Keeping the world cool
With all the news about the heat wave hitting the U.S. it is worth taking a minute to consider an area of energy consumption that is exploding upward not only in the U.S. Mid-west but especially in the Middle East, air conditioning. The excerpt that follows gives some context to just what may lie ahead in a warming world and specifically one of the most energy intensive areas to live in the world, the oil exporting countries of the Middle East.
Mohammed Badri, the director of the Emirates Authority for Standardisation and Metrology, indicated last year that 70 per cent of all electricity used in the UAE was for air conditioning. The peak demand during a summer’s day may be three times that of a winter’s night, demanding a fleet of power stations that stand idle for much of the year.”
This mean electricity and lots of it. The question is will it come from oil, natural gas, nuclear, renewables or even coal? One things seems clear the trend of rising energy consumption in the region appears as if it will persist for years and decades to come.
The graph below from the EIA illustrates the current status of natural gas in storage against the 5 year average. Back in the first quarter of 2012 gas in storage had reached levels approximately 60% above the five year average and it appeared the trend would result in storage actually being filled at some point in 2012. As of this week’s report that gap has narrowed to about 17% above the average. If the trend continues as the graph indicates storage may even possibly fall inside the range over the last five years.
The Baker Hughes data on rigs drilling for natural gas in the U.S. released today indicated it was down 4 more to 518. That is a year-over-year decline of 42% from 889 last year at this time.
There remains one unanswered question concerning the situation in the natural gas market and drilling for shale gas in particular. Have the companies and investors drilling in shale oil learned any lessons from the natural gas experience? If they have will they be the right one?