The OPEC meeting that concluded today in Vienna ended with ministers approving productions cuts for the first quarter of 2020. The cuts for OPEC+ will be increased from 1.2 million bpd to 1.7 million bpd. A 500,000 bpd cut should be painless for the organization as they are currently at over-compliance with the cuts as a group. Saudi Arabia has been carrying a large portion of the cuts to compensate for the group’s non-compliant members including Iraq, Russia and Nigeria. The group is now tasked with divvying up the cuts and enforcing the members compliance with the cuts.
On Thursday, November 21, 2019, there were four more liquefied natural gas (LNG) projects approved by the U.S. Federal Energy Regulatory Commission (FERC). This move will add to the fast-growing American LNG exports over the next few years. Three of the projects will be located along the Brownsville Ship Canal in Brownsville, Texas; Texas LNG Brownsville, Rio Grande LNG Terminal, and Annova LNG Brownsville. The fourth project being near Corpus Christi, Texas, a few hours north of Brownsville. These four projects are in addition to the other seven LNG projects approved this year. All four of these projects are working with the U.S. Department of Energy to be approved to export LNG to countries that the United States do not have free trade agreements with.
Over the past 18 months the coal-fired capacity outside of China has shrunk, but China continues to drastically increase the amount of coal-fired power plants, according to a study from Global Energy Monitor. China grew their coal-fired plants by 42.9 gigawatts (GW), while the rest of the world saw a decrease of 8.1 GW, averaging out to a net growth of 34.9 GW globally. While the country is a clean energy leader, the amount of coal usage has yet to slow. According to Global Energy Monitor, this large growth of coal is not compatible with the Paris Agreement’s plan to keep global warming to below 2 degrees Celsius.
Last week, the Brazilian Federal Audit Court approved an oil auction that covers parts of the pre-salt zone offshore Brazil that was involved in a long dispute between the Brazilian government and Petrobras. The Brazilian pre-salt oil region consist of carbonates found below the salt layer. It’s oil-rich offshore reserve that is trapped below 2,000 meters of a thick layer of salt, where this layer of salt was deposited on accumulated organic matter, holding it for millions of years until thermochemical processes turned the organic layers into hydrocarbons (oil and natural gas).
Ecuador’s government was forced out of the capital, Quito, by violent protests earlier this week. The country is already in an uneasy state with the vulnerable economy that has been battered by lack of public transportation and blocked roads. These violent protests stem from President Moreno’s decision to cut subsidies which led to an extremely sharp increase in gas prices. Gas prices in Ecuador have increased up to 120%. Due to these protests, the state-owned energy company Petroamazonas was forced to stop production after the fields were taken over by people not affiliated with the organization. The government has also deployed the army to key locations to safeguard the nation’s resources.