Main Takeaways for the week of December 1, 2021
The Biden Administration may be getting what it wished for, as unknowns around Omicron variant, JCPOA nuclear talks, and the OPEC+ December conference combine for a tumultuous week in petroleum liquids. China takes stock of fall coal shortage and charts slow path to decarbonization with long-term continued use of coal and natural gas. North American liquids pipelines have an exciting week, with developments for Enbridge Mainline and Line 5, and the continued shutdown of the Trans Mountain pipeline. European energy crisis is brought back into the headlines with a combination of cold winter and persistent low gas storage. Mining and hydrogen continue to lag behind energy transition goals.
Featured Energy Article:
The Canadian Petrochemical Industry: Navigating Uncertain Global Waters by Steven Kelly
Headlines
Global Petroleum Liquids
- Ominous “Omicron” variant with unknown characteristics brings massive uncertainty and price swings to oil market
- Biden administration “frustrated” by slow decline in U.S. gasoline prices
- Analysts predict steady gas price decline in December and January
- Representatives from JCPOA countries meet in Vienna Nov 29 to resume nuclear talks with slim prospects for success
- Decision on January OPEC+ production in light of Omicron, SPR releases, and JCPOA progress to come on December 2, 2021
Global LNG
- Government-backed think tank estimates that Chinese demand for natural gas will peak around 2040, with growth mainly coming from imports
- North American gas prices fall on higher supply and mild weather
- Europe gas prices rise on short supply and cold weather
Global Coal
- Chinese utilities and think tanks underline persistence of coal power in China for decades to come due to challenges revealed by electricity shortages
- Commodity trader and coal miner Glencore asked by activist investor to separate thermal coal business to access sustainable investment dollars
North American Energy Infrastructure
- B.C. extends 30-litre fuel purchase limit to at least December 14, as threat of new storms keep the Trans Mountain Pipeline offline
- New York State approves two major transmission lines from Upstate NY and Quebec
U.S. - China Energy Relations
- No significant developments
EU – Russia Energy Relations
- IEA Executive Director Fatih Birol blames natural gas producers rather than difficulties of energy transition for natural gas shortage
- Moldova pays for October gas after Gazprom threatens to cut supplies
- Gazprom natural gas storage in EU lower than before November 9th, the beginning of Gazprom's injection campaign, still at extremely low levels
U.S. - Canada Energy Relations
- Michigan Governor Whitmer drops state lawsuit meant to enforce Line 5 pipeline shutdown, separate 2019 state lawsuit seeking same result still in place
Middle East Energy Geopolitics
- UAE announces $10 billion in investment into the Turkish economy as part of growing cooperation as Western presence in region declines
- White House Energy Security Senior Advisor Amos Hochstein emphasizes U.S. partnership with Saudi Arabia and UAE on investment in new energy technologies
Canadian Oil and Gas
Electricity
- U.K. energy regulator considering higher capital requirements for gas and power suppliers after dozens collapse in energy crisis
- Aluminum production likely to stay depressed due to renewable energy requirements, keeping prices high for the foreseeable future
- New rules for critical natural gas facilities in wake of February crisis in Texas approved for publication
Energy Minerals
- Neskantaga First Nation taking Province of Ontario to court over consultation with their community on road to Ring of Fire mineral-rich area
- Bank of America warns that metal producers will need to double capex to meet demand from a net zero 2050 scenario, capex has taken a backseat to ESG concerns
Hydrogen
- Estimated additional 477 TWh/yr of renewable electricity supply will be needed by 2030 to meet hydrogen requirements for IEA net zero target
- EU market design, access to pipelines, and infrastructure development plans and regulations for hydrogen due December 14
Other Recommended Reading
- "Green Upheaval: the New Geopolitics of Energy" by Jason Bordoff and Meghan L. O'Sullivan, for Foreign Affairs
- "Renewables 2021: Analysis and Forecasts to 2026" by International Energy Agency
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