Welcome to this week’s edition of The Buzz, Kallanish Energy’s weekly wrap-up of the top stories our Editorial team covered the past week.
Among the many stories we covered were a plan by U.S. Congressional Democrats to transform America’s economy and creating renewable energy jobs, Venezuela’s oil minister scours the world seeking closer ties with crude customers, Opec’s crude production falls as the cartel looks to honor its committed production cuts, and developers of two separate pipeline projects join forces to move crude from the Permian Basin to the Houston Ship Channel.
Congressional Democrats look to shift from fossil fuels to renewables
U.S. Congressional Democrats launched a plan to transform the U.S. economy they say to, among other things, fight climate change and create jobs in renewable energy.
The so-called Green New Deal came under fire almost immediately from Republicans, saying it would cost trillions of dollars, would destroy the U.S. economy and result in huge tax increases.
The new plan was advanced at a press conference by freshman Rep. Alexandria Ocasio-Cortez (Democrat-New York) and Sen. Ed Markey (Democrat-Massachusetts).
The non-binding resolution calls for a 10-year national mobilization to shift the economy away from fossil fuels and to replace them with renewable energy sources such as wind and solar.
The plan does not explicitly call for eliminating the use of fossil fuels, The Associated Press reported. It sets a goal to meet 100% of the power demand in the U.S. through clean, renewable and zero-emission energy sources.
The resolution urges elimination of greenhouse gas emissions “as much as technologically feasible” in a range of economic sectors.
The plan would permit existing nuclear power plants to operate but would block new nuclear plants. It also calls for upgrading all existing buildings to be energy-efficient.
Venezuela’s oil minister looks for closer ties with major customers
Venezuela’s oil minister made a surprise appearance at an energy event in India as the country seeks closer ties with major crude customers due to U.S. sanctions.
Manuel Quevedo, who’s also the head of state producer Petroleos de Venezuela SA (PDVSA), said his nation wants to sell more crude to India, and U.S. sanctions have resulted in a $20 billion loss to the Latin American country’s economy, Bloomberg reported.
His arrival in India coincides with speculation over the future of the Venezuelan oil industry after the U.S., its largest customer, importing roughly 400,000 barrels per day of crude, blocked imports.
India is set to emerge as Venezuela’s preferred customer due to the nation’s willingness to pay for crude in cash, unlike China, which has entered into oil-for-loans deals.
Venezuela, which is selling more than 300,000 barrels a day to India, wants to more than double sales to the South Asian nation, according to Quevedo.
PDVSA is working to retain buyers in other countries such as China after American refiners halted purchases. The U.S. wants Venezuelan President Nicolas Maduro to cede power to an interim government led by Juan Guaido, a lawmaker who claims he’s the country’s rightful leader.
Opec’s crude oil production plummets in January: report
Opec’s crude oil production fell 797,000 barrels per day (Bpd), to average 30.81 million barrels per day (Mmbpd) in January, the group said in its latest monthly report.
January was the first month of the renewed Opec/non-Opec (collectively known as Opec+) oil cuts agreement, under which producers committed to reduce production by 1.2 Mmbpd for another six months.
Once again top-oil producer Saudi Arabia led in cuts, followed by the UAE and Kuwait. African member Angola has also recorded a large decline, while fellow cartel member Nigeria posted a major production increase.
According to the figures, based on secondary sources, Saudi Arabia’s January production dropped by 350,000 Bpd, to 10.21 Mmbpd. The UAE cut its output by 146,000 Bpd in the month, to average 3.07 Mmbpd, and Kuwait trimmed volumes by 90,000 Bpd, to 2.71 Mmbpd.
Further production declines were seen in Libya and Venezuela, with falls of 52,000 Bpd and 59,000 Bpd, respectively. While Libyan production is affected by outages due to militant conflicts, Venezuelan output is impacted by an ongoing crisis in the industry and the country, only exacerbated by newly imposed U.S. sanctions. Angola saw a decline of 75,000 Bpd, to 1.41 Mmbpd.
Nigeria, on the other hand, managed to lift its crude production by 52,000 Bpd, to 1.79 Mmbpd.
The International Energy Agency (IEA) said Opec’s output last month fell by 930,000 Bpd, to average 30.83 Mmbpd – a nearly four-year low. While the producers targeted lower crude output to balance the supply glut created in the second half of 2018, compliance with the agreed-to cuts have yet to happen.
According to the IEA’s Oil Market Report, Opec producers met 86% of their targeted reductions in January, while non-Opec producers, led by Russia, only delivered 25% of theirs.
Phillips, Kinder team to move crude from the Permian to the Gulf Coast
Developers of two separate pipeline projects have joined forces to move crude oil from the Permian Basin in West Texas/southeast New Mexico, to multiple shipping terminals on the Houston Ship Channel.
Phillips 66 Partners and Kinder Morgan are teaming to flow crude from the Permian and the Eagle Ford Shale play in South Texas to more destinations on the Texas Gulf Coast near Houston.
The 850-mile Gray Oak Pipeline is designed to move 900,000 barrels per day by the end of 2019. The eastern terminus in Texas of the line are the Phillips 66 Sweeny refinery in Brazoria County, plus Corpus Christi and Freeport.
Under the new agreement between Phillips 66 and Kinder Morgan, Gray Oak shippers will be able to use Kinder Morgan’s Crude and Condensate Pipeline to move crude oil from Sweeny to terminals along the Houston Ship Channel in Galena Park, Pasadena and Channelview.
Partners in the Gray Oak Pipeline are Phillips 66, Marathon Petroleum and Enbridge.
This post appeared first on Kallanish Energy News.