Could This Be The Decade Of Green Hydrogen?

By Tsvetana Paraskova - Feb 08, 2020


The pressure on the energy industry to curb carbon emissions while simultaneously meeting growing global demand has drawn attention to alternatives to fossil fuels.

Of those alternatives, renewable energy is already making steady progress in electricity generation capacity, while another source of energy—hydrogen—is also gaining momentum and is being touted as a key fuel in the energy transition.

Hydrogen has the potential to become a key clean fuel source in the future that could help reduce greenhouse gas emissions—this could be the perfect solution to supplying growing amounts of low-carbon fuel and energy.

But not all hydrogen is created equal. There’s the so-called ‘grey’ hydrogen made from coal and natural gas, and this is nearly all the hydrogen currently produced in the world. Hydrogen production from natural gas emits CO2 every year equivalent to the CO2 emissions of the United Kingdom and Indonesia combined.

Then there’s ‘blue’ hydrogen, produced from natural gas with carbon capture and storage (CCS). Oil and gas supermajor BP says that blue hydrogen is currently the lowest-cost source of low carbon hydrogen at scale.

And finally, there’s the zero-emission hydrogen, the so-called ‘green’ hydrogen, produced using renewable energy with water electrolysis.This is the hydrogen of the future and its development is set for a massive uptake in the next decade, enabled by ambitious climate goals and actions across major economies and by the continuously declining costs of renewables, proponents of the green hydrogen say.

Yet, massive investments and unprecedented policy support will be necessary to scale up green hydrogen production and make it cost-efficient.

According to the Hydrogen Council, a global CEO-level advisory body, the continuous scale up of hydrogen production and distribution could lead to a 50-percent decline in costs by 2030 for many hydrogen applications, making green hydrogen competitive with other low-carbon alternatives and, in some cases, even conventional options.

However, US$70 billion of investment will be needed to make hydrogen cost-competitive, the council says.

“Realising this ambitious vision for hydrogen’s role in the future of energy is far from automatic and requires investment above and beyond current commitments,” the Hydrogen Council said in its ‘Path to hydrogen competitiveness’ report last month.

In hydrogen production alone, achieving cost-competitive green hydrogen from electrolysis requires the deployment of aggregated 70 GW of electrolyser capacity, with an implied cumulative funding gap with ‘grey’ hydrogen production of U$20 billion. In transport and in heating for buildings and industry the investments needed are US$30 billion and US$17 billion, respectively, the report notes.

The cost of hydrogen is expected to drop drastically and imminently, and it’s up to policy-makers and investors to jump start this transition now, Hydrogen Council co-chairs Benoît Potier and Euisun Chung wrote last month.

While the US$70-billion investment in making hydrogen competitive looks huge, it is just a fraction of annual global spending on energy, accounting for less than 5 percent of that, Potier and Chung say.

A recent analysis by Wood Makenzie showed that green hydrogen costs could reach parity by 2030 in Australia, Germany, and Japan based on US$30 per megawatt-hour for renewables.

Globally, over US$3.5 billion worth of projects are in the pipeline for commissioning by 2025, WoodMac has estimated.

“Green hydrogen is a clean energy carrier and can decarbonise ‘difficult sectors’ such as steel, cement, chemicals, heating and heavy-duty trucking. It can also tackle the intermittency of renewables by diverting excess supply during the day to produce hydrogen that can be stored for use in the evening when demand is high,” Prakash Sharma, Head of Markets and Transitions in Asia Pacific at Wood Mackenzie, says.

The International Renewable Energy Agency (IRENA) believes that green hydrogen could play a central role in the global energy system and estimates that it could account for 8 percent of global energy consumption by 2050.

“Falling renewable power cost and falling capital cost for electrolyzers is creating an economic case for green hydrogen,” IRENA says.

Declining renewables costs and growing pressure for climate action could help the green hydrogen momentum going, but it will take a lot of investment and policy support to make green hydrogen a scaled-up competitive source of zero-emission energy.

By Tsvetana Paraskova for Oilprice.com

FBI says neo-Nazis pose equal threat to US as Daesh

 Sunday, 09 February 2020 

Police escorted masked members of a white nationalist group on a march through Washington's National Mall on Saturday, February 8, 2020. (Reuters photo)

The rise of violence by neo-Nazi and white supremacists in the US is now as significant a threat to the country as foreign terrorist organizations such as Daesh (ISIL), according to the FBI.

The threat of anti-government and far-right groups has risen to a "national threat priority" for 2020, FBI Director Christopher Wray told the Judiciary Committee of the US House of Representatives.

Racially and ethnically motivated extremists pose a "steady threat of violence and economic harm" to the US, Wray said.

The FBI director said his agency is "most concerned about lone offender attacks" which have "served as the dominant lethal mode" for domestic terror incidents.

In 2019, the FBI made 107 domestic terrorism arrests, on pace with the number of arrests it made for international terrorism.

In the same year, the FBI announced the launch of a Domestic Terrorism-Hate Crimes Fusion Cell, which allows the organization to allocate as much resources to combat domestic terrorism as it does to combat other terror-linked groups.

The US Department of Homeland Security, which oversees the FBI, recently recognized white nationalism as a significant domestic threat.

On Saturday, more than 100 members of a white nationalist group held a rally in Washington.

d members of a white natMaskeionalist group march on Saturday, February 8, 2020. (Photo via news2share.com)

Members of the Patriot Front, dressed in khaki pants and caps, blue jackets and white face masks, shouted "Reclaim America!" and "Life, liberty, victory!" video of the march showed.

In his State of the Union address Tuesday night, President Donald Trump said the US will continue to fight against what he called "radical Islamic terrorism" but did not mention the terror threat fueled by white nationalist and other domestic terror groups.

Since his election, polling has shown Americans wary of Trump when it comes to race. A Pew Research Center poll last year showed 56% of Americans believe Trump has made race relations worse.

Americans gave similarly poor assessments of the president’s impact on specific racial, ethnic and religious minorities. Nearly 6 in 10 considered Trump’s actions to be bad for Hispanics and Muslims, and about half said they were bad for African Americans, according to a February 2018 poll from the AP-NORC Center for Public Affairs Research.

Trump takes credit for quitting Iran deal as ‘most important’ thing he did for Israel

 Wednesday, 29 January 2020

US President Donald Trump admits he quit the Iran nuclear deal for the sake of Israel, asserting that the move was “perhaps the most important” thing he has done for the Zionist regime.

In a joint press conference with Israeli Prime Minister Benjamin Netanyahu in Washington, DC, on Tuesday, Trump enumerated his pro-Israeli moves, branding withdrawal from the internationally backed deal as the most significant thing he has done for the regime.

“As everyone knows I have done a lot for Israel; moving the United States embassy to Jerusalem [al-Quds], recognizing the Golan Heights, and frankly perhaps most importantly, getting out of the terrible Iran nuclear deal,” said the US president to a roaring pro-Israel audience at the White House.

Trump plan for Palestine ‘booster shot' for Netanyahu ‘desperate’ campaign

US President Donald Trump’s so-called peace plan is aimed at saving Netanyahu’s “desperate” campaign, a report suggests.

Pulling the US out of the Iran nuclear agreement in 2018 is has led to more tensions and instability in West Asia.

Trump’s also move originates from his animosity with former President Barrack Obama who was in office, when the Joint Comprehensive Plan of Action (JCPOA) was clinched.

Trump outlines contentious Palestine scheme, says Quds will be Israel’s ‘undivided capital’

Trump repeats his hugely-controversial endorsement of occupied Jerusalem al-Quds as Israel’s “capital” as he outlines his administration’s self-styled Mideast plan.

Trump took credit for quitting the Iran deal and turning his back to other US allies such as Britain, France and Germany, while unveiling his long awaited “peace plan” for the Israeli-Palestinian conflict.

Tehran has joined Palestinian leaders in denouncing the so-called deal of the century, which is blatantly in favor of Tel Aviv and bold in negating Palestinians their legal rights.

Superpowers Face Off For Space Supremacy


One year ago in January, a Chinese robot landed on the dark side of the moon. Since then, the Chang’e 4 probe and the Yutu-2 rover it carried onboard have been busy photographing and scanning minerals, growing yeast, hatching fruit-fly eggs, and cultivating cotton, potato, and rapeseeds in the moon’s low gravity, according to the Daily Beast.

Now, China’s National Space Administration is quietly planning to launch yet another probe into space. Chang’e 5 could blast off as early as this year.

Last year, TMU reported that the Yutu-2 rover came across a strange “gel-like” substance which the Chinese began to study extensively.

The Chinese space agency has continued to work on its Tiangong 3 space station and is planning on testing a new manned spacecraft for deep-space missions. That permanent station will reach orbit aboard the country’s new Long March 5B rocket in the first half of 2020, AFP reported. The mission will not be associated with the International Space Station.

It is worth noting that China and Europe both planned on building a moon base together in a move of “international collaboration” back in 2017. Europe and Russia are also eyeing plans to send a probe to the dark side of the moon to determine if they should build a moon base on the far side of the lunar surface.

And the U.S. hasn’t been quiet when it comes to the space race either with the introduction of Space Force and plans of its own for a joint base with Russia.

For the U.S., this space race to build a moon base is nothing new. A project known as Horizon was supposedly a plan drawn up in the 1950s that seemingly depicts the blueprints for a base on the moon. Project Horizon sought to establish a stationary Army control base on the moon by 1966 but the operation was allegedly shut down and canceled and the idea never materialized further.

It was reported in a joint announcement by NASA and Russia’s Roscosmos State Corporation for Space Activities that the U.S. and Russia wanted to build a “moon base” the same year that Europe and China announced their cooperation. However, the current plan with Russia resembles another previous proposal called the Manned Orbiting Laboratory (MOL) which ironically was suggested during the Cold War. Russia and the U.S. now seek to revive that plan with a base that will orbit the moon similar to how the International Space Station moves around Earth.

The MOL ran from December 1963 until its alleged cancellation in June 1969. Its mission was to use an elite corps of secret U.S. astronauts to gather intelligence on the Soviets during the Cold War.Related: Coronavirus Pushes China Jet Fuel Sales Down 25%

NASA and the Russian space agency Roscosmos stated the partnership was for human exploration of the moon and deep space. Both agencies signed a joint statement on the collaborative effort. It all stemmed from NASA’s “deep-space gateway” concept, a mission architecture designed to send astronauts into lunar orbit by 2020.

“This plan challenges our current capabilities in human spaceflight and will benefit from engagement by multiple countries and U.S. industry,” NASA officials said in a statement at the time.

NASA also had plans leak last year showing that they wanted to develop their own lunar surface base, which is now being threatened by a U.S. House panel.

The status of plans between Russia and the U.S. as well as China and Europe are currently public and either could be canceled for reasons of political tensions or something else before they see the light of day.

“China, the United States, Russia and Europe are all discussing whether to build a research base or a research station on the moon,” Wu Yanhua, deputy chief commander of China’s Lunar Exploration Program said.

The bigger worry isn’t space exploration - it is weaponizing space. The New York Times reported in 2015 that space could be the next war zone, warning about the implications of weaponizing space in an opinion piece literally titled “Preventing A Space War.”

By Zerohedge.com

After Three Record Breaking Years, Is The U.S. Wind Energy Boom Over?
By Irina Slav - Feb 06, 2020  

In 2019, the U.S. wind power industry recorded its third record-breaking installation year in a row, with new wind capacity hitting 9.14 GW. To date, there are another 44 GW under construction or in advanced development. Yet there are clouds on the horizon: competition from gas and solar, and the phase-out of the production tax credit that has driven the industry’s growth until now.

The Energy Information Administration is rather pessimistic about the immediate future of U.S. wind power. In a report from March last year, the agency cautioned that wind power installation additions could slow down in the next few years as the expiry of the PTC leads to higher costs. Another factor that will affect new additions is the fact that the best sites for onshore wind farms are already taken. Yet over the long term, the EIA said it expected wind to regain its popularity because of the continued fall in turbine installation costs.

Some expect the popularity growth to come much earlier. Maxx Chatsko from the Motley Fool, for example, earlier this week wrote in an article that investors may soon begin flocking back to wind after a so-called wind drought appears to have subsided.

In the first half of 2019, Chatsko wrote, electricity produced by onshore wind farms in the United States was just 1.6 percent more than the electricity produced from onshore wind in the first half of 2018. This disappointing number was attributed to what the industry calls lower wind resources, meaning there was less wind blowing where there were wind farms. In the second half of 2019, however, electricity output from onshore wind farms rose by 22.4 percent from a year earlier, signaling what could be the end of the wind drought.

Meanwhile, wind farm developers are in a rush to add as many megawatts of new capacity as they can before the production tax credit expires at the end of this year. In fact, the EIA said last month that wind installations will dominate new power generation capacity additions this year as a whole. Wind and solar together will account for a whopping 76 percent of all new capacity additions, the agency added.

Some 18.5 GW of new wind power capacity is slated to come online this year. After that, however, new additions will likely decline until the industry handles the end of the production tax credit. But, as Forbes’ Joshua Rhodes noted in a recent overview of the state of U.S. wind and the challenges it faces, renewable portfolio standards could mitigate the effect of the PTC expiry. Specifically, these could extend to offshore wind in the next few years, Rhodes said, which would spur faster growth in that segment.

Renewable portfolio standards could support wind continually: there are already 39 states enforcing these standards, which require that a certain portion of the state’s power must come from renewable sources, and some are even committing to 100 percent renewable power, Zoe Dawson wrote in an article for the Council on Foreign Relations. The number of these states is still small but it is growing. All these commitments could provide a significant push for more wind power capacity. The question is, will the officials making the commitments succeed in seeing them through.

It’s election year and anything could happen, including changes in state governments that could lead to a change in climate commitments. Then there is the solar challenge: solar is in many places cheaper than wind and it is likely to continue getting even cheaper as the sector works on cutting costs while maintaining or even enhancing efficiency. Lastly, there is the wind drought problem. It could happen again. Potentially serious as these challenges are, industry observers seem to believe the industry is strong enough to deal with them and keep growing even if it suffers temporary setback if production tax credits are not renewed yet again.

By Irina Slav for Oilprice.com

New ‘Solar Panels’ Harness The Energy Of Deep Space

By Haley Zaremba - Feb 05, 2020  

Solar power is cheaper than ever, it’s ultra-abundant, and it emits zero greenhouse gases. But it’s far from perfect--for now. One of the biggest limitations of solar energy (which applies to wind power as well) is that it is variable and is not dispatchable. Variability refers to the fact that solar power is dependent on a completely unreliable factor: the weather. Solar panels don’t generate energy if the sun isn’t shining, meaning that they don’t function for an entire half of every day and function far under capacity during overcast daylight hours. They also can’t be turned on and off according to the grid’s needs, known as dispatchability. Instead of being able to respond to the energy needs of the grid, the grid has to work around the productivity of the solar panels.

Researchers have been hard at work for years to address these two shortcomings with all different kinds of approaches. The most predominant strategy, and the one that is furthest along in development and implementation, is energy storage. When solar panels create excess energy, that is, more than the grid can absorb, the energy will be stored for later use when the sun isn’t shining. Energy storage is extremely promising, but currently is simply too expensive to be applied across the industry at a scale large enough to compete with fossil fuels. In order to reach 100 percent renewable energy in the United States, energy storage needs to be cheaper--a lot cheaper. “The answer is $20 per kilowatt hour in energy capacity costs. That’s how cheap storage would have to get for renewables to get to 100 percent,” reported Vox late last year based on findings from an MIT study. “That’s around a 90 percent drop from today’s costs. While that is entirely within the realm of the possible, there is wide disagreement over when it might happen; few expect it by 2030.”

In the meantime, there are a few teams of scientists taking a very different approach: developing a solar panel that can derive energy from the night sky. Oilprice reported on one of these projects last year. While the article proclaimed that “this ‘Anti-Solar Panel’ Could Generate Power From Darkness,” however, calling it a solar panel is a bit of a misnomer. The process does not use photovoltaic cells but operates entirely based on changes in temperature. The study from Stanford, poetically called “Generating Light from Darkness” explains: “We use a passive cooling mechanism known as radiative sky cooling to maintain the cold side of a thermoelectric generator several degrees below ambient. The surrounding air heats the warm side of the thermoelectric generator, with the ensuing temperature difference converted into usable electricity. We highlight pathways to improving performance from a demonstrated 25 mW/m2 to 0.5 W/m2. Finally, we demonstrate that even with the low-cost implementation demonstration here, enough power is produced to light a LED: generating light from darkness.”

Now, there is another new study that touts its own anti-solar panel technology. Not too far from the team in Palo Alto, another team of researchers from the University of California, Davis have published their own, even more poetically titled paper: “Nighttime Photovoltaic Cells: Electrical Power Generation by Optically Coupling with Deep Space.” A report from Popular Mechanics explains the study in layman’s terms. “To turn even low-level heat into energy, scientists have to use a thermal cell instead of a photo cell. The materials must be able to absorb the lowest wavelengths of energy.”

The report continues, “In a thermal radiation cell, we reset the parameters so Earth is the new sun, and its even minimal accumulated heat dwarfs the cold, midnight black of outer space. Letting heat seep out of thermal cells at night, drawn out by the cold night sky, could let scientists capture the energy as it goes out the same way we capture the sun’s energy as it comes in.” This is known as a heat sink.

While these studies are promising and innovative solutions to making renewable energy competitive and reliable on a large scale, they’re still in their initial stages, and commercialization can’t come fast enough. With catastrophic climate change right around the corner and the UN begging for investment in renewables, it’s a race against the clock, and right now it’s not certain if we will win.


By Haley Zaremba for Oilprice.com

Are Large-Scale Solar Projects Doomed To Fail?

By Haley Zaremba - Feb 09, 2020


Humans have been harnessing power from the sun as long as we have existed. By eating our photosynthesis-fueled friends in the animal kingdom and other organisms that eat plants, we are, ultimately gaining all of our energy from the sun. It stands to reason that we tried to extract energy from the sun for industrial purposes as well at the outset of industry. During the Industrial Revolution, way back in 1839, French scientist Alexandre Edmond Becquerellar made history when he discovered that a man-made solar cell could be used to convert sunlight into electricity thanks to the photovoltaic effect in 1839.

What’s more, sunlight is abundant, free, and clean. “Every five days, the sun provides the Earth with as much energy as all proven supplies of oil, coal, and natural gas,” reported Singularity Hub last year. “If humanity could capture just one 6,000th of Earth’s available solar energy, we’d be able to meet 100 percent of our energy needs.”

So if solar energy is more than capable of meeting all of our energy needs while producing zero greenhouse gas emissions, and the United Nations is all but pleading with the private sector to fund more renewable energy research before it’s too late to avoid the onset of catastrophic climate change, why isn’t the world simply blanketed with solar panels?

There have been some attempts to do just that: massive-scale solar plants that cover huge swaths of land. These projects have not, however, solved our clean energy needs. Far from it. The $1 billion Crescent Dunes solar plant developed by SolarReserve in Nevada was going to be the biggest solar plant in the world in its investment phase back in 2011, but by the time the project complete, it was already obsolete. “SolarReserve may have done its part, but today the company doesn’t rank among the winners. Instead, it’s mired in litigation and accusations of mismanagement at Crescent Dunes, where taxpayers remain on the hook for $737 million in loan guarantees,” Bloomberg reported last month. “Late last year, Crescent Dunes lost its only customer, NV Energy Inc., which cited the plant’s lack of reliability.”Related: Could This Be The Decade Of Green Hydrogen?

Ironically, the Crescent Dunes project was not a victim of the failure of the solar industry, but of its sweeping, whirlwind success. Solar tech has improved rapidly in past years, and a mammoth project like Crescent Dunes just couldn’t keep up. “The steam generators at Crescent Dunes require custom parts and a staff of dozens to keep things humming and to conduct regular maintenance,” the Bloomberg article goes on to say. “By the time the plant opened in 2015, the increased efficiency of cheap solar panels had already surpassed its technology, and today it’s obsolete—the latest panels can pump out power at a fraction of the cost for decades with just an occasional hosing-down.”

Despite this cautionary tale, the United States military currently has about $38 billion invested in projects very similar in style to crescent dunes. (This is not an anomaly--the U.S. Department of Defense has invested heavily in all kinds of alternatives to fossil fuels as climate change becomes an ever more pressing issue and peak oil looms around the corner.) As Popular Mechanics reports, “the Department of Defense has more of the government’s high-profile “moon shot”-type investments with DARPA, the Spruce Goose, and other famous weirdies—but in the short term, the government invests in cutting-edge science, too.”

But these investments may very well be just as ill-fated as Crescent Dunes. “As in any form of investment, there's risk involved.” the Popular mechanics article continues. “And public money has another layer of trouble. Because of the way public contracts are bid for, won, and fulfilled, the companies chosen to complete projects are often the best at the application process, and not necessarily the best at the work the project really involves.”

While it may still hold true that solar holds the greatest promise for the future of clean energy, bloated, government-contract projects mired in litigation, bureaucracy, and limited reflexivity to changing technology and trends are most certainly not the answer.

By Haley Zaremba for Oilprice.com

The Race For Arctic Oil Is Heating Up
By Tsvetana Paraskova - Feb 05, 2020

Despite climate concerns and environmentalist backlash against exploration for oil and gas in pristine sensitive regions of the Arctic, companies continue to explore for hydrocarbon resources in the Arctic Circle, in Russia and Norway in particular.

The largest Russian energy companies are looking to explore more Arctic oil and gas resources on and offshore Russia, while Norwegian and other Western oil firms are digging exploration wells in Norway’s Barents Sea.

Those companies lead the development efforts to tap more Arctic oil and gas resources as legacy oil and gas fields both offshore Norway and onshore Russia mature.

Russia’s biggest energy firms Gazprom, Rosneft, Novatek, and Lukoil, and Norway’s oil and gas giant Equinor, as well as Aker BP and ConocoPhillips, are the top oil and gas producers in the Artic region, data and analytics company GlobalData said in a new report. Gazprom is the undisputed leader in Arctic oil and gas production, followed, at a long distance, by two other Russian firms, Rosneft and Novatek, GlobalData’s estimates show.

Russian firms are ramping up exploration in Russia’s Arctic, while Equinor and other Western companies drill exploration wells in Norway’s Barents Sea, hoping for a significant discovery that could add to the Johan Castberg oilfield—a massive discovery which was made in 2011, but which hasn’t been replicated in the Barents Sea so far.

Yet, both Russia and Norway face specific challenges in getting the most out of their respective Arctic oil and gas resources.

Related: The Jet Fuel Crack Killing Oil Won’t Last

In Russia, the government has made Arctic oil and gas development a key priority and offers tax breaks for firms exploring in the area.

Energy giants Gazprom and Rosneft dominate the exploration and development efforts in Russia’s Arctic. Offshore, Gazprom’s Prirazlomnoye field is currently the only producing Russian oil and gas project on the Arctic Shelf.

But even with tax breaks, Russia may find it hard to develop its offshore Arctic resources, due to the U.S. sanctions banning collaboration on Russian deepwater, Arctic offshore, or shale projects with Gazprom, Gazprom Neft, Lukoil, Surgutneftegas, and Rosneft. These are the largest energy firms in Russia and they don’t have access to capital at western banks to develop such projects. In the wake of the sanctions, many Western oil firms withdrew from joint ventures with Russian companies, which are now left without partnerships in technology needed to explore, drill, and potentially produce and process hard-to-extract oil and gas resources.

Although Russian firms downplay the effects of the U.S. sanctions on their development plans, and although domestic companies are focused on developing in-house technology solutions to replace foreign-sourced tech, analysts believe that 100-percent local content technology in challenging projects would likely take years to implement.

Financing for large onshore projects in the Arctic is not easy either. Rosneft, which wants to develop the Vostok Oil project, to “implement a complex development program for a new oil and gas province in the north of the Krasnoyarsk Territory,” is looking east to gather funding for the US$157 billion project—to Japan, India, and China.

Russia’s largest private natural gas producer, Novatek, is one of the success stories of Arctic resource development. Novatek—which already exports liquefied natural gas (LNG) from the Yamal LNG plant—gave last year the go-ahead to its second LNG project, Arctic LNG 2 on the Gydan Peninsula. Novatek’s partners in the ventures are France’s Total with a minority stake as well as Chinese and Japanese companies.

Related: Brace For A Global Crisis In 2020

Last year, Russian officials said that the Arctic area could become the key driver of Russia’s natural gas production in less than two decades, as it has the potential to produce 90 percent of all the gas produced in Russia by 2035.

Norway’s Arctic areas open to exploration are parts of the Barents Sea, where companies are struggling to finally make a large-size discovery after Johan Castberg. Norwegian authorities say that the Barents Sea holds 64 percent of the yet to be discovered resources on the Norwegian Continental Shelf, while the North Sea and the Norwegian Sea each are estimated to hold 18 percent of the undiscovered resources.

Last year, just five wells were drilled in the Barents Sea, fewer than in 2018. In 2019, a total of 17 new discoveries were made offshore Norway, of which only one was in the Barents Sea.

Norway’s Equinor says that it continues to explore in the Barents Sea because more oil will be needed in the world just to maintain supplies.

“Discoveries in the Barents Sea can lead to significant economic development, nationally and locally. Based on our understanding of the geology, we hope to find high quality light oil that’s in demand—and better for the climate. The wells we drill in the Barents Sea are cheaper than many others, thanks to the geology and shallower waters,” says the Norwegian giant.

In 2020, Equinor will focus on exploration in the western part of the Barents Sea, Tim Dodson, Executive Vice President, Exploration at Equinor, told Reuters in November.

Norway and Russia are leading Arctic oil and gas development, but they both face challenges in making the Arctic the next oil hotspot.

By Tsvetana Paraskova for Oilprice.com

Exxon: An Oil Giant In Crisis

By Nick Cunningham - Feb 03, 2020, 7:00 PM CST
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Goldman Sachs downgraded ExxonMobil’s shares to Sell from Neutral, following another disappointing quarter.

Exxon reported a drop in profits on Friday for the fourth quarter, weighed down by a deterioration in nearly every segment. Oil prices were weak, natural gas prices fell sharply, while profit margins for refining and petrochemicals also deteriorated. “There's no doubt that 2019 was a challenging year for a number of our businesses,” Exxon CEO Darren Woods admitted to shareholders and analysts on an earnings call on January 31. “Near or at 10-year lows on price and margins for gas refining and chemicals. Fourth quarter was particularly challenging for our chemical business.”

It isn’t just 10-year lows for prices. Exxon’s share price is also at its lowest point in a decade. Meanwhile, ExxonMobil is not slowing down, spending at aggressive levels as it drills in the Permian and tries to ramp up its oil discoveries in Guyana.

As a result, the financial picture has darkened. Goldman slashed its price target for Exxon’s shares to $59, down from $72 previously. The bank’s analysts see “downside to long-term consensus estimates,” and a “lack of free cash flow limiting capital returns.” Ultimately, there is a “risk to long-term return on capital employed targets,” Goldman analysts warned. Exxon’s return on capital employed could end up being about half of what Exxon is aiming for by 2025.

Often, there are mixed reactions from industry analysts. But the rather gloomy take on Exxon from so many different corners of the financial world was notable. “Shareholder returns are poor, and debt is rising in a way that suggests that attractive dividends yields are unsustainable,” Paul Sankey of Mizuho Securities USA LLC said in a note to clients. “What is so concerning about these mega-oil results is that they come in a quarter that featured an average $62/bbl Brent price.”

Related: Jim Cramer: ‘’Fossil Fuels Are Done’’

“Lower cash flow combined with heavy capital investment led to negative free cash flow and a rise in debt that exceeded our expectations for the year,” Moody’s Investors Service Inc. analyst Pete Speer said in a note. “These trends continue to pressure the company’s credit metrics as captured in our negative outlook.”

Exxon hiked its dividend again in order to satisfy shareholders, but its share price fell anyways. Exxon has not been able to finance its dividend and share buybacks with cash generated from its operations for a very long time. Over the past ten years, Exxon dished out $202 billion to shareholders in the form of buybacks and dividends, but only generated enough money to cover about two-thirds of that payout, according to a recent report from IEEFA. Exxon financed the remaining 30 percent of those distributions from asset sales and debt.

Those numbers worsened substantially last year. “In fact, the company’s deteriorating financial condition required it to cover 64% of the dividends in 2019 with funds from asset sales and borrowing, a sharp increase from its 10-year average of 30%,” IEEFA analysts Tom Sanzillo, Kathy Hipple and Clark Williams-Derry wrote in a commentary.

Related: Oil Bankruptcies Are Reaching Worrying Levels

“It is a dividend that requires crutches,” the analysts said. “The company continues to bring new reserves to market at the wrong time and wrong price.”

ExxonMobil would need oil prices to trade at about $100 per barrel in order for the company to pay for all of its spending and also cover shareholder payouts, according to Citigroup. Needless to say, that is far higher than the prevailing oil price today, and few, if any, oil market analysts see triple-digit oil prices anytime soon.

“We can expect ExxonMobil to stay around but as a far smaller financial and production player,” IEEFA analysts wrote.

When asked about the quarterly numbers on Friday, CNBC’s Jim Cramer was even less charitable. “I’m done with fossil fuels,” he said. “They’re done. They’re just done.”

By Nick Cunningham of Oilprice.com

HEY BC LNG GOES BUST

“Gasmaggedon” Sweeps Over Global Gas Market
By Nick Cunningham - Feb 05, 2020


China’s state-owned gas importers are considering declaring force majeure on LNG imports, which would amplify the turmoil in global gas markets.

LNG prices have already plunged to their lowest levels in a decade in Asia as the ramp up of supply in 2019 came at a time when demand has slowed. That was true before the outbreak of the coronavirus. But the quarantine of around 50 million people and the shutdown of huge swathes of the Chinese economy has sent shockwaves through commodity markets.

Shipments of oil and gas are backing up at Chinese ports, which is creating ripple effects across the world. Now, Chinese state-owned CNOOC is considering declaring force majeure on its LNG import commitments, according to the FT. Sinopec and CNPC are also apparently considering the move.

Prices were already in the dumps. JKM prices recently fell to 10-year lows. But they have continued to decline, approaching $3/MMBtu for the first time in history. Just a few weeks ago, JKM prices were trading at around $5/MMBtu, itself an incredibly low price for this time of year.

LNG exports from the U.S. are uneconomical at these price levels. Many exporters have contracts at fixed, higher prices. But shipments can be cancelled for a fee. And any spot trade would be hit hard. The question now is whether shipments will come to halt. “Forward prices for summer are now at levels where U.S. LNG shut-ins begin to seem viable,” Edmund Siau, a Singapore-based analyst with energy consultant FGE, told Bloomberg. “There is usually a lead time before a cargo can be canceled, and we expect actual supply curtailments to start happening in summer.”

But if buyers start cancelling their purchases, LNG exporters have to ramp down production. That could then ripple back to the shale gas fields in the U.S., where prices are already below $2/MMBtu and drillers can’t make any money. The CEO of Marcellus shale gas giant EQT said in December that “a lot of this development doesn’t work as well at $2.50 gas.” Henry Hub prices are now below $1.85/MMBtu.

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There is little relief in sight. “Even with our projected increase in power sector natural gas demand due to the current low price environment, we estimate natural gas stocks to end this summer with 3.85 tcf in the ground,” Bank of America Merrill Lynch said in a recent note. “Such inventory level would be more than 100 bcf higher YoY, and does not leave much room for bearish errors from mild weather, high renewable generation, or reduced LNG exports.”

Europe too is sitting on abnormally high inventories. “LNG exporters desperately need cold weather in Europe to draw down inventories and provide more breathing room this summer,” Bank of America warned.

But that is not happening. Europe just saw its warmest January on record, depressing gas demand. Fossil fuels are driving climate change, so it’s rather ironic that higher temperatures are now battering gas markets.

It’s all combining to create a “gasmaggedon,” according to Bank of America Merrill Lynch.

“We are now more than halfway through the winter, and thus far Mother Nature has not been kind to natural gas prices,” analysts at the bank wrote.

The investment bank calls the U.S. Midwest power sector is the “true market of last resort,” which means that U.S. gas prices have to fall to such low depths that coal-fired power plants are forced offline in their last redoubt – the Midwest.

“We believe the US cannot sustain reduced LNG exports this summer,” Bank of America warned. “Therefore, US natural gas prices might have to go low enough to stimulate sufficient Midwest power sector natural gas demand to balance the entire global gas market.”

By Nick Cunningham of Oilprice.com