U.S. Natural Gas Consumption Soars
Natural gas-fired power generation in the United States has soared to a record high so far this year, driving up global gas demand. U.S. power producers generated a total of 55.6 million megawatt hours (MWh) from gas-fired power plants between January and September, according to data from LSEG quoted by Reuters’s columnist Gavin Maguire. This is up by 5% compared to the same period of last year. It’s also the highest power generation from natural gas since at least 2021. Moreover, the share of natural gas in the U.S. power generation has also jumped to record highs this year. Since June, gas has accounted for a record-high 46% of the nation’s power generation, according to LSEG data. The rising share of natural gas is undermining the Biden Administration’s goal of a ‘clean power’ grid by 2035. In recent years, power demand in the United States, the single largest portion of which is delivered by gas-fired power plants, has soared and is expected to continue to surge with rising electrification and more electricity necessary to power and cool data centers. U.S. power-generating companies are announcing plans for the highest volume of new natural gas-fired capacity in years as the AI boom is driving demand for electricity. During the first half of 2024, electricity-generating firms unveiled plans for the new gas-powered capacity equal to all capacity announced in 2020, according to data from Sierra Club cited by Bloomberg last month. Natural gas-fired electricity generation in the United States has jumped year-to-date compared to the same period last year, as total power demand rose with warmer temperatures and demand from data centers. After more than a decade of flatlining power consumption in America, the AI boom and the chip and other tech manufacturing are leading to higher U.S. electricity demand. For years, natural gas has accounted for the largest share of U.S. power generation, at around 40% of all electricity-generating sources.
GAIL India issues LNG tender for November delivery, sources say
GAIL (India) GAIL.NS, the country’s biggest natural gas distributor, issued a tender seeking a cargo of liquefied natural gas for delivery in November, two industry sources said on Monday. It is seeking the cargo on a delivered-ex-ship (DES) basis for Nov. 6-15 delivery to the Dahej terminal. The tender closes on Oct. 7.
GAIL partners with AM Green for sustainable energy solutions
GAIL (INDIA) informed that it has signed memorandum of understanding (MoU) with AM Green B.V. (AMG) to explore projects aimed at advancing sustainable energy solutions in India. The partnership will focus on the loterm supply of carbon dioxide (CO2) for eMethanol production and the exploration of hybrid renewable energy projects across India. According to the terms of the MoU, both companies will conduct studies for the loterm supply of around 350 KTA of CO2 generated by GAILs gas processing plants to produce eMethanol, an environmentally friendly fuel that can reduce carbon emissions and promote a circular economy. Under the agreement, GAIL will also have the option to invest equity in the proposed eMethanol project. Additionally, both parties plan to explore the establishment of solar and wind hybrid renewable projects totaling up to 2.5 GW across India. These hybrid projects, in conjunction with Greenkos upcoming Pump Storage Projects, are expected to provide round-the-clock power to end users, including the proposed eMethanol project. Rajeev Singhal, Director (business development), GAIL said The signing of this MOU with AM Green underscores our commitment to pioneering sustainable energy solutions. By facilitating the supply of CO2 for eMethanol production, we are taking a proactive approach to reduce carbon emissions and support alternative fuel development.
India does not see any shortage of crude oil supplies: Hardeep Singh Puri
Despite last week’s crude oil price spiral, the situation seems to be stabilising with analysts expecting the market to cool off in the coming days. Tensions between Israel and Iran led to a 13 per cent spurt in Brent crude prices in the past seven days, with the benchmark crude hitting $79.4 per barrel on October 7, up from $70.2 just a week earlier. The Indian government is confident of shielding the country from any fallout in case of crude oil supplies being hit by an escalation in the tensions. “Today there is more oil available in the world than there is consumption”, said Hardeep Singh Puri, Union Minister for Petroleum and Natural Gas, adding, “If some parties hold back on availability there are new suppliers on the market also, in the short to medium term I do not see any shortage of oil in the world. There is enough oil available and we have enough choices to exercise.” Currently, India imports 88 per cent of its crude oil requirements from 39 countries, leaving it exposed to the vagrancies of the market. According to energy market expert Narendra Taneja, the situation could get hairy for India only if tensions escalate in the Gulf. “If Israel attacks oil installations in Iran, the situation will get out of control”, said Taneja in a conversation with Business Today. He added that Iran in turn could block the Straits of Hormuz and create a “massive disruption in supplies causing prices will go through the roof.” Softening crude prices If the geo-political situation does not worsen in the coming days, crude prices are seen softening with experts of the opinion that Israel and Iran are likely to pull back from the precipice as neither can afford the results of an all-out war. “Benjamin Netanyahu has been very cautious about starting a war with Hezbollah”, says Ian Bremmer, President and Founder, Eurasia Group, because Hezbollah is far better trained and armed than Hamas. He adds the likelihood of an all-out war is low. “So, on one hand they want to get Hezbollah forces away from the Israeli border so that Israelis can come back to their homes and schools, on the other hand the likelihood of an all-out war is pretty low. That’s the reason oil prices haven’t moved since August and markets also do not believe that it is coming”, says Bremmer.
Middle East Unrest To Fuel Oil Inflation
The fight against Hamas by Israel has been intensified recently with recent move by it in target killing and ground advance in Lebanon and Iran joining the fight against the Jewish state by missile attacks. The current situation is tense and it may lead to full-fledged war in Middle East, which may lead to global forces joining the either side in escalation of war. Talking to Bizz Buzz, M Narendra, former Chairman and Managing Director, Indian Overseas Bank (IOB), said: “It is difficult to fully know the consequences of the ongoing disturbance and tension in the Middle East on the global economy. It is to be seen whether oil prices, which were so far in comfortable position, may rise, if so, it will affect the oil importing countries in terms of foreign exchange outflow and its impact on domestic commodity prices.” India in the recent past has widened its sources for importing oil and we are able to get oil from Russia at competitive prices. However, this will be one of the risks in acceleration in oil prices which will affect India, he said. The commodity prices, which were also softer on global markets, may go up temporarily, increasing the cost of imports. There may be impact on supply chains and shipping routes which will increase freight costs which can have impact on international trade. However, India has strong macro-economic fundamentals and highest forex reserves comfortable for more than 11 plus months imports which acts as cushion to absorb the temporary upheaval. These rapidly increasing geopolitical ‘hotspots’ will definitely impact all numbers factored into budgets adversely. MV Hariharan, ex-treasury head, SBI, said: “The sustained instabilities will extract higher costs for India, be it in education abroad, jobs and tourism too. Oil is always an ‘elephant in the room’. Banks can feel the pinch of their education loans coming under stress with students in no man’s land with the uncertainties which will get triggered by the political context in play.”
GAIL India issues LNG tender for November delivery, sources say
GAIL (India) GAIL.NS, the country’s biggest natural gas distributor, issued a tender seeking a cargo of liquefied natural gas for delivery in November, two industry sources said on Monday. It is seeking the cargo on a delivered-ex-ship (DES) basis for Nov. 6-15 delivery to the Dahej terminal. The tender closes on Oct. 7.