U.S. coal and oil demand rises again, hitting climate targets


Energy sector update

As the economy accelerates, the US appetite for fossil fuels has returned. This has provided a boost to energy groups, but Washington’s efforts to cut emissions have been sluggish.

After the relaxation of pandemic restrictions, the return of motorists to the road is pushing up fuel demand and the bottom line of refineries, and the shift from natural gas in the power generation industry is a boon for coal miners.

Floods and wildfires in many parts of the world have exposed the devastating effects of climate change, Landmark report The “clearness” determined last week was the result of human activity-mainly through the burning of fossil fuels.

As the pandemic forced people to stay at home, gasoline demand collapsed last year. But the introduction of vaccines and the relaxation of restrictions have allowed American motorists to return to the effective road this summer. At the beginning of last month, oil consumption reached a record high of more than 10 million barrels per day.

The surge in demand pushed up fuel prices and caused the Biden administration to be alarmed last week. Put pressure on Russia and Saudi Arabia Increase oil production to cool the rebound.

The US Federal Energy Information Administration estimates that Americans consume an average of 8.8 million barrels of gasoline per day this year, an increase of 10% from last year, but lower than the 9.3 mb/d consumed in 2019. This is mainly due to the increase in staff.

Booming fuel demand has boosted refineries that were hit hard by the collapse last year. The company has increased its trading volume, and many companies have returned to profitability after recording huge losses last year.

“Liquidity increased significantly in the second quarter, driving higher demand for refined products, especially in the United States,” Joseph Gorder, CEO of Valero, the world’s largest independent refiner, recently told analysts. “In fact, we are seeing demand for gasoline and diesel in the U.S. Gulf Coast and Central Continental regions exceeding pre-pandemic levels.”

Greg Garland, CEO of Phillips 66, said that in the early stages of the 2020 pandemic, demand for gasoline, jet fuel and diesel for the refiner has fallen by 70%.

“People are predicting the end of the world. Garland said at the company’s headquarters in Houston last week that you told the government to shut down their economy globally.

Garland said that refineries are still under pressure. “Sales are improving dramatically,” he said, “but we need the whole world to return to its original state.”

Shows that coal's rebound in U.S. power generation will be temporary

Coal demand in the United States is also rising sharply, but for different reasons. Rising natural gas prices are prompting power producers to burn more of the dirtiest fossil fuels again. EIA estimates that coal consumption for electricity generation in the United States will increase by 17% this year to 511.7 short tons.

This means that as Joe Biden strives to pass Congress to push for comprehensive new clean energy legislation, his first year as president will coincide Rise again In the use of coal.

EIA predicts that coal consumption will drop again in 2022 as part of a long-term trend driven by the decommissioning of old thermal power plants. But for now, manufacturers are enjoying a respite. Peabody Energy, the largest coal mining company in the United States, reported that sales to US power plants increased by more than 20% in the second quarter.

“In the United States, the thermal coal market indicators are favorable,” Peabody CEO James Greche told analysts.

Although refineries and coal producers welcome the surge in fossil fuel consumption, it runs counter to Washington’s food, where the president hopes to cut Emissions halved By the level of 2005, by the end of 2005, the United States will no longer rely on oil and coal, and will switch to electric vehicles and renewable electricity.

According to EIA data, emissions from energy use will increase by 7% this year, but will still be lower than the level in 2019, and dropped by 11% last year.

EIA Acting Administrator Steve Nalley said that as the economy reopens, the energy sector’s carbon emissions will increase “significantly”, but said the agency does not expect to return to pre-pandemic levels in the short term.

Additional reporting by Amanda Chu in New York

Climate capital

Where climate change meets business, markets, and politics. Explore the UK’s “Financial Times” report here.

Are you curious about the environmental sustainability commitment of the Financial Times? Learn more about our science-based goals here


Source link