Oil & Energy
New Energy Reality, A Massive Opportunity For Investors
Since the very beginning of the novel coronavirus pandemic, it was clear that coronavirus would have a severe and lasting impact on the energy industry. At first, as the worldwide economy ground to a sudden halt, energy demand plummeted, causing oil markets to go haywire. OPEC+ almost immediately turned on each other causing a price war and global oil glut, and in North America oil prices did the previously unthinkable, with the West Texas Intermediate crude benchmark bottoming out way below zero, closing the day at nearly $40 in the hole. In the same month, energy consumption in the United States hit a stunning 16-year low.
Now, although oil markets have recovered in comparison to what some are calling Black April, the outlook is still bleak for fossil fuels. Energy consumption actually continued to get a lot worse, hitting a whopping 30-year low before leveling off. Demand has not fully recovered to pre-pandemic levels, and energy consumption will remain impacted for a long time to come. As the months have passed, the complexity of what the pandemic has done to our energy consumption patterns has become more clear.
Some of these effects are no-brainers. Commercial and industrial energy consumption is down (consumption in the commercial sector dropped by 11 percent and the industrial sector dropped by 9 percent year over year). Household energy consumption is up (8 percent nationally and an incredible 21 percent in Arizona and Michigan). But the big picture is a lot more complicated, and a lot more interesting.
A new study from Diana Sabau at CommercialCafe compares the second quarter of 2019 to the second quarter of 2020 and analyses the contrast from a number of different angles. The study looks at the breakdown state-by-state, and the impact of COVID-19 on energy consumption is surprisingly diverse in different parts of the country. The state with the biggest drop in commercial energy consumption was Hawaii, which clocked a loss of 22 percent thanks in large part to the shutdown of the tourist sector and the islands’ energy-guzzling hotels and restaurants along with other hospitality-related businesses. Hawaii was followed by Pennsylvania and Washington, D.C., which saw commercial energy consumption drop by 21% and 20%, respectively.
One of the interesting takeaways from this analysis is that the industrial sector’s plummeting energy usage would have been remarkably lower were it not for hospitals, which were running on overdrive and have the energy footprint to prove it. “Because treatments typically heavily rely upon electrical devices — such as heart and vital signs monitors; IV machines; sequential compression devices; ventilators and so on — energy consumption here has increased sixfold,” Com-mercialCafe reports.
The energy mix has also notably changed year over year, with renewables overtaking coal for the first time, and not by a small margin. Renewables beat out the notoriously dirty fossil fuel by 7 percent in the second quarter. Natural gas, however, remained supreme, accounting for about 40 percent of the total energy mix in the first half of this year.
This sudden and extreme change in the way that energy is consumed in the United States has led to great innovation. “With so much unused or underused space on the market, owners and investors are seeing renewed potential in adaptive reuses of these buildings,” For-bes reported this week. “For instance, thousands of square feet of office space in Boston, San Diego, Houston and New York are currently being converted into lab space as demand for this type of space has been growing since the onset of the pandemic.”
Other experts believe that this unprecedented interruption to the energy industry’s status quo is an invaluable opportunity to redirect the trajectory of energy around the world in order to better our means of production and consumption on the eve of catastrophic climate chan-ge. The bigwigs over at the World Economic Forum have advocated for the use of this cataclysmic shift in momentum to design and implement a “new energy order” and a “great reset.” With countries around the world planning green stimulus packages for post-pandemic economic recovery, it’s looking hopeful that one of the silver linings of this tragic pandemic will be a more intentional, efficient, and responsible energy landscape.
Zaremba writes for Oilprice.com
Haley Zaremba
As part of the restructuring, the company said it had promoted high-performing employees, released retiring staff, and disengaged others whose performance fell below expected standards.
It added that it has also begun implementing a comprehensive employee development and customer management plan to strengthen its service delivery framework.
“In line with its corporate transformation strategy, Abuja Electricity Distribution Company has announced a restructuring exercise aimed at delivering improved services to its customers as well as enhanced operational efficiency and excellence.
“The restructuring is in line with our strategic direction to become a more responsive and efficient organisation, capable of delivering world-class service to our customers.
“As part of the transformation, the Company has promoted high-performing staff, released retiring employees and those performing below par, and has put in motion the implementation of a robust employee development and customer management plan aimed at driving AEDC’s customer-centric focus,” the company said.
AEDC noted that the reforms are part of its broader commitment to provide reliable, safe, and sustainable electricity to customers across its franchise areas, including the Federal Capital Territory and the states of Niger, Kogi, and Nasarawa.
The firm further pledged to continue investing in infrastructure upgrades, digital technologies, and operational innovations to improve service reliability and customer satisfaction.
“With a strong commitment to delighting its customers, AEDC continues to contribute to the growth and development of Nigeria’s energy sector through investments in infrastructure, innovative technologies, and sustainable practices.
“AEDC consistently seeks to improve the quality of life for its customers, promote efficient energy usage, and actively engage with its communities,” the statement added.
Nwoko who is also the Senator representing Delta North Senatorial District, said that forensic reviews show over S22b, S81b and S200b remained unaccounted for across different audit periods.
“I remain committed, alongside my colleagues, to ensuring accountability, recovery, and reform within the oil and gas sector.
Nwoko stated that the Committee had earlier presented its interim report before the senate saying “Our investigation has so far uncovered massive revenue losses amounting to over $300 billion in unaccounted crude oil proceeds over the years.
“This represents one of the most troubling cases of economic sabotage our nation has ever faced.
“We have made far-reaching recommendations to end this long-standing menace.
“There is need for strict enforcement of international crude oil measurement standards at all production and export points.
He urged the federal government to mandate the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to deploy modern, tamper-proof measuring technology or return this function to the Department of Weights and Measures under the Ministry of Industry, Trade, and Investment.
The senator called for the deployment of advanced surveillance systems, including drones, to assist security agencies in combating oil theft.
He also called for the creation of a Special Court for Crude Oil Theft to ensure swift prosecution of offenders and their collaborators, saying it would also go a long way in tackling the challenge.
“We must also ensure the full implementation of the Host Communities Development Trust Fund under the Petroleum Industry Act (PIA) to empower local communities and reduce sabotage.
“Ceding abandoned oil wells to the NUPRC for allocation to modular refineries to support local production and job creation is also very vital in fighting the menace of oil theft and sabotage,” Nwoko further said.