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DOI | [db:DOI] |
Experts React: COVID-19 Impacts the Energy Sector | |
admin | |
2020-03-06 | |
出版年 | 2020 |
国家 | 美国 |
领域 | 地球科学 ; 资源环境 |
英文摘要 | Experts React: COVID-19 Impacts the Energy SectorMarch 6, 2020 The coronavirus, also known as COVID-19, is not only a global public health emergency but also a source of significant regional and increasingly global economic disruption. This impacts the energy and climate world in many ways. The economic downturn puts pressure on global oil prices leading the Organization of Petroleum Exporting Countries (OPEC) to consider further cuts to production. It hurts demand for natural gas during a time of extremely low prices. It changes the economic, energy, and climate policymaking environment in China, one of the most consequential energy consumers and sources of greenhouse gas emissions. And it has temporarily disrupted supply chains throughout the energy industry, including renewable energy, at a time when supply chain connections with China were being reevaluated due to ongoing tariff and trade disputes. How consequential or transformative any of these changes are for the energy sector or for climate efforts will depend upon the ultimate trajectory of the virus outbreak itself. BACK TO TOPFrank VerrastroSenior Vice President and Trustee Fellow, Energy Security and Climate Change ProgramAs OPEC convenes this week, member states will almost certainly attempt to retake control of the market. But in the face of unknowable uncertainties, they are equally likely to come up short no matter how ambitious an effort is forthcoming.In the past few weeks as the coronavirus has spread beyond China to greater Southeast Asia, parts of the Middle East, Africa, Europe, Latin America, and more recently to the United States, commodity prices have been in freefall. As a consequence of reduced air travel, lower economic activity, and refinery shutdowns, crude oil demand is projected to be less than one-half the rate of previous forecasts, necessitating action to curb additional output. The OPEC ministerial meeting on March 4 produced a recommendation calling for an additional 1.5 million barrel per day (b/d) cut for the OPEC-plus Alliance through June 30 and continuation of the current (previously agreed upon) cuts through the end of the year. If approved by the Alliance, the additional cut would be split between OPEC members (at 1 million b/d) and the non-OPEC alliance countries (500,000 b/d), particularly Russia. Russia will likely find the larger suggested cut distasteful but are nonetheless expected to join the collective action even if their “contribution” is likely to be modest and slow to materialize. In the interests of preserving the OPEC Alliance pact, the Saudis are likely to assume a large portion of the reduction obligation even as they seek recognition for their previous overcompliance volumes. All that said, the combination of the uncertainty surrounding the duration and extent of demand destruction, coupled with still growing supply and rising inventory levels, will conspire to delay meaningful price improvement even after economies begin to recover. BACK TO TOPSarah EmersonSenior Associate (Non-resident), Energy Security and Climate Change ProgramThe emergence of COVID-19 as a serious threat to oil demand is well known. Extensive quarantine measures have had a significant impact on Chinese demand for transport fuels while also threatening overall economic growth. The spread of the virus to other countries, as well as fear of further spread, has had an impact on international transport demand and economic growth in Asia and now increasingly other regions. Finally, interruptions to the global manufacturing supply chain are impacting industrial fuels such as naphtha and diesel. BACK TO TOPAlbert HelmigSenior Associate (Non-resident), Energy Security and Climate Change ProgramThe financial markets have gone through a very aggressive revaluation process in light of the coronavirus outbreak. All financial assets have been impacted. China is the largest crude oil importer and Asia-Pacific the demand driver for petroleum products, materially affecting energy prices. Futures markets tend to overextend price movements when volatility increases. Futures markets can delink from physical markets in these conditions as noncommercial participants react to real time events. We have witnessed a fair amount of this over the last couple of years. Global markets react almost instantly to headline news in the fast pace of information today, while the longer-term implications will be difficult to discern for some time to come. BACK TO TOPNikos TsafosSenior Fellow, Energy Security and Climate Change ProgramThe COVID-19 outbreak is kneecapping demand in a gas market that was already both weak and overly reliant on China. Prices have dropped sharply. Henry Hub in the United States has fallen by 22 percent so far in 2020 (to February 28); the Title Transfer Facility in the Netherlands by 26 percent; and the Japan Korea Marker, the main benchmark for spot liquefied natural gas (LNG) in Asia, by 44 percent. In Europe, gas storage facilities are over 60 percent full, far above what is normal in the end of February (around 40 percent). In the United States, gas in storage is slated to reach a record level in 2020. BACK TO TOPStephen NaimoliResearch Associate, Energy Security and Climate Change ProgramThe coronavirus is increasingly expected to hurt the global growth of zero-carbon energy this year—but by how much remains to be seen. Many of the world’s largest solar, battery, and wind manufacturers produce in China. The Chinese government has restricted domestic travel and briefly halted all manufacturing in eight provinces, including those that major clean energy manufacturers call home. Analysis firm BloombergNEF has lowered their forecast for Chinese battery production by 10 percent this year and expects the country could see some small dips in solar and wind installations in the domestic market (but they caution this could change if the country is able to ramp production back up quickly enough). Fortunately, production began ramping back up toward the end of February, but it will take a while for them to reach full capacity again.This does not solve the problem for installations or even manufacturing outside China, however. China’s aggressive response to the outbreak hindered the movement of Chinese workers, and shipments of parts to other countries are delayed. (Wind turbine parts being an exception as their exports have not been restricted.) The slowdown in exports is already delaying projects in other parts of the world, and further delays could start driving up costs in the short term. Unless other countries can develop new supply chains, project developers have to hope that Chinese manufacturers will be able to recover quickly and avoid further production slowdowns. Will developers look to diversify their supply chains away from China as a result of the coronavirus? Seeing as how the work stoppages in China lasted less than a month and direct impacts appear to be muted (even though the ripple effects will continue for some time), it seems likely that this will be a relatively short-term disruption rather than a long-term shift to supply chains. BACK TO TOPTaiya SmithSenior Associate (non-resident), Energy Security and Climate Change ProgramLast week, the IMF said that the outbreak would likely lower China’s economic growth this year to 5.6 percent, 0.4 percentage points below its earlier estimate in January. China was already on track to meet its emissions targets for 2020, so this additional reduction in emissions would enable China to exceed its carbon emissions targets. However, sluggish growth at the end of 2019 had already started conversations in Beijing about stimulating economic activity by lowering environmental taxes and delaying the implementation of any substantive climate policies. The coronavirus outbreak puts those fears on steroids. BACK TO TOPLachlan CareyAssociate Fellow, Energy Security and Climate Change ProgramThe economic fallout of the coronavirus has seen a dramatic fall in carbon dioxide emissions in China, the world’s largest contributor to climate change. CO2 emissions are about 25 percent lower than they otherwise would have been, due largely to a fall in the industrial activity that is at the heart of China’s emissions and pollution problem. Over just a three-week span, the emissions avoided due to this tragedy are the equivalent of almost one-half the annual emissions of Australia. |
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来源平台 | Center for Strategic & International Studies |
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文献类型 | 科技报告 |
条目标识符 | http://119.78.100.173/C666/handle/2XK7JSWQ/250243 |
专题 | 地球科学 资源环境科学 |
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