New base 20 june 2018 energy news issue 1182 by khaled al awadi

Copyright © 2018 NewBase www.hawkenergy.net Edited by Khaled Al Awadi – Energy Consultant All rights reserved. No part of this publication may be reproduced, redistributed,
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NewBase Energy News 20 June 2018 - Issue No. 1181 Senior Editor Eng. Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
UAE Lamprell, Asyad Holding to set up Saudi JV company
Lamprell + Business Arabia
UAE-based Lamprell, a major provider of fabrication, engineering and contracting services, said it
will join hands with Asyad Holdings to set up a joint venture company in the kingdom as part of its
regional expansion strategy.
A key player in the kingdom, Asyad Holdings brings significant regional knowledge and forms part
of a group of companies managing a diversified portfolio of businesses, including working on major
projects in Saudi Arabia.

The establishment of Lamprell Saudi Arabia is core to the Emirati group's growth strategy where its
primary focus to date has been the investment into the joint venture between Saudi Aramco, Bahri
and Hyundai Heavy Industries to develop a major maritime yard in the Arabian Gulf, known as
International Maritime Industries.
It comes in line with the firm's investment plans for Saudi Arabia and its aim to boost presence in
the kingdom. Lamprell said it was also pursuing other opportunities to gain a stronger foothold in
Saudi Arabia. Among other things, one objective is to qualify as a contractor to Saudi Aramco on
their Long Term Agreement (LTA) programme.
The LTA programme is where contractors
undertake offshore engineering,
procurement, construction and installation
projects in the oil & gas sector. A key
component of all LTA projects is Saudi
Aramco's In-Kingdom Total Value Add
(IKTVA) programme, which is designed to
encourage and increase local investment
by the LTA contractors.
Unveiling its new strategy in Saudi Arabia,
Lamprell said it is taking steps to achieve
IKTVA commitments by developing its in-
Kingdom capabilities and by partnering with
strong local businesses. A key component
of its plans to reach the IKTVA goal is
through the formation of Lamprell Saudi Arabia, said a senior official.
"We are uniquely positioned to build our business in Saudi Arabia with the complementary
opportunities of investment in the International Maritime Industries yard and our LTA bid to Saudi
Aramco," remarked Christopher McDonald, the chief executive of Lamprell.
"We are committed to developing our local capabilities and we are looking to realise these
opportunities by aligning with strong partners in-Kingdom. We are therefore pleased to gain the
support from Saudi investors, both as a major shareholder through Blofeld Investment Management
and as our local partner in our Saudi joint venture," noted McDonald.
According to him, the region has some of the strongest fundamentals in the oil sector and has
demonstrated resilient production throughout the market downturn with an exceptional growth
strategy going forward.
Lamprell said Blofeld Investment Management, a private family fund based in Saudi Arabia, has
increased its shareholding in the company to 10.08 per cent.
The key investment by Blofeld, a company owned by the same investor from Saudi Arabia which
owns Asyad Holdings, and partnership with major Saudi businesses will help boost the company's
strategic exposure in the region, said the top official.
"Much of Lamprell's effort over the past two years focused on building a presence in the region and
we are pleased to see our strategy supported by local partners," he added.

Gulf: Energy subsidies tumble across GCC
Oman observer - Conrad Prabhu
Energy subsidies plummeted dramatically across the Gulf Cooperation Council (GCC) states on the
back of reforms fuelled by the slump in hydrocarbon export earnings — the mainstay of government
revenues in the region, according to a report by the International Monetary Fund (IMF).
Pre-tax energy subsidies are estimated to have tumbled to $47 billion in 2016, down from $116
billion, said the global multilateral institution in a report titled ‘The Economic Outlook and Policy
Challenges in the GCC Countries’.
While energy price reforms are well advanced in some member states of the bloc, the pace of
reforms could be accelerated in others, it noted.
“Countries have made significant strides to reduce fuel subsidies,” the report said. “Gasoline and
diesel subsidies have been fully eliminated in the UAE, and substantially reduced in Oman. Their
prices were brought close to the international level and the authorities put in place automatic price
adjustment mechanisms that link domestic prices to movements in international oil prices.
The upward adjustment of lower grade gasoline prices, however, was capped in Oman in February
2017 until a mechanism to protect the most vulnerable has been put in place. While significant price
increases have also taken place in Kuwait, Saudi Arabia, Qatar and Bahrain, fuel prices remain well
below international levels.”
That mechanism referenced in the report has since been put in place in the Sultanate, with an
estimated 200,000 Omani motorists earning RO 600 or less entitled to subsidised petrol or diesel
up to a limit of 200 litres per month. A further 2,000 Omani fishermen are also part of the National
Subsidy Scheme (NSS) which entitles nationals falling in low income categories to receive
subsidised fuel.

Recipient numbers are expected to burgeon post August 1, 2018 when the salary cut-off, currently
set at RO 600, jumps to RO 950 per month, in line with a recent decision by the Council of Ministers
to offset the effects of rising international crude prices on local fuel tariffs.
Electricity price reforms are also moving forward, but progress in this area has been slower,
according to the IMF report. “In Bahrain, electricity and water prices are being increased for
businesses and households based on a multi-year plan, and exemptions from increases have been
provided for nationals on one property, and for small businesses.
Kuwait and Oman increased electricity prices for businesses and other big consumers in the first
half of 2017. Further prices increases are expected in Kuwait and Saudi Arabia, although in Kuwait,
nationals will be exempt,” the report said.
While electricity prices in Saudi Arabia and the UAE are comparable to that of the US, the electricity
generation costs are much higher in the Gulf region, primarily due to the usage of fossil fuel.
“Reforms should continue in this area until full cost recovery is attained,” it noted.
As for water prices, reform has been very limited, the report states. “Water subsidies are substantial
in the GCC as almost all the water for consumption is desalinated by burning fossil fuel,” it said.
Qatar, Bahrain and Saudi Arabia all increased water prices during 2015-16, while Kuwait increased
the rates in 2017 for businesses and expatriates. Some countries, notably Saudi Arabia, plan to
further rationalize water prices to cost recovery over the medium-term.
The IMF report, drafted by staff of the Fund, however emphasises the importance of protecting the
vulnerable from the impact of subsidy reforms. “To build public support, it is important to design
mitigating measures to protect the most vulnerable households from the impact of subsidy reforms,
which should be income-tested and well targeted. Such schemes are being designed in Oman and
Saudi Arabia,” it added.

Egypt: SDX Energy, gas discovery at its South Disouq Concession
Source: SDX Energy
SDX Energy, the North Africa focused oil and gas company, has announced that a gas discovery
has been made at its SD-4X well in the South Disouq Concession, Egypt (SDX 55% working interest
and operator).
The SD-4X well was drilled to a total depth of 7806 feet and encountered 89 feet of net conventional
natural gas pay in the Abu Madi horizon, which had an average porosity in the pay section of 24%.
The well came in on prognosis with a reservoir section of similar quality but thicker than the original
SD-1X discovery well.
The well will be completed as a producer in the Abu Madi and then tested after the drilling rig has
moved off location. The testing is anticipated to commence between 30 and 45 days after the rig
departs, depending on the availability of testing equipment.
Assuming a successful test, it is anticipated that the well will be connected to the infrastructure
located adjacent to the original SD-1X discovery, where production start-up is anticipated late in the
4th quarter of 2018. After completion, the rig will move to the SD-3X well which is the second of
two appraisal locations included in the 2018 development program.
SDX Energy has announced a gas discovery at its SD-4X well in the in the South Disouq
Concession
The well test program in the LMS-1 well in the Company's Lalla Mimouna Nord permit in
Morocco has been completed. Upon test the well flowed at sub-commercial rates which at this

stage we believe are temporary and due to damage created by the fluids used to control the elevated
pressures encountered in the well whilst drilling, however this is still being investigated. At present,
we believe the damage is the result of formation clays reacting to certain components used to
increase the mud weight of the drilling fluid.
The reservoir section, beyond this zone of damage, is thought to be of excellent quality based upon
the well log response and is not expected to have been damaged by the drilling fluids. Once the
fluid interaction study is complete, a stimulation program will be designed and implemented and the
well test will be repeated.
Paul Welch, President and CEO of SDX, commented:
'We are extremely encouraged by today's result at South Disouq. We had anticipated a thickening
of the pay section as we moved away from the crest of the structure, and this has now been
confirmed. We will now accelerate our development activity in the area. It's our intent to establish
production from both the South Disouq and Ibn Yunus areas before year end 2018. These results
demonstrate the significant potential we see in this area.
'At LMS-1, we were very surprised by the results of the flow test. The well flowed a significant
amount of gas whist drilling requiring the drilling mud weight to be increased to control the well so it
could be logged and completed.
That said, this part of the basin is a frontier area and this was the first time this section had been
drilled, so the composition of the reservoir section was unknown. Fortunately, we have a complete
data set from this well which will allow us to quickly and accurately design a stimulation program for
this, which we are confident will work.
'Overall we are very pleased with our recent drilling activity. In Morocco we had seven successful
results from our nine well program and in Egypt we have had three successes out of the four wells
drilled to date with one well to go. I am looking forward to updating our shareholders on the well
test results of the SD-4X, the spud of SD-3X and the progress we are making on our development
activity in South Disouq along with our plans to retest the LMS-1 in Morocco in due course.'

Egypt: Rockhopper provides update on Egypt operaions
Source: Rockhopper Explorations
AIM-listed Rockhopper Exploration, the oil and gas company with key interests in the North
Falklands Basin and the Greater Mediterranean region, has provided the following operational and
corporate update in relation to its Egyptian portfolio.
Abu Sennan, Egypt (22% working interest)
Year to date average daily production from the Abu Sennan concession has been maintained at
approx. 4,000 boepd gross (approx. 880 boepd net to Rockhopper).
An active programme has been agreed for 2018 including the drilling of one exploration well
('Prospect S'), two development wells and a water injection programme targeting the Al Jahraa field.
A drilling rig has been contracted and is expected to arrive in the concession shortly. The first well
is anticipated to spud in the last week of June once rig up and all inspections are completed. It is
currently planned that the two development wells will be drilled first (Al Jahraa-6 and Al Jahraa-11),
followed by the exploration well at Prospect S.

In addition to increasing production from the Abu-Roash reservoirs, Al Jahraa-6 has been designed
to test a deeper exploration target in the Bahariya to test good quality, water wet sands encountered
in Al Jahraa-1, but in an up-dip location.
Prospect S is an exploration target in the adjacent fault block to the Al Jahraa field. It has a similar
tilted fault block trap and is targeting the same Abu Roash reservoirs that produce at Al Jahraa.
The water injection project is progressing well and injection is expected to commence in early July.
The operator has performed the hydrotest for the new line from the water injection station to the Al
Jahraa-9 injection well. Preparations for installation of all the necessary equipment are in the final
stages. The development programme at the Al Jahraa field is designed to increase reserves and
field production rates.
Drilling on the Abu Sennan concession is expected to last for approx. six months with total capital
expenditure, net to Rockhopper's 22% interest, of approx. US$3 million.
El Qa'a Plain, Egypt (25% working interest)
Commitment well Raya-1X was spudded on 17 June 2018. This well is targeting the Nukhul
Formation reservoir, known from the Gulf of Suez, in a tilted fault block structure, close to where oil
has been tested from the same formation.
Expenditures on the El Qa'a Plain concession, net to Rockhopper's 25% interest, are anticipated to
be less than US$1 million.
Egypt payment situation
Rockhopper continues to experience an improving payment situation in Egypt with a number of
payments from Egyptian General Petroleum Corporation ('EGPC') towards its outstanding
receivables balance received in recent months.
As at end May 2018, Rockhopper's EGPC receivable balance was approx. US$2.2
million (unaudited).

India: Tesla to Venture in India, the keys to Tesla India strategy
Guest Contributor | Vikram Barhat | @vikrambarhath
 Tesla's strategy for India has been unclear, even though India's population is expected to
surpass China's as the world's largest within a decade.
 A more attractive business proposition for Tesla in India than its cars may be its Powerwall
home-energy solar storage solution.
 Whatever the case, Elon Musk may lean heavily on his CFO Deepak Ahuja to call the shots.
Tesla CEO Elon Musk's latest comments on an India venture caught many Tesla watchers by
surprise.
In a Twitter interaction with a Tesla fan from India on May 30, Musk indicated it was the company's
Indian-born chief financial officer, Deepak Ahuja, who was really calling the shots on Tesla entering
India.
Would love to be in India. Some challenging government regulations, unfortunately. Deepak Ahuja,
our CFO, is from India. Tesla will be there as soon as he believes we should.
That Ahuja — who grew up in India but moved to the United States to pursue higher education and
never returned — is not known to have this particular expertise, left some industry insiders with
more questions than answers.
Had he really been handed the control of the eclectic carmaker's India fate or had he been in the
driver's seat all along? Could Ahuja accurately calibrate the timing of Tesla's entry into the South
Asian nation and the market's readiness for its products?
Some Tesla and technology experts are interpreting the CEO's remark as merely being a cheeky
throwaway quip consistent with his character, especially his Twitter persona. But others, including
those who personally know Musk, inferred that the billionaire entrepreneur was simply thinking aloud
— and maybe seriously — on the microblogging platform, but short of actually making anything like
an official statement.
Musk's tweet was completely unexpected, said Vivek Wadhwa, a distinguished fellow and adjunct
professor at Carnegie Mellon University's College of Engineering and author of "The Driver in the
Driverless Car: How Our Technology Choices Will Create the Future."
Wadhwa said he had been interacting
with Musk about India, but Ahuja's role
in it never came up.
"This is new. I last exchanged emails
with Elon in November about going to
India," Wadhwa said. "I think that Elon
was just inundated and tweeted his
thoughts, he wasn't making an
announcement."
Wadhwa, who counts Ahuja as a friend,
said the latter was close enough to India
to know its problems and opportunities.

"Deepak [Ahuja] is a very experienced and sensible business executive who knows both the U.S.
and Indian markets — as well as the strengths and weaknesses of Tesla," he said. "Ahuja is Elon's
trusted advisor, so it makes complete sense to leave the decision to him."
Deepak Ahuja, Tesla CFO (left) and Elon Musk, Tesla founder and CEO (right), at the Nasdaq
opening bell ceremony for the Tesla initial public offering on Tuesday, June 29, 2010.
"Ahuja does have a lot of international experience with Ford, but none in India that I'm aware of,"
said Morningstar equity analyst David Whiston.
Ahuja ran Ford South Africa and also headed a Ford-Mazda international joint venture before he
left the Detroit automaker for Tesla.
There's a possibility, though, that Musk was referring to connections Ahuja has in India.
Ahuja, who came out of retirement to rejoin the Palo Alto-based automaker last year, left India at
age 22 to pursue a master's degree in materials engineering in the U.S. He comes from a family of
entrepreneurs and his father has originally expected him to return to India to help run a family
business after being schooled in the U.S. He did complete his undergraduate work at the India
Institutes of Technology.
"While I wouldn't expect a college student to be an expert in a culture, it's certainly better insight
than 'left at an early age', or someone who has only visited. And having close family and friends in
India may be help as well," said Tesla analyst Eric Ross at Cascend Securities, who has a sell rating
on Tesla.
A Tesla spokesman put it more simply, saying Ahuja has an important role in these types of strategic
decisions, including whether and when Tesla expands into new markets.
Wadhwa said he had urged Musk to accelerate the move to India but not to rush into selling cars.
Instead, he thinks India has a sizeable need for Tesla's Powerwall home battery, and that's a more
attractive business proposition for Tesla in India than its cars. "This is where the biggest opportunity
is," he said. "The battery when combined with solar cells can solve one of the biggest problems that
Indians face — the lack of reliable power."
Musk was "very interested in India" but already had far too much demand for Powerwall than he
could possibly handle, Wadhwa said. Wadhwa quoted Musk verbatim from one of their email
exchanges: "He [Musk] wrote: 'India is a very important market, but it will take us a year or so to get
to a scale that matters."
"If your car runs out of electricity in one of India's famous traffic
jams, you'd have a problem."-Morningstar analyst David Whiston, on the need to bring not just cars
but charging infrastructure to India
Right now it seems India couldn't be further from Musk's mind.

"I don't think there are any [India] plans yet; they are working frantically on scaling production up
to meet the massive demand," Wadhwa said. "Elon is focused on ramping up production of the
Model 3, the 'production hell' that he has tweeted about."
Wadhwa estimated Tesla could sell "a million Model 3's at the $35K price as well as several million
Powerwalls in the next 12 months if they could produce them fast enough."
"India requires a significant percentage of products to be manufactured in India, something TSLA
doesn't have the capital nor the appetite for at this time," Ross said. India also lacks the charging
infrastructure necessary for Tesla to release into a new market. "I assume given these challenges,
Ahuja may put India on the back-burner for a while; I certainly would if I were in his shoes."
Based on "current expectations," TSLA could release Models S and X in India no sooner than in
August 2019, and Model 3 in December 2019, Ross estimates.
Similar production concerns were expressed by Morningstar's Whiston, who said Tesla has to be
able to bring enough product to meet demand at a pace satisfactory to consumers, and build up
the charging infrastructure [in India]. "If your car runs out of electricity in one of India's famous
traffic jams, you'd have a problem," the Morningstar analyst said.
The current drive to reach profitability
Then there's another hurdle that Musk would rather the market didn't obsess over too much: the
need to raise capital. Contrary to Musk's repeated claims he wouldn't need to raise capital, Ross
said the India launch is out of the question until Tesla has raised capital to the tune of several billion
dollars.

"We don't expect they will even announce anything until they have raised capital, which we expect
in the second half of 2018, or the first half of 2019, at the latest," Ross said, adding that "TSLA will
raise additional capital once they show a strong ramp of Model 3s, perhaps 5,000 units per week,
and at good margins, so there is a positive story to tell investors."
Tesla referred questions about its cash needs to its recent Q1 shareholder letter in which the
company said that if it executes according to its plan for Model 3 production, then it will at least
achieve positive net income excluding non-cash stock based compensation in Q3 and Q4 and
expects to also achieve full GAAP profitability in each of these quarters. "Ultimately, the growth of
Model 3 and the profit associated with it will help us accelerate the transition to sustainable energy
even faster," the letter said.
Last week at the Tesla annual meeting, Musk followed that up by saying, "I think it is really looking
like we will have positive gap net income next quarter as well as positive cash flow in Q3 and Q4.
And we, as I have said before, do not expect to need to raise any incremental debt or equity."
Tesla announced a round of layoffs last week equal to 9 percent of its workforce, or roughly 3,600
employees, mostly salaried positions and with no expected impact on Model 3 production. In an
email to Tesla employees explaining the job reductions, Musk wrote the move was required to
reduce costs and become profitable.
Ross said he didn't think Musk was lying about capital requirements, but was being too "optimistic
about his production assumptions." It's unlikely Musk could ramp up production to "10,000 Model
3 cars per week, but if he did reach that level, he'd start generating real cash flow and he could
then fund himself."
Over the weekend, Musk sent an email to Tesla employees saying that "radical improvements" are needed
to meet quarterly targets. Ross gave another reason — less specific but maybe equally significant — as to
why India may have to wait: "Tesla has too many balls in the air, and any time they have a challenging
quarter, they announce a new 'world-changing vehicle'," Ross said. "We now have a Model Y, Semi and
pickup truck coming, all miraculously without requiring a capital raise."

NewBase June 20 - 2018 Khaled Al Awadi
NewBase For discussion or further details on the news below you may contact us on +971504822502 , Dubai , UAE
Oil up on U.S. stocks, Libya ahead of OPEC meeting
Reuters + Bloomberg + NewBase
Oil prices rose on Wednesday, supported by a drop in U.S. commercial crude inventories and the
loss of storage capacity in Libya, with investors cautious ahead of a biannual meeting of OPEC
exporters to decide production policy.
Benchmark Brent crude LCOc1 was up 70 cents at $75.78 a barrel by 0735 GMT. U.S. light crude
CLc1 was 60 cents higher at $65.67.
U.S. crude inventories fell by 3 million barrels to 430.6 million barrels in the week to June 15,
according to an American Petroleum Institute report on Tuesday. Traders said a drop in Libyan
supplies due to the collapse of an estimated 400,000-barrel storage tank also helped push up prices.
Looming large over markets, however, were meetings on June 22-23 in Vienna of the Organization
of the Petroleum Exporting Countries with other big producers, including Russia.
De-facto OPEC leader and top crude exporter Saudi Arabia, as well as Russia, which is not a
member of the cartel but is the world’s biggest oil producer, are pushing to loosen supply controls
introduced in 2017 to prop up prices.
Other OPEC-members, including Iran, are against such a move, fearing a sharp slump in prices.
“Unlike previous meetings, the run up to this OPEC meeting is fraught with uncertainty with Iran
from the onset adopting a very entrenched opposition to any supply increase,” Harry Tchilinguirian,
head of global oil strategy at French bank BNP Paribas, told the Reuters Global Oil Forum.
Jack Allardyce, oil and gas research analyst at Cantor Fitzgerald Europe, said he expected OPEC
would agree to pump more oil, probably a fairly modest 300,000-600,000 barrels per day, or only
around 0.5 percent of total world production.
“We could see this knocking $5 per barrel off Brent,” Allardyce said.
Markets are also anxiously watching trade tensions between the United States and China, in which
both sides have threatened to impose stiff duties on each other’s exports, including U.S. crude oil.
A 25 percent tariff on U.S. crude oil imports, as threatened by China in retaliation for duties
Washington has announced but not yet implemented against Chinese products, would make
American crude uncompetitive in China versus other supplies.
This would almost certainly lead to a sharp drop-off in Chinese purchases of U.S. crude, which have
boomed in the last two years to a business now worth around $1 billion per month.
Oil price special
coverage

OPEC Maths Reveals Gap Between Headlines and Real Barrels
When OPEC meets on Friday in Vienna to discuss a possible output hike in the second half of the
year, there’s likely to be a significant gap between the headline numbers under discussion and the
amount of oil that can actually be added to the market.
The gap between real barrels and those that exist only on paper means that the impact on the
market of any agreement between the Organization of Petroleum Exporting Countries and its allies
to increase supply is likely to be about one-third smaller than the headline announcement, according
to Bloomberg calculations.
To see why, look at the 1.5 million-barrel-a-day increase that has been floated by Russian Energy
Minister Alexander Novak. He said on Tuesday that his proposal would allocate the quota increase
among all OPEC+ members in proportion to the original cuts each country agreed back in 2016.
That would give Saudi Arabia a 402,000-barrel increase, Russia a 248,000-barrel hike, and so forth.
But it would also allot higher quotas to countries which are probably, or certainly, unable to lift output
-- such as Venezuela, Mexico and Angola.
The Haves and Have Nots
Impact of a 1.5 million b/d quota increase shared in proportion to original cut
Note: excludes Iran, Libya, and Nigeria, as they did not agree to cut production under the original deal, and Kazakhstan, which is already
producing more than any theoretical new quota

Of the 1.5 million-barrel-a-day increase, only 958,000 barrels would go to producers that are almost
certainly able to use them. The same logic applies to smaller quota adjustments. A 1 million barrel-
a-day boost would actually hand only 639,000 barrels of increased quotas to countries that could
definitely use them.
"Because so many OPEC countries can’t increase production, the real output boost will be
substantially lower than the headline announcement," said Amrita Sen, Chief Oil Analyst at
consultant Energy Aspects Ltd.
OPEC Members Gird for Battle
Iran rejected a potential compromise at OPEC, saying it won’t support even a small increase in oil
production when the cartel meets on Friday. The comments by Bijan Namdar Zanganeh, the Iranian
oil minister, are the strongest indication yet that the meeting of the Organization of Petroleum
Exporting Countries could end in disarray for the first time since 2011.
“I don’t believe in this meeting we can reach an agreement,” Zanganeh told reporters on his arrival
in Vienna. OPEC makes its decision by unanimity, so the veto threat may force Saudi Arabia
to assemble a coalition of countries willing to bypass Tehran. Trump has tweeted twice in the last
two months to complain about high oil prices and accuse OPEC of being “at it again.”
Oil has been stuck mostly below $67 this month as investors assess mixed signals from the
Organization of Petroleum Exporting Countries and its allies on whether they will ease production
cuts to offset potential supply losses. Russia is advocating a 1.5 million-barrel increase in collective
daily output, while Iran, Iraq and Venezuela argue it’s too soon to back away from the historic caps
that helped erode a worldwide glut.
“Investors would have taken more of a wait-and-see stance in ordinary circumstances before an
OPEC meeting, but factors that are not unique to the oil market, such as the risk of a U.S.-China
trade war, could further lower crude prices,” Jun Inoue, a senior economist at Mizuho Research
Institute Ltd., said by phone from Tokyo. “If prices fall too much, that could affect OPEC’s
discussions on output policy.”

NewBase Special Coverage
News Agencies News Release June 20-2018
U.S: Adoption of autonomous vehicles could increase U.S. transport
energy consumption . U.S. EIA, Annual Energy Outlook 2018 Autonomous Vehicles:
Autonomous vehicles are one of the main sources of uncertainty in the future of U.S. transportation
energy consumption, as autonomous vehicle technology has the potential to change travel behavior,
vehicle design, energy efficiency, and vehicle ownership.
Analysis in EIA’s Annual Energy Outlook 2018 (AEO2018) shows that the widespread adoption of
autonomous vehicles could increase overall light-duty vehicle travel and, depending on how those
vehicles are powered, lead to slightly higher transportation energy consumption.
On-road vehicles, including light-duty vehicles, buses, and commercial and freight trucks, are
significant consumers of energy in the United States, accounting for 31% of all delivered end-use

energy. Light-duty vehicles alone account for 21% of total delivered end-use energy consumption.
EIA projects that light-duty vehicle travel will continue increasing in the future. By 2050, light-duty
vehicle miles traveled will reach 3.3 trillion miles, or 18% higher than the 2017 level.
In two AEO2018 sensitivity cases that assume more widespread use of autonomous vehicles—and
that these vehicles are driven more miles per year than non-autonomous vehicles—than in the
Reference case, overall light-duty vehicle travel demand increases 14% higher than Reference case
levels by 2050, reaching 3.8 trillion miles in that year.
One case assumes the increasing adoption of autonomous battery electric vehicles; another case
assumes the increasing adoption of autonomous hybrid electric vehicles. Both cases assume that
autonomous vehicles as a share of overall light-duty vehicle sales increase from 1% percent in the
Reference case to 31% in the sensitivity cases in 2050.
In the AEO2018 Reference case, autonomous vehicles are powered by conventional gasoline
internal combustion engines.
Despite the relative fuel efficiency of battery electric and hybrid electric vehicles compared with
conventional gasoline internal combustion engines, more energy is consumed in both sensitivity
cases (up to 4% more) compared with Reference case levels in 2050 because of increased light-
duty vehicle travel. In all three cases, however, conventional gasoline engines remain the most
common technology powering light-duty vehicles.
U.S. Energy Information Administration, Annual Energy Outlook 2018 Autonomous Vehicles: Uncertainties and Energy Implications

Future transportation energy demand in the Reference and both sensitivity cases is still lower than
in 2017, largely because of Corporate Average Fuel Economy and greenhouse gas emissions
standards on light-duty vehicle energy consumption.
In the two sensitivity cases with greater autonomous vehicle adoption, transportation energy
demand is slightly higher than in the Reference case, as the improved fuel economy associated
with battery electric vehicles and hybrid electric vehicles only partially offsets the increase in travel
demand.
In the sensitivity case with more hybrid electric vehicles, gasoline consumption is slightly higher
than in the Reference case. In the case with more battery electric vehicles, electricity consumption
is slightly higher than in the Reference case. In both cases, diesel consumption is virtually
unchanged.
Source: U.S. EIA, Annual Energy Outlook 2018 Autonomous Vehicles: Uncertainties and Energy Implications
In both sensitivity cases, fuel use in public transit modes is affected by assumptions about how they
could interact with autonomous vehicles. Large fleet long-haul commercial trucks are assumed to
start using automation technology to improve fuel efficiency through platooning, where groups of
vehicles travel in a tight formation to reduce aerodynamic drag.
However, the energy consumption effects of these changes for commercial trucks or other modes
such as mass transit are relatively small compared with the consumption changes in light-duty
vehicles.The full Issues in Focus article Autonomous Vehicles: Uncertainties and Energy
Implications provides additional discussion of definitions of autonomous vehicles, potential benefits
and obstacles, uncertainties related to energy consumption, and scenario assumptions and results.

NewBase For discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
The Editor :”Khaled Al Awadi” Your partner in Energy Services
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Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
Mobile: +97150-4822502
khdmohd@hawkenergy.net
khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with a total of 28 years of experience in
the Oil & Gas sector. Currently working as Technical Affairs Specialist for
Emirates General Petroleum Corp. “Emarat“ with external voluntary Energy
consultation for the GCC area via Hawk Energy Service as a UAE operations
base , Most of the experience were spent as the Gas Operations Manager in
Emarat , responsible for Emarat Gas Pipeline Network Facility & gas
compressor stations . Through the years, he has developed great experiences
in the designing & constructing of gas pipelines, gas metering & regulating
stations and in the engineering of supply routes. Many years were spent drafting, & compiling gas
transportation, operation & maintenance agreements along with many MOUs for the local
authorities. He has become a reference for many of the Oil & Gas Conferences held in the UAE
and Energy program broadcasted internationally, via GCC leading satellite Channels.
NewBase : For discussion or further details on the news above you may contact us on +971504822502 , Dubai , UAE
NewBase June 2018 K. Al Awadi

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Your Energy Consultant for the GCC area
Khaled Al Awadi

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