The United States is about to supplant Saudi Arabia as the world’s largest exporter of oil and petroleum products – an economic powerplay that has seismic geopolitical implications. The shift, which overturns 70 years of precedent and appeared unthinkable until very recently, is expected to take place this year, according to the research company Rystad Energy. Saudi Arabia has led the global market since it began selling oil overseas in the 1950s but a technology-driven shale boom in Texas has positioned the US to embark on its own era of worldwide energy dominance. President Trump has begun to exploit the enhanced political clout that this gives the White House on the world stage. Freed from his predecessor’s concerns about the impact of energy embargoes on domestic petrol prices, he has levied sanctions on Iran and Venezuela, two big oil-producing nations. The increased global supply through the growth of Texas crude oil exports has forced down oil prices, weakening the economies of Russia and Saudi Arabia and compelling them to respond by cutting back their own production to try to prop up prices. The effects of American energy supremacy are about to become more marked. “The political and economic impact of this shift in global trade has already been dramatic, and will be even more pivotal within the next five years,” said Per Magnus Nysveen, a senior partner at Rystad. “The US trade deficit will evaporate and its foreign debt will be paid quickly, thanks to the swift rise of American oil and gas exports.”
Times 12th March 2019 read more »
Telegraph 11th March 2019 read more »
A shale gas explorer has announced a discovery at its site in north Nottinghamshire, but has added that set limits on quakes caused by fracking could prove “prohibitive”.
Times 12th March 2019 read more »
North Sea oil was back at the centre of a constitutional tug-of-war today after the production forecasts for the oil and gas sector were revised upwards. The industry regulator, the Oil and Gas Authority, has predicted that 11.9 billion barrels will be extracted by 2050 – a hike of almost 50 per cent from the forecast four years ago, of eight billion barrels. The figures were greeted by the SNP as “great news”, which “confirmed the major economic potential that North Sea oil reserves have to offer” and raised a new demand for a Scottish oil fund. But the Scottish Conservatives said that it was the tax policies of the UK government which had encouraged investment in the North Sea, and that there was no appetite for independence in Scotland.
Scotsman 11th March 2019 read more »
The National 12th March 2019 read more »
Climate campaigners and their growing allies among big investors appear to be on a roll. Last week, the Norwegian government recommended its sovereign wealth fund divest from upstream oil and gas groups (albeit not from integrated majors such as BP). A few days before, HSBC came under pressure from a group of big investors to end fully all financing of new coal power stations. Two weeks before, the mining company Glencore made headlines by vowing to cap its coal production. Scores of other listed fossil fuel companies are facing a proliferation of demands from investors and campaigners to commit to stronger action on climate. Demands include that they publish “two degree plans” aligning their strategy with the goals of the Paris accord on climate change and that they set clear targets for their – and their customers’ – carbon emissions. In such a context, campaigners’ efforts to limit investment in new production by those oil, gas and coal companies they happen to be targeting, even assuming they are successful, will probably have a limited impact on climate outcomes – unless they pull off a commensurately successful effort to curb fossil fuel demand. Instead, there may be two more likely results of all their activity. The first is to facilitate a shift in the global balance of new fossil fuel production towards private, smaller or state-owned companies that are less susceptible to investor pressures and therefore have fewer qualms about taking up the production slack. In the case of oil, for example, some Middle East state oil companies and Russian producers may be key beneficiaries. Second, to the extent that global supplies are genuinely restrained as a result of the pressures, fossil fuel prices will probably rise, potentially significantly. True, this should encourage the further take-up of renewables, but it could also incentivise a subsequent supply surge from fossil fuel producers – and certainly help existing producers to cash in.
FT 11th March 2019 read more »