| | COP 26 – How close are we to 1.5C? It is just over a week since the COP 26 meeting adjourned. Considering all of the pledges in COP26, along with our energy demand forecasts and other factors, total emissions are poised to decline fast enough to be closer to a 1.6° scenario than before. More evidence of action is needed but it is not a stretch to say that if promises are kept the temperature rise can be limited to less than we previously anticipated. Even 1.5° is not totally out of reach. Rystad Energy’s assessment of the COP26 summit consensus is that the last-minute compromises can be seen as very positive towards averting critical levels of global warming. Our data-driven forecasts model, different climate scenarios and, up until the Glasgow Climate Pact, our research pointed to a likely outcome of 1.8°C. However, while we will not change our base case until further evidence justifies such a move, the commitments by global leaders to cut methane emissions and reduce deforestation, alongside faster than expected solar PV manufacturing capacity additions and EV penetration, could be a recipe for limiting the temperature rise to 1.6°C versus pre-industrial levels. Please join us for this month’s edition of Rystad Talks Energy on Thursday, November 25 as we continue our discussions related to the most current issues on the global energy agenda. |
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| Jarand Rystad
CEO, Rystad Energy
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| | | | | As falling costs make new oil cheaper to produce, climate policies may fail unless they target demand Rystad Energy’s annual cost of supply analysis has revealed that costs within the upstream sector have come down considerably in 2021, making new oil more competitive and significantly cheaper to produce. The average breakeven price for new oil projects has dropped to around $47 per barrel – down around 8% over the past year and 40% since 2014, with offshore deepwater remaining one of the least expensive sources of new supply. Learn more |
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| Shale getting stingy? Reinvestment rates in the US hit historic lows in Q3 shaping record free cash flow Reinvestment rates among US shale oil producers hit an all-time low in the third quarter of 2021, resulting in a record free cash flow for the quarter, and are projected to fall even lower by year-end according to a Rystad Energy analysis. Learn more |
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| Having hedged most of their output, US gas producers face billions in hedging losses next year US gas producers are set to book billions of dollars in hedging losses next year because they hedged most of their 2022 production before the recent energy crunch caused gas prices to soar, a Rystad Energy analysis reveals. Learn more |
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| Cost inflation will hit the US oil and gas supply chain in coming years, starting with a surge in EPCI Supply chain costs are set to increase for oil and gas projects in the US in coming years, with the engineering, procurement, construction and installation (EPCI) segment being the first to record a double-digit percentage hike in costs. Learn more |
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| COP26 pledge to do better could help limit global warming to 1.6°C but more evidence needed Rystad Energy’s assessment of the COP26 summit consensus is that the last-minute compromises can be seen as overwhelmingly positive towards averting critical levels of global warming. Our data-driven forecasts model different climate scenarios and, up until the Glasgow Climate Pact, our research pointed to a likely outcome of 1.8°C. Learn more |
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| EV sales set to smash records with 7 million cars in 2021 while crossing the 10% annual threshold Electric vehicle (EV) sales are projected to surpass 7 million cars globally in 2021, more than doubling 2020 sales of 3.2 million. Rystad Energy estimates that EVs, including plug-in hybrid electric vehicles (PHEV) and battery electric vehicles (BEV), will account for around one in every 10 new cars purchased, with a global market share of 10.3%, up from 5.3% in 2020. Learn more |
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| Low jet fuel demand and structural obstacles push West Africa’s crude output into lasting decline Global oil production is slowly recovering towards pre-Covid-19 levels, but in West Africa the pandemic is set to leave lasting effects. This important region for sweet crude oil production faces numerous challenges as it strives to heal from the pandemic, including underinvestment, a lack of infill drilling at mature fields, and infrastructure that is either ageing or threatened Learn more |
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