Daily Energy Report
Russia’s stops publishing oil stats, Coal still top electricity source, EU’s restrictive climate policies, China-Russia trade, Norway’s plans to nationalize gas pipelines, Venezuelan oil, and more
The Russian government has decided to stop publishing statistics on oil and gas output for a year, until April 2024, the Russian state news agency TASS reported.
The Federal Service for State Statistics (Rosstat) did not publish the monthly oil production data in its latest economic report which was published on Wednesday.
EOA’s Main Takeaway:
Russia is doing exactly what Iran did when its oil production and exports started declining. That means Moscow will not provide its production data to OPEC+, or the oil producers group will not publish the Russian data if it is provided.
This latest Russian decision means that the possibility of a decline in production and exports is now higher than before. Additionally, the quality of data on the global oil market will continue to deteriorate.
CHART OF THE DAY: Coal Remains King!
In its recently published fourth annual Global Electricity Review, EMBER, a UK-based independent energy think tank, revealed that 35.73% of global electricity was generated from coal in 2022, as shown in Figure (1) above, followed by natural gas at 22.22%. This data, and the continuous reports about increasing coal output in India and China to address power shortages, show that coal is still king in global electricity generation.
Total generation from fossil fuels, meanwhile, amounted to 61%, while electricity generated from wind and solar accounted for 12.09% of the power mix— despite hundreds of billions of dollars of investments in green energy.
EOA’s Main Takeaway:
Replacing fossil fuels (61% of total generation) will not only require additional investments, but it will also take a long time to be achieved.
Current trends reveal that the idea of bringing carbon dioxide emissions to net zero by 2050 remains improbable. And as we mentioned in previous reports, natural gas is the default fuel. It is the leading fuel, not a transition fuel.
Major investments in LNG terminals around the world prove that gas is here to stay (we discussed recent gas developments in the EU, Russia, Mozambique, and Nigeria in the last few days). The same applies to gray and blue ammonia, and hydrogen.
Our long-standing view is that demand for oil, gas, and coal is going to be higher than existing forecasts. Current predictions assume that all government-led green energy plans will materialize.
STORY OF THE DAY
In a study published today, the London-based New Economics Foundation said the EU's proposed policies regarding borrowing mean that not all member states will be able to spend to fund the green transition and attain the EU's climate goals.
The report noted that the European Commission's proposed "Green Deal Industrial Plan" has faced criticism for substantial deregulation unlike the US Inflation Reduction Act (IRA).
"Restrictions on debt and deficits mean governments need to keep their debt-to-GDP ratio and their borrowing arbitrarily low. Those with higher debt and deficits will not be able to benefit from green industrial policies as much as those that are less indebted," the authors, Sebastian Mang and Dominic Caddick, said.
The Green Deal Industrial Plan means that only four countries will have the fiscal power to achieve climate goals, particularly the 1.5-degree scenario, while others won't be able to fully follow through. These four are Ireland, Sweden, Latvia, and Denmark which represent 10% of EU GDP, according to the report.