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A nuclear power plant in southeastern China could turn into an “imminent radiological threat,” the part owner of the facility, a French company, has told the United States, CNN reported on Monday, citing U.S. officials and a letter of the French firm it had obtained.

The U.S. has been assessing the report of the fission gas leak over the past week, CNN reports, quoting the warning from the French firm that China’s authorities had raised the limits of acceptable radiation levels at and around the plant to avoid a shutdown.

The Taishan Nuclear Power Plant in the Chinese province of Guangdong is being operated by a joint venture in which French energy giant EDF and its subsidiary Framatome hold 30 percent. The EDF Group and its subsidiary Framatome supplied the EPR pressurized reactor technology for the plant.

According to officials in the U.S. Administration who spoke to CNN, the situation with the Chinese nuclear power plant has not reached a “crisis level.”

The French company has reached out to the United States to obtain a waiver that would allow them to share U.S. technical assistance to resolve the issue at the plant.

China has yet to acknowledge that there is a problem, CNN reports.

The U.S. administration has been in contact with the French government to discuss the situation, sources told CNN. Contact has been made with China, too, although it is not clear to what extent.

Following the report from CNN, the French company Framatome issued a statement on Monday related to Taishan’s reactor number 1, saying that it “is supporting resolution of a performance issue with the Taishan Nuclear Power Plant.”

“According to the data available, the plant is operating within the safety parameters,” the company said.

“Our team is working with relevant experts to assess the situation and propose solutions to address any potential issue,” Framatome added.

Oil Markets Baffled As The IEA Calls For More Production

June 15, 2021

Oil Markets Baffled As The IEA Calls For More Production

In its latest Monthly Oil Report, the IEA called on OPEC+ to increase production in order to counter higher demand in 2022.

The agency claimed that, based on current global economic growth expectations, demand for crude oil and petroleum products will be reaching pre-COVID levels by 2022. The Paris-based energy watchdog, which has come under fire after its shocking Net-Zero by 2050 report called for no more investments in oil and gas, stated that “OPEC+ needs to open the taps to keep the world oil markets adequately supplied”. At the same time, the IEA has also reiterated that market realities are at odds with its proposed strategies to reach net zero-emission levels by 2050. Criticism will likely be harsh for the “former” leading oil and gas agency, as the agency has called upon the world to double down on renewables and commit to the Paris Agreement while admitting that the global economy continues to demand vast amounts of hydrocarbons.

The relevance of some of these reports will have to be reassessed, especially when looking at the high-profile “Golden Age of Gas” report and the “Net Zero by 2050” roadmap. When asked what needs to be done, the IEA indicated that the call on OPEC+ will be very strong, as the international oil and gas producers group will need to increase crude oil supply to the market by 1.4 million bpd in 2022. Which would mean a significant increase over its current July 2021-March 2022 targets.

The demand expectations of the IEA fall in line with some others, as OPEC, the EIA, and independent consultants, have stated before that demand for oil is going to increase substantially. Some even expect volumes in 2022 to be higher than 2019 levels, even as prices are increasing substantially.

…click on the above link to read the rest of the article…

Saudi Arabia And Russia Warn Of Major Oil Supply Crunch

June 11, 2021

Saudi Arabia And Russia Warn Of Major Oil Supply Crunch

The debate about emissions reduction and the path forward for oil companies moved to a whole new level since the International Energy Agency (IEA) dropped last month the bombshell report suggesting no new investment in oil and gas would be needed if the world is to reach net-zero emissions by 2050.

Environmentalists and activist shareholders intensified pressure on large public oil firms to align their businesses with a net-zero scenario, while some of the international majors acknowledged they have a part to play in the energy transition.

But the leaders of the OPEC+ group, Saudi Arabia and Russia, will continue to invest in oil and gas because, they say, the world will still need those resources for decades, despite the growing push against fossil fuels and investment in new supply.

Chronic underinvestment in oil and gas supply while operational oilfields mature would lead to a supply crunch and a spike in oil prices down the road, analysts and Big Oil top executives such as TotalEnergies’ Patrick Pouyanné say.

While international oil majors were somewhat more contained in their views on the IEA report—those that commented on it anyway—Saudi Arabia and Russia didn’t beat around the bush and said outright that the suggestion of no new oil and gas investments ever is “unrealistic,” “simplistic,” and taken out of a “La La Land” script.

BP’s chief executive Bernard Looney wrote that forecasts of much lower investments in oil and gas were “in many ways consistent with our approach – to reduce our oil and gas production by 40% in the next decade.” Eni’s CEO Claudio Descalzi commented on Looney’s post that “We are now at a historic turning point, where each of us needs to play an active role.”

…click on the above link to read the rest of the article…

Extreme Drought Puts California’s Power Supply At Risk

June 4, 2021

Extreme Drought Puts California’s Power Supply At Risk

A more severe than usual drought in California has depleted reservoirs and lakes, including the ones feeding some of the largest hydropower facilities, putting the state again at risk of power outages during heat waves this summer.

Last year, residents in California went through rolling outages as there was insufficient energy to meet the high demand during the heatwave.

This year, the drought in California has reduced output of hydropower stations and could force the state with ambitious emission-reduction targets to rely more on its remaining natural gas-powered plants for baseload electricity supply.

Water levels at Lake Oroville, for example, are much lower than usual and could fall to below a threshold by August—one that could prompt state officials to shut down the Edward Hyatt Power Plant, the Associated Press reports.

The Hyatt power plant is the fourth largest energy producer of all the hydroelectric facilities in California.

North American Electric Reliability Corporation (NERC) warned last month in its 2021 Summer Reliability Assessment that parts of North America are at elevated or high risk of energy shortfalls this summer during above-normal peak temperatures. California falls in the “high risk” category, as it relies on large energy imports during peak demand and when solar resource output retreats in the evening hours, according to NERC.

“California is at risk of energy emergencies during periods of normal peak summer demand and high risk when above-normal demand is widespread in the west,” NERC says.

California needs imports to the area to “maintain reliability when demand peaks in the afternoon and to ramp up even further for several hours as internal resources draw down,” the assessment notes, despite the fact that the state will have 675 megawatts (MW) of new battery energy storage systems online at the start of the summer that can continue to supply stored energy for periods when needed.

The IEA’s Latest Proposal Is Both Reckless And Impossible

May 19, 2021

The IEA’s Latest Proposal Is Both Reckless And Impossible

The International Energy Agency, which has stepped up its efforts to become a major green energy supporter, appears to have forgotten the reason it was set up as an agency in the first place. In its new report “Net Zero in 2050”, the energy agency calls for no new investments in oil- and gas-related projects.

As stated by Fatih Birol, the IEA’s executive director, “new energy security challenges will emerge on the way to net zero by 2050 while longstanding ones will remain, even as the role of oil and gas diminishes”. The IEA also stated that the contraction of oil and natural gas production will have far-reaching implications for all the countries and companies that produce these fuels. In a very remarkable statement, Birol said that “no new oil and natural gas fields are needed in the net zero pathway”. While he admits that, within that pathway, oil and gas supplies (aka production) will become increasingly concentrated in a small number of low-cost producers. Based on its own assessments, the IEA predicts that OPEC’s share of a much-reduced global oil supply will increase from 37% at present to 52% in 2050, a level higher than at any point in the history of oil markets.

While the IEA’s new report focuses on the need to drastically reduce our use of fossil fuels in order to reduce CO2 and methane emission, there are some major underlying issues it fails to address. In its determination to reach Net Zero emissions by 2050, the IEA appears to have engaged in wishful thinking, ignoring the existing constraints and immense investments needed to achieve such a goal. In its report, the agency does admit that there are severe risks on the way to Net Zero, including geopolitical and economic risks related to an overdependency on critical minerals.

…click on the above link to read the rest of the article…

U.S. Energy Production Saw Steepest Drop On Record In 2020

May 13, 2021

U.S. Energy Production Saw Steepest Drop On Record In 2020

Due to economic responses to the pandemic, U.S. energy production dropped by 5 percent last year, marking the steepest annual decline on record, the U.S. Energy Information Administration (EIA) said on Thursday.

Last year, energy production in the United States fell to just below 96 quadrillion British thermal units (quads), a 5-percent decline from the record production in 2019, according to EIA’s Monthly Energy Review. The decline in absolute terms was the largest annual decrease in U.S. energy production on record, and this decline was primarily due to the pandemic, which slashed demand for energy.

The EIA calculates and compares different types of energy reported in different physical units such as barrels or cubic feet by converting sources of energy to common units of heat, called British thermal units (Btu).

Due to plunging drilling activity amid low oil prices, U.S. crude oil production fell by nearly 1 million barrels per day (bpd) last year, registering the largest annual decline in history, the EIA said earlier this year.

In 2020, U.S. crude oil production averaged 11.3 million bpd, dropping by 935,000 bpd—or 8 percent—compared to the record-high annual average of 12.2 million bpd in 2019.

Less than two months after American crude oil production reached a peak of 12.8 million bpd in January 2020, oil prices collapsed in March, leading to production shut-ins over the following months, and to the lowest average monthly production for 2020 in May, when U.S. output was just 10 million bpd, according to EIA’s estimates.

U.S. coal production also booked its largest annual decline on record last year, falling by 25 percent to less than 11 quads, the EIA said today.

Natural gas production also dropped in 2020, by 0.6 quads, or by 2 percent.

U.S. renewable energy production, however, rose by 2 percent to a record-high 11.8 quads in 2020, due to higher electricity generation from wind and solar, the EIA said.

Extending The European Green Deal Into Eurasia

May 12, 2021

Extending The European Green Deal Into Eurasia

The European Green Deal should be extended to include the Eurasian Economic Union.

In June, the European Commission will present a package of bills detailing the European Green Deal, a strategy that aims to reduce CO2 emissions by 55% to 1990 levels by 2030, improve energy efficiency by 32.5%, and increase the share of renewables in the energy mix up to 32%.

One of the critical instruments of the deal must be the Carbon-Border Adjustment Mechanism (CBAM). Better known as the “carbon levy”, CBAM will be the second building block in a cross-border carbon management system that began to take shape in 2005, when the European Union launched its emissions trading system (EU ETS). Unlike the latter, CBAM will directly affect almost all non-EU countries that export a bright palette of raw materials, including vital fossil fuels to the EU.

If countering measures are imposed, this will definitely lead to a progressive inflationary process, higher raw materials prices and could potentially even downgrade the competitiveness of many EU-based manufacturers.

Bringing not only a challenge but an opportunity

Among these exporting countries is Russia, for which carbon levy is often viewed as a clear and a present challenge, while in reality, it presents an opportunity. First, because Russia has already done a lot to decarbonize its economy. In 2018, CO2 emissions in Russia amounted to only 52.4% of the 1990 level, as follows from Greenpeace. This was achieved through a radical restructuring of the economy that occurred after the collapse of the USSR, when employment and output in industry and agriculture declined, while in the environmentally neutral service sector, it grew.

Russia will not be satisfied with what has been already achieved. In 2016, the country joined the Paris Climate Agreement, and in 2019 it ratified them, officially committing itself to reducing emissions.

…click on the above link to read the rest of the article…

Nuclear Reactions At Chernobyl “Cause for Concern”

May 12, 2021

Nuclear Reactions At Chernobyl “Cause for Concern”

Sensors have detected increased levels of neutrons in an inaccessible chamber at the Chernobyl site, signaling that nuclear fission reactions are taking place in the entombed reactor hall, Science reports.

The signs that fission reactions are occurring come 35 years nearly to the date when the Chernobyl nuclear power plant in what is now Ukraine exploded on April 26, 1986. It was the worst-ever nuclear disaster in the world to date.

The nuclear fission reactions are taking place in a room that is sealed with concrete and contains a large part of the uranium fuel of the former reactor.

Ukrainian scientists are now trying to assess whether the detected nuclear fission reactions will die out or create a larger problem that will require some type of extraordinary intervention.

“It’s like the embers in a barbecue pit,” Neil Hyatt, a nuclear materials chemist at the University of Sheffield, told Science.

Maxim Saveliev of the Institute for Safety Problems of Nuclear Power Plants (ISPNPP) in Kyiv, Ukraine, says that the scientists cannot rule out the possibility of an accident.

“We’re talking about very low rates of fission, so it’s not like a fizzing nuclear reactor,” Hyatt told New Scientist.

“And our estimation of fissile material in that room means that we can be fairly confident that you’re not going to get such rapid release of nuclear energy that you have an explosion. But we don’t know for sure,” the nuclear materials chemist noted.

According to Hyatt, the higher level of neutrons is a “cause for concern but not alarm.”

However, if sensors continue to detect rising production of neutrons, the site may need an extraordinary intervention, Hyatt said. One approach could be to drill into the entombed chamber and spray it with a substance such as gadolinium nitrate, which would stop the fission reactions.

Big Oil Is In Desperate Need Of New Discoveries

May 11, 2021

Big Oil Is In Desperate Need Of New Discoveries

The year 2020 was a watershed moment for the fossil fuel sector. Faced with a global pandemic, severe demand shocks and a shift towards renewable energy, experts warned that nearly $900 billion worth of reserves–or about one-third of the value of big oil and gas companies–were at risk of becoming worthless.

Even Big Oil mostly appeared resigned to its fate, with Royal Dutch Shell (NYSE:RDS.A) CEO Ben van Beurden declaring that we had already hit peak oil demand while BP Plc. (NYSE:BP)—a company that doubled down on its aggressive drilling right after the historic 2015 UN Climate Change Agreement--finally gave in saying “..concerns about carbon emissions and climate change mean that it is increasingly unlikely that the world’s reserves of oil will ever be exhausted.” BP went on to announce one of the largest asset writedowns of any oil major after slashing up to $17.5 billion off the value of its assets and conceded that it “expects the pandemic to hasten the shift away from fossil fuels.”

Yet, an ironic twist of fate might mean that rather than huge oil and gas reserves remaining buried deep in the ground, the world could very well run out those commodities in our lifetimes.

Norway-based energy consultancy Rystad Energy has warned that Big Oil could see its proven reserves run out in less than 15 years, thanks to produced volumes not being fully replaced with new discoveries.

According to Rystad, proven oil and gas reserves by the so-called Big Oil companies, namely ExxonMobil (NYSE:XOM), BP Plc., Shell, Chevron (NYSE:CVX), Total ( NYSE:TOT), and Eni S.p.A are falling, as produced volumes are not being fully replaced with new discoveries.

Source: Oil and Gas Journal

…click on the above link to read the rest of the article…

The Ugly Truth About Renewable Power

May 1, 2021

The Ugly Truth About Renewable Power

When Texas literally froze this February, some blamed the blackouts that left millions of Texans in the dark on the wind turbines. Others blamed them on the gas-fired power plants.

The truth isn’t so politically simple. In truth, both wind turbines and gas plants froze because of the abnormal weather.

And when Warren Buffet’s Berkshire Hathaway said it had plans for additional generation capacity in Texas, it wasn’t talking about wind turbines. It was talking about more gas-fired power plants—ten more gigawatts of them.

While the Texas Freeze hogged headlines in the United States, across the Atlantic, the only European country producing any electricity from solar farms was teeny tiny Slovenia. And that’s not because Europe doesn’t have any solar capacity—on the contrary, it has a substantial amount. But Europe had a brutal winter with lots of snow and clouds. Despite the often-referenced fact that solar panels operate better in cooler weather, sub-zero temperatures are far more drastic than cool. This is not even to mention the cloud cover that, based on the Electricity Map data above, did not help.

If we go back a few more months, there were the California rolling blackouts of August that state officials and others insisted had nothing to do with the state’s substantial reliance on solar and wind power. The state’s own utilities commission disagrees.

This is what the California Public Utilities Commission and the state’s grid operator, CAISO, said in a joint letter to Governor Newsom following the blackouts:

“On August 15, the CAISO experienced similar [to August 14] supply conditions, as well as significant swings in wind resource output when evening demand was increasing. Wind resources first quickly increased output during the 4:00 pm hour (approximately 1,000 MW), then decreased rapidly the next hour…

…click on the above link to read the rest of the article…

U.S. Oil Bankruptcies Shoot Up In Q1 2021

April 17, 2021

U.S. Oil Bankruptcies Shoot Up In Q1 2021

The number of North American producers that filed for bankruptcy protection in the first quarter of 2021 reached the highest number for a first quarter since 2016, yet the wave of bankruptcies has significantly slowed since the peaks in the second and third quarter of 2020, law firm Haynes and Boone said in its latest tally to March 31.

The Oil Patch Bankruptcy Monitor showed that eight producers filed for bankruptcy this past quarter, which was the highest Q1 total since 2016 when 17 oil producers in North America sought protection from creditors.

Texas accounted for 50 percent of the total producer filings in the first quarter of 2021, with four in total, Haynes and Boone said.

The law firm noted that there were no producers with billion-dollar bankruptcies in Q2 2021, which had not happened since the third quarter of 2018.

The total debt for producers that filed in the first quarter was just over $1.8 billion—the second-lowest total for a Q1 after $1.6 billion in Q1 2019, according to Haynes and Boone.

Even though the number of first-quarter 2021 bankruptcies was the highest for a Q1 since 2016, it showed the trend of slowing filings after 18 oil and gas producers filed in the second quarter of 2020 and another 17 in the third quarter, the two quarters in which the oil price crash and the crisis were most severely felt by indebted producers.

Apart from eight producers, the first quarter of 2021 also claimed five oilfield services companies that filed for bankruptcy, Haynes and Boone data showed. This number is the third-lowest Q1 total since 2015, and much lower than 27 filings in Q3 2020 and another 17 filings from oilfield services companies in Q4 2020.

The aggregate debt for oilfield services companies that filed in Q1 2021 was over $7.2 billion—the third-highest Q1 total since 2015, but one company, Seadrill Limited, accounted for 99.8 percent of the aggregate debt for the quarter, Haynes and Boone said.

Shell To Exhaust Dwindling Oil & Gas Reserves By 2040

April 16, 2021

Shell To Exhaust Dwindling Oil & Gas Reserves By 2040

Shell expects to have produced 75 percent of its current proved oil and gas reserves by 2030, and only around 3 percent after 2040, the supermajor said in its Energy Transition Strategy that it will put to a non-binding shareholder vote next month.

Discussing the risk of stranded assets in the energy transition, Shell said that every year it tests its oil and gas portfolio under different scenarios, including prolonged low oil prices, and cross-references assets with break-even prices to assess if they would still be viable in case of low oil and gas prices.

At December 31, 2020, Shell estimated that around 70 percent of its proved plus probable oil and gas reserves, known as 2P, will be produced by 2030, and only 5 percent after 2040.

Shell’s proved oil and gas reserves have been declining in recent years, shrinking the reserves life to below eight years of production.

In 2020, Shell’s proved reserves—taking production into account—decreased by 1.972 billion barrels of oil equivalent (boe) to 9.124 billion boe at December 31, 2020, the firm’s annual report showed.

That’s reserves for just seven years of production, lower than most peers.

The declining reserves life is not unique for Shell. The largest international oil companies have seen their average crude reserves drop by 25 percent over the past five years, which could be a challenge for Big Oil’s production and earnings in the coming years, Citi said earlier this month.

The supermajors reported lower reserves in their most recent reports, also due to the 2020 oil price and oil demand collapse, which forced all of them to write off billions of U.S. dollars off the value of assets.

In Shell’s case, the declining reserves life is not in contradiction to its assessment from earlier this year that its oil production peaked in 2019 and is set for a continual decline over the next three decades.

The Iran-China Axis Is A Fast Growing Force In Oil Markets

March 29, 2021

The Iran-China Axis Is A Fast Growing Force In Oil Markets

One of the things that doesn’t get a lot of discussion in the press is the under-the-table relationship Iran and China have had when it comes to oil. At first glance, they wouldn’t seem to have a lot in common. One is a theocracy with a radical view of non-believers and the other is probably the only example of a successful communist dictatorship since this form of government was created. But, if you look a little deeper they have a couple of things that align their mutual interests strongly. The first is they are both absolute dictatorships, meaning the institutions of government and national policies can be changed at the whim of those at the top. The second thing they have in common, and this is the main takeaway, both countries have serious geopolitical issues with the United States.

Iran suffers from years of sanctions imposed primarily by the U.S. to compel them to comply with U.N. resolutions regarding their atomic program. China views this century as the one in which they displace America as the world’s dominant Super Power. The place where these two authoritarian government’s worldviews align is in their opposition to the U.S.

It’s worth noting China’s apparent success has been funded by western economies over the last 75-years, thanks to our desire to buy everything as cheaply as possible. In that time, China has become the manufacturing center for the world and amassed immense wealth in doing so. The pandemic has caused a rethinking of the wisdom of outsourcing strategic commodities to despotic regimes, but for now, if you buy something other than food odds are it was made in China.

…click on the above link to read the rest of the article…

David Messler, oilprice.com, china, iran, oil markets, oil,

OPEC+ Will Keep A Lid On Oil Production

March 25, 2021

OPEC+ Will Keep A Lid On Oil Production

OPEC+ will likely decide to keep oil production essentially steady for another month, according to four Reuters sources.

Saudi Arabia and the UAE have both spoke out in favor of the need to tread lightly when it comes to how much oil is put into the market. And this week is perhaps proof positive that the group would be wise to heed.

On Tuesday this week, the price of Brent crude plunged to $60.86 per barrel from $69.63 per barrel on March 11. By Wednesday, the price had rebounded to nearly $64 per barrel—up more than 5% on the day.

The dramatic price fluctuations are attributable to a variety of events, including U.S. oil inventory figures, another round of lockdowns in the EU, AstraZeneca vaccine safety and efficacy concerns, and a vessel stuck in the Suez canal causing a traffic jam of oil tankers.

No matter the reason for the price swings, the data suggests that the market is still sensitive to stimuli—bullish or bearish, and nothing but a sustained increase in demand is likely to cure that.

Even if OPEC holds production steady for April—or allows a couple of eager producers to ramp up just slightly—there remain a couple of wildcards that threaten OPEC’s ability to keep supplies tight: Libya and Iran.

Libya, complete with its unified government and exempt from OPEC’s production cut agreement, has plans—and now perhaps the ability—to increase its oil production. Libya’s ambitions are to lift its oil production to 1.45 million bpd by the end of the year from 1.3 million bpd now.

Iran and Venezuela are also exempt from the production cuts. Iran’s oil exports have been on the rise, and Venezuela’s production has been rising, even if only slightly.

Julianne Geiger, Oilprice.com, opec+, oil production

How Will We Pay for the Energy Transition?

March 25, 2021

How Will We Pay for the Energy Transition?

Earlier this month, the International Renewable Energy Agency said the world needed to invest $131 trillion by 2050 in order to limit the estimated global rise in average temperatures to 1.5 degrees Celsius. That’s 30 percent more than what is currently planned. It’s also equal to investments of $4.4 trillion every year from now until 2050. How realistic are these spending goals?

Well, it appears that the realism of IRENA’s estimates depends on how you look at the energy transition: as simply an increase in renewable energy generating capacity and a consequent increase in the share of electricity in national energy mixes. While not exactly wrong, this widely shared perspective fails to account for the sheer scale of the change we are in the process of undertaking.

James Bradford, chief executive of asset manager Vivid Capital management, compared the energy transition to the Industrial Age in terms of significance—an era that will present substantial challenges and numerous opportunities.

“There will be some spectacular growth industries developed along the way,” Bradford told Oilprice. “Installed solar capacity for example is expected to grow from less than 1TW today to nearly 10TW by 2050. That’s 10x growth, which is enormous growth, for any industry.”

And solar is just one example. When you add all the other renewable forms of energy such as wind or biomass, or hydro, and the ambitious plans many governments have about hydrogen, the scale of the transition—and the fitting size of the investment needed to implement it—becomes more obvious.

…click on the above link to read the rest of the article…

irina slav, oilprice.com, renewable energy, energy transition, fossil fuels, irea, international renewable energy agency

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