For years, the so-called Oil Day of the annual IHS CERA energy conference, which draws thousands of industry executives to Houston, has been the highlight of this weeklong event. It comes first – before Gas Day and Power Day. The biggest names are keynote speakers that day (This year, for example, Steven Chu, US Secretary of Energy, was among the keynote speakers). And attendence is at its highest.
But the irony of how natural gas is beginning to overtake oil in importance to the industry was underscored by the lunchtime keynote speaker Jim Mulva, chief executive of ConocoPhillips, the third biggest US oil and gas company. Even though Conoco is an oil company first and foremost, and Mr Mulva was speaking on Oil Day to a room filled with oil executives, his speech was called Natural Gas – The Gift.
On FT Energy Source:
- Is the super-grid hoping for too much from Norway’s hydropower?
- Lithium, copper and the new energy scramble
- Craig Venter and the algal biofuel outlook
- Oil market contango eases
- Oil at the heart of Iranian sanction efforts
- Nat gas industry heartened by Colorado plans
- Climate talk despondency and China’s copper deal in Energy headlines
- The mighty thorium
- Peak demand, yes – but not the nice kind
- The Maldives commissions a new, floating island
- Goldman’s Jeff Currie on oil, gold and nat gas
- Mexico’s politics keep oil riches just out of reach
- ETS – without a significant economic impact
- Russian crude takes on Gulf
- Shanghai maps out energy consumption cuts
- The unfrozen North
- ‘Food vs fuel’ yields no fruit
Source: Korean Land Ministry
Forget the troubled US electricity grid, or European super-grid plans, not to mention far more remote African solar desert-to-Europe concept.
China is going ahead and securing Chilean copper for its own grid expansion plans.
Meanwhile, remember Renault/Nissan chief Carlos Ghosn’s comments at the Geneva Motor Show last week about electric cars? He predicted a scramble for the resources to produce green vehicles, including lithium.
China has some lithium reserves of its own – and is producing them at a fairly high rate – but Japan and South Korea, the other two biggest producers of lithium goods – have none.
In a sign that Ghosn might be onto something, South Korea recently began to talk much more confidently about its plans to make lithium from seawater.
Flickr: Lee Nachtigal
The Wall Street Journal has an interview with J. Craig Venter, the biologist who mapped the human genome and whose company Synthetic Genomics last year received a sizeable commitmentfrom ExxonMobil to develop biofuels from algae.
Venter strikes an interesting balance between optimism and the reality of the many unknowns in getting algal biofuel towards being both cost-effective and scalable.
[We were interested to read the Synthetic Genomics is also working on a project with BP, although the financial details of that arrangement have not been disclosed.]
He talks about using natural or modified organisms that consume CO2 as their feedstock to create transport fuels.
Which is not to say it’ll actually go away any time soon.
The spread between forward prices and spot prices for crude oil is narrowing towards 18 month lows. Lower inventories amid higher demand, particularly from Asia, are seen as the main reasons. Barclays Capital analyst Amrita Sen sees the narrowing spread in the context of higher front month prices:
With global crude inventories being slowly whittled away and concerns of floating storage diminishing greatly, the groundwork for a slight flirtation of prompt contracts with backwardation in early Q2 is being laid. Moreover, in our view, the oil market is transitioning away from the long-held period of $70-80 range-bound trading to a higher trading range. Having settled above $80/bbl for the third day running and currently trading near $82 with relative ease, it does seem to have become relatively easier for prices to test and break past $80.
Will there be a full move into backwardation, in which front month contracts attract a premium, or will the contango simply flatten?