Liberty Energy Chief Executive: Oil Is Far From Dead (31 August 2022): By Irina Slav - “Three decades from now the vast majority of energy will come from hydrocarbons.” This prediction was made earlier this week by Chris Wright, chief executive of Liberty Energy, the second-largest fracking services provider in the U.S. Speaking to Bloomberg, Wright went a lot further, too. He dismissed the idea that there was an energy transition in progress and said that subsidizing wind and solar would not only not help reduce emissions but would end up increasing electricity prices and rendering the grid more vulnerable. In the current media environment, such statements sound nothing short of outrageous. And yet the chief executive of Liberty Energy is neither the first nor the only one saying these things. (Source: Oil Price)
Bulgaria: Gazprom’s Weaponization Test Case (30 August 2022): By Irina Slav - Earlier this month, Russia’s state gas giant Gazprom said it would need to halt the flow of gas via the Nord Stream 1 pipeline for additional maintenance. The fear this announcement struck in European capitals, even as gas storage fills up ahead of schedule, speaks volumes about Europe’s predicament: there is no quick fix to dependence on Russian gas. As Germany braces up for the suspension of gas flows tomorrow, in Bulgaria—the EU’s poorest member—a few hundred people have been protesting every day against the return of the Russian company as the biggest gas supplier to the country. That return, according to the caretaker government currently in charge of Bulgaria, is inevitable because there are simply no alternative suppliers. According to protesters, U.S. LNG and Azeri gas can substitute Russian pipeline gas. (Source: Oil Price)
How Will Iran’s Return To Oil Markets Impact Prices? (29 August 2022): By Irina Slav - The United States and Iran are in the final stages of agreeing on a new nuclear deal that could see the return of Iranian crude on international markets, which some analysts say would result in downward pressure on oil prices–an eventuality Saudi Arabia is trying to avoid. Still, other analysts suggest that the return of Iran to oil markets could be completely irrelevant for prices. Earlier this month, Saudi Arabia’s energy minister Abdulaziz bin Salman hinted that OPEC+ could decide to reverse its production growth strategy in response to what he called "a self-perpetuating vicious circle of very thin liquidity and extreme volatility" on oil markets. The news sent Brent over $100 per barrel after the international benchmark slipped below that threshold amid deepening fears of a global recession. It was this fear that led to the divorce between paper and physical markets that bin Salman referenced in an interview with Bloomberg last week, when he noted that traders are ignoring the tightness on physical oil markets. (Source: Oil Price)
Big Oil's $41 Billion Buyback Bonanza (28 August 2022): By Alex Kimani - Oil and gas supermajors are on course to repurchase their shares at near-record levels this year thanks to soaring oil and gas prices helping them to deliver bumper profits and boost returns for investors. According to data from Bernstein Research, the seven supermajors–including ExxonMobil (NYSE: XOM), Chevron (NYSE: CVX), BP (NYSE: BP) and Shell (NYSE: SHEL)--are poised to return $38bn to shareholders through buyback programmes this year, with investment bank RBC Capital Markets putting the total figure even higher, at $41bn. In 2014, when oil was trading over $100/barrel, we only saw $21 billion in buybacks. This year’s figure rivals that of 2008. (Source: Oil Price)
The Inflation Reduction Act Falls Short On Emissions Regulation (25 August 2022): By Leonard Hyman & William Tilles - When, early this year, the U.S. Supreme Court of the United States (SCOTUS) throttled the Environmental Protection Agency’s (EPA) authority to reduce carbon emissions on the grounds that Congress should pass a law specifically addressing the problem, we imagine that lobbyists who worked for the electric utility industry, so assiduously skilled in delaying any climate action, took the cynical advice offered by the Financial Times’ resident PR expert, Rutherford Hall. He advised clients to “position fossil fuel stuff as concern about global energy security. Keep stressing the commitment to your long-term green goals even as you slide away from them.” (Financial Times, 21 August 2022, “Can I go back to being an uncaring boss yet?”) Of course, our utility executives pushed the need for a carbon bridge to the future driven by base load, gas-fired power plants— a supposedly “reasonable” glide path to lower CO2 emissions yet nothing that would cause disruption to a monopoly's business. But the idea, no doubt, was to remain plausibly “green” while stalling as long as possible. (Source: Oil Price)
Clean Fuel refinery expansion will reduce Thailand energy dependence (24 August 2022): Thailoil's ongoing expansion and upgrading works at its Laemchabang plant (Chonburi province, approximately 125km from Bangkok) will enable the state-owned oil company to increase its crude oil processing capacity from 275,000 bpd to an estimated 400,000 bpd upon completion in 2023. These expansion works have required an estimated investment of $4.8bn since project approval in 2018, to upgrade from a light crude processing plant to include, among others, a crude distillation unit (CDU), a hydrogen manufacturing unit, and an energy recovery unit (ERU). This latter unit will generate up to 250MW of electricity and 175 tons of steam per hour, which will cover the energy needs of the rest of the plant. (Source: HP)
European Crop Yields Collapse Amid Worst Drought In 500 Years (23 August 2022): By ZeroHedge - Besides the news of record high electricity prices, a troubling new crop failure report about Europe's upcoming harvest was published Monday. The bloc's Monitoring Agricultural Resources forecasted corn yields could drop by nearly a fifth due to a devastating drought, according to Bloomberg. Before we dive into the crop report, Europe's centuries-old 'hunger stones' were recently revealed in the Elbe River, which runs from the mountains of Czechia through Germany to the North Sea. The stones date back to a drought in 1616 and read: "Wenn du mich siehst, dann weine." That translates to "if you see me, then weep." The warning on the stones appears correct because the new crop report forecasts corn yields will drop 16% below the five-year average. That compares with a July forecast of an 8% decline. (Source: Oil Price)
Saudi Arabia Is Planning To Build The World’s Largest Wind Farm In Uzbekistan (22 August 2022): By Eurasianet - Uzbekistan’s president has returned from a trip to Saudi Arabia with $14 billion in promised investments, his office says. Of that, $12 billion is earmarked to address chronic energy shortages. The agreements include a pledge for Saudi firm ACWA Power to build a 1.5 GW wind farm in Karakalpakstan. Uzbekistan’s Energy Ministry says it will be the world’s largest and will power 1.65 million homes. ACWA Power has already begun building two smaller wind farms in the Bukhara region. This is welcome news to Uzbeks still sweating their way through a season of shortages. With rising summer temperatures and drought putting strain on Central Asia’s hydropower networks, Uzbekistan has begun to experience electricity shortages in the hottest months in addition to the traditional blackout season of winter. (Source: Oil Price)
Europe’s Gas Price Is Now Equivalent To $410 Per Barrel Of Oil (20 August 2022): By Tsvetana Paraskova - Heatwaves this summer and expected natural gas shortages this winter are driving gas prices higher and higher. Europe's benchmark gas prices surged by 14% in just three days to a fresh record-high, continuing the upward trend from recent weeks, as gas demand for power generation is high amid heatwaves and Russian pipeline supply remains at low levels, while the EU scrambles to fill gas storage ahead of the winter that would see energy and gas rationing, industries shutting down production, and households paying sky-high prices for heating and electricity. Europe is in the most precarious position, but natural gas prices are rallying in the United States and Asia, too. Gas demand for power is high, and production is flat in America, while major Asian buyers are back on the LNG market to secure supplies for the winter. (Source: Oil price)
Why Solar Power Is Failing Amid Record-Breaking Heat (12 August 2022): By Felicity Bradstock - With heatwaves being reported worldwide, leading to wildfires and other environmental concerns, at least one energy sector is getting attention for its major producing potential – solar power. But with solar panels collecting energy from the sun’s radiation, the world’s overheating may (unexpectedly) be of little benefit to solar power production. However, this is not stopping rising consumer interest as people are driven to invest in solar technology as they see both hotter summers and rising consumer prices. With some of the hottest summers on record for several decades in many parts of the world, it must be doing wonders for solar power, right? As the world heats up, people may think that more sun will bring more solar energy, even if it has been negative for many other reasons. But soaring temperatures may be hindering solar power production as solar panels work optimally at around 25oC and start becoming less efficient when the heat goes above this. And even if the heat does not hamper solar production, it is also doing little to help it. (Source: Oil price)
How The EU Plans To Cut Natural Gas Consumption By 15% (17 August 2022): By Felicity Bradstock - Last week, European Union ministers accepted major gas cuts across Europe in the face of gas shortage worries going into the winter. So what are countries around the world doing to curb their energy usage as they see shortages and rising prices? Several governments are now introducing measures to ensure they maintain their energy security as the flow of Russian gas begins to slow. Last week, the European Commission proposed a 15 percent cut in gas usage across member states, starting in August and ending in March 2023 to ease worries of energy insecurity going into the winter months. Although this is one year less than previously recommended. However, Spain, Portugal, Greece, and Denmark all opposed compulsory cuts, with Spain pointing to its energy self-sufficiency. Certain member states argued against the gas cuts, highlighting that some European countries have come to rely much more heavily on Russian gas than others, making the curbs unjust. (Source: Oil Price)
Nuclear And Hydropower Falter As Droughts Grip Europe (16 August 2022): By ZeroHedge - In Italy, the River Po has fallen two meters below its normal levels, seeing rice paddy fields dry out. Meanwhile, Germany’s River Rhine has become so shallow that cargo vessels can’t pass through it fully loaded, pushing up shipping costs, and France’s Tille River, in the Burgundy region, is now a dried up bed covered in thousands of dead fish. Nuclear power too has fallen since 2021. One reason for this is that France has had to shut down several of its nuclear power plants because the rivers Rhone and the Garonne have been too warm to be able to cool down its reactors. France is 70 percent dependent on nuclear energy and is a key exporter of electricity, usually supplying Italy, Germany and the UK. It’s important to note here however, that other problems are troubling France’s nuclear fleet too. A significant number of the country’s power plants have had to be powered down recently due to malfunctions and maintenance issues, which had been delayed because of the pandemic. These combined reasons mean, according to Wired, that the country’s hydropower output is down nearly 50 percent.
The Finite Factor Standing In The Way Of The Renewable Revolution (15 August 2022): By Irina Slav - Earlier this year, now former UK Prime Minister Boris Johnson said the country could become the Saudi Arabia of wind. In the United States, just last week, the House of Representatives passed the sweeping Inflation Reduction Act that will provide a huge financial push for more wind and solar. In Europe, Brussels is shortening approval procedures for renewables. And in China, they're out of land for growing food. Bloomberg reported earlier this month that a series of what it called extreme events, such as floods and droughts, had affected crops in the world's wind and solar investment and capacity leader. This, in turn, had presented the authorities with a choice between continuing to use arable land for wind and solar, or using it for food. (Source: Oil Price)
It’s Time For An Oil And Gas Boom In Africa (13 August 2022): By Felicity Bradstock - Several African countries have been gradually boosting their oil and gas output over the last year, as demand for fossil fuels continues to rise. While many countries in the West are curbing their fossil fuel operations, the African region is offering major oil firms the opportunity to develop new, low-carbon oil operations in largely untapped areas. But will governments that want to develop their oil industries be able to successfully make their case at COP27? Several leaders of African countries are expected to present the case for new fossil fuel projects to go ahead across the continent at the next global climate summit in November, according to media sources. Africa is offering the world access to vital gas resources at a time when many countries are facing energy shortages and rising prices. In addition, Africa’s largely unexplored oil reserves could provide the world with the low-carbon resources needed to bridge the gap in the renewable energy transition. (Source: Oil Price)
An Unjustified Fear Of Nuclear Energy Is Holding The Industry Back (11 August 2022): By Felicity Bradstock - Governments are backing nuclear power in a big way but fears of disasters still linger, with any mishap having the potential to derail the big nuclear resurgence. As governments get behind nuclear projects for the first time in several decades, in order to boost their energy security, many continue to be fearful of nuclear developments for both safety and environmental reasons. But will leaders be able to convince the public of the need for nuclear energy as part of a green transition? Nuclear energy was hailed years ago as the cleaner alternative to fossil fuels that could provide reliable energy to countries around the globe. But as it was increasing in popularity, with several major global developments being achieved, three notable disasters undermined the potential for widespread nuclear development. The events of Three Mile Island in Pennsylvania in 1979; Chornobyl in 1986; and Fukushima in Japan in 2011 led to a movement away from the development of nuclear projects in favor, largely, of fossil fuels. (Source: Oil Price)
Is U.S. Inflation Actually Cooling Quicker Than Expected? (10 August 2022): By City A.M - US inflation is cooling much quicker than experts are betting in a sign the Federal Reserve’s series of steep rate hikes are quashing price pressures. Prices climbed 8.5 percent in the world’s biggest economy last month, down from a 40-year high 9.1 percent, according to the Labor Department. Wall Street had forecast headline consumer price index inflation to have dipped to 8.7 percent in July. Fed chair Jerome Powell and the rest of the federal open market committee have embarked on the quickest rate hike cycle since the early 1980s to tackle the inflation surge. US borrowing climbs have climbed 225 basis points since March, including two successive 75 basis point rate hikes. (Source: Oil Price)
IMF Calls For Global Guidelines On Climate Reporting (9 August 2022): By City A.M - Global guidelines on corporate climate reporting must fall in line with those in Europe and the US or investors could be hit by fragmented and inconsistent information, the European Central Bank and IMF have warned. Financial institutions globally are looking to establish standards for corporate climate reporting in a bid to stamp out ‘greenwashing’, with Frankfurt-based International Sustainability Standards Board (ISSB) proposing global “baseline” measures. But the European Union and the US Securities and Exchange Commission are already drafting standards for climate guidelines, prompting the International Monetary Fund to warn there needed to be coordination and alignment between the sets of rules. (Source: Oil Price)
Shell: UK North Sea Needs Investments In New Oil And Gas Projects (8 August 2022): By Tsvetana Paraskova - The UK North Sea oil and gas sector needs more investments in new developments as Britain will need domestic fossil fuel resources, Shell’s UK head of upstream Simon Roddy told Bloomberg in an interview published on Monday. “There was only one major development consent for the whole of the North Sea last year. I don’t fundamentally think that’s a sustainable position,” Roddy told Bloomberg. According to Shell’s executive, the UK will continue to need oil and gas, and the more it gets domestically, the lower volumes, likely from higher-emission sources, it would import. Two weeks ago, Shell took the final investment decision (FID) to develop the Jackdaw gas field in the UK North Sea, following regulatory approval earlier this year. (Source: Oil Price)
China Hits Back At The United States Following Pelosi Visit To Taiwan (6 August 2022): By ZeroHedge - China has begun its retaliation against Washington by announcing Friday the cancelation of a series of meetings with the United States, namely the suspension of issues it was working bilaterally with the US on, including related to military dialogue, climate change and anti-drug projects. Most important among these at a moment Washington has expressed concern that "the risk of a mistake could actually lead to some sort of conflict" (in John Kirby's words Thursday) - is the cancelation of military ties. This comes in addition to unveiling undefined sanctions against House Speaker Nancy Pelosi over the "egregious provocation" of her overnight trip to Taiwan earlier in the week, which saw China immediately respond with ongoing live fire drills which have surrounded the self-ruled island, as well as ballistic missile firings in the vicinity. (Source: Oil Price)
Oil Prices Fall To $90, But It’s Not Enough For Biden (3 August 2022): By Alex Kimani - After touching the highest level since 2009 above $130/bbl, oil prices have pulled back sharply over the past two months with both Brent and WTI crude currently trading at sub-$100/bbl, and the Biden administration is gunning for a much bigger drop. In an interview with Bloomberg, Amos Hochstein, the White House’s senior adviser for global energy security, has said that gas and oil prices need to go even lower while U.S. producers and OPEC+ need to raise output. As of 13:02 p.m. EST, Brent crude was trading down 3.32% on the day at $97.20, while WTI was down 3.58% at $91.04 in response to a slight output increase announced by OPEC+ and surprise US crude oil inventory build reported by the API. (Source: Oil Price)
U.S. Natural Gas Production Hit An All-Time High In 2021 (2 August 2022): By Robert Rapier - Natural gas is the cleanest-burning of the fossil fuels. It is also the fastest-growing fossil fuel, with a global 2.2% average annual growth rate over the past decade. In comparison, oil grew at a rate of 0.7% globally over the past decade, and coal grew globally at 0.1%. Looking ahead, natural gas is projected to be the only fossil fuel that will see substantial demand growth over the next two decades. Over the past decade, the U.S. shale gas boom propelled the U.S. into the global lead among natural producers. In 2021, the U.S. set a new all-time high for natural gas production. For the year, the U.S. held a commanding 23.1% share of global natural gas production, ahead of Russia (17.4%) and even the entire Middle East (17.7%). (Source: Oil Price)
Russia Says It Can't Help With Nord Stream Gas Turbine Repairs (1 August 2022): By Tsvetana Paraskova - There is little Russia can do to help with repairs of equipment at Nord Stream compressor stations, according to Kremlin spokesman Dmitry Peskov. The situation with the necessary repairs needs to be resolved, but Russia can do little in this regard, Peskov told Russian reporters on Monday. The Kremlin doesn't have anything to add to what Gazprom has already said: there are equipment failures necessitating urgent repairs, and there are additional "artificial difficulties" caused by the "illegal sanctions and restrictions," Peskov added. The gas turbine manufacturer, Siemens Energy, has said, for its part, that it hadn't received any reports from Gazprom about malfunctions, and so it had to assume the equipment was operating normally. (Source: Oil Price)