| |
|
|
|
|
|
|
|
|
|
Hello again readers, and welcome to another edition of Power Up! This week we’re looking at energy use in top consumer China and how the intensity of energy use – how much energy it takes per unit of economic activity – has declined over time. It’s not enough to meet climate goals, but it’s notable.
Note: Power Up will be on hiatus for the U.S. July 4 holiday so we will return in a week!
|
|
|
|
|
|
|
|
|
|
A coal-burning power plant behind a factory in Baotou, in China's Inner Mongolia Autonomous Region. REUTERS/David Gray/File Photo
|
|
|
China consumes over a quarter of the world’s energy supply and remains the growth engine of consumption - and India is growing rapidly, too.
Per BP’s statistical energy review released earlier this week, in 2021 China accounted for about 27% of the world’s energy use, with the United States in second at nearly 16%. But over the last ten years, growth in U.S. energy use has remained dead, while China’s consumption is up 3.4% per annum in that time. China covered 22% of world energy use 10 years ago; the U.S. was 18%.
Of the top 10 energy users in the world, the only one growing faster is India, and it consumes barely a quarter of China’s energy.
And what are they using? A lot of everything. China was responsible for close to 60% of global LNG demand growth last year. The nation also accounted for 36% and 40% of solar and wind capacity growth, respectively. In addition, coal consumption grew over 6% worldwide, to 2014 era highs, and China was a big part of that; the nation belched out more than 10 billion tonnes of carbon dioxide last year, the first nation to surpass that level.
|
|
|
|
|
|
|
|
|
|
|
Graphic by David Gaffen
|
|
|
Different parts of the world have had to cope with the growing energy crisis in varying ways. Poorer nations are being forced into power cuts, while European leaders are planning for conservation efforts due to the threat that Russia will cut off gas supply by this winter.
Discussions of conserving energy start to come when consumers are feeling the effect of a massive crunch in availability that necessitates sacrifice. Most nations are doing their best to keep the lights on, but efficiency has helped offset some of the ongoing increases in power demand.
The world’s energy use has become less intense - the graphic shows how gross domestic product per unit of energy has declined over the decades, which means vehicles, appliances and heating elements like boilers are more advanced than in the past. That’s in part due to efficiency, though other factors come into play, including a nation’s climate and economic structure. China is working to reduce its intensity over the coming years.
“It’s important to think about reductions in energy use brought about by energy efficiency upgrades and conservation,” said Harrison Fell, senior scholar at Columbia University’s Center for Global Energy Strategy. “Certainly if higher prices persist one would expect we would get some conservation in the short run and some more efficiency in the long run.”
|
|
|
|
|
|
|
|
|
|
|
Pemex's refinery in Salamanca, in Guanajuato state, Mexico. REUTERS/Edgard Garrido
|
|
|
Mexico's president will inaugurate a big new refinery that’s part of a plan to make his country energy independent. Even though it isn’t close to ready.
The Dos Bocas refinery was supposed to cost $8 billion and open in 2022. The cost projection was off - it will cost at least $12 billion - but President Andres Manuel Lopez Obrador wants it open in 2022, so open it will, finished or not.
Mexico’s state-run Pemex has been prepping for this day, even suggesting at industry conferences that it may shun imports of products from the United States on the expectation that it would have enough oil to make requisite amounts of gasoline and diesel to send out for the world.
But people familiar with the project, including a source at Pemex, say there are billions more to spend, and many days before it truly opens to the nameplate 340,000 bpd in capacity. In fact, there are 17 stages to this - and AMLO, as the president is known, is only going to ring in the inaugural stage.
Mexico refines about 830,000 bpd right now - half of their refiners’ capacity. Dos Bocas will fit right in.
|
|
|
|
|
|
|
|
|
|
|
Flaring!
|
|
|
The world’s biggest culprits for natural gas flaring - a contributor of emissions like methane into the atmosphere - had a mixed record last year, according to BP’s annual statistical review of energy. Overall, flaring rose by 2.9% in 2021 to 152 billion cubic meters, but that’s still below 2020 levels, which was even worse.
Flaring emits large amounts of CO2 and methane into the atmosphere, and the latter is particularly insidious because it is more damaging than carbon dioxide; however, it exits the atmosphere more quickly, which is why many countries and companies have promised to tackle it by 2030.
The top three offenders are Russia, Iran and Iraq, who combined account for about 41% of overall flaring in the world, and all three got worse in 2021, per BP. The United States comes in after that, but U.S. flaring has dropped to 9.7 bcm, the lowest since 2017; the Biden administration has vowed to crack down on methane emissions that the Trump administration turned a blind eye to, and this may be the preliminary effects of that effort.
One notable spot where flaring has picked up, though, is Mexico, where a pair of major gas fields are being probed for their excessive flaring despite weak production. Flaring there rose to 7.8 bcm, making it about 5% of world flaring, even though Mexico produces 2% of the world’s oil and less than 1% of its natural gas.
|
|
|
|
|
|
|
|
"If you have only countries in Europe and the United States and a few others agreeing to or imposing a price cap then you will continue to see what is currently happening, which is, Russian crude will go to countries who are perfectly okay to still purchase Urals for instance.”
|
|
|
-Shell CEO Ben van Beurden, on a proposed price cap on Russian oil
|
|
|
|
|
|
|
|
|
|
"It's still a Big Mac, but we call it 'Le Big Mac.'"
|
|
|
France’s Emmanuel Macron caused a stir at this week’s G7 region after Reuters overheard him telling U.S. President Joe Biden that the leader of OPEC producer the UAE told him that Saudi Arabia and the United Arab Emirates are nearly tapped out in terms of oil output.
The UAE and Saudi are among the few countries that investors and analysts had assumed could raise output if required. Macron told Biden that the Saudis could only pump another 150,000 barrels per day- and it might take six months before there is any more capacity.
UAE Energy Minister Suhail bin Mohammed Al Mazrouei said that the country is producing very close to its OPEC quota level of 3.17 million barrels per day (bpd), but it could get up to about 3.4 million bpd.
Industry leaders are also pointing to tight supply. Shell CEO Ben van Beurden warned as well that spare capacity is very low while refiners are running very tight at the moment. Norway is sending more crude to Europe to plug the continent’s gap that opened due to Russia; Ecuador has lost about 1.8 million barrels of production in the last two weeks (it produces about 500,000 bpd), and Libya is still struggling with its output.
“Saudi Arabia remains the only member that can contribute material incremental supply. But even then, we are not sure how much gas is left in the tank if we use Saudi’s April 2020 scorched-earth policy production number of 11.5 mb/d,” wrote RBC analysts.
|
|
|
|
|
Essential Reading
|
|
|
|
|
|
|
|
Recommended newsletters
|
|
|
|
|
|
Reuters Sustainable Switch
|
|
|
|
Make sense of companies and governments grappling with climate change, diversity, and human rights.
|
|
|
|
Subscribe
|
|
|
|
Reuters Auto File
|
|
|
|
Joe White makes sense of the fast-paced world of automotive technology, mobility and transportation news.
|
|
|
|
Subscribe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
