Home » Posts tagged 'Irina Slav'

Tag Archives: Irina Slav

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

The Fatal Flaw In A Perfect Energy Solution

The Fatal Flaw In A Perfect Energy Solution

Solar wind tower

More than thirty years ago a giant tower was built in Manzanares, Spain, to produce electricity in a way that at the time must have seen even more eccentric than it seems now, by harnessing the power of air movement. The Manzanares tower was, sadly, toppled by a storm. Decades ago, several other firms tried to replicate the idea, but none has succeeded. Why?

A simple idea

The idea behind the so-called solar wind towers is pretty straightforward. The more popular version is the solar updraft tower, which works as follows:

On the ground, around the hollow tower, there is a solar energy collector—a transparent surface suspended a little above ground—which heats the air underneath.

As the air heats up, it is drawn into the tower, also called a solar chimney, since hot air is lighter than cold air. It enters the tower and moves up it to escape through the top. In the process, it activates a number of wind turbines located around the base of the tower. The main benefit over other renewable technologies? Doing away with the intermittency of PV solar, since the air beneath the collector could stay hot even when the sun is not shining.

A more recent take on solar wind towers involved water as well. Dubbed the Solar Wind Downdraft Tower, this project first made headlines in 2014, but since then there have been few updates, and those have been far between. The latest was from last year, when the company behind it, Solar Wind Energy Tower, announced a letter of intent by an investment company to provide financing for the project. That financing was to come from investors that the company was yet to find.

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

There’s No Stopping The World’s Most Politically Charged Pipeline

There’s No Stopping The World’s Most Politically Charged Pipeline

Putin

This week, Denmark granted Gazprom approval for its Nord Stream 2 gas pipeline project, a project that is set to bring 55 billion cubic meters of Russian gas into Europe annually. It is one of the most controversial pipeline projects in the world and is now moving ahead despite strong opposition from multiple EU members and the United States.

The geopolitical tensions surrounding the development of Nord Stream 2 are unprecedented. To begin with, Russia has very poor relations with the Baltic states and Poland, nations who will almost always fight against anything they see as empowering Russia geopolitically. Then there is Ukraine, a nation that is strongly against the pipeline due to its fear of losing the transit fees that it currently charges Russia for exporting gas to Europe. Finally, and perhaps most importantly, the United States sees this pipeline as a direct threat to its soft power in Europe as well as a threat to its growing LNG exports.

But for all the politics and attention that this pipeline is attracting, the simple truth of the matter is that Europe, and more specifically Germany, needs this natural gas. Germany plans to shut down all its nuclear reactors by 2022. Many have questioned the wisdom—and some even the sanity—of that decision, but it remains government policy. The generation capacity the is being lost in that sector will need to be replaced, in the short term at least, by natural gas.

Despite its green reputation, Germany is a country that generates a surprisingly large portion of its total energy from coal. Its total installed coal-fired capacity is close to its solar capacity, at 44.9 GW, versus 47.9 GW for solar. At today’s growth rates, it’s current solar and wind capacity will not be enough to replace the retired nuclear plants.

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

Texas Hit Hard By Shale Slowdown

Texas Hit Hard By Shale Slowdown

Texas Shale Slowdown

Texas’ economy is perhaps the most vulnerable to oil price swings given its leading role in the country’s oil industry. Recently, as prices have remained low, talk has begun about the outlook for the state’s economy.

According to a recent Reuters report, for example, smaller independent oil and gas producers in the Lone Star State are struggling to get loans from banks as the latter become increasingly wary of the ability of the borrowers to return the money when the time comes.

Jobs in the Texas oil and gas industry are falling, too. The Houston Business Journal reported this month that September saw a 1,100 decline in the number of jobs in the mining and logging sector—the category that includes oil and gas jobs. Over the 12 months from September 2018, the state’s oil and gas industry added just 1,700 new jobs, which was the lowest number of new job additions to any Texas industry over the same period, data from the Texas Workforce Commission showed.

Yet not everyone is worried. The University of Houston Energy Fellows, for instance, wrote in an article for Forbes that “the alarm bells are premature.” While the experts that make up the group acknowledge there are plenty of reasons to be worried about the economy of Houston—the article focuses on the city—oil prices are not among them.

The trade war with China and the anticipation of a global economic slowdown caused by it is a top concern for any economy and Houston is no exception. Political economic problems in Europe are also a cause for worry. Yet, according to the University of Houston Energy Fellows, bankruptcies in the Houston oil and gas industry are only slightly higher this year than last, and the credit crunch energy independents are facing now is “far from comparable to 2015-16.”

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

Solar Storms Can Devastate Entire Civilizations

Solar Storms Can Devastate Entire Civilizations

Solar flare

Climate has inarguably become a hot topic of discussion in developed economies over the last decade, and it is getting hotter by the day as study after study warn we are close to doomed if we don’t change our ways urgently. Yet climate on Earth is not the only problem that humankind faces. There is another climate we need to pay attention to, and there is nothing we can do to change that.

Solar storms, whose more scientific name is coronal mass ejections, were until recently believed to be a rare occurrence—only happening once every couple of centuries or so. However, there is reason to believe they may be a lot more frequent than that. In a world increasingly dependent on electricity, this is, to put it mildly, a problem.

In 1859 the Sun spewed concentrated plasma that broke through its magnetic fields in the direction of the Earth. Commonly referred to as the Carrington Event, that coronal mass ejection hit the Earth’s magnetic field, which warped it and caused telegraphs around the world to fail. For a long time, the scientific consensus was that solar storms of this magnitude were a rarity.

That was in the 19th century where telegraphs were cutting-edge tech. Now, we have power grids, airplanes, satellites, and computers, and all of them are potentially susceptible to the effects of another solar storm. We also know that solar storms of the magnitude of the Carrington Event or even worse occur more frequently.

“The Carrington Event was considered to be the worst-case scenario for space weather events against the modern civilization… but if it comes several times a century, we have to reconsider how to prepare against and mitigate that kind of space weather hazard,” the lead research in a study that reached that conclusion, Hisashi Hayakawa, said after the release of the study earlier this month.

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

China’s Renewable Boom Hits The Wall

China’s Renewable Boom Hits The Wall

Renewable Boom

When earlier this year China announced subsidies for 22.79 GW of new solar power capacity, those following the country’s renewable energy story must have started to worry. The capacity subsidized is half the amount approved in 2017, at 53 GW. And chances are that solar and wind additions will continue to fall.

Subsidies are one reason. In January, Beijing said it will only approve solar power projects if they are cost-competitive with coal. Judging by the size of subsidies announced in July, more than 22 GW in projects can boast cost-competitiveness with coal.

Yet there is another reason: curtailment. China-based journalist Michael Standaert wrote in a recent story for Yale Environment 360 that China’s solar and wind farms continue to produce electricity that is wasted because there is not enough transmission capacity.

Renewable energy is a top priority for China as it fights one of the worst air pollution levels in the world while subject to an uncomfortably high degree of reliance on energy imports, namely oil and gas. At the same time, it is one of the biggest—if not the single biggest—driver of global energy demand as its middle class grows fast and with it, energy demand. Now, it seems, energy demand is taking the upper hand.

China has substantially increased subsidies for shale gas exploration and methane separation from coal, Standaert writes. He also quotes a former IEA official as saying, “Though China is the largest clean energy market in the world, wind and solar only accounted for 5.2 percent and 2.5 percent of China’s national power generation in 2018.”

What’s more, Kevin Tu, now a fellow at the Center on Global Energy Policy at Columbia University, tells Standaert that “Against the backdrop of an ongoing U.S.-China trade war and a slowing Chinese economy, political priority of climate change in China is unlikely to become very high in the near future, indicating great difficulties for Beijing to further upgrade its climate ambitions.”

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

A Perfect Storm Is Brewing For US LNG

A Perfect Storm Is Brewing For US LNG

LNG tanker

That the U.S. energy industry would be among those hardest hit by a full-blown trade war between Washington and Beijing was a no-brainer. Yet the extent of the fallout as the war continues is only becoming evident now, as some companies find it hard to secure the funding for their ambitious LNG projects.

According to the Bank of America Merrill Lynch, a number of companies may delay their final investment decisions on new LNG capacity to next year because of U.S.-Chinese trade tensions. Bloomberg reports these include Tellurian and NextDecade, as well as other companies focused exclusively on LNG.

“We see delays as likely given current pricing headwinds, no resolution yet on the U.S.-China trade war, and minimal contract announcements in recent months,” BofA analysts wrote in a recent note to clients, referring to Tellurian’s US$28-billion Driftwood LNG project in Louisiana.

While the companies themselves are not too talkative when it comes to possible obstacles to the so-called second wave of LNG projects in the U.S., the facts are not encouraging: China has imported no U.S. LNG since March, according to data from ClipperData. Bloomberg data is even gloomier: it suggests no U.S. LNG has made its way into China since February. No wonder, since Beijing first imposed a 10-percent tariff on the commodity and then upped this to 25 percent in retaliation for U.S. tariffs. 

Yet there is another aspect of the trade war that is more damaging to U.S. LNG producers. To secure funding for these projects that typically cost billions, U.S. companies need long-term commitments to convince banks the projects are viable. Chinese buyers were the natural choice for these long-term commitments but this is no longer the case as Chinese investors shun U.S. projects amid the war.

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

Climate Change Triggers Hysteria As Ireland Declares A ‘Climate Emergency’

Climate Change Triggers Hysteria As Ireland Declares A ‘Climate Emergency’

Pollution

Ireland has declared a climate emergency, with Climate Action Minister Richard Bruton calling climate change the greatest challenge mankind is facing.

ITV quoted the minister as saying, “We’re reaching a tipping point in respect of climate deterioration. Things will deteriorate very rapidly unless we move very swiftly and the window of opportunity to do that is fast closing.”

The move, which followed cross-party support to amendments to a climate action report drafted by the country’s parliament, made Ireland the second country in the world to declare a climate emergency after the UK. In the latter, the declaration followed crippling environmentalist protests in London that paralyzed parts of the city.

In its wake, an independent, government-appointed Committee on Climate Change recommended to the government such measures as reducing the consumption of meat and dairy products, changing the way farms do business, and making electric cars the only cars that people can buy starting in 2035. By 2050, according to the panel, the country should be greenhouse gas emission-free.

It looks like climate emergency declarations could become a trend: hours after media reported the Irish parliament’s vote for an emergency, the New Zealand Vegan Society issued a call for the government to declare a climate emergency.

“New Zealand is woeful in its protection of the environment, with many rivers and waterways polluted, in part due to excess dairying in particular regions. It shows that we are simply not doing enough to protect our part of the world,” the call read

“It is the next biggest inconvenient truth… eating animals is causing habitat loss, driving climate change and the 6th mass extinction wave. What can we do? The answer is simple: go vegan and plant trees!” said a Vegan Society Aotearoa New Zealand representative, Claire Insley.

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

‘High’ Oil Prices Are Already Dampening Demand

‘High’ Oil Prices Are Already Dampening Demand

Fatih Birol

Crude oil prices are affecting demand for the commodity negatively, the International Energy Agency’s head Fatih Birol told S&P Global Platts in an interview.

“The higher oil price environment may, if they stay around this level, also have an impact…put some downward pressure under demand growth,” Birol said. The warning follows the release of IEA’s latest Oil Market Report, in which the authority kept its oil demand growth projections for this year unchanged at 1.4 million bpd.

The agency’s boss noted that Brent over US$70 a barrel is affecting demand the most in the emerging markets that account for the most of demand growth, including China and India, but also the United States.

“So it will not be a surprise if we are to revise our demand numbers in the next edition of the oil market report if the prices remain at these levels,” he told S&P Global Platts.

For those that are watching oil price movements and the reactions of the world’s largest importers, this is not news. After a slump in the fourth quarter of last year, Brent has rebounded by about 40 percent, trading above US$70 at the moment.

Prices were pushed up by the entry into effect of the latest OPEC+ round of production cuts with Saudi Arabia leading the charge and cutting considerably more than it had agreed to, yet again in a bid to raise prices to levels it feels more comfortable with. However, these are levels that India and China do not feel equally comfortable with.

India relies on exports for more than 80 percent of its oil consumption and China is more dependent on imports than it would like to be. So, it is no wonder that the climb in prices “will definitely hurt oil demand if it soared especially in the important demand growth centers such as India,” according to Birol.

The Race Is On: Big Oil Rushes To Supply The 1 Billion Disconnected

The Race Is On: Big Oil Rushes To Supply The 1 Billion Disconnected

power meter

Supermajors are taking on more renewable energy commitments lately as they prepare for a less carbon-intensive future. Some of them are going a step further, coupling these green commitments with humanist causes such as providing access to energy to part of the one billion people all over the world who have no electricity.

Power for All director William Brent reviewed in a recent story this push that will see Shell, Total, French Engie, Schneider Electric and others of their caliber, build electricity supply from clean sources for 200 million of this one billion within the next ten years. Shell is the most ambitious, aiming to provide access to electricity for 100 million, and Total plans to provide 25 million people in Africa with solar energy derived power within the next two years.

Others are also catching up with the green agenda. Exxon recently announced it had inked a 12-year deal with Danish renewable energy company Orsted to buy 500 MW of electricity produced by solar and wind farms to power its oil production in the Permian. The deal reflects falling renewable energy prices, which is making renewable energy a lot more competitive with fossil fuels, not to mention the reputational effect its deployment would have on Big Oil– and Big Oil is in serious need of news that is good for its reputation. Even with a redoubling of efforts to move more quickly into renewable energy territory, challenges remain, however.

Shell and BP, for instance, are being pressured by activist shareholders into doing more to lower their carbon footprint. One such activist shareholder, Dutch group Follow This, has been actively pressuring the companies it holds shares in to be more active in carbon footprint reduction work.

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

Big Oil Doubles Down On Shale Despite Price Drop

Big Oil Doubles Down On Shale Despite Price Drop

big oil shale

It’s the time of the year when oil companies start announcing their budgets for next year and besides a steady albeit guarded optimism, one thing stands out: oil majors are doubling down on their shale endeavors.

Chevron, ConocoPhillips, and Hess Corp all announced their capex plans for next year in the last few days and all three have big plans for U.S. shale. In fact, Conoco said it would allocate half of its budget on onshore operations in the United States, while Hess Corp said the bulk of its US$1.89 billion production growth budget, or US$1.425 billion, would be poured into the Bakken play.

Chevron has  earmarked US$3.6 billion for expanding its production in the Permian and another US$1.6 billion will be invested in other shale plays in the United States. That makes a total of US$5.2 billion for U.S. shale, which is substantially higher than this year’s budget of US$4.3 billion.

Anadarko, which made its 2019 spending plans public last month, said it planned to allocate more than two-thirds of its 2019 budget to shale operations, with a particular focus on the Delaware Basin in the Permian and the DJ basin in Colorado.

According to Bloomberg, shale has become “a safe haven” for Big Oil amid the recent increased volatility in prices. The argument is that shale production costs are much lower than a few years ago and combine with the opportunity for a steady production increase and quicker returns than conventional projects.

The recent assessment of the U.S. Geological Survey of the recoverable reserves in the Wolfcamp basin must have added fuel to Big Oil’s shale enthusiasm.

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

Is This The Next Disaster For Canadian Drillers?

Is This The Next Disaster For Canadian Drillers?

Oil infrastructure

The government of Alberta this week took an unprecedented decision to enforce a crude oil production cut so excess inventories could be shrunk and the price of western Canadian grades could improve, but the industry’s problems are far from over. They will be among the hardest hit by the International Maritime Organization’s new emission rules, to enter into effect in two years, which will require a reduction of the sulfur content of bunkering fuel to 0.5 percent from 3.5 percent.

“We’ve got challenges with respect to pipelines, we’ve got challenges with respect to rail and now we’ve got challenges with respect to our demand market,” Bloomberg quoted the chief executive officer of the Canadian Energy Research Institute as saying at a presentation this week. The emission rules will start affecting the price of Canadian crude next year, Allan Fogwill, along with other analysts, believes.

Canadian crude is heavy and sour, that is, high in sulfur content, which is the obvious reason why the IMO changes would affect prices, adding to already substantial pressure from pipeline bottlenecks and the rising amount of crude that is being transported by costlier rail.

According to IHS Markit analyst Kurt Barrow, the emission rules will make Canadian crude another $7-8 cheaper than West Texas Intermediate in 2019. Even the completion of the Line 3 replacement project won’t offset these losses, although it will add 375,000 bpd to daily pipeline capacity.

Another analyst, Wood Mackenzie research director Mark Oberstoetter, told Bloomberg Western Canadian Select will likely be US$20 cheaper than WTI for most of 2019, which is the cost of railway transportation for Albertan heavy crude. All in all, things are looking pretty bad. But how bad is bad?

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

Oil Falls On Crude Inventory Build

Oil Falls On Crude Inventory Build

Oil jack

Crude oil prices slipped further down today after the Energy Information Administration reported crude oil inventories for the week to November 23 had added 3.6 million barrels. That’s compared with a build of 4.9 million barrels a week earlier.

The EIA figures came after yesterday the American Petroleum Institute reported an estimated inventory increase of 3.453 million barrels, which failed to affect prices in any significant way.

EIA also said gasoline inventories last week had declined by 800,000 barrels and distillate fuel inventories had added 2.6 million barrels. A week earlier, the authority estimated a decline of 1.3 million barrels in gasoline and a 100,000-barrel decline in distillate fuel inventories.

Meanwhile, production is hitting new highs and this will continue, according to most estimates, unless oil prices continue declining at a fast pace. The likelihood of this happening is relatively low, however. OPEC is meeting next week in Vienna to discuss a new round of production cuts and most analysts expect the cuts to be agreed with Russia also joining in again.

However, Morgan Stanley, for one, sees a 33-percent chance of the cartel failing or refusing to agree a production cut, in which case prices will definitely slump more, pressured by bleak economic outlooks and concerns about a crude oil oversupply. The argument against a production cut is simple enough: market share. It’s no wonder some OPEC members have already spoken against a cut, notably Libya, which said it expected to be granted an exemption from any cuts.

Besides the OPEC meeting, oil market observers would be watching the G20 meeting, where Russia may or may not give a clear indication whether it will join any cut agreements. Just like last time, Moscow would be a crucial ally for the cartel if it decides to join the cuts or a deal-breaker if it decides to sit these out.

 

Mexico’s Oil Crisis Deepens

Mexico’s Oil Crisis Deepens

Pemex oil

Mexico’s state oil company Pemex said it produced an average 1.76 million bpd of crude in October, down 7 percent from October last year, Reuters reports, citing data released by the company. This is also one of the lowest monthly production rates since 1990 when records began.

The decline was attributed to the natural depletion of mature fields, highlighting the urgent need for new production in the country. The outgoing government of Enrique Pena Nieto launched a sweeping reform in Mexico’s energy sector, one of its aims being to open up the local oil wealth to foreign operators in order to stem this decline in production. The incoming government is currently reviewing oil contracts signed by the previous administration to make sure no corruption was involved in the deals.

Exports of crude also declined last month, and by a lot more than production. Pemex exported an average 1.03 million bpd, down by 25 percent from a year earlier. President-elect Andres Manuel Lopez Obrador earlier this year said Pemex should keep more crude for its refineries instead of exporting it to reduce Mexico’s dependency on imported fuels, but the country’s refining sector needs a lot of work to make this plan successful.

It was in October that Pemex’s refineries hit a record low utilization rate of 25.7 percent, according to an S&P Global Platts report, which also noted the causes of the drop included shortages of light crude and technical difficulties at some refineries. Pemex would need to upgrade its refineries to produce more gasoline to make local refining more profitable as currently its facilities produce a lot more fuel oil than would make economic sense.

Despite the problems, Obrador has ambitious plans, including an increase in crude oil production to 2.6 million bpd by the end of his six-year term in office and a lot more domestic refining.

Canadian Oil Producers Divided On Output Cuts

Canadian Oil Producers Divided On Output Cuts

crude pipelines

Crude oil producers in Alberta appear to be split on a proposed cut in production amid record-low prices, Canadian media report.

One of the large Canadian oil producers, Cenovus Energy, is calling upon the government of Alberta to mandate temporary production cuts at all drillers in a bid to ease Canadian bottlenecks that have resulted in Canada’s heavy oil prices tumbling to a record-low discount of US$50 to WTI.

The province of Alberta, the heart of Canada’s oil sands production, has the necessary legislation to have all producers agree to production cuts and it needs to use it now, Cenovus said in an emailed statement to Bloomberg yesterday.

“We’re probably producing about 200,000 or 300,000 barrels per day of oil in excess of our ability to get that oil out of the province, either by pipelines or by rail,” Cenovus’ CEO Alex Pourbaix told Global News.

However, other big players disagree that the industry needs to produce less. “Our position is that government intervention in the market would send the wrong signals to the investment community regarding doing business in Alberta and Canada. And we really do need to take a long-term view and allow the market to operate as it should,” Global News quoted a spokeswoman for Suncor as saying.

However, Suncor is in a favorable position: according to the company spokeswoman it has no exposure to the suffocating differential between Western Canadian Select and West Texas Intermediate since it processes as much as 70 percent of its crude at home.

Husky Energy is another of the large Canadian producers who oppose a government-led intervention in production rates. According to Husky, “Market intervention comes with an unacceptably high level of economic and trade risk.”

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

Is Shale The Future For Big Oil?

Is Shale The Future For Big Oil?

oil rig

If anyone had compared shale oil to Google five years ago, it would have sounded strange. Yet when last week in a report Wood Mackenzie’s chairman and chief analyst Simon Flower did just that, comparing shale oil to the FAANG stocks, he had a good reason to do so. Shale oil is the star of the decade as far as the global energy industry is concerned, and now even Big Oil has woken up to this fact.

In a report detailing the relationship of Big Oil and shale, Wood Mac’s analysts forecast a bright future for both, with the share of shale oil in the supermajors’ total production rising from the current 700,000 bpd to 2.2 million bpd in 2026 before it starts declining. This will represent a tenth of the supermajors’ total production, Wood Mac’s research analyst Roy Martin said in the report.

Meanwhile, it’s not just the supermajors that are expanding their shale oil footprint at a fast pace. Large independents are getting larger, too. As Houston Chronicle commentator Chris Tomlinson noted in a recent story on the same topic, “Seasoned oil executives know that when both prices and production rise, it’s time to cash out and sell to the big boys.”

There’s a consolidation underway in the U.S. shale patch, and it will likely continue for some time until, Tomlinson argues, only the strongest players remain, all in a position to benefit from the marriage of lower costs, higher drilling and production efficiency, and consequently, consistent output growth.

Among the most notable acquisitions in this area so far this year were BHP Billiton’s sale of its shale operations to BP for US$10.5 billion, after it was pressured by Elliott Management to exit shale, as well as Encana’s purchase of Newfield Exploration for US$5.5 billion, and Chesapeake’s acquisition of WildHorse Resource Development for US$4 billion.

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

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
Click on image to purchase