Drilling wells and lifting fluids to the surface are core skills in the oil and gas industry. Hence could geothermal be a natural fit in the energy transition? This 17-page note finds next-generation geothermal economics can be very competitive, both for power and heat. Pilot projects are accelerating and new companies are forming. But the greatest challenge is execution, which may give a natural advantage to incumbent oil and gas companies.
Unprecedented high-grading is now occurring in the US shale industry, amidst challenging industry conditions. This means 2020-21 production surprising to the upside, and we raise our forecasts +0.7 and +0.9Mbpd respectively. Conversely, when shale activity recovers, productivity could disappoint, and we lower our 2022+ forecasts by 0.2-0.9 Mbpd. This 7-page note explores the causes and consequences of this whipsaw effect.
Oil prices must entrench well above $50/bbl for 2023-25 oil markets to balance. But prices could materially overshoot. This short 4-page note presents our latest conclusions, and top charts on oil supply-demand, including our outlook to 2025.
20% of Europe’s renewable electricity currently comes from biomass, mainly wood pellets, burned in facilities such as Drax’s 2.6GW Yorkshire plant. But what are the economics and prospects for biomass power as the energy transition evolves? This 18-page analysis leaves us cautious.
Enhancing the concentration of CO2 in greenhouses can improve agricultural yields by c30%. It costs $4-60/ton to supply this CO2, while $100-500/ton of value is unlocked. Shell and ABF have already under-taken projects, while industrial gas and monitoring companies can also benefit. But the challenge is scale. Around 50Tpa of CO2 is supplied to each acre of greenhouses. Only c10% is sequestered. So the total CO2 sequestration opportunity may be limited to around 50MTpa globally.
Investment bubbles in history typically take 4-years to build and 2-years to burst, as asset prices rise c815% then collapse by 75%. In the aftermath, finances and reputations are both destroyed. There is now a frightening resemblance between energy transition technologies and prior investment bubbles. This 19-page note aims to pinpoint the risks and help you defray them.
For green hydrogen to become competitive, total electrolyser costs must deflate by over 75% from current levels around $1,000/kW. This 14-page note breaks down the numbers and the challenges, based on patents and technical papers. We argue 15-25% total cost deflation may be more realistic if manufacturers also strive to make a margin in the future.
A lack of gas is likely to slow down Europe’s energy transition in the 2020s. This is the conclusion in our new 12-page note, which captures basic policy objectives, such as phasing out 50% of Europe’s coal, electrifying 20% of its vehicles, cleaning up 25% of its shipping and shifting 3% of its energy into low carbon hydrogen. To achieve this, an incremental 85MTpa of LNG must be sourced by 2030, absorbing one third of new global LNG supplies, and stoking mid-2020s LNG shortages.
Tree planting charities are emerging as the best means to offset CO2. They will displace other ‘new energies’ from the cost curve. Abatement costs are $3-10/ton. The solution is available today. It also restores nature. This 18-page note presents the numbers, the advantages, pushbacks, implications, and profiles some of the charities we have supported.
A dozen challenges for floating offshore wind projects are ranked in this 4-page note, by reviewing 50 recent patents across the industry. We model these challenges are likely to double capex and levelized costs, compared with traditional offshore wind. The potential for floating offshore wind is also location dependent, with inherent advantages, for example, in Norway relative to China, due to sea depths and construction facilities.