OPEC president says shale no threat to group

OPEC President and UAE Energy Minister Suhail Al-Mazrouei does not see US shale as a threat to OPEC. (Reuters)
Updated 20 February 2018
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OPEC president says shale no threat to group

LONDON: UAE Energy Minister and OPEC President Suhail Al-Mazrouei said the US shale oil industry was “not a threat” to OPEC member oil-producing countries.
Speaking at an event in London on Feb. 20, he said it was important that the oil industry does not repeat the “mistakes of the past,” where producers became “so excited” by rising shale oil production that they overproduce, causing an imbalance in the market and job losses.
A glut in oil supply caused global oil prices to plummet from mid-2014.
Al-Mazrouei said OPEC plans to meet US shale oil producers at CeraWeek event in the US next month when they will explore the outlook for shale, rather than relying solely on analysts’ reports on the industry.
He underlined the commitment of all 24 OPEC and non-OPEC countries, including Russia, to continue to cut oil production by 1.8 million barrels per day until the end of 2018, following last November’s agreement.
“We are focused on what we agreed in 2017 to work together to balance the market,” he said, refuting suggestions of talks within any countries about an exit strategy from the deal.
“I don’t think we are talking about exit strategy for the time being, we are focused on one target, which is balancing the market,” he said.
Al-Mazrouei said he would like OPEC and non-OPEC oil producers to continue to work together beyond 2018 to ensure “market stability,” as the “job is not complete.”
Commercial oil stocks in the Organization for Economic Cooperation and Development (OECD) have fallen by more than 220 million barrels since the beginning of last year, compared to the five-year average, he said.
There remains a further 100 million barrels to remove from the market to reach the five-year OECD inventory average.
Al-Mazrouei confirmed there were plans for an alliance of the 24 non-OPEC and OPEC producers, but he refused to give details while the plans were still in draft form.
He expressed the hope that the alliance would not only be based on benefiting members, but also on “how we contribute to world economic growth.”
And he also reconfirmed previously reported recommendations that oil producer countries need to have capacity buffers in place to help deal with any shocks to the market.


‘Fuel of the future’ comes of age as Aramco opens first hydrogen filling station

Updated 17 June 2019
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‘Fuel of the future’ comes of age as Aramco opens first hydrogen filling station

  • Fatih Birol’s comments were a deliberate poke at those experts who think that the sheer logistics of hydrogen make it always an unlikely solution to global energy challenges
  • Birol’s article was followed by a report from the IEA that put some meat on the bones of the argument that hydrogen is key to solving problems such as global warming

DUBAI: Fatih Birol, executive director of the International Energy Agency, cracked a joke in the Financial Times a couple of weeks ago.
“Hydrogen is the fuel of the future, and it always will be,” he wrote about the fuel that many experts agree could hold the key to the world’s energy problems.
It was a deliberate poke at those experts who think that the sheer logistics of hydrogen — generation, storage, and transportation — make it always an unlikely solution to global energy challenges.
Birol’s article was followed by a report from the IEA that put some meat on the bones of the argument that hydrogen is key to solving such problems as global warming and environmental degradation.
“The world has an important opportunity to tap into hydrogen’s vast potential to become a critical part of a more sustainable and secure energy future … The world should not miss this unique chance to make hydrogen an important part of our clean and secure energy future,” the report said.
That argument will get a critical boost today, when Saudi Aramco, the biggest oil company in the world, opens its first hydrogen fueling station in Dhahran Techno Valley, in the heart of the Kingdom’s oil producing region.
Aramco has partnered with Air Products, a US company that has been a pioneer in the use of industrial gases, to produce a filling station for hydrogen-fueled vehicles.

 

It is very much a test. “The collected data during this pilot phase of the project will provide valuable information for the assessment of future applications of this emerging transport technology in the local environment,” Aramco said when the project was first announced.
But it is something Aramco has been investigating for a long time. Ahmed Al-Khowaiter, Aramco’s chef technology officer, said: “The use of hydrogen derived from oil or gas to power fuel cell electric vehicles represents an exciting opportunity to expand the use of oil in clean transport.”
Hydrogen — essentially what is left when you take the oxygen out of water — has been recognized as a potential fuel source for many decades. Motor manufacturers developed a hydrogen motor engine 50 years ago, but the ease and accessibility of hydrocarbon fuels — oil, gas and coal — made it uneconomic to develop this technology beyond the prototype stage.
Now, as the debate over the role of hydrocarbons in the global environmental balance has become ever more intense, some experts, including Birol and other influential parts of the thought-leadership establishment, believe hydrogen is the next Big Thing in global energy trends.
The World Economic Forum (WEF) said recently that “green” hydrogen offers a solution to the world energy challenge, and that is the problem the theoreticians are struggling with: Hydrogen is released naturally in the process of burning hydrocarbons, but it is self-defeating, in an environmental sense. if you have to burn oil, gas or coal to produce it.
On the other hand, renewable sources, like sun, wind and water, do not produce enough hydrogen to be practically or commercially viable, and not at the right times, when people actually need it.
But, as the WEF noted recently “low-cost green hydrogen is coming”, as technology advances mean the cost of renewable energy falls dramatically each year. The Middle East already has a very big and very cost-efficient program for solar energy generation.
The other challenges lay in how to store and transport hydrogen. It can be loaded onto a tanker like LNG, or pushed through pipelines, but it would require a huge investment to change current logistics systems — essentially designed for oil and LNG — to handle hydrogen.
Many countries, including Saudi Arabia, already have the infrastructure associated with oil and gas refining and petrochemicals production to be able to equip “hydrogen hubs,” as long as there is government will and commercial incentive to do so.
For the Kingdom, it looks like a no-brainer for the future. As Birol said: “So, hydrogen offers tantalising promises of cleaner industry and emissions-free power. Turning it into energy produces only water, not greenhouse gases. It’s also the most abundant element in the universe. What’s not to like?”

FACTOID

Technological advances mean low-cost ‘green’ hydrogen offers a solution to the world energy challenge, according to the World Economic Forum.