Big Oil's Empty Green Promises (31 August 2023): By Felicity Bradstock - Despite big promises, recent reports suggest that international oil majors are doing little to contribute to the green transition when compared to their ongoing investments in oil and gas operations. Studies show that much of Big Oil’s investment in renewable energy operations is going towards PR efforts to promote the green work they are doing, rather than to greatly expand their clean energy portfolios. In addition, oil and gas subsidies hit record levels last year, showing the ongoing preference for fossil fuels over renewable alternatives. An analysis commissioned by Greenpeace Central and Eastern Europe has revealed just 0.3% of production from twelve of Europe’s leading fossil fuel producers came from renewable energy sources in 2022. The report showed that around 7.3 percent, equivalent to $7.1 billion, of the 12 companies’ 2022 investments went towards renewable energy, with $88.15 billion in financing for fossil fuel operations. ... (Source: Oil Price)
Maui Fires: A Lesson For Utility Companies? (30 August 2023): By Leonard Hyman & William Tilles - In July, the big insurance companies raised prices roughly 50% on a worldwide basis, a reaction to the huge claims they had to pay recently. Not many people seemed to have noticed, at first. But insurance companies can’t operate without the backstop and off-loading of risk provided by the reinsurance companies. So expect the price of insurance policies to rise if not being canceled altogether. In August, deadly wildfires spread over the Hawaiian island of Maui. More than 100 people died. Did the actions or inactions of the local electric company contribute to the disaster? Had it invested enough to protect the grid? Had its operators made the right decisions to de-energize fire spreading transmission lines during the fire? What would internal documents show? Hawaiian Electric’s stock tanked 70% ($3 billion of wealth erased) as analysts opined on how much the company might have to ultimately pay out in damages to fire victims and their next of kin. The County of Maui filed a case against the utility, arguing that it made serious operational errors that contributed to the disaster. ... (Source: Oil Price)
What's Wrong With Rystad Energy's Global Oil Reserve Estimate? (29 August 2023): By Roger Bentley - Rystad Energy in a June 29th press release reported that its most recent assessment of the true size of the world’s proved oil reserves stands at 285 billion barrels, a value only one-sixth of the widely accepted value of around 1700 billion barrels. Insiders have long known of this extraordinary discrepancy, but it may come as a surprise to many. The widely accepted global proved oil reserves are those published by organisations such as the US EIA, OPEC, Oil and Gas Journal, World Oil and BP’s Statistical Review of World Energy; and then copied into websites including Our World in Data, Worldometer and Statista. These reserves data are those generally provided by the governments of the oil-producing countries concerned, and so are considered ‘official data’. ... (Source: Oil Price)
BRICS Represents Nearly Half Of Global Population (28 August 2023): By ZeroHedge - Following the 15th annual BRICS summit, which was held in Johannesburg, South Africa last week, the bloc of five major emerging economies announced the admission of six new members. Iran, Saudi Arabia, Egypt, Ethiopia, Argentina and the United Arab Emirates are set to formally join the group on January 1, 2024 to expand the bloc’s footprint in the Global South and grow its economic and political clout on the world stage, establishing a real counterweight to the Western-dominated G7. As Statista's Felix Richter notes, the new bloc will represent roughly 46 percent of the world population, account for 29 percent of the world’s gross domestic product in nominal terms and 37 percent of global GDP at purchasing power parity. ... (Source: Oil Price)
Natural Gas Fills The Gap As Renewable Power Falters (25 August 2023): By Tsvetana Paraskova - All major U.S. power markets have relied more on natural gas to keep a balanced grid system so far this year. Increased gas-powered generation highlights the fact that the fossil fuel – the single-biggest power generation source in the United States – continues to play a critical role in balancing the power systems amid high air conditioning demand in heatwaves, lower-than-usual wind speeds, and reduced hydropower generation due to drought. The Biden Administration has set a target to achieve a carbon pollution-free electricity sector by 2035. While coal retirements have accelerated in recent years, replaced by soaring renewables capacity and increased natural gas-powered generation, the U.S. power sector is far from the track to be emissions-free. Natural gas, which accounted for 39.8% of U.S. utility-scale electricity generation in 2022, isn’t going anywhere. In fact, it has helped balance power generation so far this year, as operators have raised gas-fired electricity supply to offset lower hydropower generation in the Pacific Northwest and lower wind speeds in the Midwest while delivering power amid increased demand during the summer heatwaves. ... (Source: Oil Price)
IBM's New Analogue Chip Boosts AI Energy Efficiency (24 August 2023): By Haley Zaremba - A new breakthrough in tech may have just solved artificial intelligence’s energy problems. AI requires a massive and growing amount of energy, and is producing more and more greenhouse gas emissions as the sector continues to expand. The issue has been the subject of increasing attention and anxiety in recent months, but those worries could soon be a thing of the past thanks to a new kind of analogue computer chip developed by IBM research. The analogue chip is capable of running an AI speech recognition model 14 times more efficiently than a standard computer chip. The analogue chip is a compute-in-memory (CiM) model, which means that it’s able to performs calculation directly within its own memory instead of sending information back and forth millions of times to recall or store data in external memory chips, thereby relieving a significant bottleneck currently plaguing AI operations. ... (Source: Oil Price)
Europe’s Green Tech Future Threatened By Limited Investment (23 August 2023): By Felicity Bradstock - The EU simply cannot seem to keep up with the U.S. when it comes to its green energy policy or China when it comes to green investment. Despite bold promises of establishing a law that would stand up against President Biden’s Inflation Reduction Act (IRA), the EU has so far failed to deliver. And its investment in green energy and related technologies nowhere near compares with the massive levels of funding being pumped into the sector in China. So, can we expect the EU to deliver on its green promises or to fall short of the world’s expectations? Around a year after the U.S. introduced its most far-reaching climate policy, the IRA, the EU is still finding it difficult to provide such an expansive climate law. The IRA provides companies billions of dollars in grants, subsidies, and tax exemptions to develop green energy projects and clean technologies. This has attracted huge investment in the sector over the last year, with significantly more funding expected in the coming years, thanks to the favourable tax environment. The combination of the IRA and the $108-billion Bipartisan Infrastructure Law, established in 2021, has made the U.S. highly competitive when it comes to clean energy and tech, allowing it to rival its biggest competitor – China. While its spending on the sector may remain lower than in China, it is rapidly becoming a major regional green hub. ... (Source: Oil Price)
America's EV Boom Faces Grid Challenges And Parking Puzzles (22 August 2023): By Haley Zaremba - The electric vehicle revolution is already well underway, and estimates of future EV adoption are enormous. While the EV industry and the policymakers who back it are charging full speed ahead, however, there are some major infrastructure challenges that the EV boom will have to work around if it wants to maintain its projected growth trajectory. And for some of those problems, there’s no clear answer. The main two logistical issues facing EV are grid infrastructure and public charging infrastructure, and both issues are more complex than they may seem on the surface. EV sales reached a record high in 2022, and future sales are expected to explode as electric cars become more affordable, the public becomes more trusting of the vehicles’ utility and reliability, and the policy atmosphere becomes increasingly supportive. The Biden administration has set a goal of having 50% of all new vehicle sales be electric by just 2030 and has thrown a considerable amount of money behind the cause through initiatives such as the Inflation Reduction Act. While 50% by 2030 may be overly ambitious, the United States has consistently kept ahead of projected EV adoption, and domestic EV usage could continue to grow quicker than experts have anticipated. ... (Source: Oil Price)
White Hydrogen: Boon Or Bust For A Sustainable Future? (21 August 2023): By Kurt Cobb - Just when you thought the hydrogen economy zombie was dead and gone, it rises again, this time in color. Yes, hydrogen comes in many colors these days: green, blue, gray and now white. No, these are not literal colors, but rather marketing tools designed to convince investors, policymakers (think: public subsidies), and the public (think: support of public subsidies) that the hydrogen economy is right around the corner and will be a key to addressing climate change. When burned, of course, hydrogen combines with oxygen to produce water. When manufactured, however, the process can produce a little or a lot of carbon dioxide depending how the manufacturing is done and whether fossil fuels are used as feedstocks. Periodically, hydrogen advocates create a boomlet in media coverage to announce the coming of the hydrogen economy that never seems to arrive. White hydrogen is the newest hydrogen media boomlet. It denotes hydrogen occurring naturally in reservoirs in the Earth's crust as a free gas not combined with other elements. Its presence has been known for a long time. But no one believed the reservoirs were numerous enough or large enough to bother extracting. That thinking has changed, and there are now companies actively prospecting for underground hydrogen reservoirs. ... (Source: Oil Price)
Net-Zero Goals Won’t Slow Down Oil Exploration (19 August 2023): By Irina Slav - Underinvestment in oil and gas exploration has been a scarecrow for energy security for several years now. Various industry executives, most notably perhaps those from the Middle East oil kingdoms, have warned that unless investment in new exploration rebounds, energy security will be compromised on a global scale. Wood Mackenzie recently had some good news for these executives: investment in new oil and gas exploration is recovering and is set to average $22 billion annually over the next four years. Despite the billions being channeled into the transition away from hydrocarbons. At the same time, there is a connection between the transition and the rebound in new exploration spending in oil and gas. That connection has to do with the new demands that the transition has created for exploration and production companies – pressure to focus on assets with a low emissions profile, for instance, and stricter environmental requirements that would make some discoveries unviable. ... (Source: Oil Price)
Offshore Wind Red Tape Costing UK Tax Payers £1.5 Billion Per Year (17 August 2023): By City A.M - Bill payers are being left £1.5bn worse off per year due to Treasury red tape blocking new offshore wind projects, according to new research from the Energy and Climate Intelligence Unit (ECIU). The climate body warns that Treasury rules that constrain the number of contracted farms allotted at offshore wind auctions will constrain the number of projects being approved and keep bills higher. Offshore wind projects are secured through bidding processes – known as allocation rounds – where projects are given income guarantees known as strike prices. This scheme is called the contracts for difference arrangement, where wind farms to be contracted at a lower price than the wholesale price, creating a saving for bill payers. ... (Source: Oil Price)
UK Wind Projects To Get A Modern Refit (16 August 2023): By City A.M - Wind turbines are routinely regarded as an energy source of the future, as debates spin over its upcoming role in the country’s supply mix. Yet, they are also a story of our past, with wind turbines stretching across our coastlines and nestling in our sunlit uplands for decades, with the first swirly structure being hoisted in 1887 by a pioneering Scottish engineer wanting to light up his holiday home, before a growing pipeline slowly emerged over the following century. The UK now has a 28GW bedrock of wind, both on land and sea, a robust fleet that rivals any country in the world. However, some of these turbines are closing in on their operational shelf life of 25-30 years, with data from trade association Renewable UK revealing that 546 turbines operating in the UK across 33 projects were installed in the 1990s, with a total capacity of 256M – enough for over 150,000 homes. ... (Source: Oil Price)
U.S. Shale Oil Production Growth Getting Increasingly Difficult (15 August 2023): By Julianne Geiger - The average U.S. shale output per well may have doubled over the past decade, but those crazy growth days are now behind us, according to a new report released on Tuesday by Enverus Intelligence Research (EIR), a subsidiary of Enverus. “The U.S. shale industry has been massively successful, roughly doubling the production out of the average oil well over the last decade, but that trend has slowed in recent years,” said Dane Gregoris, the reports author and managing director at EIR. The production decline curves—or the rate at which production falls over time—have steepened more than half of a percentage point annually since 2010, the report revealed, and Enverus expects the shape of the curve to continue to steepen over time as well density increases. ... (Source: Oil Price)
ADNOC Could Raise Covestro Bid To $12.6 Billion (14 August 2023): By Alex Kimani - Abu Dhabi National Oil Co (ADNOC) has signaled a willingness to raise its informal offer to 60 euros per share for a valuation of $12.6 billion for German plastics and chemicals maker Covestro. The latest offer would represent a premium of nearly 30% to Covestro's closing share price on Friday. ADNOC last raised its informal offer to 57 euros per share in July, although no final decision has yet been made. ADNOC appears willing to go on an M&A spree: Abu Dhabi’s national oil company is separately in talks with Austria's OMV regarding a possible merger of the two companies that could form an entity worth $30 billion. It’s not clear why ADNOC is interested in buying Covestro, considering how badly the petrochemical business has been doing lately. Earlier in August, Covestro reported a 21%Y/Y fall in second quarter revenues to 3.7 billion euros. Covestro is hardly alone, with U.S. oil and gas giants facing a similar fate. Sluggish consumer demand as well as a deluge of new factories coming online over the past few years means petrochemical margins face a protracted downturn. The situation is so dire that Cologne-based Lanxness AG has called it a “Lehman 2” moment for the chemicals industry. ... (Source: Oil Price)
Will Bank Of England’s Rate Hikes Tip The UK Into Recession? (13 August 2023): By City A.M - The UK economy grew faster than expected in June, and expanded 0.5 per cent, helping to bring growth in the second quarter to 0.2 per cent – but analysts are divided about what the figures say for the coming months. Growth in June was given a boost by a strong performance from the production sector, which includes manufacturing, as well as warmer weather attracting punters to pubs and restaurants. The figure was also flattered by its comparison to May, when there was an extra bank holiday for the king’s coronation. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the figures are “probably the start of a sustainable recovery”. Tombs pointed out that household consumption grew 0.7 per cent in the second quarter despite the impact of soaring inflation. ... (Source: Oil Price)
The Looming Oil Crisis The World Is Ignoring (10 August 2023): By Gail Tverberg - It has recently become clear to me that heavy oil, which is needed to produce diesel and jet fuel, plays a far more significant role in the world economy than most people understand. We need heavy oil that can be extracted, processed, and transported inexpensively to be able to provide the category of fuels sometimes referred to as Middle Distillates if our modern economy is to continue. A transition to electricity doesn’t work for most heavy equipment that is powered by diesel or jet fuel. A major concern is that the physics of our self-organizing economy plays an important role in determining what actually happens. Leaders may think that they are in charge, but their power to change the way the overall system works, in the chosen direction, is quite limited. The physics of the system tends to keep oil prices lower than heavy oil producers would prefer. It tends to cause debt bubbles to collapse. It tends to squeeze out “inefficient” uses of oil from the system in ways we wouldn’t expect. In the future, the physics of the system may keep parts of the world economy operating while other inefficient pieces get squeezed out. ... (Source: Oil Price)
Are We Nearing A Fossil Fuel Turning Point? (9 August 2023): By Leonard Hyman & William Tilles - At some point, fossil fuel sales will stop growing. How soon? You can make the projections, the ones that start with overall demand, and the ones that look at each individual use of fuel. We suggest that you might assess their plausibility using a simpler technique. Years ago at an economic seminar, we witnessed one of the world’s greatest econometricians fill an entire blackboard (they had them then) with equations to explain the growth of the economy. Another economist rose to say that he could explain the economy as well with five equations. Then he said he could do an even better job of projecting by connecting the points with a ruler and extending the line. So, let’s get out the ruler. ... (Source: Oil Price)
America's Credit Downgrade: A Sign Of The Times Or Tip Of The Iceberg? (8 August 2023): By ZeroHedge - Last week, Fitch Ratings downgraded the US’s long-term credit rating from AAA to AA+. While the downgrade won’t significantly impact the US government’s ability to borrow, it should serve as a wake-up call because there is a much bigger problem looming on the horizon: a market-driven downgrade of the US dollar. The bond market got pummeled last week with four losing days before a rally on Friday driven by a weaker-than-expected jobs report. That rally wasn’t enough to recover all the losses, and yields finished the week above 4% across the board. We also saw a reversion in the 5-year and 30-year yields, with the 30-year closing above the 5-year for the first time in quite a while. The 5-year and 10-year yields remain inverted, still flashing recession. ... (Source: Oil Price)
MIT's Carbon Black Innovation: Infrastructure That Stores Power (7 August 2023): By Felicity Bradstock - Scientists at the university believe they have discovered a new material that could be scaled for use in roads and building to provide renewable energy. The researchers mix the cement, water, and carbon black to produce a supercapacitor. They have previously tried creating battery-like properties in building materials by mixing concrete with graphene-based carbon nanotubes. However, as nanotubes are expensive to manufacture, this was not viewed as viable for use as a commercial building material. In contrast, carbon black is produced from the incomplete combustion of coal, vegetable matter, or fuel, and is much cheaper to make. The group at MIT found that mixing cement, water, and carbon black created a “fractal-like,” electron-conducting network. The final product is used to form small plates, that are 1mm thick and 10mm wide and coated in a potassium chloride membrane. There are two electrodes made from the material, separated by an insulating layer, which lets them become a powerful supercapacitor. When provided with power, the plates can light a series of LEDs, which, the team believes, could make them useful in roads and buildings, when used to store energy. ... (Source: Oil price)
MIT Engineers Develop Groundbreaking Concrete Supercapacitor (5 August 2023): By Brian Westenhaus - MIT engineers have created a supercapacitor from just cement, water, and carbon black. The supercapacitor is made of ancient, abundant materials, that can store large amounts of energy. The device could form the basis for inexpensive systems that store intermittently renewable energy, such as solar or wind energy. According to a new study two of humanity’s most ubiquitous historical materials, cement and carbon black (which resembles very fine charcoal), may form the basis for a novel, low-cost energy storage system. The technology could facilitate the use of renewable energy sources such as solar, wind, and tidal power by allowing energy networks to remain stable despite fluctuations in renewable energy supply. The researchers found the two materials can be combined with water to make a supercapacitor – an alternative to batteries – that could provide storage of electrical energy. As an example, the MIT researchers who developed the system say that their supercapacitor could eventually be incorporated into the concrete foundation of a house, where it could store a full day’s worth of energy while adding little (or no) to the cost of the foundation and still providing the needed structural strength. The researchers also envision a concrete roadway that could provide contactless recharging for electric cars as they travel over that road. ... (Source: Oil Price)
A $15 Billion Electric Vehicle Niche Is Flying Under Wall Street’s Radar (2 August 2023): By Josh Owens - The EV industry is simultaneously a wildly rewarding and wildly risky ride for investors. EV manufacturers are now struggling to stay profitable unless they are Tesla or China’s biggest players. In 2022, we saw overall car sales plummet by 8%, but at the same time, EV sales soared by 65%, according to Kelley Blue Book. Still, despite the fact that electric vehicles are now the clear future, growing pains, cash burn and a brutal price war have rendered this a snake pit for investors. While EV sales are set for a 35% year-on-year increase in 2023, bolstered by national policies and incentives providing further impetus for producers and consumers, some companies are dealing with missed deadlines, lagging production and serious fiscal problems, including bankruptcy. While some of the biggest failures went through SPAC deals (special purpose acquisition company mergers) in 2020 and 2021, those deals are fading away now after failures to deliver and amid SEC investigations. At their hyped-up height, they were all listed as future “Tesla killers”. ... (Source: Oil Price)
Will Oil Prices Hit $100 By Year's End? (1 August 2023): By Irina Slav - OPEC is producing less oil thanks to the Saudi voluntary cuts and a suspension of crude oil loadings at Nigeria’s Forcados terminal due to a leak risk. The figures vary depending on the source, but a Reuters survey has suggested the group pumped 840,000 bpd less in July than in June. And they are not showing any signs of reconsidering. The results are already visible: oil prices are up and rising, with Brent topping $85 per barrel earlier this week while WTI climbed closer to $82 per barrel. The question now is how high they will reach before OPEC begins to roll back the cuts. The other question: will it be able to boost production fast enough if necessary? Analysts have previously said that Saudi Arabia needs oil at $90 per barrel to continue with its ambitious public spending plans that make up the Vision 2030 diversification program. ... (Source: Oil Price)