OEF REVIEW:The first European fuel cell of megawatt size is now operating in Germany. Contrary to conventional power plants, this energy solution delivers heat and electricity virtually absent of pollutants. It will provide clean energy for the production processes of materials specialist FRIATEC. It has a capacity of 1.4 megawatts.In terms of technology and environmental protection, fuel cells represent a promising alternative to conventional combined heat and power plants. They generate power in a non-combustion process which is virtually absent of pollutants. By using this fuel cell, FRIATEC will be able to reduce its CO2 emissions by approximately 3,000 tons per year. Karsten Wildberger, a member of the E.ON SE Board of Directors, adds: “Fuel cells are one of the key technologies for the clean energy world of tomorrow.”
OEF REVIEW:The first wave-produced electricity in the US goes online in Hawaii. The ocean packs enough power to meet a quarter of America’s energy needs and reduce the nation’s reliance on oil, gas and coal. But wave energy technology lags behind wind and solar power, with important technical hurdles still to be overcome. Both the solar and wind industries received substantial government investment and tax credits that helped them become energy sources cheap enough to compete with fossil fuels. Wave energy test sites run by other researchers are being planned in Oregon and California. One of those projects, Cal Wave, run by California Polytechnic State University, hopes to provide utility-scale power to Vandenberg Air Force Base. But while the U.S. government and military have put about $334 million into marine energy research over the last decade, Britain and the rest of Europe have invested more than $1 billion, according to the Marine Energy Council.
OEF REVIEW:The Brookings report “Lower Oil Prices and the U.S. Economy: Is This Time Different?” explores the effect on U.S. real GDP growth of the sharp decline in the global price of crude oil and hence in the U.S. price of gasoline after June 2014. This decline produced a stimulus of about 0.7 percentage points of real GDP growth by raising private real consumption and an additional stimulus of 0.04 percentage points reflecting a shrinking petroleum trade deficit. However, the net stimulus since June 2014 has been effectively zero. No evidence of an additional role for frictions in reallocating labor or the price of gasoline in explaining the sluggish response. Neither was there evidence of lower oil costs stimulating other business investment, nor an increase in household savings, nor of households deleveraging.
OEF REVIEW:High regional gas prices in South America, most notably Argentina, are attracting US exports of domestically produced LNG, with more than 70% of landed cargoes arriving on the continent so far this year. South America has offered the most profitable destination for US exports compared with Europe, the Middle East and Asia. Regional gas markets, particularly in Argentina, are experiencing elevated prices. In an effort to stem the decline in gas production, the Argentine president cut domestic subsidies in December. His administration hopes that higher wellhead prices will revive production in older fields and stimulate new production, particularly in the Vaca Muerta Basin where large untapped volumes remain locked in shale and tight gas reservoirs. In March and April the first and second US cargoes to arrive in South America landed in Brazil, and since April, all eight US cargoes exported to the region have landed in the Southern Cone nations of Argentina and Chile.
OEF REVIEW:China’s crude oil output is at a 6-year low as the country’s state-run energy companies continued to pump less from aging, high-cost fields. Production during August dropped 9.9 percent and during the first eight months of the year output dropped 5.7 percent. The country is forecast to lead production declines across Asia, helping tighten the global market as the world’s largest consuming region relies more on overseas supplies. China’s imports rebounded last month to the highest since April. Nomura Holdings Inc. in Hong Kong pointed out that ”China’s crude output won’t see an apparent rebound unless Brent recovers to $60 a barrel level, as most of China’s aging oilfields can’t make a profit below this price,” adding that ”Massive capital expenditure cuts have translated to more oil supply destruction.”
OEF REVIEW:According to the IEA the oil glut in global oil markets will persist into late 2017 as demand growth slumps and supply proves resilient. Stocks of oil in OECD countries are swelling to levels never seen before. The combination of faltering demand and increased OPEC output pushed oil inventories in developed nations to a record in July. BNP Paribas considers that “OPEC’s long game got a little longer”, and also with regard to OPEC Petromatrix GmbH says that the organization is “trapped” since “Non-OPEC supply has been able to adjust better than expected to the lower oil prices.”
OEF REVIEW:Nimble U.S. shale oil producers continue to show an uncanny ability to squeeze more and more crude from new wells, allowing them to do more with less as they try to weather another dip in oil prices to $40 a barrel, so they are still seeing output gains from improved well designs and fracking techniques. The pace of innovation is increasing. Pioneer Natural Resources said it was introducing its third generation of well completion techniques, called version 3.0, using even more sand and water than the super-sized volumes introduced as version 2.0 earlier in the price crash to pull more oil out of rock. For its part, Devon Energy Corp has cut costs to drill and complete new wells by 40 percent and plans to cut $1 billion in costs this year.
OEF REVIEW:Oil analysts are looking to next year for a rebound. Crude has plunged as refineries created a glut of gasoline while failing to eliminate excess supply of crude. That wrecked refining margins. Yet, global oil prices will average $57 a barrel in 2017, according to the median of at least 20 analyst estimates compiled by Bloomberg. “We’re looking at a market that’s still in a very slow process of rebalancing and we don’t think that you’ll get a sustainable deficit until the second quarter of 2017,” said Michael Hsueh. Oil companies’ capital expenditure reductions are set to reach $1 trillion by 2020 and this lack of investment “will have a big impact on global supply,” said Hans Van Cleef who forecast Brent will reach $70 next year.