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The EU embargo on seaborne Russian crude oil exports and the G7 price cap on Russian oil are both less than a month away.
While a global economic slowdown and weak oil demand in China have capped prices, looming supply disruptions will likely send oil prices higher.
A lack of refinery capacity and crude oil disruptions will drive the price of fuels higher as well, particularly the price of diesel.

Less than a month from now, an embargo on seaborne Russian crude oil exports to the European Union will come into effect. As a result, global oil supply is set to tighten considerably as Russia is the biggest oil and fuels exporter in the world. And the market is preparing.

Hedge funds once again like oil, and are buying it on the futures market in considerable volumes, according to Reuters’ John Kemp. Last week, the buying reached 22 million barrels of Brent crude and 15 million barrels of West Texas Intermediate.

India is buying Russian crude at a discount, so it is buying a lot: its share of Middle Eastern oil imports fell to the lowest in 19 months in September, according to new data. Russia overtook Saudi Arabia as India’s number-two supplier after Iraq.

China is also buying Russian oil and not giving any indications it’s going to stop when the embargo enters into effect. The same is true of the G7 price cap for Russian crude that should also be coming into effect in a few weeks. China has already stated this will not change its current oil-buying habits.

Yet, with an EU embargo and a G7 price cap, what will almost certainly happen by the end of the year is that oil will become more expensive than it is now. Perhaps more worryingly, fuels – especially diesel…

…click on the above link to read the rest…

Austria Looks To Ban Oil And Coal Heaters From 2023

November 4, 2022

Austria Looks To Ban Oil And Coal Heaters From 2023

Austria’s government is looking to ban the use of new fossil fuel heaters as of next year and replace very old oil and coal heaters with climate-friendly options by 2025, Euractiv reports.

Austria, like the other EU countries, aims to cut its reliance on Russian gas as soon as possible. The government says that abandoning Russian gas should happen simultaneously with adopting renewable heat options.

Before the Russian invasion of Ukraine, Austria received around 80% of the natural gas it consumed from Russia. As of August, this high dependence on Russian gas flows had dropped to below 50%, the government said.

The ban on new fossil fuel heaters, however, would need the approval of at least two-thirds of the Austrian Parliament because the draft bill would require amendments to the constitution, Euractiv’s Nikolaus Kurmayer notes.

“The Russian war of aggression against Ukraine has shown how vulnerable our energy supply is. The answer to that can only be ‘get rid of Russian gas’,” Austria’s Energy and Climate Minister Leonore Gewessler said on Wednesday.

With the Renewable Heat Act (EWG), Austria is now taking another big step on this path, Gewessler added.

Under the new act, gas heaters cannot be installed in new buildings as of 2023, the minister said, adding that by 2040, Austria would switch all heaters in the country to climate-friendly alternatives, getting rid of oil and gas boilers, and moving to use heat pumps, district heating, or pellets.

Austria will support the proposed heaters switch program by making available around $1.95 billion (2 billion euros) by 2026, the minister said.

The Renewable Heat Act (Erneuerbaren-Wärme-Gesetz, EWG) says that fossil-fuel heating such as coal, oil, and gas heating should be phased out in Austria by 2040.

Presenting the initial draft of the bill, minister Gewessler said earlier this year that heating currently accounts for around one-quarter of Austria’s gas consumption.

IEA: The Current Energy Crisis Is Unprecedented

October 26, 2022

IEA: The Current Energy Crisis Is Unprecedented

The executive director of the International Energy Agency has said that the world is currently in the middle of the first truly global energy crisis.
Natural gas markets are particularly tight, and they are set to worsen next year as demand climbs and Europe struggles to replace Russian pipeline gas.
As well as being more expensive than pipeline gas, the lack of infrastructure to import LNG to Europe is resulting in delivery delays.

“The world is in the middle of the first truly global energy crisis,” the executive director of the International Energy Agency, Fatih Birol, said today in Singapore.

The official went on to warn that natural gas and LNG markets would tighten further in 2023, with only 20 million tons of new liquefaction capacity scheduled to come online in that year, Reuters reported.

Speaking at the Singapore International Energy Week, the head of the IEA also said that while supply remains tight, demand for gas will continue to be strong, especially in Europe and possibly in China.

Birol’s warning comes amid expectations that this winter will not be the toughest for Europe. Next winter is believed to be potentially much worse because, during the first half of this year, the EU could stock up on Russian pipeline gas, which is unlikely to come back next year, leaving the EU with a supply gap that other suppliers would be hard-pressed to fill.

Meanwhile, as many as 60 LNG tankers have turned into floating storage off European coasts as there is not enough regasification capacity on the continent to unload the cargo.

This, CNBC reports, is delaying some of the tankers’ return to the Gulf Coast to reload, and pushes gas inventories higher, Andrew Lipow from Lipow Oil Associates told the network.

…click on the above link to read the rest…

Europe’s Energy Crisis May Not End Until 2024

October 22, 2022

Europe’s Energy Crisis May Not End Until 2024

The EU gas storage units are nearly full giving some relief to fears of shortages
Challenges remain for the continent’s energy security as winter arrives
The challenges will persist into the winter of 2023-24.

The worst energy security fears of spring and summer as regards the coming winter in the European Union-EU, have been somewhat allayed. Earlier this year when war broke out in Ukraine and it became clear that the conflict would drag on for months, if not years, the EU appeared perilously in danger of a winter “Polar-Geddon,” as cold air gripped the continent. Largely forgotten and retired gas storage caverns, that hadn’t been filled in the expectation of a steady supply from Russia via the Nordstream I and II pipelines, suddenly were thrust front and center into the public eye. Troubles often come in twos. The next shoe to drop was the deflation of expectations of much of the EU electric grid base load being met by wind and solar farms, when the elements refused to cooperate. Beginning in the middle of last year, it was noted that the wind wasn’t blowing and the output of solar farms was less than predicted. These two events appeared ready to converge upon the EU and presenting it with a stark, and chilly future for the winter of 2022-23.

As is often the case, the fullness of time alleviated the worst fears as energy leaders in the countries that make up the EU, sprang into action. They turned to Norway for an additional 90 bn cubic meters of gas to begin filling the storage caverns. The infrastructure was in place, it was just a matter of price…

…click on the above link to read the rest…

Can Europe Avoid A Worst-Case Energy Scenario This Winter?

October 20, 2022

Can Europe Avoid A Worst-Case Energy Scenario This Winter?

European countries have done most things they feasibly could to fill gas storage units.
Overall in the EU, gas storage was 92.37% full as of October 17.
Weather will be the determining factor in how fast gas in storage would be depleted, so Europe hopes for the best and prays for a milder winter.

Europe’s gas prices fell at the start of this week to the lowest level in three months as storage is fuller than initially expected, LNG cargoes are coming in, and the weather is mild. But European governments have been preparing for the worst-case scenario in which a colder-than-usual winter could quickly sap gas in storage, send gas prices soaring again, intensify competition for costly LNG with Asia, break consumers’ resolve to conserve energy in freezing temperatures, and force more businesses and industrial processes to halt operations.

Europe has done all it can to ensure the heating and lights will be on this winter, analysts say. Yet this may not be enough—a long cold, windless spell this winter would threaten to unravel all the efforts and lead to mandatory energy-saving targets, rationing, or rolling outages.

The Good News

All that can be feasibly done to ensure alternative gas supply after the Russian invasion of Ukraine and the Russian halt of gas flows to nearly all EU member states has been done. Floating storage regasification units (FSRUs) are being set up in Germany, the Netherlands, and Finland. Eemshaven in the Netherlands and Wilhelmshaven and Brunsbüttel in Germany are expected to begin operations as early as the end of this year. Europe is paying a lot for LNG supply, outbidding Asia, which was the top buyer of spot cargoes before the war.

…click on the above link to read the rest…

Europe’s Fuel Supply Fears Worsen As Major Refinery Malfunctions

October 14, 2022

Europe’s Fuel Supply Fears Worsen As Major Refinery Malfunctions

The biggest refinery in Europe, Shell’s Pernis in the Netherlands, suffered a malfunction late on Wednesday, which could exacerbate an already worsening fuel supply situation in northwest Europe due to the strikes in France.

Shell Pernis said late on Wednesday that “Due to a malfunction on one of our installations, we are forced to flare.”

Shell is investigating the cause of the malfunction and is doing everything it can to solve the problem as soon as possible, and to limit the nuisance for the residents in the vicinity of the refinery near Rotterdam, the company said.

Governments have been informed about the malfunction at Europe’s largest refinery, Shell said in a statement carried by Bloomberg, but didn’t go into details about potential losses of fuel supply.

Fuel supply is already tight in Europe amid an ongoing strike at most of France’s refineries, and if the Dutch refinery malfunction leads to further supply losses, the European diesel market will find itself even shorter on supply, less than four months before the EU embargo on imports of Russian fuels by sea.

France’s fuel distribution continues to be disrupted by the ongoing strikes at refineries, with no end in sight to the industrial action that has left more than 60% of French refining capacity offline. Earlier this week, France said that it would requisition essential workers to staff Exxon’s French oil depot, and threatened to do the same for Total’s French refineries if talks failed to progress. But workers at Total’s Donges refinery decided on Tuesday to strike beginning on Wednesday, French union CGT said.

French ministers said today that TotalEnergies should raise the salaries of the workers, who have been on strike for two weeks now.

…click on the above link to read the rest…

NOPEC Bill Won’t Bring Oil Prices Down

October 13, 2022

NOPEC Bill Won’t Bring Oil Prices Down

Washington responded angrily to OPEC+’s decision to cut output.
U.S. legislators have suggested the introduction of a bill called NOPEC in order to reduce OPEC’s power.
NOPEC could send oil prices higher and end the dominance of the petrodollar.

“Nobody f*cks with a Biden,” said the U.S. president, and the oil ministers of the member countries of the Organization of the Petroleum Exporting Countries (OPEC+) replied, “Hold my beer.” OPEC+ then proceeded to approve production cuts of 2 million barrels per day, despite a full court press by the administration in the weeks leading up to the decision, and raised the price of oil for the U.S., lowered it for Europe, and left it unchanged for Asia. According to National Security Advisor Jake Sullivan, “the President is disappointed by the shortsighted decision by OPEC+ to cut production quotas” and “the Biden Administration will also consult with Congress on additional tools and authorities to reduce OPEC+’s control over energy prices,” neglecting to mention that Biden administration decisions to cancel the Keystone XL pipeline and to stop issuing new oil and gas leases on public lands gave OPEC+ the upper hand.

Apparently, a fist bump only gets you so far.

There followed a lot of “how dare they!” by the great and good, but OPEC+ was having none of it. The day before the announcement, the Saudi energy minister dressed down a Reuters reporter for shoddy work by his colleague who claimed that Russia and Saudi Arabia (the Kingdom) conspired to price oil at $100 per barrel, and later explained OPEC+ was being proactive as the West is attacking inflation with higher interest rates which, in turn, may cause a recession and drive down oil demand (and price)…

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

Cash For Fracking: UK Households May Receive Payouts For Allowing Fracking

October 12, 2022

Cash For Fracking: UK Households May Receive Payouts For Allowing Fracking

The UK lifted its long-running ban on fracking last month.
UK households could soon receive cash payouts for allowing fracking in their neighborhoods.
Drilling companies could soon go door to door in Britain, offering money in exchange for fracking support.

UK households could soon receive cash payouts for allowing fracking in their neighborhoods, media reported on Monday.

The UK may have lifted its long-running ban on fracking last month, but its fracking industry still has one big hurdle that it must overcome: local opposition.

Fracking has been criticized for its reported ties to earthquakes and other environmental damage, and has fallen out of favor. The practice’s sullied reputation has led to its ban in several countries, including France, Germany, Spain, and until recently, the UK.

Despite its pariah status, fracking managed to make its way into the hearts and minds of Texans to eventually become the backing behind the United States’ rise to stardom within the global oil and gas industry. Fracking was able to make inroads in the U.S. shale patch precisely because locals benefited from the fracking activity by way of receiving money from the oil and gas taxes that the states collected, which then flowed into the areas that allowed it.

That those areas benefited greatly from the fracking dollars cannot be denied. Now Britain, too, is taking a page from the U.S. shale handbook: paying households £1,000 for allowing fracking in their areas. But the money will come directly from drillers rather than from industry tax revenue.

Drilling companies could soon go door to door in Britain, according to media reports on Monday, offering money in exchange for fracking support.

When the UK’s new Prime Minister Liz Truss removed the fracking ban last month, she did so with one caveat: it would only be allowed in communities that showed at least 50% support. Drillers must now gain half the residents over to the controversial practice in order to commence drilling.

An Oil Supply Shock May Be Imminent

September 28, 2022

An Oil Supply Shock May Be Imminent

Oil demand has remained resilient in the face of a multitude of challenges.
OPEC+ has fallen behind more than 3.5 million bpd on its output goals.
The DoE has no immediate plans to start refilling the SPR.
The risk of a supply shock grows as China’s economy re-opens while Russian oil is being forced off the market.

When the chief executive of Aramco said earlier this week that years of underinvestment had damaged the balance between supply and demand in the oil market, it should have been a wake-up call to those in decision-making positions. Instead, the secretary-general of the UN bashed the oil industry once again for “feasting” on record-high profits and urged governments to make them pay for this.

Meanwhile, OPEC’s production shortfall last month reached 3.58 million bpd—a figure equal to some 3.5 percent of global demand—and the United States continued to sell oil from its strategic petroleum reserve.

These seemingly unrelated news reports do have something very important in common. Both clearly suggest a supply shortfall on a global level is imminent. Throw in the news that Russia’s oil exports could fall by some 2.4 million bpd after the EU embargo enters into effect in December, and an oil shortage becomes more or less unavoidable.

Oil demand has remained resilient in the face of a multitude of challenges, and even prices of over $100 per barrel failed to curb it in any significant way earlier this year. Now, prices are somewhat tempered, but the embargo is still about two months away. Once this kicks in, prices are bound to jump because alternative supply is limited. And the U.S. will need to start refilling its SPR at some point because it is getting depleted.

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

The Global Water Crisis Could Crush The Energy Industry

September 26, 2022

The Global Water Crisis Could Crush The Energy Industry

Water is growing more scarce due to climate change.
Water scarcity could derail the green energy boom, and even hinder fossil fuel production.
With rising concerns over water scarcity, mainly due to climate change, there are fears that the big transition to renewable energy will be hindered even further.

For years, the energy sector, and almost every other sector, has taken water for granted, viewing it as an abundant resource. But as we move into a new era of renewable energy, the vast amounts of water required to power green energy operations may not be so easy to find. And it’s not just renewables that are under threat from water scarcity, as it also hinders fossil fuel production and threatens food security.

In recent months, we have seen extreme droughts across Europe and the U.S., which are finally making people realise the significance of water security. Stefano Venier, CEO of the Italian energy infrastructure company Snam, highlights the huge impact recent droughts have had on both food security and energy production. Labelled as ‘Europe’s worst drought in 500 years’, the low water levels have restricted shipping capabilities, as well as drying up soil and reducing summer crop yields.

Venier explains, “For a long time, water was considered [as being] for free, as something that is fully available in any quantity.” He went on to say, “Now, we are discovering that with climate change … water can become scarce.” And so, “we have to regain the perception of importance, and the value [that] … the water has, also, with respect to … energy production… we have discovered that without water, enough water, we cannot produce the energy we need, or we can’t ship the fuels for filling the power plants,” he added.

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

A Natural Gas Shortage Is Looming For The U.S.

September 21, 2022

A Natural Gas Shortage Is Looming For The U.S.

As natural gas demand around the world breaks new records, U.S. shale producers are struggling to keep up with demand.
While natural gas prices in the United States fell after a railway strike was averted last week, it looks likely that prices both at home and abroad will spike this winter.
A hotter-than-expected summer and a lack of alternative energy sources have left U.S. inventories below the seasonal average.

Last week, the media rushed to report that natural gas prices in the United States had fallen sharply after trade unions and railway companies reached a tentative deal that averted a potentially devastating strike.

Indeed, natural gas prices fell by nearly a dollar per million British thermal units, helped by a respectable build in inventories. And yet, inventories remain below the seasonal average, exports are running at record rates, and producers are beginning to struggle to meet demand, both at home and abroad.

Reuters’ John Kemp wrote in a recent column that domestic and international gas consumption had risen to record highs, and shale producers—the ones that account for the bulk of U.S. natural gas output—were having a hard time catching up with this demand.

Meanwhile, although higher on a weekly basis, inventories remained at the second-lowest for this time of the year for the last 12 years, Reuters’ market analyst noted. He also added there were no signs of any improvement in the level of inventories despite the rise in prices.

None of this suggests lower prices for natural gas are coming to either the United States or international markets as the northern hemisphere heads into winter. On the contrary, the latest figures suggest more financial pain for gas consumers. And they confirm, to an extent, forecasts made earlier this year.

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

Europe’s Natural Gas Shortage Could Trigger A Food Crisis

September 14, 2022

Europe’s Natural Gas Shortage Could Trigger A Food Crisis

Energy crises impact nearly every aspect of our lives, and that is particularly true of food markets, with food production next year expected to be severely threatened.
About 70 percent of the cost of fertilizer production is solely the price of natural gas, and as the price of energy soars, the cost of making and moving food is increasing alongside it.
At the same time, Russia’s invasion of Ukraine and threats from Putin that Russia may alter grain export routes have only added to uncertainty in food markets.

The problem with an energy crisis is that it’s actually an everything crisis. In a world where virtually every industry relies on energy in some form, runaway inflation is an inevitability. This phenomenon is not news – you’ve been experiencing it for the better part of two years now. But while global governments are using every tool in their kits to curb the rising inflation rates, there’s far less they can do about the coming food shortage.

For months, the agricultural industry has been warning the rest of the world that next year’s food production is severely threatened, as the fertilizer industry is in shambles. Industrial NPK fertilizers (so named for their makeup of nitrogen, phosphorus, and potassium oxide), are heavily reliant on natural gas supplies. About 70 percent of the cost of fertilizer production is solely the price of natural gas, which is used in liberal amounts to make the ammonia phosphate slurries that turn into fertilizer. Indeed, according to CRU Group, European fertilizer producers in the region are currently losing approximately $2,000 for every ton of ammonia produced. So as Russia has stemmed and then indefinitely stopped the flow of natural gas into Europe, sending gas prices through the roof, the continent’s fertilizer sector has halted as much as 70 percent of its production capacity.

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

Czech PM Blames Russian Propaganda For Mass Protests In Pragu

September 5, 2022

Czech PM Blames Russian Propaganda For Mass Protests In Prague

Czech Prime Minister Petr Fiala is blaming pro-Russian forces for mass demonstrations this weekend that saw tens of thousands of people protest against the government, the European Union and NATO amid soaring energy prices and inflation.

The “Czechia First” demonstration saw 70,000 people gather to protest the government in a development the Czech prime minister is blaming on elements influenced by Russian propaganda.

“It is clear that Russian propaganda and disinformation campaigns repeatedly appear on our territory and that someone is simply succumbing to them,” Fiala said, as reported by Euractiv.

Protesters, brought together by the Communist Party, the Freedom party, the Direct Democratic Party, and other groups labeled as “radical”–both far-left and far-right–called on the government to address soaring energy prices and the highest cost of living since the early 1990s for everything from housing to consumer goods.

Protesters called for a new deal with Russia for gas supplies, just a day after Moscow said natural gas flows through Nord Stream 1 to Europe that had been cut off for maintenance would not be restored on Saturday as scheduled, and would be delayed indefinitely.

Inflation has hit 17% and is marching towards 20% in the coming months, according to Fortune, citing the Czech central bank.

The mass protests also came a day after a no-confidence vote against the five-party coalition government failed.

While the prime minister blamed Russian influence, other coalition government officials warned against sidelining real economic issues facing the people.

News reports noted that some demonstrators donned T-shirts favoring Russian President Vladimir Putin and some carried anti-EU and anti-NATO posters.

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

Finland Braces For Rolling Blackouts This Winter

August 24, 2022

Finland Braces For Rolling Blackouts This Winter

Finnish grid operator warns of rolling blackouts this winter.
Gazprom stopped in May all gas deliveries to Finland.
Norway is considering limiting its electricity exports.

Finland should be prepared for possible power outages this winter in case of shortfalls in electricity supply, the Finnish grid operator said on Tuesday, in yet another warning of an energy crunch in Europe after gas supply from Russia was severely reduced.

In Finland’s case, Gazprom stopped in May all gas deliveries to Russia’s neighbor to the West, making Finland the third EU member state with Russian pipeline supply cut off after Poland and Bulgaria. The halt of Russian supply to Finland took place days after Finland—together with its Scandinavian neighbor Sweden—formally applied to join NATO in the wake of the Russian invasion of Ukraine. Russia has warned both countries against applying to become NATO members.

Finland gets up to 70 percent of the gas it uses from Russia, but gas doesn’t have a large share in the overall energy mix and accounts for 5 percent of total energy consumption.

“The war in Europe and the exceptional situation on the energy market have increased uncertainties related to the availability of electricity. As a result of the great uncertainties, Finns should be prepared for power outages caused by possible electricity shortages this coming winter,” Finnish grid operator Fingrid said today.

According to Fingrid, the Olkiluoto 3 nuclear power plant would compensate for the missing Russian imports.

“In practice, in the event of an electricity shortage, Fingrid will inform the local distribution network companies of the total amount of power to be disconnected from each distribution network company’s area, and after this, power outages will be recycled as two-hour outages until the electricity shortage has ended,” said Tuomas Rauhala, Senior Vice President, Power System Operation, at Fingrid.

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

Investors Have Now Spent $5 Billion Pursuing The “Holy Grail Of Energy”

August 20, 2022

Investors Have Now Spent $5 Billion Pursuing The “Holy Grail Of Energy”

When it comes to nuclear fusion, the joke is that it is always just decades away, but that hasn’t stopped investors from spending $5 billion on chasing the holy grail of energy.
In 2022, investors spent twice as much money as has ever been spent before on nuclear fusion, with nearly all of that investment coming from the private sector.
Every nuclear fusion experiment so far has been net negative when it comes to energy production, but the biggest ever reactor is nearly 80% complete and could change that.

What do The Dark Knight Rises, Back to the Future, Oblivion, and Interstellar all have in common? They are sci-fi blockbusters that showcase a technology that scientists consider to be the Holy Grail of Energy: Nuclear fusion. Theoretically, two lone nuclear reactors running on small pellets could power the entire planet, safely and cleanly. That’s the promise of nuclear fusion. So, why are we still relying on fossil fuels? What’s stopping us from building these reactors everywhere?

After all, scientists have been working on nuclear fusion technology since the 1950s and have always been optimistic that the final breakthrough is not far away. Yet, milestones have fallen time and again and now the running joke is that a practical nuclear fusion power plant could still be decades away.

Well, the past few years have witnessed a resurgence in the field with a handful of startups setting up shop to make nuclear fusion an everyday reality. Interestingly, the vast majority of the sector’s funding has come from the private sector rather than public investments.

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

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