TRANSPETRO 2018 — Questão 14 · Língua Inglesa - Compreensão e Interpretação de Texto

The key energy questions for 2018

..

The renewables industry has had a great year.

How fast can it grow now?

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What are the issues that will shape the global

energy market in 2018? What will be the energy

mix, trade patterns and price trends? Every country

is different and local factors, including politics, are

5 important. But at the global level there are four key

questions, and each of which answers is highly

uncertain.

The first question is whether Saudi Arabia is

stable. The kingdom’s oil exports now mostly go to

10 Asia but the volumes involved mean that any volatility

will destabilise a market where speculation is rife.

The risk is that an open conflict, which Iran and

Saudi have traditionally avoided despite all their

differences, would spread and hit oil production and

15 trade. It is worth remembering that the Gulf states

account for a quarter of global production and over

40 per cent of all the oil traded globally. The threat to

stability is all the greater given that Iran is likely to win

any such clash and to treat the result as a licence to

20 reassert its influence in the region.

The second question is how rapidly production

of oil from shale rock will grow in the US — 2017 has

seen an increase of 600,000 barrels a day to over 6m.

The increase in global prices over the past six months

25 has made output from almost all America’s producing

areas commercially viable and drilling activity is rising.

A comparable increase in 2018 would offset most of

the current OPEC production cuts and either force

another quota reduction or push prices down.

30 ----The third question concerns China. For the

last three years the country has managed to deliver

economic growth with only minimal increases in

energy consumption. Growth was probably lower than

the claimed numbers — the Chinese do not like to

35 admit that they, too, are subject to economic cycles

and recessions — but even so the achievement

is considerable. The question is whether the trend

can be continued. If it can, the result will limit global

demand growth for oil, gas and coal.

40 ----China, which accounts for a quarter of the world’s

daily energy use, is the swing consumer. If energy

efficiency gains continue, CO2 emissions will remain

flat or even fall. The country’s economy is changing

and moving away from heavy industry fuelled largely

45 by coal to a more service-based one, with a more

varied fuel mix. But the pace of that shift is uncertain

and some recent data suggests that as economic

growth has picked up, so has consumption of oil and

coal. Beijing has high ambitions for a much cleaner

50 energy economy, driven not least by the levels of air

pollution in many of the major cities; 2018 will show

how much progress they are making.

The fourth question is, if anything, the most

important. How fast can renewables grow? The last

55 few years have seen dramatic reductions in costs

and strong increase in supply. The industry has had

a great year, with bids from offshore wind for capacity

auctions in the UK and elsewhere at record low levels.

Wind is approaching grid parity — the moment

60 when it can compete without subsidies. Solar is also

thriving: according to the International Energy Agency,

costs have fallen by 70 per cent since 2010 not least

because of advances in China, which now accounts

for 60 per cent of total solar cell manufacturing

65 capacity. The question is how rapidly all those gains

can be translated into electric supply.

Renewables, including hydro, accounted for just

5 per cent of global daily energy supply according

to the IEA’s latest data. That is increasing — solar

70 photovoltaic capacity grew by 50 per cent in 2016

— but to make a real difference the industry needs

a period of expansion comparable in scale to the

growth of personal computing and mobile phones in

the 1990s and 2000s.

75 ---- The problem is that the industry remains

fragmented. Most renewable companies are small

and local, and in many cases undercapitalised; some

are built to collect subsidies. A radical change will be

necessary to make the industry global and capable

80 of competing on the scale necessary to displace

coal and natural gas. The coming year will show us

whether it is ready for that challenge.

In many ways, the energy business is at a

moment of change and transition. Every reader will

85 have their own view on each of the four questions. To

me, the prospect is of supply continuing to outpace

demand. If that is right, the surge in oil prices over

the past two months is a temporary and unsustainable

phenomenon. It would take another Middle East war

90 to change the equation. Unfortunately, that is all too

possible.

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Available at: <https://www.ft.com/content/c9bdc750- ec85-11e7-8713-513b1d7ca85a>. Retrieved on: Feb 18, 2018. Adapted.

The production of oil from shale rock in the US is mentioned in paragraph 4 (lines 21-29) because in 2018 it