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Global energy: supply-demand model?

The purpose of this data-file is to enable some simple scenario testing for supply-demand balances in the global energy system. I.e. what energy supplies are most likely to be available from 2020-2030 to meet global energy demand, looking across coal, oil, gas, nuclear, wind, solar and other sources?

Worsening energy shortages are most likely, based on what we are currently seeing. If underlying energy demand ‘wants’ to grow by around 2% per year, while we phase back coal and nuclear, put oil and gas on a “plateau”, and ramp renewables by an astounding 1 TW per year by 2030, then we think energy shortages will deepen to around 10% total under-supply by 2030.

Possible resolutions could be if energy prices rise so high as to “destroy demand”, and thus total final energy use only grows 1% per year (not 2%), or if gas output grows 6% per year (not flat), or some combination of the two. It seems challenging to resolve energy shortages by other means.

Please download the data-file to stress test your own scenarios. Other metrics in the file include CO2 emissions and the total capital investment in primary energy (in $bn pa) that is associated with the scenarios.

Top Public Companies In Energy Transition

Some of the top public companies in energy transition are aggregated in this data-file, looking across over 1,000 items of research into the energy transition published to date by Thunder Said Energy.

The data file should be useful for subscription clients of Thunder Said Energy, if you are looking for a helpful summary of all of our research to-date, how it reflects upon public companies, and links to explore those companies in more detail, across our other research.

Specifically, the file allows you to filter different companies according to (a) listing country (b) size — i,e., small-cap, mid-cap, large-cap, mega-cap (c) Sector — e.g., energy, materials, capital goods, OEMs (d) TSE resarch — and whether the work we had done made us incrementally more optimistic, or cautious, on this company’s role generating economic returns while advancing the energy transition.

A back-up tab then reviews all of our research to date, going back to 2019, and how we think that specific research conclusion might impact upon specific companies. This exercise is not entirely perfect, due to the large number of themes, criss-crossing a large number of companies, at a large number of different points in time. Hence the observations in this data-file should not be interpreted as investment recommendations.

The screen is updated monthly. At the latest update, in September-2022, it contains 285 differentiated views on 148 top public companies in energy transition.

The Ascent of Shale

This model contains our live, basin-by-basin shale forecasts. It covers the Permian, Bakken and Eagle Ford, as a function of the rig count, drilling productivity, completion rates, well productivity and type curves. Thus, we derive production and financial expectations.

For 2022, the key challenge is stepping up activity levels, as the rig count must rise +60% YoY to keep early-2020s oil markets sufficiently supplied. Conversely, in 2021, production surpassed our expectations due to an unprecedented rate of DUC drawdowns, while well productivity was also stronger-than-feared.

Our longer-term numbers hinge on the productivity gains described in our thematic research. Shale productivity trebled from 2012-2018. We think it can rise another 45% by 2025, unlocking 15Mbpd of liquid shale production. However productivity could disappoint mildly in 2022 as the industry ramps activity levels back post-COVID.

We have also modeled the Marcellus shale gas play, using the same framework, in a further tab of the data-file. Amazingly, there is potential to underpin a 100-200MTpa US LNG expansion here, with 20-50 additional rigs.

Ventures for an Energy Transition?

This database tabulates almost 300 venture investments made by 9 of the leading Oil Majors, as the energy industry advances and transitions.

The largest portion of activity is now aimed at incubating New Energy technologies (c50% of the investments), as might be expected. Conversely, when we first created the data-file, in early-2019, the lion’s share of historical investments were in upstream technologies (c40% of the total). The investments are also highly digital (c40% of the total).

Four Oil Majors are incubating capabilities in new energies, as the energy system evolves. We are impressed by the opportunities they have accessed. Venturing is likely the right model to create most value in this fast-evolving space.

The full database shows which topic areas are most actively targeted by the Majors’ venturing, broken down across 25 sub-categories, including by company. We also chart which companies have gained stakes in the most interesting start-ups.

Alternative truck fuels: how economic?

This data-file compares different trucking fuels — diesel, CNG, LNG, LPG and Hydrogen — across 35 variables. Most important are the economics, which are fully modelled, in the 2020s in the US, in the 2020s in Europe and incorporating deflation in the 2040s.

Hydrogen still screens as an expensive alternative. We estimate full cycle freight costs will be c30% higher for hydrogen vehicles than diesels in Europe, and as much as 2x higher in the US. The data-file contains a breakdown of hydrogen truck concepts and their operating parameters.

Natural Gas can be close to competitive. On an energy-equivalent basis, $3/mcf gas is 4x more economical than $3/gal diesel. However, the advantages are offset by higher vehicle costs, operational costs and logistical costs. Mild environmental positives of gas are also offset by mild operational challenges.

The Top Technologies in Energy

The top technologies for energy transition are aggregated in this data-file, scoring their economics, technical readiness, and decarbonization potential, as assessed apples-to-apples across 1,000 pieces of research in Thunder Said Energy energy transition research.

Specifically, for each technology, we have summarized the opportunity in two-lines. Then we score its economic impact, its technical maturity (TRL), and the depth of our work on the topic to-date.

The output is a ranking of the top technologies in the energy transition, by category; and a “cost curve” for the total costs to decarbonize global energy.

Specifically, the world’s energy system will rise from 70,000 TWH pa of useful energy in 2021 to well over 100,000 TWH of useful energy by 2050. All else equal, this would increase global CO2e emissions from 50GTpa to 80GTpa. But the opportunities in this data-file can decarbonise the global energy system almost 3x over by 2050.

Our roadmap to net zero picks as many bars as possible from the left-hand size of the energy transiton cost curve, to achieve the most decarbonization for the lowest cost. The most economical roadmap has an average abatement cost of $40/ton. The contribution of each technology, and energy transition cost of each technology are modelled out in the back-up tabs.

A breakdown of the top technologies for energy transition. We see around 20% of all decarbonization coming from renewables (wind, solar, next-generation nuclear), effiiciency technologies that do ‘more with less’ (electric vehicles, electrification, power-electronics, advanced materials, advanced manufacturing), switching coal to gas (50-60% lower CO2 per MWH), carbon capture and storage (CCS, blue hydrogen, CO2-EOR, CO2-to-materials) and nature based solutions to climate change (reforestation, conservation agriculture, blue carbon).

A long list of over 1,000 companies that have crossed our screens is also aggregated in the final tab of the data-file, as a reference, for decision-makers looking for a list of companies in the energy transition.

Aerial Vehicles: Which Ones Fly?

We have compiled a database of over 100 companies, which have already flown c40 aerial vehicles (aka “flying cars”) and the number should rise to c60 by 2021.

The data substantiates our conclusion that aerial vehicles will gain credibility in the 2020s, the way electric vehicles did in the 2010s. Our latest updated in early-2020 shows strong progress was made in 2019 (chart below).

The database categorizes the top vehicle concepts by type, company, year-founded, company-size, company-geography, backers, fuel-type, speed, range, take-off weight, payload, year of first prototype, target commercial delivery date, fuel economy and required battery weights.

Some vehicle concepts are extremely impressive and credible; but a few may find it more challenging to meet the ranges they have promised at current battery densities…

Leading Companies in Plastic Pyrolysis?

This data-file assesses the outlook for 30 leading companies in plastic pyrolysis, operating (or constructing) 100 plants around the world, which use chemical processes to turn waste plastics back into oil.

Our data-file includes the number of plants, locations, start-up years, input-types and capacities for each plant. We also include our own notes, our assessment’s of each company’s technology.

The data-file has been updated in 2022, revising our rankings, and concluding that the industry is ‘on track’ for the game-changing scale-up originally foreseen in our 2019 research note (here).

Further research. Our recent commentary on the leading companies in plastic pyrolysis is linked here.

The cutting edge of shale technology?

The database evaluates 950 technical papers that have been presented at shale industry conferences from 2018-2020. We have summarised each paper, categorized it by topic, by author, by basin, ‘how digital’ and ‘how economically impactful’ it is.

The aim is to provide an overview of shale R&D, including the cutting edge to improve future resource productivity. We estimate 2020 was the most productivity-enhancing set of technical papers of any year in the database.

Recent areas of innovation include completion design, fracturing fluids, EORand machine learning. We also break down the technical papers, company-by-company, to see which operators and service firms have an edge (chart below).

Lula: how much growth left?

This data-file tracks the Lula oilfield, well-by-well, FPSO-by-FPSO, aggregating data from over 100 production reports, which are published monthly by Brazil’s national hydrocarbon regulator.

Hence we have formulated “production forecasts” for each FPSO, and for the entire field; in 2H19 and in 1H20. This matters for oil markets; and for pre-salt producers, such as Petrobas, Shell and Galp.

Our outlook is for slowing growth, due to rising water- and gas-cuts, which are reviewed well-by-well. One FPSO is now definitively constrained by gas-handling capacity. Another is off-plateau due to maturity. Six Lula FPSOs are now negotiating water-cuts, as shown in the data-file.

1H19 production was lower than expected, at just 72% of total installed FPSO capacity. Our notes attribute the drivers, and contextualise the growth ahead.

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