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DAILY BRIEFING IEA still sees record 2020 oil demand fall but easing lockdowns helping
IEA still sees record 2020 oil demand fall but easing lockdowns helping


IEA still sees record 2020 oil demand fall but easing lockdowns helping

The International Energy Agency (IEA) says it is still expecting a record fall in oil demand in 2020, reports Reuters, but the easing of lockdown measures will reduce the size of the drop. In its monthly report, the IEA forecasts a fall in demand of 8.6m barrels per day (bpd) this year, says the newswire – trimming its estimate by almost 700,000. The reduced drop is down to “stronger-than-expected mobility in some European countries and the US as well as higher Chinese demand as it recovers from the virus outbreak”, Reuters says. The IEA report also says that oil supply will likely fall to a nine-year low this month, notes that Financial Times. Production in May is expected to fall by 12m bpd, the FT says, as a result of supply reductions from the oil-producer group Opec and Russia – known together as “Opec+” – and “massive cuts” from other countries including the US and Canada. The IEA says the cuts from outside Opec+ are “faster than expected”, notes Axios. While the oil output cuts were “welcome”, IEA executive director Fatih Birol said that he “d[id] not think” they were going to be enough to balance the drop in demand, says another Reuters piece. In a conference call, he said: “We are seeing the early signs of a start of recovery, but it is far too early to say we are soon going to reach the rebalancing of the markets, we are just in the beginning of that process.” The IEA report says that the sharp decline in global refining activity has continued into May, reports Reuters, “as refiners face the double whammy of rising crude prices and falling diesel profits”. Although a separate Reuters article also notes that oil processing in China “rebounded in April from a 15-month low in March as refiners cranked up operations to meet renewed fuel demand”. Oil prices rose yesterday on the back of the news of lower global stockpiles, Reuters notes, “though the Brent benchmark was still hovering around $30 a barrel as a weak demand picture curbed gains”.

Elsewhere, BP has called on governments to “press ahead” with commitments to tackle climate change even if they find their budgets under strain in the aftermath of the coronavirus pandemic, reports the FT. Speaking at the FT Global Boardroom online conference, BP’s chief financial officer Brian Gilvary said: “I fear that as countries rebuild their balance sheet we won’t press ahead with the pace that we have to if we’re going to hit the 2C scenario.” He added: “We have got to do the energy transition – this isn’t an option.” Meanwhile, shareholders in Norwegian oil firm Equinor – dominated by the Norwegian government – have rejected all climate resolutions at yesterday’s annual general meeting, reports Reuters. The resolutions included adjusting Equinor’s climate targets in line with the Paris Agreement and stopping oil exploration in vulnerable areas such as the Arctic Barents Sea, the newswire says. The company’s board had proposed rejecting the resolutions, saying Equinor’s strategy already supported “a balanced transition to low carbon society”. Finally, in other oil-related news, the Daily Telegraph reports that the chief executive of Heathrow has said that passengers should pay higher flight taxes if their plane is using traditional fuel compared to sustainable alternatives.

Reuters Read Article
US electricity use to drop by record amount in 2020 due coronavirus

The US Energy Information Administration (EIA) says US electricity consumption will drop by a record 4.6% in 2020 as businesses shut during the coronavirus lockdown, Reuters reports. In its short-term outlook, the EIA projected total US power demand will drop to 3,716bn kilowatt hours (kWh) in 2020 from 3,896bn kWh in 2019, before rising to 3,753bn kWh in 2021, the newswire says. On a daily basis, the EIA says business closures caused weekday power demand in March and April to drop by 9%-13% in the US central region and 11%-14% in New York, the hardest hit state with the most coronavirus cases. Reuters adds: “If power consumption falls as expected in 2020, it would be the first time since 2012 that total demand declines for two years in a row.”

Meanwhile, Politico reports that the pandemic has caused the loss of 600,000 jobs in the US clean energy sector, equivalent to 17% of the sector’s workforce. The report from industry groups finds that California had the largest number of layoffs, at 77,900, while Florida, Georgia, Texas, and Michigan all lost more than 20,000 clean energy jobs each, Politico says. The report “conservatively project[s] that the clean energy sector will lose about a quarter of its workforce or 850,000 jobs by the end of the second quarter if no actions are taken to support the clean energy industry and its workers”. Politico also reports that US Energy Secretary Dan Brouillette downplayed industry concerns that work on new clean energy projects could be disrupted because of President Donald Trump’s executive order to protect the power grid, saying he doesn’t expect “any problems or uncertainty” for developers. Earlier this month, Trump directed the Department of Energy to identify and ban power grid devices from foreign suppliers that could threaten national security, the outlet says, noting that “renewable energy and power storage developers are worried the order’s language is so broad – covering nearly 20 types of equipment – that they may be forced to put projects on hold for fear their components could be banned”. However, in an interview with Politico, Brouillette called some of those concerns “unfounded” and said the order only targets equipment used in large-scale power generation and transmission lines, and not devices like rooftop solar arrays or home batteries on smaller-scale local utility systems.

Elsewhere on the US power sector, E&E News delves into the details of how a change in the rules to the US Environmental Protection Agency (EPA) Clean Air Act could “stymie efforts by future administrations to combat climate change”. It continues: “The White House Office of Management and Budget is reviewing a draft rule that EPA says would improve the consistency and transparency of regulatory cost-benefit analyses under the landmark environmental law used to limit carbon under both the Obama and Trump administrations.” Recent changes to the Affordable Clean Energy (ACE) rule have “swapped the more expansive Obama-era estimate related to global climate damage from CO2 for a steeply discounted figure that looked only at the continental US”, the outlet says. This “more limited methodology” may now appear in the draft Clean Air Act, E&E News says: “The outcome would be that future rules will struggle to justify their compliance costs. That could fuel political opposition if future administrations try to promulgate strong environmental protections, or in some cases make it harder to defend them.”

Reuters Read Article
Methane observing firm eyes UK for key base

The Canadian-based space company GHGSat says it intends to set up a global centre in the UK to analyse the emissions of greenhouse gases, reports BBC News. The firm currently flies the spacecraft making the highest resolution measurements of methane in the atmosphere, the outlet says, and the satellite is the first in a planned network of orbiting observers. The report notes: “The British centre’s job will be to take their data and assess the sources of emissions worldwide. For methane – an extremely potent greenhouse gas – these sources could be oil and gas facilities, agriculture, hydro-electric dams, coal mines and landfills.”

BBC News Read Article
UK proposes extending low-carbon power generation support scheme

The UK government is proposing to extend its support for low-carbon power generation through the “contracts for difference” (CfD) scheme until the end of March 2030, Reuters reports. Under the CfD scheme, “qualifying projects are guaranteed a strike price at which they can sell electricity, and renewable power generators bid for CfD contracts in a round of auctions”, the newswire says. The government has awarded contracts to about 16 gigawatts of new renewable power capacity so far and the next allocation round of contracts is scheduled for 2021. In a consultation document, the government said: “In order to ensure the scheme can continue to support new low carbon electricity projects in the future, the government is also proposing to extend the CfD scheme delivery years until 31 March 2030.” Reuters notes: “The government said higher levels of wind deployment will be needed to meet its 2050 net-zero emissions target. Therefore, it is considering to help floating offshore wind projects get to commercial deployment.”

Reuters via Yahoo Finance Read Article


Coal’s US downfall is a lesson for power markets

Writing for Bloomberg Green, Bloomberg New Energy Finance analyst Nathaniel Bullard discusses “coal and oil’s potentially terminal decline [in the US] alongside the recent rise of renewables such as wind and solar”. Looking back at power generation figures over the past 45 years, Bullard observes: “Nuclear…increased about seven times over from 1975 to the mid-2000s, and has been flat since. Coal peaked in 2007 and has since declined by nearly half. Gas, a resource on par with oil and hydro, has handily passed coal in total generation. Wind power also helped erode coal’s position and has now eclipsed hydro, which has been flat for decades.” Bullard then looks at India, whose power makeup today “looks much like the US did 45 years ago”. He writes: “India’s coal-fired power generation is growing, but it’s not growing per the expectations of planners and builders. The nation’s total coal fleet is at all-time low capacity utilisation.” The drop is down to a mix of reasons, Bullard says, including growing competition from hydropower, wind, and solar and low demand amidst coronavirus lockdown. Quoting Carbon Brief analysis, Bullard says that “India’s emissions recently fell for the first time in decades”. While India is planning to add more coal power in the coming years, Bullard parting note is that “renewables will generate more power than coal by 2050”.

Elsewhere in comment on coal, Reuters columnist Clyde Russell writes that “with much of the world still struggling to contain the new coronavirus and economies devastated by lockdowns, so far the only thing that’s clear is that 2020 is going to be a bad year for new investments and projects”. But now that solar and onshore wind are the “cheapest sources of new-build generation for at least two-thirds of the global population”, they have the “cost edge” over coal, Russell says. While there are plans for new hydropower, solar and wind in Australia, for example, there “are currently no advanced coal-fired power projects in Australia, although the federal government gave A$4.4m to a little-known company to study the feasibility of a new plant in Queensland”, he says. In Australia, Bob Carr – a contributor to the Sydney Morning Herald – says that “while the world looked the other way, corporate giants abandoned coal”. A series of decisions taken by international corporations during April to move away from carbon have “put paid to dreams in Canberra of a new coal-fired plant”, Carr says: “After last month’s shift, nobody will invest in it, nobody will insure it.” And in related coal news, EUobserver reports that a coal-fired power plant in Rotterdam intends to sue the Netherlands over their coal-exit strategy under the Energy Charter Treaty – a controversial international agreement that protects foreign investments in the energy sector. Finally, InsideClimate News reports that Great River Energy has “announced it will close the largest coal-fired power plant in North Dakota and replace it with renewable sources, an almost complete overhaul of the way the utility provides electricity to the smaller rural electric cooperatives it serves”.

Nathaniel Bullard, Bloomberg Green Read Article


Model simulations of atmospheric methane (1997–2016) and their evaluation using NOAA and AGAGE surface and IAGOS-CARIBIC aircraft observations

Methane (CH4) is an important greenhouse gas, and its atmospheric budget is determined by interacting sources and sinks in a dynamic global environment. Methane observations indicate that after almost a decade of stagnation, from 2006, a sudden and continuing global mixing ratio increase took place. This study applied a general circulation model to simulate the global atmospheric budget, variability, and trends of methane for the period 1997–2016. The CH4 growth that started in 2007 and continued almost linearly through 2013 was investigated, exploring the contributions by four potential causes, namely biogenic emissions from tropical wetlands, from agriculture including ruminant animals, and from rice cultivation, and anthropogenic emissions (fossil fuel sources, e.g., shale gas fracking) in North America. The study found that an increase in emissions from shale gas (7.67 Tg per year), rice cultivation (7.15 Tg per year), and tropical wetlands (0.58 Tg per year) for the period 2006–2013 leads to the best agreement between model results and observations.

Atmospheric Chemistry and Physics Read Article
Climate change strategic narratives in the United Kingdom: Emergency, Extinction, Effectiveness

Achieving policy, business and behaviour change necessary to mitigate climate change is one of the most formidable challenges of the twenty-first century. Increasingly, researchers have argued that communicating purposively designed stories – ‘strategic narratives’ – may be effective in building support for the policy measures necessary to limit anthropogenic warming to 2C above pre-industrial levels. Recently, following the release of the IPCC’s 1.5C special report, novel dynamics have emerged in climate strategic communication, with the emergence of new narrators, including youth climate strikers, such as Greta Thunberg, and Extinction Rebellion. This paper analyses five strategic narratives that became prominent in the United Kingdom following the IPCC report. Contrary to some previous calls for all-encompassing strategic narratives communicated top-down from governmental organisations, the most notable strategic narratives emerged from civil society. The authors call for greater attention towards the interaction of different narrators in climate change strategic communication, to address whether a broader range of narrators constrains or enables coordinated action to mitigate climate change.

Energy Research & Social Science Read Article


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