil could go "parabolic". Energy Aspects, a consultancy with clients stretching from hedge funds to state energy companies, says we are facing "perhaps the most bullish oil market there ever has been". Goldman Sachs thinks oil prices will "average" $140 a barrel in the third quarter of this year. Read more...

Oct. 19, 2020 - EIA: Natural Gas is Poised to be More Competitive Than Renewables in China

The U.S. Energy Information Administration recently released its 2020 International Energy Outlook (IEO), delivering some very promising insights into the future of natural gas, driven in particular by demand in Asia. As noted in the report, Asian markets, deprived from local natural gas resources, have a gargantuan need for the affordable and popular energy-source, in order to achieve country-based energy transition targets. Just last year, almost 70 percent of the total global LNG exports were shipped to Asia, with China becoming the largest natural gas importer in 2018. Thus, Asia's growing natural gas demand translates into promising expansion opportunities for U.S. natural gas producers. Let's take a closer look into a couple of the outlook's findings. Read more...