Newsletter

Hello and welcome to Gas Outlook Monthly,

The monthly ‘Elites Newsletter‘ has had a refresh. To continue expanding our offering, we’ve decided to rebrand the newsletter as Gas Outlook – a news service that aims to bridge the gap between climate news and the fossil fuel industry.

As well as highlighting elite voices in the energy transition conversation, the Gas Outlook monthly letter will also analyze the top energy stories from the previous month, providing links to content, information on upcoming industry events, interesting data and detailed reporting.

This month, media narratives on gas drew heavily on events at the CERAWeek conference held in Houston, Texas. An annual summit, this year’s CERAWeek was strongly characterised by the efforts of oil executives to denounce a rapid phase-out of fossil fuels. Biden’s LNG pause was also debated at the energy conference, and in this month’s newsletter we take a further step in exploring the impact of LNG expansion, diving into the affected livelihoods of local communities and businesses. Following other popular discussion trends in March, we also delve into the growing divergence between the 2024 oil demand forecasts of the IEA and OPEC, which currently are seeing their largest margin since 2008.

The newsletter highlights key insights from the online conversation around natural gas, focusing on what journalists and investors have been discussing. The statistics are derived from Brandwatch.com and mostly rely on X (formerly Twitter) data, but also include vital mentions on Reddit, forums, blogs and online media outlets.

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Upcoming events in April 2024:

All year-round, Gas Outlook reports on key oil and gas events across the globe to provide insightful and incisive content on the energy transition. In April, our correspondents will report from two upcoming events:

• The Arpel-Naturgas Week in Colombia from April 8th-12th
  A conference bringing together international energy experts and fossil fuel executives to discuss the future of energy in Latin America and the Caribbean.
• The Oman Petroleum & Energy Show from April 22nd-24th
  The Oman Petroleum & Energy Show is a networking business event which brings together local and international fossil fuel companies to exchange their expertise on new opportunities, challenges and the future of the oil and gas industry. This year, the SPE (Society of Petroleum Engineers) conference will be diving into ‘Affordable, Sustainable, and Clean Energy.’

 

Takeaways from CERAWeek 2024

On March 18th, the 42nd annual CERAWeek conference began, gathering together some of the top energy leaders, policymakers, technology and industry communities to advance solutions on the future of energy and climate. The conference, organised by the insights company S&P Global in Houston, is often dubbed as the “Super Bowl” of energy.  According to EnergyNow, this year’s CERAWeek can be summed up in one word; demand. For the Canadian outlet, the conference was an optimistic showcase on consumption, whether it be discussions surrounding oil, gas or renewable energy. The debates had a clear message: “the world needs all of the above” (EnergyNow).

Despite these optimistic, multi-fueled energy discussions, there was a “sour” mood among oil leaders, says The Economist’s editor, Vijay V. Vaitheeswaran (MarketPlace). For Vaitheeswaran, the collective tantrum is a reflection of some of the election-year decisions undertaken by the White House: (1) Biden’s LNG pause, (2) the technical tax ruling on hydrogen, (3) the Bipartisan Infrastructure Law and Inflation Reduction Act finance slow release. With CERAWeek being characterised by a multitude of discussions, announcements and debates, this newsletter has chosen to unpack two notable takeaways:

• Big Oil presence Top oil leaders took to the stage at CERAWeek to vocally oppose a rapid transition away from fossil fuels, with their key message being that the societal repercussions would be too costly, explains Reuters. On its first day, thousands of oil and gas voices joined the Houston gathering to reaffirm their confidence in rising global gas demand and an LNG expansion coherent with an advancing energy transition (Gas Outlook). A statement from Aramco’s CEO Amin H. Nasser set the tone for the rest of the conference: “We should abandon the fantasy of phasing out oil and gas, and instead invest in them adequately, reflecting realistic demand assumptions.”
• Artificial Intelligence (AI) emerges in the energy world Executives had another bullish front to discuss at CERAWeek: the power of AI. Across on-stage panels and interviews, Bloomberg reports that energy leaders were effusive about the technology’s potential and its power to reshape production. “With this huge revolution around artificial intelligence, I think the energy needs are going to be enormous,” said ConocoPhillips’ CEO Ryan Lance. As ambitions mount at technology companies, this new hot topic brings a fresh dilemma; AI’s appetite for electricity (The Wall Street Journal). As EnergyNow reports, the rise in AI means U.S. data centres could consume more energy than households by 2030 – a staggering fact that sparked discussions on the potential strain on a clean energy transition. Energy experts anticipate utilities to continue to heavily depend on natural gas, coal and nuclear, while technology firms not only seek new power sources but also clean ones. The growing demand would pose an extra challenge for the Biden administration’s goal of eliminating carbon emissions from the US electricity sector by 2035, explains The Wall Street Journal.

 

The impact of LNG expansion: A “nail in the coffin” for Louisiana’s local fishermen

In the midst of the CERAWeek conference in Houston, some energy conversations drifted away from traditional dialogues on supply, demand and innovation, and focused instead on Biden’s divisive pause on U.S. LNG exports, explains Forbes. Executives shared their predictions on when the pause would be lifted, from Venture Global’s chief executive Michael Sabel striking optimism to Freeport LNG’s Michael Smith’s statement claiming the freeze could last longer than expected (Upstream & Upstream). On the conference’s kick-start day, U.S. Energy Secretary Granholm announced the pause would end within a year (E&E News), which was welcome news for oil and gas leaders who remain confident about rising global gas demand and the value of LNG expansion (Gas Outlook).

Despite increasing debate and new research showing methane emissions far exceed official estimations, the North American oil and gas industry continues to maintain its stance on LNG, regardless as well of the catastrophic impact on the region’s export facilities and its communities (Nature).The U.S. currently boasts eight operational LNG terminals, with an additional seven under construction and over a dozen in different stages of the permitting process, explains Gas Outlook. Nearly all of the infrastructure development is concentrated in Texas and Louisiana, and particularly impacts the border region between the two states. Over recent years, the expansion of regional LNG facilities has endangered local communities, exposing them to rising environmental, health and economic insecurity. In January, findings from the Louisiana Bucket Brigade revealed the underreporting of the amount of toxic air emissions released from LNG facilities – an air pollution destined to worsen as expansion progresses.

In southwest Louisiana’s Cameron Parish, home to Venture Global’s Calcasieu Pass, commercial fishermen say the facilities are affecting not only the communities’ health and environment, but also their businesses. In a recent investigation conducted by Gas Outlook, local fishermen detailed the repercussions of the Calcasieu Pass on their activities. These include disturbances and adverse effects on fish populations caused by boats passing through the channel, restrictions on fishing operations near LNG tankers, and the closure of boat launches in Cameron. Commercial fisherman Phillip Dyson told Gas Outlook, “They [LNG] want you gone. They’re just making it harder and harder, trying to push you out.”

On March 17th, Venture Global announced the acquisition of nine newbuild LNG ships, according to Reuters. As energy executives continue to secure the future of LNG, fishermen are faced with what could be the final blow to their businesses and livelihoods in Louisiana.

Interested in the expansion of LNG in Louisiana, and its impacts on local communities?

Read Gas Outlook’s two-part Long Read (part 1 and part 2).

 

 

IEA & OPEC diverge on 2024 oil demand

On March 14th, the International Energy Agency (IEA) published its monthly oil market report, raising its estimate for 2024 oil demand growth by 110,000 to 1.3 million b/d. The report highlights a surge in oil inventories “on water” due to the shipping disruptions caused by the Red Sea crisis – an amount of oil in transition that has reached record levels, reports Offshore Energy. This is the fourth time since Houthi attacks began in November 2023 that the IEA has boosted its 2024 forecasts, according to Reuters.

By contrast, OPEC+ announced an extension of its voluntary oil supply cutbacks of 2.2 million barrels until mid-2024 to support market stability (Bloomberg). This was an anticipated declaration, as indicated by a Bloomberg survey in which more than 80% of polled traders and analysts were expecting the extension, deeming it crucial to counteract a seasonal decline in worldwide fuel consumption and surging production from competitors. Reflecting on OPEC+ members, analysts at Jefferies Group said: “The decision sends a message of cohesion and confirms that the group is not in a hurry to return supply volumes, supporting the view that when this finally happens, it will be gradual,” (Reuters).

A Reuters analysis has revealed that the OPEC and IEA forecasts have reached their largest margin of difference since 2008. This gap sends conflicting signals on the strength of the 2024 oil market to traders and investors, according to the news agency. For reporters at Oil Prices, the growing divergence also brings into view a legitimate debate: “Who’s right?”.

“It’s worth noting that neither authority is completely impartial” suggests Oil Prices. Whilst the IEA was founded as the “energy watchdog,” its mandate over the past decades has shifted from oil and gas supply security to renewable energy development, reports Reuters. This transition compromises its impartial authority for certain OPEC states. In comparison, OPEC’s dependence on fossil fuel revenues stands to suffer irreversible repercussions from a rapid shift away from oil. Despite these biases, however, Reuters analysis found that the two forecasters had statistically tied accuracy levels based on tracked records – a finding that further deepens the uncertainty on 2024 global oil market predictions.

For any follow up questions, feel free to reach out at sophie.davies@gasoutlook.com

Best wishes,
Sophie Davies
Editor, Gas Outlook