Easwaran Kanason

Co - founder of NrgEdge
Last Updated: September 6, 2018
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Business Trends

And the hits keep coming in Guyana. This week, ExxonMobil announced that it had made a new discovery – called the Hammerhead-1 – in the South American nation. It is the ninth in a string of major offshore discoveries that have turned the once sleepy nation into the world’s newest hotbed of upstream exploration.

Located in the Stabroek Block, the Hammerhead-1 well encountered ‘approximately 60 metes of high quality, oil-bearing sandstone reservoirs’, the fifth discovery in the basin and just 21 km southwest of Liza-1, the well that kicked off the bonanza in January 2017. The discovery brings the estimated gross recoverable resources in the Guyana-Suriname basin to 4 billion barrels of oil equivalent, up from the initial 1.4 billion barrels when Liza-1 was discovered and 3.2 billion barrels in January 2018, when the Ranger-1 well struck oil.

The current timeline has Phase 1 of Liza – which is already sanctioned - reaching first oil by early 2020, using the Liza Destiny FPSO to produce an initial 120,000 b/d. Liza Phase 2 is set for FID at the end of the year, bringing in another FPSO with 220,000 b/d capacity by 2022, while sanctioning for Payara (using a 180,000 b/d FPSO) is set for 2019 for a 2023 startup. Beyond that, ExxonMobil, Hess and CNOOC Nexen have noted that the discoveries in Stabroek could support up to five FPSO vessels, producing some 750,000 b/d by 2025.

That is, if things stay the way they are. The current exploration program in Guyana has a success rate of 82%, and there are almost 18 prospects left in the Stabroek block that can be pursued. The consortium led by ExxonMobil (45%) with Hess (30%) and CNOOC Nexen (25%) is currently the only player in Guyana, operating the 26,800 square km Stabroek Block. Buoyed by that resounding success, there are more players knocking at the door – in search of assets that the US Geological Survey estimated could contain as much as 13.6 billion barrels of oil and 32 tcf of natural gas. Even neighbouring countries of Suriname and French Guiana are gearing up for some action.

With this much riches on the horizon, Guyana could become the new Qatar or Brunei – a tiny nation punching well above its weight economically, or what Wood Mackenzie is calling ‘the richest corner of the continent’. However, there are warning signs that the current institutional and regulatory framework is insufficient to handle the influx of discoveries; a national oil company is being developed and a new taxation system for oil contract is being mooted to prevent the ‘lopsided’ ExxonMobil contract from repeating, but more needs to be done. The future looks very bright for Guyana, but with petro-dollars always come major risks. Here’s hoping the opportunities Guyana has been blessed with will not be squandered.

Major oil discoveries in Guyana

Estimated recoverable volumes: 4 billion barrels oil (August 2018)

  • January 2017: Liza-1
  • January 2017: Payara-1 (Payara-2 in June 2017)
  • February 2017: Liza Deep
  • March 2017: Snoek
  • October 2017: Turbot-1
  • January 2018: Ranger-1
  • March 2018: Pacora-1
  • June 2018: Longtail-1
  • August 2018: Hammerhead-1

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The United States consumed a record amount of renewable energy in 2019

In 2019, consumption of renewable energy in the United States grew for the fourth year in a row, reaching a record 11.5 quadrillion British thermal units (Btu), or 11% of total U.S. energy consumption. The U.S. Energy Information Administration’s (EIA) new U.S. renewable energy consumption by source and sector chart published in the Monthly Energy Review shows how much renewable energy by source is consumed in each sector.

In its Monthly Energy Review, EIA converts sources of energy to common units of heat, called British thermal units (Btu), to compare different types of energy that are more commonly measured in units that are not directly comparable, such as gallons of biofuels compared with kilowatthours of wind energy. EIA uses a fossil fuel equivalence to calculate primary energy consumption of noncombustible renewables such as wind, hydro, solar, and geothermal.

U.S. renewable energy consumption by sector

Source: U.S. Energy Information Administration, Monthly Energy Review

Wind energy in the United States is almost exclusively used by wind-powered turbines to generate electricity in the electric power sector, and it accounted for about 24% of U.S. renewable energy consumption in 2019. Wind surpassed hydroelectricity to become the most-consumed source of renewable energy on an annual basis in 2019.

Wood and waste energy, including wood, wood pellets, and biomass waste from landfills, accounted for about 24% of U.S. renewable energy use in 2019. Industrial, commercial, and electric power facilities use wood and waste as fuel to generate electricity, to produce heat, and to manufacture goods. About 2% of U.S. households used wood as their primary source of heat in 2019.

Hydroelectric power is almost exclusively used by water-powered turbines to generate electricity in the electric power sector and accounted for about 22% of U.S. renewable energy consumption in 2019. U.S. hydropower consumption has remained relatively consistent since the 1960s, but it fluctuates with seasonal rainfall and drought conditions.

Biofuels, including fuel ethanol, biodiesel, and other renewable fuels, accounted for about 20% of U.S. renewable energy consumption in 2019. Biofuels usually are blended with petroleum-based motor gasoline and diesel and are consumed as liquid fuels in automobiles. Industrial consumption of biofuels accounts for about 36% of U.S. biofuel energy consumption.

Solar energy, consumed to generate electricity or directly as heat, accounted for about 9% of U.S. renewable energy consumption in 2019 and had the largest percentage growth among renewable sources in 2019. Solar photovoltaic (PV) cells, including rooftop panels, and solar thermal power plants use sunlight to generate electricity. Some residential and commercial buildings heat with solar heating systems.

October, 20 2020
Natural gas generators make up largest share of U.S. electricity generation capacity

operating natural-gas fired electric generating capacity by online year

Source: U.S. Energy Information Administration, Annual Electric Generator Inventory

Based on the U.S. Energy Information Administration's (EIA) annual survey of electric generators, natural gas-fired generators accounted for 43% of operating U.S. electricity generating capacity in 2019. These natural gas-fired generators provided 39% of electricity generation in 2019, more than any other source. Most of the natural gas-fired capacity added in recent decades uses combined-cycle technology, which surpassed coal-fired generators in 2018 to become the technology with the most electricity generating capacity in the United States.

Technological improvements have led to improved efficiency of natural gas generators since the mid-1980s, when combined-cycle plants began replacing older, less efficient steam turbines. For steam turbines, boilers combust fuel to generate steam that drives a turbine to generate electricity. Combustion turbines use a fuel-air mixture to spin a gas turbine. Combined-cycle units, as their name implies, combine these technologies: a fuel-air mixture spins gas turbines to generate electricity, and the excess heat from the gas turbine is used to generate steam for a steam turbine that generates additional electricity.

Combined-cycle generators generally operate for extended periods; combustion turbines and steam turbines are typically only used at times of peak load. Relatively few steam turbines have been installed since the late 1970s, and many steam turbines have been retired in recent years.

natural gas-fired electric gnerating capacity by retirement year

Source: U.S. Energy Information Administration, Annual Electric Generator Inventory

Not only are combined-cycle systems more efficient than steam or combustion turbines alone, the combined-cycle systems installed more recently are more efficient than the combined-cycle units installed more than a decade ago. These changes in efficiency have reduced the amount of natural gas needed to produce the same amount of electricity. Combined-cycle generators consume 80% of the natural gas used to generate electric power but provide 85% of total natural gas-fired electricity.

operating natural gas-fired electric generating capacity in selected states

Source: U.S. Energy Information Administration, Annual Electric Generator Inventory

Every U.S. state, except Vermont and Hawaii, has at least one utility-scale natural gas electric power plant. Texas, Florida, and California—the three states with the most electricity consumption in 2019—each have more than 35 gigawatts of natural gas-fired capacity. In many states, the majority of this capacity is combined-cycle technology, but 44% of New York’s natural gas capacity is steam turbines and 67% of Illinois’s natural gas capacity is combustion turbines.

October, 19 2020
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global energy consumption for power generation

Source: U.S. Energy Information Administration, International Energy Outlook 2020 (IEO2020)

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IEO2020 builds on the Reference case presented in IEO2019. The models, economic assumptions, and input oil prices from the IEO2019 Reference case largely remained unchanged, but EIA adjusted specific elements or assumptions to explore areas of uncertainty such as the rapid growth of renewable energy.

Because IEO2020 is based on the IEO2019 modeling platform and because it focuses on long-term electricity market dynamics, it does not include the impacts of COVID-19 and related mitigation efforts. The Annual Energy Outlook 2021 (AEO2021) and IEO2021 will both feature analyses of the impact of COVID-19 mitigation efforts on energy markets.

Asia infographic, as described in the article text

Source: U.S. Energy Information Administration, International Energy Outlook 2020 (IEO2020)
Note: Click to enlarge.

With the IEO2020 release, EIA is publishing new Plain Language documentation of EIA’s World Energy Projection System (WEPS), the modeling system that EIA uses to produce IEO projections. EIA’s new Handbook of Energy Modeling Methods includes sections on most WEPS components, and EIA will release more sections in the coming months.

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