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NewBase Energy News 12 April 2024 No. 1715 Senior Editor Eng. Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Global coal power grew 2% last year, the most since
2016, GEM survey says
By Reuters + NewBase
The world's coal-fired power capacity grew 2% last year, its highest annual increase since 2016,
driven by new builds in China and decommissioning delays elsewhere, according to research
published on Thursday.
Despite record renewable additions, nearly 70 gigawatts (GW) of new coal power capacity were
commissioned across the world last year, including 47.4 GW in China, the U.S.-based Global
Energy Monitor think tank said in its annual survey. Coal-fired capacity outside China also grew for
the first time since 2019, while worldwide only 21.1 GW was shut down, the survey said.
Smoke and steam billows from the coal-fired power plant owned by Indonesia Power, next to an
area for Java 9 and 10 Coal-Fired Steam Power Plant Project in Suralaya, Banten province,
Indonesia, July 11, 2020. Picture taken July 11, 2020. REUTERS/Willy Kurniawan/File
Photo Purchase Licensing Rights, opens new tab
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Since the Paris Agreement was signed in 2015, 25 countries have cut coal-fired power capacity, but
35 have increased it, and far more needs to be done, said Flora Champenois, the GEM report's
lead author.
"The world is heading in the right direction in terms of coal's role in the energy sector, but not quickly
enough, and with some risky detours along the way," Champenois said.
To keep average global temperature rises within the key threshold of 1.5 degrees Celsius (2.7
degrees Fahrenheit), global coal power capacity needs to be eliminated by 2040, according to
projections by the International Energy Agency.
Such a phase-out would require an average of 126 GW of closures every year, the equivalent of
two plants a week, even if no new capacity was added, GEM estimated.
Currently, however, another 578 GW of coal capacity is in development. That includes 408 GW in
China alone and is enough to power the whole of India.
Just under 200 GW is under construction, including 140 GW in China, according to the survey.
China's coal plant retirement rate, amid concerns over energy security, was also at its lowest in a
decade last year.
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With coal-fired power incompatible with China's declared longer-term climate goals, GEM said
China is running the risk of being lumbered with billions of yuan in stranded assets.
Recent approvals for coal projects in China have come with the slogan "build first and modify later",
suggesting they are considered a short-term energy supply solution.
"Overbuilding coal 'just in case' and with a 'we'll deal with that later' approach is a costly and risky
gamble, especially when alternative solutions are available to meet targets and address energy
security," said Champenois.
Globally, the projected coal-fired capacity in 2030, if all proposed projects are realized and
retirements aren’t accelerated further, is almost 2400 GW, while the amount of capacity consistent
with the IPCC 1.5 degree pathways would be 1100 GW.
An additional 1300 GW will need to be cancelled or retired: 450 GW in the OECD, 500 GW in China
and 400 GW in the rest of the world, to meet the emission budgets consistent with limiting global
warming to 1.5 degrees.
However, a very large number of projects, totaling 11GW, have started feasibility studies, and 21GW
of already permitted projects have issued calls for tenders or entered construction. There haven’t
been any indications of cancelling or suspending the permits to projects that the environmental
inspector said should not have been issued. This makes it seem that local officials are waiting for
guidance from the top, while project developers are plowing ahead at full steam.
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UAE’s Mubadala-backed ethanol producer Atvos to build $69m
biomethane plant in Brazil
The National -Neil Halligan
Atvos, one of Brazil's largest biofuel producers, has signed an agreement to build a biomethane
factory in the state of Mato Grosso do Sul, it said in a statement on Wednesday. The biomethane
plant, which will cost more than $69 million (350 million Brazilian real), will have a 28-million cubic
metre capacity per crop and will be Atvos' first based on sugar cane waste.
Atvos, which is backed by Abu Dhabi's Mubadala Capital, said the new facility is being built in Nova
Alvorada do Sul, where it already has an ethanol factory. The new operation will use vinasse and
filter cake, waste resulting from the sugar cane production chain, as inputs.
Bruno Serapiao, chief executive of Atvos, said the unit will mark its "entry into the market for natural
gas from renewable sources, with the advantage of producing it on a large scale to meet an ever-
growing demand".
Mubadala Capital acquired a 31.5 per cent stake in Atvos last year
"At the same time, we expanded our portfolio of sustainable solutions, and, above all, we effectively
contributed to the transition of the energy matrix, following a circular economy concept, by disposing
of and generating new revenues from waste from our production chain,” he said in a press
statement.
The project will enter an engineering analysis phase for final approval, with construction expected
to start this year, Atvos said. Mr Serapiao said the biomethane will help provide an alternative to
fossil fuels, especially in regions not served by gas pipelines or in remote areas.
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In addition to replacing diesel, he said it can also be used for industrial use, replacing liquefied
petroleum gas (LPG) and fuel oil, and even in thermoelectric plants.
“In the case of Usina Santa Luzia, production should be directed to supplying part of the company's
and its partners' logistics fleet, aiming to reduce the use of diesel by up to 40 per cent in the medium
term," he said.
"The excess volume must be
directed to the surrounding
municipalities.” Abiogás, the
Brazilian Biogas Association, has
projected that biomethane
production will jump 600 per cent by
2029.
There are currently 20 production
plants in the country, of which only
six sell biogas. It's expected that the
total number of production units
dedicated to commercialisation will
reach 90 in the next five years, 42 per cent of which will be via the sugar-energy sector.
Atvos' operation in Nova Alvorada do Sul has the capacity to crush 5.5 million tons of sugar cane
and produce 498 million litres of ethanol, which is enough to power nine million compact cars, in
addition to cogenerating 376 GWh of clean electrical energy, capable of supplying a population of
1.8 million people.
Mubadala investments
Mubadala Capital, the asset management subsidiary of Mubadala Investment Company, invested
$99.6 million in Atvos last year in exchange for a 31.5 per cent stake.
Reuters reported in October that Mubadala Capital raised its stake in Atvos through investment fund
FIP MC Green, acquiring the 6.85 per cent owned by Grupo Novonor, formerly known as Odebrecht.
Set up in 2011, Mubadala Capital has grown significantly in scale over the past decade, with offices
around the world. It manages $22 billion in aggregate across its own balance sheet investments
and third-party capital vehicles across its private equity, solutions, venture capital and Brazil
businesses.
In October, Mubadala Capital closed its second investment fund in Brazil after raising more than
$710 million.
Brazil Special Opportunities Fund II raised capital from a diverse set of global investors, including a
leading public pension fund, family offices, corporates, private equity funds and asset managers
across North America, Europe, the Middle East and Asia, Mubadala said in a statement.
Mubadala Capital closed its first fund in Brazil in February 2022 with total commitments of $322
million.
In April last year, Mubadala Capital's energy company Acelen said it would invest $2.5 billion in the
next 10 years to produce renewable diesel and sustainable aviation kerosene in the north-eastern
Brazilian state of Bahia.
Acelen – which owns the Mataripe Refinery in Bahia, Brazil's second biggest and one of the oldest
in the country – plans to start production in 2026.
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Tanzania to showcase major LNG projects at IAE
TradeArabia News Service
With estimated recoverable gas resources of around 57 trillion cubic feet (tcf), Tanzania will feature
as part of an East African regional spotlight at Invest in African Energy (IAE) 2024.
Since discovering large volumes of offshore gas, Tanzania has initiated plans to become a major
LNG exporter. The country’s flagship Tanzania LNG project – set to process gas from fields
operated by Equinor, Shell and ExxonMobil, producing 10 million metric tonnes per year – is
awaiting the signing of a host government agreement that would enable the start of development.
Shell’s Blocks 1 and 4 have an estimated 16 tcf of gas in place, while Equinor’s Block 2 has yielded
nine discoveries with more than 20 tcf of estimated reserves. Last November, the governments of
Tanzania and Uganda signed an agreement to undertake a feasibility study for the construction of
a pipeline linking Tazania’s gas fields to Uganda.
Licensing round
Tanzania is expected to launch its fifth oil and gas licensing round by June 2024, with licenses to
be awarded by December of the same year. While the details have yet to be disclosed, 26 oil and
gas blocks have been initially allocated for tender, including 15 onshore and 11 offshore blocks.
Representing the country’s first bid round in over a decade, the licensing round aims to accelerate
foreign investment in the country’s upstream sector and showcase its highly prospective acreage.
So far, Chinese national oil company CNOOC is leading exploration in the country – in collaboration
with Tanzania Petroleum Development Corporation – and is conducting seismic surveys in
deepwater blocks located nearby gas discoveries made by Shell, Equinor and ExxonMobil.--
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U.S: Biden Plans Sweeping Effort to Block Arctic Oil Drilling
(Bloomberg)
The US set aside 23 million acres of Alaska’s North Slope to serve as an emergency oil supply a
century ago. Now, President Joe Biden is moving to block oil and gas development across roughly
half of it.
The initiative, set to be finalized within days, marks one of the most sweeping efforts yet by Biden
to limit oil and gas exploration on federal lands. It comes as he seeks to boost land conservation
and fight climate change — and is campaigning for a second term on promises to do more of it.
The changes wouldn’t affect ConocoPhillips’s controversial 600-million-barrel Willow oil project in
the National Petroleum Reserve-Alaska. But oil industry leaders say the plan is more expansive
than initially anticipated and threatens to make it nearly impossible to build another megaproject in
the region.
That’s spooking oil companies with holdings in the National Petroleum Reserve, which — along with
the rest of Alaska’s North Slope — was viewed as a major growth engine for the industry before the
shale boom. Interest has surged again in recent years, fed by mammoth discoveries. Tapping the
region’s reservoirs could yield decades of production.
Company executives and Alaska lawmakers have increasingly raised alarm over the plan, saying it
could thwart oil and gas development across much of the reserve, even on existing leases. The
opposition has united a broad spectrum of foes, from Alaska Natives to lower-48 oil producers.
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Santos Ltd., which leases more than a million acres within the reserve and is developing the nearby
Pikka Unit joint venture with Repsol SA, said in a filing with the Bureau of Land Management that
the proposal would infringe on its holdings, with impacts “as extensive as whole projects being
denied.”
ConocoPhillips, which has 156 leases in the reserve, warned the regulation would violate its
contracts and “drive investment away from the NPR-A.” And Armstrong Oil & Gas Inc., whose leases
there span 1.1 million gross acres, said the measure could block it from building the infrastructure
needed to access those tracts.
The proposed rule would effectively nationalize the company’s leases, Chief Executive Officer Bill
Armstrong told White House officials in a March 21 meeting, according to people familiar with the
discussion. A company spokesman declined to comment on the matter.
Administration officials argue the changes are necessary to balance oil development with the
protection of sensitive landscapes that provide habitat for polar bears, migratory birds and the
61,500-strong Teshekpuk caribou herd. “We must do everything within our control to meet the
highest standards of care to protect this fragile ecosystem,” Interior Secretary Deb Haaland said in
announcing the measure last year.
The regulation would limit future oil development in some 13 million acres (20,000 square miles) of
designated “special areas” within the Indiana-sized reserve, including territory currently under lease.
There’d be an outright prohibition on new leasing in 10.6 million acres.
The proposal would create a formal program for expanding protected areas at least once every five
years — while making it difficult to undo those designations. And it would raise the bar for future
development elsewhere in the reserve.
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The Interior Department said in a preamble the regulation wouldn’t affect existing leases. But the
proposed rule text doesn’t offer similar, explicit assurance. Instead, it proposes to give the
government broad authority to limit or bar access to existing leases, “regardless of any existing
authorization.” Oil leasing and infrastructure development would be presumed not to be permitted
unless specific information clearly demonstrates the work can be done with “no or minimal adverse
effects” on the habitat.
Environmentalists and some Alaska Natives have widely praised Biden for setting aside territory for
conservation.
“These are resources that once they’re gone, they’re gone forever, and we can’t wait until they have
disappeared to go and get them back,” said Rachael Hamby, policy director for the Center for
Western Priorities. “We need to manage now to protect those resources and values for present and
future generations.”
The Interior Department says the proposal would not have a significant effect on the nation’s energy
supply. Still, the reserve could be a notable source of fuel, with the rock formations beneath it holding
an estimated 8.7 billion barrels of recoverable oil, according to a 2017 assessment by the US
Geological Survey.
Enthusiasm for the region picked up after recent discoveries in the Nanushuk field, and the state of
Alaska expects crude production from the reserve to climb from 15,800 barrels per day in fiscal
2023 to 139,600 barrels per day in fiscal 2033.
Opponents say the plan would shift the role of the reserve to conservation instead of oil
development, contrary to congressional intent. “The current statute says that the primary purpose
is to increase domestic oil supply as expeditiously as possible,” said Kara Moriarty, president of the
Alaska Oil and Gas Association. “But the rule takes a completely different premise.”
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NewBase April 12 -2024 Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oil prices head back up on Middle East jitters
Reuters + NewBase
Oil prices rose in early trade on Friday on heightened tensions in the Middle East, where Iran has
promised to retaliate for a suspected Israeli air strike on its embassy in Syria, which could risk
disruptions to supply from the oil producing region.
Brent crude futures climbed 34 cents, or 0.38%, to $90.08 a barrel, while U.S. West Texas
Intermediate crude futures rose 44 cents, or 0.51%, to $85.45, at 0033 GMT.
The gains erased some losses from the previous session, which was dominated by worries about
stubborn U.S. inflation that dampened hopes for an interest rate cut as early as June.
Suspected Israeli warplanes bombed Iran's embassy in Damascus in an April 1 strike 1 for which
Iran has vowed revenge, ratcheting up tension in a region already strained by the Gaza war.
Israel has not said it was responsible but Iran's supreme leader, Ayatollah Ali Khamenei, said on
Wednesday Israel "must be punished and it shall be" for the attack.
Oil price special
coverage
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The U.S. expects an attack by Iran against Israel but one that would not be big enough to draw
Washington into war, according to a U.S. official. Iranian sources said that Tehran has signalled a
response aimed at avoiding major escalation.
Israel is keeping up its war in Gaza but is also preparing for scenarios in other areas, Prime Minister
Benjamin Netanyahu said on Thursday.
"The geopolitical risks remain elevated," ANZ Research said in a note, adding that oil prices have
jumped almost 19% also supported by improving economic conditions and supply cuts by the
Organization of the Petroleum Exporting Countries and allies, together called OPEC+.
She said Washington would not accept this industry being "decimated" by China's overcapacity in
key products.
In Europe, where the labor market has begun to soften and growth is stagnating, central bankers
left the policy rate unchanged on Thursday but signalled they remain on track to cut rates as soon
as June.
"The European Central Bank's decision to leave policy rates unchanged ... was expected, but
accompanying statements open the door for near-term monetary easing," S&P Global Market
Intelligence said in a note.
However in the U.S., Federal Reserve officials signalled on Thursday no rush to cut interest rates,
as sticky U.S. inflation remains a concern.
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 Hawk Energy Sees Oil at $85-$100 This Year With Strong Demand Growth
 That’s a ‘ foreseeable & sensible range,’ Hawk Energy CEO M. Al Shihabi says
 Demand set to grow by 2.0 million barrels a day in 2024: Al Awadhi says
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NewBase Specual Coverage
The Energy world –April 12 -2024
CLEAN ENERGY
How accurate were EIA’s Winter Fuels Outlook forecasts?
source: U.S. Energy Information Administration, Winter Fuels Outlook
Every October, in our Winter Fuels Outlook, we publish forecasts for residential energy
consumption, prices, and expenditures for the upcoming winter months. Generally, these forecasts
have performed well.
Our October forecasts for energy expenditures during the five-month period from November 2023
through March 2024 were within 3% of our final estimates for homes primarily heated with natural
gas, electricity, and propane.
Data source: U.S. Energy Information Administration, Winter Fuels Outlook
Data values: Winter Fuels Outlook
Estimated energy expenditures for homes primarily heated with heating oil were 13% lower than
our October forecast because of mild winter weather and lower-than-expected crude oil prices.
In our Winter Fuels Outlook, U.S. households are categorized by their main heating fuel and divided
into the four census regions: Northeast, Midwest, South, and West. The consumption and
expenditure values measure all end uses associated with a home’s primary heating fuel—not just
the heating-related portion.
Weather is the largest source of uncertainty in our forecasts, so we also publish cases that assume
colder and warmer winter weather. Throughout the winter, we update these forecasts based on
realized weather and energy prices, and we publish our evolving forecasts for future weather and
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or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this
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prices for the remaining winter months. The data values in this article reflect our final estimates
based on the most recent data for weather and prices.
Winter weather was warmer than expected, especially in the Midwest
Our weather forecasts are based on a combination of near-term expectations provided by the
National Oceanic and Atmospheric Administration (NOAA) and a linear trend that extrapolates the
long-term degree day trends over the previous 30 years.
In October, our forecast indicated that the upcoming winter would be 4% warmer than the previous
10-year average, as measured by population-weighted heating degree days. Instead, the winter
was 9% warmer than the previous 10-year average.
The Midwest typically has the coldest winter weather. The particularly mild winter weather during
December and February resulted in a 12% warmer-than-forecast winter in the Midwest.
Data source: U.S. Energy Information Administration, Winter Fuels Outlook
Data values: Winter Fuels Outlook
The other three regions of the country also had warmer-than-forecast winter weather, but compared
with the Midwest, heating degree day forecasts for those regions were more accurate. At the
national level, this past winter was 6% warmer than our October forecast. This difference affected
our consumption forecast, especially for propane, which is more commonly used as a primary
heating fuel in the Midwest than in other regions.
Natural gas and electricity expenditure forecasts were generally accurate
Natural gas fuels heating equipment in 47% of homes, making it the most common primary heating
fuel in the United States. In October, we forecast that natural gas-heated homes would spend $600
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on natural gas bills from November 2023 through March 2024. Our final estimate was the same as
our October forecast: $600.
Warmer-than-expected weather meant that actual natural gas consumption was less than our
October forecast. However, actual retail natural gas prices were higher than we expected. These
forecast errors mostly offset each other when calculating energy expenditures for natural gas-
heated homes.
Similarly, actual electricity consumption was lower than our October forecast, and actual electricity
prices were higher. These forecast errors offset each other, and actual expenditures were about the
same as forecast expenditures. Electricity is the primary heating fuel in 43% of homes and is more
common in the South and in parts of the country with relatively low heating demand.
In October, we forecast electricity expenditures to be $1,060 in our base weather case. Our final
estimate for winter electricity expenditures—which includes all end uses, not just heating—was
$1,080. These estimates represent a weighted average of all electric heating equipment.
Data source: U.S. Energy Information Administration, Winter Fuels Outlook
Data values: Winter Fuels Outlook
Propane expenditures were in line with the forecast
Propane expenditures usually have the most uncertainty across our weather cases. In addition to
being sensitive to changing weather, propane prices tend to fluctuate more than natural gas and
electricity.
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Changes in propane prices are passed to consumers more readily than changes in natural gas and
electricity prices, which are insulated from rapid wholesale price fluctuations because of the
regulatory processes that determine how utilities set prices.
Propane is used by fewer homes (5% of the national total) but is more common in the colder climates
of the Midwest and Northeast. We originally expected that these homes would spend $1,340 on
propane in November through March. Our final estimate was $1,300.
Lower crude oil prices resulted in lower heating oil prices than forecast
Relatively few homes (4%) are heated with heating oil, and most of these homes are in the
Northeast. Retail heating oil prices closely follow crude oil prices, which are sensitive to global
markets.
Our October forecast anticipated higher crude oil prices in the winter months and, therefore, higher
retail heating oil prices than what occurred: actual retail heating oil prices were 9% lower than our
October forecast. We estimate that homes that use heating oil as their primary heating fuel spent
$1,610 this winter, or 13% less than our October forecast of $1,850.
Data source: U.S. Energy Information Administration, Short-Term Energy Outlook (STEO), October 2023
and April 2024
Data values: Energy Prices (current forecast) and STEO Archives (October 2023 forecast)
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Mild winter weather may lead to persistently high natural gas
inventories through 2025 in U.S
source: U.S. EIA, Short-Term Energy Outlook (STEO), April 2024
U.S. working natural gas inventories ended the winter heating season (November 1–March 31) at
2,290 billion cubic feet (Bcf), 39% more than the previous five-year (2019–23) average. Relatively
high natural gas inventories all winter have contributed to record-low Henry Hub natural gas spot
prices.
The surplus to the five-year average grew over winter 2023–24 because of mild weather, low natural
gas consumption, and high natural gas production. In our April Short-Term Energy Outlook (STEO),
we expect natural gas inventories to remain relatively high and natural gas spot prices to remain
relatively low through 2025.
According to the National
Oceanic and Atmospheric
Administration (NOAA), the
United States just
experienced its warmest
winter on record. Since
October 2023, the residential
and commercial sectors
consumed less natural gas
than during previous winters,
and less natural gas was
withdrawn from storage:
about 1,500 Bcf this winter
versus 2,000 Bcf in previous
winters.
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Mild winter weather led to low residential and commercial sector use of natural gas
U.S. natural gas consumption peaks in winter because of its use as a space-heating fuel in the
residential and commercial sectors. According to NOAA, December 2023 was the warmest
December on record in many U.S. locations, particularly in the northern and central United States,
where most households use natural gas for space heating.
In the Northeast and Midwest, natural gas consumption in the residential and commercial sectors
in December 2023 averaged 20 billion cubic feet per day (Bcf/d), 23% lower than December 2022
and 15% lower than the previous five-year (2018–22) average.
Except for a winter storm in mid-January, relatively mild weather from November 2023 through
March 2024 resulted in natural gas consumption in the U.S. residential and commercial sectors
averaging 35 Bcf/d, 6% less than in the winter of 2022–23 and 7% less than the previous five-year
average. Less consumption this winter contributed to below-average natural gas storage
withdrawals and higher natural gas inventories.
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Natural gas production increased this winter
Dry natural gas production averaged 106 Bcf/d in November and 107 Bcf/d in December—a record
high. More production has also contributed to relatively high natural gas volumes in storage and the
resulting low prices. In February and March, several producers, reacting to low natural gas prices,
announced current or planned curtailments to production or reductions in capital expenditures
toward natural gas-directed activities in 2024.
We estimate that natural gas production averaged 103 Bcf/d in March, or 4 Bcf/d lower than the
December 2023 peak. If production falls faster than we currently forecast and natural gas
consumption—especially in the electric power sector—increases more than we currently forecast
(for example, because of unusually hot weather this summer), then inventories could be drawn down
to average levels and natural gas prices could rise.
Natural gas inventories influence natural gas prices
The difference between the storage inventory level at the end of March and the previous five-year
average is an important price indicator for market participants at the start of natural gas storage
injection season (April 1–October 31). The higher the surplus to the previous five-year average, the
lower the Henry Hub price tends to be, and vice versa.
In our October 2023 STEO, we forecast U.S. working natural gas inventories would end the winter
330 Bcf more than the previous five-year average and the Henry Hub spot price would average
$3.10 per million British thermal units (MMBtu). As the winter progressed, the surplus of natural gas
inventories continued to build because consumers needed less natural gas for heating. By the end
of March, inventories were 640 Bcf higher than the previous five-year average, and the Henry Hub
price had fallen to $1.50/MMBtu, generally in line with the relationship between inventories and
price.
Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 20
We changed our forecast for natural gas prices for the remainder of 2024 based on the recent
record-low Henry Hub spot price and the persistently high natural gas inventories. In the October
STEO, we forecast the Henry Hub spot price to average $3.20/MMBtu in 2024.
We now forecast the Henry Hub price to remain below $2.00/MMBtu until the second half of 2024
and to average $2.20/MMBtu for the year. We still expect the natural gas price to increase from the
March 2024 low as production curtailments and increased natural gas consumption for electricity
generation bring supply and demand closer to balance.
Data source: U.S. Energy Information Administration, Short-Term Energy Outlook (STEO),
October 2023 and April 2024
Data values: U.S. Natural Gas Supply, Consumption, and Inventories and STEO Archives
Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 21
NewBase Energy News 12- April - Issue No. 1715 call on +971504822502, UAE
The Editor:” Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced Twice a week and sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscriptions, please email us.
About: Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
www.linkedin.com/in/khaled-al-awadi-38b995b
Mobile: +971504822502
khdmohd@hawkenergy.net or khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with over 30 years of experience in the Oil & Gas
sector. Has Mechanical Engineering BSc. & MSc. Degrees from leading U.S.
Universities. Currently working as self leading external Energy consultant for the
GCC area via many leading Energy Services companies. Khaled is the Founder of
the NewBase Energy news articles issues, Khaled is an international consultant,
advisor, ecopreneur and journalist with expertise in Gas & Oil pipeline Networks,
waste management, waste-to-energy, renewable energy, environment protection
and sustainable development. His geographical areas of focus include Middle East,
Africa and Asia. Khaled has successfully accomplished a wide range of projects in
the areas of Gas & Oil with extensive works on Gas Pipeline Network Facilities & gas
compressor stations. Executed projects in the designing & constructing of gas pipelines, gas metering &
regulating stations and in the engineering of gas/oil supply routes.
Has drafted & finalized many contracts/agreements in products sale, transportation, operation &
maintenance agreements. Along with many MOUs & JVs for organizations & governments authorities.
Currently dealing for biomass energy, biogas, waste-to-energy, recycling and waste management. He has
participated in numerous conferences and workshops as chairman, session chair, keynote speaker and
panelist.
Khaled is the Editor-in-Chief of NewBase Energy News and is a professional environmental writer with over
1400 popular articles to his credit. He is proactively engaged in creating mass awareness on renewable
energy, waste management, plant Automation IA and environmental sustainability in different parts of the
world. Khaled has become a reference for many of the Oil & Gas Conferences and for many Energy program
broadcasted internationally, via GCC leading satellite Channels. Khaled can be reached at any time, see
contact details above.
Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this
publication. However, no warranty is given to the accuracy of its content. Page 22

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12 April 2024 Energy News issue - 1715 by Khaled Al Awadi.pdf

  • 1. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 1 NewBase Energy News 12 April 2024 No. 1715 Senior Editor Eng. Khaled Al Awadi NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE Global coal power grew 2% last year, the most since 2016, GEM survey says By Reuters + NewBase The world's coal-fired power capacity grew 2% last year, its highest annual increase since 2016, driven by new builds in China and decommissioning delays elsewhere, according to research published on Thursday. Despite record renewable additions, nearly 70 gigawatts (GW) of new coal power capacity were commissioned across the world last year, including 47.4 GW in China, the U.S.-based Global Energy Monitor think tank said in its annual survey. Coal-fired capacity outside China also grew for the first time since 2019, while worldwide only 21.1 GW was shut down, the survey said. Smoke and steam billows from the coal-fired power plant owned by Indonesia Power, next to an area for Java 9 and 10 Coal-Fired Steam Power Plant Project in Suralaya, Banten province, Indonesia, July 11, 2020. Picture taken July 11, 2020. REUTERS/Willy Kurniawan/File Photo Purchase Licensing Rights, opens new tab ww.linkedin.com/in/khaled-al-awadi-80201019/
  • 2. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 2 The video player is currently playing an ad. You can skip the ad in 5 sec with a mouse or keyboard Since the Paris Agreement was signed in 2015, 25 countries have cut coal-fired power capacity, but 35 have increased it, and far more needs to be done, said Flora Champenois, the GEM report's lead author. "The world is heading in the right direction in terms of coal's role in the energy sector, but not quickly enough, and with some risky detours along the way," Champenois said. To keep average global temperature rises within the key threshold of 1.5 degrees Celsius (2.7 degrees Fahrenheit), global coal power capacity needs to be eliminated by 2040, according to projections by the International Energy Agency. Such a phase-out would require an average of 126 GW of closures every year, the equivalent of two plants a week, even if no new capacity was added, GEM estimated. Currently, however, another 578 GW of coal capacity is in development. That includes 408 GW in China alone and is enough to power the whole of India. Just under 200 GW is under construction, including 140 GW in China, according to the survey. China's coal plant retirement rate, amid concerns over energy security, was also at its lowest in a decade last year.
  • 3. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 3 With coal-fired power incompatible with China's declared longer-term climate goals, GEM said China is running the risk of being lumbered with billions of yuan in stranded assets. Recent approvals for coal projects in China have come with the slogan "build first and modify later", suggesting they are considered a short-term energy supply solution. "Overbuilding coal 'just in case' and with a 'we'll deal with that later' approach is a costly and risky gamble, especially when alternative solutions are available to meet targets and address energy security," said Champenois. Globally, the projected coal-fired capacity in 2030, if all proposed projects are realized and retirements aren’t accelerated further, is almost 2400 GW, while the amount of capacity consistent with the IPCC 1.5 degree pathways would be 1100 GW. An additional 1300 GW will need to be cancelled or retired: 450 GW in the OECD, 500 GW in China and 400 GW in the rest of the world, to meet the emission budgets consistent with limiting global warming to 1.5 degrees. However, a very large number of projects, totaling 11GW, have started feasibility studies, and 21GW of already permitted projects have issued calls for tenders or entered construction. There haven’t been any indications of cancelling or suspending the permits to projects that the environmental inspector said should not have been issued. This makes it seem that local officials are waiting for guidance from the top, while project developers are plowing ahead at full steam.
  • 4. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 4 UAE’s Mubadala-backed ethanol producer Atvos to build $69m biomethane plant in Brazil The National -Neil Halligan Atvos, one of Brazil's largest biofuel producers, has signed an agreement to build a biomethane factory in the state of Mato Grosso do Sul, it said in a statement on Wednesday. The biomethane plant, which will cost more than $69 million (350 million Brazilian real), will have a 28-million cubic metre capacity per crop and will be Atvos' first based on sugar cane waste. Atvos, which is backed by Abu Dhabi's Mubadala Capital, said the new facility is being built in Nova Alvorada do Sul, where it already has an ethanol factory. The new operation will use vinasse and filter cake, waste resulting from the sugar cane production chain, as inputs. Bruno Serapiao, chief executive of Atvos, said the unit will mark its "entry into the market for natural gas from renewable sources, with the advantage of producing it on a large scale to meet an ever- growing demand". Mubadala Capital acquired a 31.5 per cent stake in Atvos last year "At the same time, we expanded our portfolio of sustainable solutions, and, above all, we effectively contributed to the transition of the energy matrix, following a circular economy concept, by disposing of and generating new revenues from waste from our production chain,” he said in a press statement. The project will enter an engineering analysis phase for final approval, with construction expected to start this year, Atvos said. Mr Serapiao said the biomethane will help provide an alternative to fossil fuels, especially in regions not served by gas pipelines or in remote areas.
  • 5. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 5 In addition to replacing diesel, he said it can also be used for industrial use, replacing liquefied petroleum gas (LPG) and fuel oil, and even in thermoelectric plants. “In the case of Usina Santa Luzia, production should be directed to supplying part of the company's and its partners' logistics fleet, aiming to reduce the use of diesel by up to 40 per cent in the medium term," he said. "The excess volume must be directed to the surrounding municipalities.” Abiogás, the Brazilian Biogas Association, has projected that biomethane production will jump 600 per cent by 2029. There are currently 20 production plants in the country, of which only six sell biogas. It's expected that the total number of production units dedicated to commercialisation will reach 90 in the next five years, 42 per cent of which will be via the sugar-energy sector. Atvos' operation in Nova Alvorada do Sul has the capacity to crush 5.5 million tons of sugar cane and produce 498 million litres of ethanol, which is enough to power nine million compact cars, in addition to cogenerating 376 GWh of clean electrical energy, capable of supplying a population of 1.8 million people. Mubadala investments Mubadala Capital, the asset management subsidiary of Mubadala Investment Company, invested $99.6 million in Atvos last year in exchange for a 31.5 per cent stake. Reuters reported in October that Mubadala Capital raised its stake in Atvos through investment fund FIP MC Green, acquiring the 6.85 per cent owned by Grupo Novonor, formerly known as Odebrecht. Set up in 2011, Mubadala Capital has grown significantly in scale over the past decade, with offices around the world. It manages $22 billion in aggregate across its own balance sheet investments and third-party capital vehicles across its private equity, solutions, venture capital and Brazil businesses. In October, Mubadala Capital closed its second investment fund in Brazil after raising more than $710 million. Brazil Special Opportunities Fund II raised capital from a diverse set of global investors, including a leading public pension fund, family offices, corporates, private equity funds and asset managers across North America, Europe, the Middle East and Asia, Mubadala said in a statement. Mubadala Capital closed its first fund in Brazil in February 2022 with total commitments of $322 million. In April last year, Mubadala Capital's energy company Acelen said it would invest $2.5 billion in the next 10 years to produce renewable diesel and sustainable aviation kerosene in the north-eastern Brazilian state of Bahia. Acelen – which owns the Mataripe Refinery in Bahia, Brazil's second biggest and one of the oldest in the country – plans to start production in 2026.
  • 6. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 6 Tanzania to showcase major LNG projects at IAE TradeArabia News Service With estimated recoverable gas resources of around 57 trillion cubic feet (tcf), Tanzania will feature as part of an East African regional spotlight at Invest in African Energy (IAE) 2024. Since discovering large volumes of offshore gas, Tanzania has initiated plans to become a major LNG exporter. The country’s flagship Tanzania LNG project – set to process gas from fields operated by Equinor, Shell and ExxonMobil, producing 10 million metric tonnes per year – is awaiting the signing of a host government agreement that would enable the start of development. Shell’s Blocks 1 and 4 have an estimated 16 tcf of gas in place, while Equinor’s Block 2 has yielded nine discoveries with more than 20 tcf of estimated reserves. Last November, the governments of Tanzania and Uganda signed an agreement to undertake a feasibility study for the construction of a pipeline linking Tazania’s gas fields to Uganda. Licensing round Tanzania is expected to launch its fifth oil and gas licensing round by June 2024, with licenses to be awarded by December of the same year. While the details have yet to be disclosed, 26 oil and gas blocks have been initially allocated for tender, including 15 onshore and 11 offshore blocks. Representing the country’s first bid round in over a decade, the licensing round aims to accelerate foreign investment in the country’s upstream sector and showcase its highly prospective acreage. So far, Chinese national oil company CNOOC is leading exploration in the country – in collaboration with Tanzania Petroleum Development Corporation – and is conducting seismic surveys in deepwater blocks located nearby gas discoveries made by Shell, Equinor and ExxonMobil.--
  • 7. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 7 U.S: Biden Plans Sweeping Effort to Block Arctic Oil Drilling (Bloomberg) The US set aside 23 million acres of Alaska’s North Slope to serve as an emergency oil supply a century ago. Now, President Joe Biden is moving to block oil and gas development across roughly half of it. The initiative, set to be finalized within days, marks one of the most sweeping efforts yet by Biden to limit oil and gas exploration on federal lands. It comes as he seeks to boost land conservation and fight climate change — and is campaigning for a second term on promises to do more of it. The changes wouldn’t affect ConocoPhillips’s controversial 600-million-barrel Willow oil project in the National Petroleum Reserve-Alaska. But oil industry leaders say the plan is more expansive than initially anticipated and threatens to make it nearly impossible to build another megaproject in the region. That’s spooking oil companies with holdings in the National Petroleum Reserve, which — along with the rest of Alaska’s North Slope — was viewed as a major growth engine for the industry before the shale boom. Interest has surged again in recent years, fed by mammoth discoveries. Tapping the region’s reservoirs could yield decades of production. Company executives and Alaska lawmakers have increasingly raised alarm over the plan, saying it could thwart oil and gas development across much of the reserve, even on existing leases. The opposition has united a broad spectrum of foes, from Alaska Natives to lower-48 oil producers.
  • 8. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 8 Santos Ltd., which leases more than a million acres within the reserve and is developing the nearby Pikka Unit joint venture with Repsol SA, said in a filing with the Bureau of Land Management that the proposal would infringe on its holdings, with impacts “as extensive as whole projects being denied.” ConocoPhillips, which has 156 leases in the reserve, warned the regulation would violate its contracts and “drive investment away from the NPR-A.” And Armstrong Oil & Gas Inc., whose leases there span 1.1 million gross acres, said the measure could block it from building the infrastructure needed to access those tracts. The proposed rule would effectively nationalize the company’s leases, Chief Executive Officer Bill Armstrong told White House officials in a March 21 meeting, according to people familiar with the discussion. A company spokesman declined to comment on the matter. Administration officials argue the changes are necessary to balance oil development with the protection of sensitive landscapes that provide habitat for polar bears, migratory birds and the 61,500-strong Teshekpuk caribou herd. “We must do everything within our control to meet the highest standards of care to protect this fragile ecosystem,” Interior Secretary Deb Haaland said in announcing the measure last year. The regulation would limit future oil development in some 13 million acres (20,000 square miles) of designated “special areas” within the Indiana-sized reserve, including territory currently under lease. There’d be an outright prohibition on new leasing in 10.6 million acres. The proposal would create a formal program for expanding protected areas at least once every five years — while making it difficult to undo those designations. And it would raise the bar for future development elsewhere in the reserve.
  • 9. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 9 The Interior Department said in a preamble the regulation wouldn’t affect existing leases. But the proposed rule text doesn’t offer similar, explicit assurance. Instead, it proposes to give the government broad authority to limit or bar access to existing leases, “regardless of any existing authorization.” Oil leasing and infrastructure development would be presumed not to be permitted unless specific information clearly demonstrates the work can be done with “no or minimal adverse effects” on the habitat. Environmentalists and some Alaska Natives have widely praised Biden for setting aside territory for conservation. “These are resources that once they’re gone, they’re gone forever, and we can’t wait until they have disappeared to go and get them back,” said Rachael Hamby, policy director for the Center for Western Priorities. “We need to manage now to protect those resources and values for present and future generations.” The Interior Department says the proposal would not have a significant effect on the nation’s energy supply. Still, the reserve could be a notable source of fuel, with the rock formations beneath it holding an estimated 8.7 billion barrels of recoverable oil, according to a 2017 assessment by the US Geological Survey. Enthusiasm for the region picked up after recent discoveries in the Nanushuk field, and the state of Alaska expects crude production from the reserve to climb from 15,800 barrels per day in fiscal 2023 to 139,600 barrels per day in fiscal 2033. Opponents say the plan would shift the role of the reserve to conservation instead of oil development, contrary to congressional intent. “The current statute says that the primary purpose is to increase domestic oil supply as expeditiously as possible,” said Kara Moriarty, president of the Alaska Oil and Gas Association. “But the rule takes a completely different premise.”
  • 10. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 10 NewBase April 12 -2024 Khaled Al Awadi NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE Oil prices head back up on Middle East jitters Reuters + NewBase Oil prices rose in early trade on Friday on heightened tensions in the Middle East, where Iran has promised to retaliate for a suspected Israeli air strike on its embassy in Syria, which could risk disruptions to supply from the oil producing region. Brent crude futures climbed 34 cents, or 0.38%, to $90.08 a barrel, while U.S. West Texas Intermediate crude futures rose 44 cents, or 0.51%, to $85.45, at 0033 GMT. The gains erased some losses from the previous session, which was dominated by worries about stubborn U.S. inflation that dampened hopes for an interest rate cut as early as June. Suspected Israeli warplanes bombed Iran's embassy in Damascus in an April 1 strike 1 for which Iran has vowed revenge, ratcheting up tension in a region already strained by the Gaza war. Israel has not said it was responsible but Iran's supreme leader, Ayatollah Ali Khamenei, said on Wednesday Israel "must be punished and it shall be" for the attack. Oil price special coverage
  • 11. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 11 The U.S. expects an attack by Iran against Israel but one that would not be big enough to draw Washington into war, according to a U.S. official. Iranian sources said that Tehran has signalled a response aimed at avoiding major escalation. Israel is keeping up its war in Gaza but is also preparing for scenarios in other areas, Prime Minister Benjamin Netanyahu said on Thursday. "The geopolitical risks remain elevated," ANZ Research said in a note, adding that oil prices have jumped almost 19% also supported by improving economic conditions and supply cuts by the Organization of the Petroleum Exporting Countries and allies, together called OPEC+. She said Washington would not accept this industry being "decimated" by China's overcapacity in key products. In Europe, where the labor market has begun to soften and growth is stagnating, central bankers left the policy rate unchanged on Thursday but signalled they remain on track to cut rates as soon as June. "The European Central Bank's decision to leave policy rates unchanged ... was expected, but accompanying statements open the door for near-term monetary easing," S&P Global Market Intelligence said in a note. However in the U.S., Federal Reserve officials signalled on Thursday no rush to cut interest rates, as sticky U.S. inflation remains a concern.
  • 12. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 12  Hawk Energy Sees Oil at $85-$100 This Year With Strong Demand Growth  That’s a ‘ foreseeable & sensible range,’ Hawk Energy CEO M. Al Shihabi says  Demand set to grow by 2.0 million barrels a day in 2024: Al Awadhi says
  • 13. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 13 NewBase Specual Coverage The Energy world –April 12 -2024 CLEAN ENERGY How accurate were EIA’s Winter Fuels Outlook forecasts? source: U.S. Energy Information Administration, Winter Fuels Outlook Every October, in our Winter Fuels Outlook, we publish forecasts for residential energy consumption, prices, and expenditures for the upcoming winter months. Generally, these forecasts have performed well. Our October forecasts for energy expenditures during the five-month period from November 2023 through March 2024 were within 3% of our final estimates for homes primarily heated with natural gas, electricity, and propane. Data source: U.S. Energy Information Administration, Winter Fuels Outlook Data values: Winter Fuels Outlook Estimated energy expenditures for homes primarily heated with heating oil were 13% lower than our October forecast because of mild winter weather and lower-than-expected crude oil prices. In our Winter Fuels Outlook, U.S. households are categorized by their main heating fuel and divided into the four census regions: Northeast, Midwest, South, and West. The consumption and expenditure values measure all end uses associated with a home’s primary heating fuel—not just the heating-related portion. Weather is the largest source of uncertainty in our forecasts, so we also publish cases that assume colder and warmer winter weather. Throughout the winter, we update these forecasts based on realized weather and energy prices, and we publish our evolving forecasts for future weather and
  • 14. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 14 prices for the remaining winter months. The data values in this article reflect our final estimates based on the most recent data for weather and prices. Winter weather was warmer than expected, especially in the Midwest Our weather forecasts are based on a combination of near-term expectations provided by the National Oceanic and Atmospheric Administration (NOAA) and a linear trend that extrapolates the long-term degree day trends over the previous 30 years. In October, our forecast indicated that the upcoming winter would be 4% warmer than the previous 10-year average, as measured by population-weighted heating degree days. Instead, the winter was 9% warmer than the previous 10-year average. The Midwest typically has the coldest winter weather. The particularly mild winter weather during December and February resulted in a 12% warmer-than-forecast winter in the Midwest. Data source: U.S. Energy Information Administration, Winter Fuels Outlook Data values: Winter Fuels Outlook The other three regions of the country also had warmer-than-forecast winter weather, but compared with the Midwest, heating degree day forecasts for those regions were more accurate. At the national level, this past winter was 6% warmer than our October forecast. This difference affected our consumption forecast, especially for propane, which is more commonly used as a primary heating fuel in the Midwest than in other regions. Natural gas and electricity expenditure forecasts were generally accurate Natural gas fuels heating equipment in 47% of homes, making it the most common primary heating fuel in the United States. In October, we forecast that natural gas-heated homes would spend $600
  • 15. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 15 on natural gas bills from November 2023 through March 2024. Our final estimate was the same as our October forecast: $600. Warmer-than-expected weather meant that actual natural gas consumption was less than our October forecast. However, actual retail natural gas prices were higher than we expected. These forecast errors mostly offset each other when calculating energy expenditures for natural gas- heated homes. Similarly, actual electricity consumption was lower than our October forecast, and actual electricity prices were higher. These forecast errors offset each other, and actual expenditures were about the same as forecast expenditures. Electricity is the primary heating fuel in 43% of homes and is more common in the South and in parts of the country with relatively low heating demand. In October, we forecast electricity expenditures to be $1,060 in our base weather case. Our final estimate for winter electricity expenditures—which includes all end uses, not just heating—was $1,080. These estimates represent a weighted average of all electric heating equipment. Data source: U.S. Energy Information Administration, Winter Fuels Outlook Data values: Winter Fuels Outlook Propane expenditures were in line with the forecast Propane expenditures usually have the most uncertainty across our weather cases. In addition to being sensitive to changing weather, propane prices tend to fluctuate more than natural gas and electricity.
  • 16. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 16 Changes in propane prices are passed to consumers more readily than changes in natural gas and electricity prices, which are insulated from rapid wholesale price fluctuations because of the regulatory processes that determine how utilities set prices. Propane is used by fewer homes (5% of the national total) but is more common in the colder climates of the Midwest and Northeast. We originally expected that these homes would spend $1,340 on propane in November through March. Our final estimate was $1,300. Lower crude oil prices resulted in lower heating oil prices than forecast Relatively few homes (4%) are heated with heating oil, and most of these homes are in the Northeast. Retail heating oil prices closely follow crude oil prices, which are sensitive to global markets. Our October forecast anticipated higher crude oil prices in the winter months and, therefore, higher retail heating oil prices than what occurred: actual retail heating oil prices were 9% lower than our October forecast. We estimate that homes that use heating oil as their primary heating fuel spent $1,610 this winter, or 13% less than our October forecast of $1,850. Data source: U.S. Energy Information Administration, Short-Term Energy Outlook (STEO), October 2023 and April 2024 Data values: Energy Prices (current forecast) and STEO Archives (October 2023 forecast)
  • 17. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 17 Mild winter weather may lead to persistently high natural gas inventories through 2025 in U.S source: U.S. EIA, Short-Term Energy Outlook (STEO), April 2024 U.S. working natural gas inventories ended the winter heating season (November 1–March 31) at 2,290 billion cubic feet (Bcf), 39% more than the previous five-year (2019–23) average. Relatively high natural gas inventories all winter have contributed to record-low Henry Hub natural gas spot prices. The surplus to the five-year average grew over winter 2023–24 because of mild weather, low natural gas consumption, and high natural gas production. In our April Short-Term Energy Outlook (STEO), we expect natural gas inventories to remain relatively high and natural gas spot prices to remain relatively low through 2025. According to the National Oceanic and Atmospheric Administration (NOAA), the United States just experienced its warmest winter on record. Since October 2023, the residential and commercial sectors consumed less natural gas than during previous winters, and less natural gas was withdrawn from storage: about 1,500 Bcf this winter versus 2,000 Bcf in previous winters.
  • 18. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 18 Mild winter weather led to low residential and commercial sector use of natural gas U.S. natural gas consumption peaks in winter because of its use as a space-heating fuel in the residential and commercial sectors. According to NOAA, December 2023 was the warmest December on record in many U.S. locations, particularly in the northern and central United States, where most households use natural gas for space heating. In the Northeast and Midwest, natural gas consumption in the residential and commercial sectors in December 2023 averaged 20 billion cubic feet per day (Bcf/d), 23% lower than December 2022 and 15% lower than the previous five-year (2018–22) average. Except for a winter storm in mid-January, relatively mild weather from November 2023 through March 2024 resulted in natural gas consumption in the U.S. residential and commercial sectors averaging 35 Bcf/d, 6% less than in the winter of 2022–23 and 7% less than the previous five-year average. Less consumption this winter contributed to below-average natural gas storage withdrawals and higher natural gas inventories.
  • 19. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 19 Natural gas production increased this winter Dry natural gas production averaged 106 Bcf/d in November and 107 Bcf/d in December—a record high. More production has also contributed to relatively high natural gas volumes in storage and the resulting low prices. In February and March, several producers, reacting to low natural gas prices, announced current or planned curtailments to production or reductions in capital expenditures toward natural gas-directed activities in 2024. We estimate that natural gas production averaged 103 Bcf/d in March, or 4 Bcf/d lower than the December 2023 peak. If production falls faster than we currently forecast and natural gas consumption—especially in the electric power sector—increases more than we currently forecast (for example, because of unusually hot weather this summer), then inventories could be drawn down to average levels and natural gas prices could rise. Natural gas inventories influence natural gas prices The difference between the storage inventory level at the end of March and the previous five-year average is an important price indicator for market participants at the start of natural gas storage injection season (April 1–October 31). The higher the surplus to the previous five-year average, the lower the Henry Hub price tends to be, and vice versa. In our October 2023 STEO, we forecast U.S. working natural gas inventories would end the winter 330 Bcf more than the previous five-year average and the Henry Hub spot price would average $3.10 per million British thermal units (MMBtu). As the winter progressed, the surplus of natural gas inventories continued to build because consumers needed less natural gas for heating. By the end of March, inventories were 640 Bcf higher than the previous five-year average, and the Henry Hub price had fallen to $1.50/MMBtu, generally in line with the relationship between inventories and price.
  • 20. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 20 We changed our forecast for natural gas prices for the remainder of 2024 based on the recent record-low Henry Hub spot price and the persistently high natural gas inventories. In the October STEO, we forecast the Henry Hub spot price to average $3.20/MMBtu in 2024. We now forecast the Henry Hub price to remain below $2.00/MMBtu until the second half of 2024 and to average $2.20/MMBtu for the year. We still expect the natural gas price to increase from the March 2024 low as production curtailments and increased natural gas consumption for electricity generation bring supply and demand closer to balance. Data source: U.S. Energy Information Administration, Short-Term Energy Outlook (STEO), October 2023 and April 2024 Data values: U.S. Natural Gas Supply, Consumption, and Inventories and STEO Archives
  • 21. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 21 NewBase Energy News 12- April - Issue No. 1715 call on +971504822502, UAE The Editor:” Khaled Al Awadi” Your partner in Energy Services NewBase energy news is produced Twice a week and sponsored by Hawk Energy Service – Dubai, UAE. For additional free subscriptions, please email us. About: Khaled Malallah Al Awadi, Energy Consultant MS & BS Mechanical Engineering (HON), USA Emarat member since 1990 ASME member since 1995 Hawk Energy member 2010 www.linkedin.com/in/khaled-al-awadi-38b995b Mobile: +971504822502 khdmohd@hawkenergy.net or khdmohd@hotmail.com Khaled Al Awadi is a UAE National with over 30 years of experience in the Oil & Gas sector. Has Mechanical Engineering BSc. & MSc. Degrees from leading U.S. Universities. Currently working as self leading external Energy consultant for the GCC area via many leading Energy Services companies. Khaled is the Founder of the NewBase Energy news articles issues, Khaled is an international consultant, advisor, ecopreneur and journalist with expertise in Gas & Oil pipeline Networks, waste management, waste-to-energy, renewable energy, environment protection and sustainable development. His geographical areas of focus include Middle East, Africa and Asia. Khaled has successfully accomplished a wide range of projects in the areas of Gas & Oil with extensive works on Gas Pipeline Network Facilities & gas compressor stations. Executed projects in the designing & constructing of gas pipelines, gas metering & regulating stations and in the engineering of gas/oil supply routes. Has drafted & finalized many contracts/agreements in products sale, transportation, operation & maintenance agreements. Along with many MOUs & JVs for organizations & governments authorities. Currently dealing for biomass energy, biogas, waste-to-energy, recycling and waste management. He has participated in numerous conferences and workshops as chairman, session chair, keynote speaker and panelist. Khaled is the Editor-in-Chief of NewBase Energy News and is a professional environmental writer with over 1400 popular articles to his credit. He is proactively engaged in creating mass awareness on renewable energy, waste management, plant Automation IA and environmental sustainability in different parts of the world. Khaled has become a reference for many of the Oil & Gas Conferences and for many Energy program broadcasted internationally, via GCC leading satellite Channels. Khaled can be reached at any time, see contact details above.
  • 22. Copyright © 2024 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed, or otherwise copied without the written permission of the authors. This includes internal distribution. All reasonable endeavors have been used to ensure the accuracy of the information contained in this publication. However, no warranty is given to the accuracy of its content. Page 22