Energy This Week: oil, lithium batteries, borders, smoke and water

Oil prices slip despite Saudi cut extension

Saudi Arabia announced it would?continue its voluntary production cut?of 1 million barrels per day through August, and Russia said it would cut supply by 500,000 barrels per day. Oil prices were still down at close on Monday, even though Emirates NBD economists say the kingdom will probably keep the restrictions in place for most of the rest of the year. Prices gained on Tuesday, though, after news that Russia, which has failed to live up to promised production curbs,?would reduce exports.

Crude gained each day from Wednesday to Friday last week after dropping on Tuesday. Nevertheless, the Brent benchmark is still?down 6 per cent?in the second quarter. The market digested a drop in US inventories, a?recovery in jet fuel consumption?to the highest post-Covid levels, likely further purchases for the US’s strategic petroleum reserve, improved American consumer optimism and easing US inflation, offset by weak Chinese economic figures. Although European inflation has dropped, it remains persistent and European Central Bank president Christine Lagarde said it was?too early to “declare victory”. The US Federal Reserve also expects further interest rate rises by year end.

UAE road fuel prices have?gone up this month, with Special 95 petrol rising 1.76 per cent

Revenues from oil exports earned by Opec members?reached $888 billion last year, up from $622 billion in 2021, according to the US Energy Information Administration. However, the EIA expects a fall this year to $656 million amid lower prices and Opec+ production cuts.

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Adnoc Gas expands while Kuwait wrangles with Iran

Adnoc Gas has awarded $1.34 billion of contracts to?expand its pipeline network, with particular focus on serving customers in the Northern Emirates. Petrofac Emirates, National Petroleum Construction Corporation and CAT International will perform the work.

The offshore Al Durra gasfield is an important resource for gas-short Kuwait, which shares it with Saudi Arabia. It could produce up to 1 billion cubic feet per day, compared to Kuwait’s total output of 1.29 billion cubic feet daily last year. Iran also claims part of the field, which it calls Arash. The two sides negotiated in Tehran in March over their maritime borders. Kuwait’s foreign ministry has now?issued a statement?saying: “Only the State of Kuwait and Saudi Arabia have exclusive rights to the natural resources of Al Durra field.”

After last year’s gas crisis, Europe faces the opposite challenge this summer: gas storage is set to reach the?target of 90 per cent filling?well ahead of the November 1 deadline, and gas imports might even have to be diverted elsewhere. Nevertheless, gas prices have risen after a drop in Norwegian supplies, related to maintenance.

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Warren Buffett moves on Occidental

Berkshire Hathaway, the conglomerate controlled by the 92-year-old billionaire, has?raised its stake?in the US oil company above 25 per cent. Berkshire helped finance Oxy’s takeover of Anadarko Petroleum in 2019, and started buying its stock early last year as oil prices rose following Russia’s invasion of Ukraine. Mr Buffett has said he does not plan to buy the company outright but has spoken positively of the management of chief executive Vicki Hollub. Oxy is an important oil and gas producer in the UAE, Qatar and Oman as well as its home base, and has innovative plans to build up its business in capturing carbon dioxide.

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What John Goodenough's lithium battery inspiration brought

Lithium-ion batteries have enabled three revolutions: mobile and smartphones, electric cars and renewable energy. Their inventor,?Nobel laureate John Goodenough, has died at the age of 100. But battery innovation continues, with further breakthroughs and applications on the way.

One major smartphone maker, Samsung, is nearly a third of the way to?becoming a net-zero company, it says, through using renewable energy, recycling and reusing water. The corporation emitted 20.17 million tonnes of carbon dioxide in 2021, the most among major tech companies, and ahead of Amazon with 16.2 million tonnes. The South Korean company’s emissions are comparable to those of an entire country such as Jordan or Lebanon.

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UAE tripling renewable energy by 2030

Investment to meet national energy demand will amount to Dh150 billion to Dh200 billion by 2030, and the?contribution of renewable energy will triple, as announced by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai. He said the national hydrogen strategy has been approved, including a specialised research and development centre. A policy on electric cars will include a network for vehicle charging.

India aims to have 500 gigawatts of renewable energy capacity by 2030, and New Delhi is offering?incentives for local manufacturing. Indian coal-to-renewables conglomerate Adani Group has succeeded in?raising extra capital?as it attempts to overcome accusations of fraud made by short-seller Hindenburg Research in January.

Wind power development is going through a difficult patch, with rising costs. German manufacturer Siemens Energy lost about $6 billion in market value after?revealing mechanical problems?with its wind turbines that could cause them to break, and cost more than $1.1 billion to fix.

Europe is looking to sustainable aviation fuel (SAF) for carbon-free flying. Less than 1 per cent of jet fuel currently used worldwide is SAF. The EU has set binding targets for SAF use, and could?need 150 additional refineries, costing €250 billion ($272.46 billion), to meet its needs.

UAE-based start-up?CarbonSifr?allows companies to track their emissions and consumers to pay for them. Abu Dhabi Global Market has?launched a regulatory framework?for sustainable investing.

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'Radical collaboration': Climate action from King Charles to Sheikha Shamma

The UK’s King Charles III has held talks on?accelerating the green transition?with key climate leaders in London, including Cop28 President-designate Dr Sultan Al Jaber. Dr Al Jaber, who is also the UAE Minister of Industry and Advanced Technology, also?met the mayor of London, Sadiq Khan, to discuss sustainable cities, and the Secretary of State for Energy Security and Net Zero, Grant Shapps. Sheikha Shamma bint Sultan told London Climate Action Week that “we must engage in radical collaboration” in a borderless approach, pointing to a $3 trillion-$3.5 trillion gap in annual sustainable investment in developing countries. Climate change disproportionately affects lower-income countries, but its?impact is universal.

The UK has been one of the fastest decarbonising major economies since 1990. But the UK’s Climate Change Committee warns that “we are worried about inertia”. Chris Stark, chief executive of the independent committee, says: “We are looking to policy programmes from the government that will achieve that. Our confidence for them to be met has declined. The plans are insufficient.”

US and EU green incentives face the UK with a “new competitive threat” and “time is now very short to achieve this change of pace”. The Institute for Public Policy Research commented: “In the global green race, the UK is still stuck in the changing room complaining to the referee about the boots the other runners are wearing."

The physical projects built to tackle climate change should be?showcased at Cop28, says Angela Wilkinson, head of the World Energy Council. “I think that should be less about people coming and promising what they’re going to do and [more about] showcasing what’s really going on.”

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Climate change brings drought, smoke – and violence

Italy is providing funding to?repair Iraq’s Mosul Dam, which has suffered from poor design, decades of under-maintenance and occupation by ISIS in 2014. A collapse could submerge Mosul and other Iraqi cities and endanger hundreds of thousands of people. The dam is also important for water storage and hydroelectric generation, but Iraqi-American hydraulic engineer Azzam Al Wash questions whether it can ever be made safe. And Turkey has?cut off water supplies?relied on by 1 million people in north-east Syria.

Climate change exacerbates conflict, and?violent and extremist groups recruit and prey on?those who have lost their livelihoods. Water shortages in Iraq were linked to support for ISIS, and environmental and agricultural degradation have forced some people to join armed organisations such as the FARC-EP in Colombia and Boko Haram in Nigeria, Niger, Chad and Cameroon. Sustainable water and crop management, and reintegration of former fighters are essential parts of tackling the problem beyond a purely securitised approach.

North America may seem more secure against such climate threats. But?smoke from record wildfires?has left many Canadian and US cities with dangerously poor air quality.