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Russia Is Struggling to Repair Refineries Due to Sanctions

Russia Is Struggling to Repair Refineries Due to Sanctions

Due to the sanctions, Russia cannot access spare parts from Western engineering companies that have provided refinery equipment in the past, leaving Russian refiners struggling to repair damaged units, multiple industry sources in Russia have told Reuters.

Western firms including America’s UOP and Swiss ABB have supplied parts and equipment to major Russian refineries in the past. After the invasion of Ukraine, they no longer fulfill new orders from Russia, leaving local engineers scrambling to find spare parts and equipment.

One example of such difficulty is Lukoil’s Norsi refinery in Nizhny Novgorod on the Volga River. A turbine malfunctioned there in early January and Russian engineers have struggled to have the equipment replaced since then, according to Reuters sources.

This has left the refinery with a reduced capacity to produce gasoline.

The malfunction at the refinery compounded last month after a fire broke out at the facility following a drone attack.

Since all major Russian refineries use at least some part of Western technology, they could struggle to repair equipment and units that broke down or have been damaged by Ukrainian drone attacks, which have intensified in recent weeks and have taken an estimated 14% of Russia’s refining capacity offline.

Russia claims it can repair all damaged units within two months.

On Wednesday, Russia’s Energy Minister Nikolai Shulginov said that all damaged refineries in the country would be restarted by the beginning of June.

“Repairs are underway at the refineries. We plan to re-launch a number of refineries after repairs in April-May, possibly before the beginning of June,” Russian news agency Interfax quoted Shulginov as saying.

“All facilities that were damaged will be re-commissioned,” the minister added.

…click on the above link to read the rest…

Exxon Threatens to Take Billions of Dollars in Climate Investment Out of the EU

Exxon Threatens to Take Billions of Dollars in Climate Investment Out of the EU

Exxon has warned the European Union that it will leave and take billions of dollars in climate investment with it unless Brussels makes it easier to spend those billions on transition-related projects.

The Financial Times cited the company today as saying that there was way too much red tape in the EU and it took too long to get a project going, which prompted the supermajor to consider spending its $20 billion in decarbonization investments for 2022-2027 elsewhere.

“When we make investments, we’ve got very long time horizons in mind. I would say that recent developments in Europe have not instilled confidence in long-term, predictable policies,” Karen McKee, president of Exxon Product Solutions, told the FT.

“What we’re experiencing is the deindustrialisation of the European economy and we’re concerned,” McKee also said.

The European Union’s leadership has promised time and again it will facilitate transition projects but it seems it has been slow to act on this promise. According to Exxon—and a lot of other companies involved in the transition—getting a project off the ground in the EU is fraught with regulatory obstacles and “slow and torturous” permitting and funding procedures, per Exxon’s McKee.

The EU’s Green Deal plan features a “predictable and simplified regulatory environment” as one of its four pillars but judging from the reactions of the business world, this has yet to go from theory to practice. Faster access to funding is the second pillar in the EU’s lineup but that, too, is taking quite long to materialize.

It is these delays in implementation that have prompted business leaders to meet today in Belgium to press the EU leadership into going from words to actions. There is growing concern that the regulatory burden put on businesses is scaring them away, taking investments elsewhere.

There are also some European leaders, notably France’s Emmanuel Macron and Belgium’s Alexander de Croo, who have blamed red tape for the farmers’ protests.

 

China’s Coal Production Hit a New Record High in 2023

China’s Coal Production Hit a New Record High in 2023

Higher power demand and efforts to boost energy security pushed China’s coal production to a record-high level in 2023, according to official statistics data published on Wednesday.

Chinese coal output rose by 2.9% year-over-year to 4.66 billion metric tons in 2023, per data from China’s National Bureau of Statistics reported by Reuters.

Coal imports also rose last year, as some domestic mining operations were suspended for some time in 2023 due to safety inspections and concerns.

Higher demand after the COVID restrictions were lifted and higher domestic coal prices led to record-high coal imports into China, which soared by 61.8% year-on-year to 474.42 million metric tons in 2023, data from the General Administration of Customs showed last week.

In the latter part of 2023, China ramped up coal and natural gas production, imports, and consumption as its electricity demand jumped in the second half and looks to hit a record-high winter peak demand.

Chinese authorities have been keen to avoid a repeat of the 2022 shortages and spiking prices and have instructed utilities and producers to maximize imports and output before the winter.

China continues to rely on coal and coal-fired power generation to meet its growing power demand, and despite being the world’s top investor in solar and wind capacity, it also plans a lot of new coal-fired electricity capacity.

During the first half of 2023 alone, China approved more than 50 GW of new coal power, Greenpeace said in a report this year. That’s more than it did in all of 2021, the environmental campaign group said.

China’s coal demand is expected to drop this year and plateau through 2026, and global demand is set to decline to 2026, “but China will have the last word,” the International Energy Agency (IEA) said in its Coal 2023 annual report.

The outlook for coal in China will be significantly affected in the coming years by the pace of its clean energy deployment, weather conditions, and structural shifts in the Chinese economy, according to the agency.

Occidental’s CEO Sees Oil Supply Crunch from 2025

Occidental’s CEO Sees Oil Supply Crunch from 2025

  • The ratio of discovered resources versus demand has dropped in recent decades and is now at around 25%.
  • Oxy CEO Hollub: “2025 and beyond is when the world is going to be short of oil.”.
  • Oil industry executives have been warning that new resources, new investments, and new supply will be needed just to maintain the current supply levels as older fields mature.
Permian

The world would find itself short of oil from 2025 onwards as exploration for longer-producing crude reserves is set to lag demand growth, Vicki Hollub, chief executive of Occidental Petroleum, said at the Davos forum on Tuesday.

For most of the second half of the 20th century, oil companies were finding more crude than global consumption, around five times the demand volumes, Hollub said, as carried by Reuters.

The ratio of discovered resources versus demand has dropped in recent decades and is now at around 25%.

“In the near term, the markets are not balanced; supply, demand is not balanced,” Oxy’s CEO said.

“2025 and beyond is when the world is going to be short of oil.”

According to the executive, the oil market will find itself moving from an oversupply in the near term to a long period of supply shortages.

Oil industry executives have been warning that new resources, new investments, and new supply will be needed just to maintain the current supply levels as older fields mature.

One of the most persistent warnings has come for years from Saudi Arabia, the world’s largest crude oil exporter, and its state oil giant Aramco.

The Kingdom and Aramco have repeatedly said that the focus of the energy sector and the debates on the energy transition should be on how to cut emissions, not on reducing oil and gas production.

…click on the above link to read the rest…

Watchdog Has Grim Winter Warning: There May Be Blackouts

Watchdog Has Grim Winter Warning: There May Be Blackouts

  • North American Reliability Corp: As much as two-thirds of the United States could experience blackouts in peak winter weather.
  • Earlier this year, NERC issued a blackout warning for some parts of the U.S. over the summer, citing extreme temperatures.
  • The regulator points to the lack of gas transport infrastructure as one of the main challenges for the U.S. grid this winter.
Electricity

As much as two-thirds of the United States could experience blackouts in peak winter weather this and next year, the North American Reliability Corp has warned.

These warnings have become something of a routine for the regulatory agency lately. Earlier this year, NERC issued a blackout warning for some parts of the U.S. over the summer, citing extreme temperatures.

This latest warning also has to do with extreme temperatures. Yet it’s not just the temperatures themselves that are the problem. It’s the power generation mix that is making the grid more vulnerable.

In its latest assessment, NERC cited recent data showing that up to a fifth of generating capacity could be forced offline in case of a cold snap over areas that do not normally get this kind of weather.

The regulator points to the lack of gas transport infrastructure as one of the main challenges for the U.S. grid this winter as it compromises the security of generating fuel supply. The report also notes historical evidence that extreme winter weather can also affect the production of natural gas and, as a result, reinforce the effect of weather on power supply security.

It is not just natural gas that is problematic, however. The massive buildout of wind and solar capacity has also had an impact on electricity supply reliability and could turn into a problem during the winter.

…click on the above link to read the rest…

The New Global Oil Market Order Hangs In The Balance After Hamas Attacks Israel

The New Global Oil Market Order Hangs In The Balance After Hamas Attacks Israel

  • Palestinian political and military organisation Hamas launched coordinated multi-pronged attacks by land, sea, and air against Israel last weekend.
  • The potential for the Hamas attacks on Israel to suck in other Arab states into the conflict, and for it to then become another proxy war could have major ramifications for a large number of countries.
  • Soaring oil prices as a result of renewed tensions in the Middle East could lead to economy-crippling levels of inflation in the West.
Missile

In what turned out to be extraordinary timing, October 3 saw a Western coalition of France’s TotalEnergies and Italy’s Eni, plus Qatar Energy, apply for the second licensing round on oil and gas blocks 8 and 10 in Lebanese waters, while only four days later Palestinian political and military organisation Hamas launched coordinated multi-pronged attacks by land, sea, and air against Israel. Lebanon is a core member of the Iran-dominated Shia Crescent of Power, which both China and Russia have long seen as the foundation stone for their expansion of power across the Middle East as a whole, as analysed in depth in my new book on the new global oil market order. Lebanon’s political and military organisation, Hezbollah – like its Palestinian counterpart Hamas – vows Israel’s destruction and praised Hamas for its “heroic operation” against Israel on October 7. Both paramilitary groups receive multi-layered support from Iran’s financial, intelligence, and military networks and each of these support facilities are inextricably linked to China and Russia, as also fully examined in my new book. The potential for the Hamas attacks on Israel to suck in other Arab states into the conflict, and for it to then become another proxy war – to add to that still raging in Ukraine – between the U.S. and Russia (and China) appears large…

…click on the above link to read the rest…

Oil Exploration Grows But Discovered Volumes Fall To New Lows

Oil Exploration Grows But Discovered Volumes Fall To New Lows

  • Rystad: in the first half of 2023, explorers found 2.6 billion barrels of oil equivalent.
  • The exploration and production (E&P) industry is in a transitionary period, with many companies exercising increased caution and shifting their strategies to target more profitable and geologically better-understood regions.
  • In the hunt for new resources, exploration companies are prioritizing the offshore sector.
Exploration

Spending on conventional oil and gas exploration is rebounding and expected to top $50 billion this year, the highest since 2019, but operators are still waiting for the results they had hoped for. Rystad Energy research shows that despite the rising investments, discovered volumes are falling to new lows.

Our estimates show that in the first half of 2023, explorers found 2.6 billion barrels of oil equivalent (boe), 42% lower than the first half of 2022 total of 4.5 billion boe. Fifty-five discoveries have been made, compared to 80 in the first six months of last year. This means discoveries in 2023 have averaged 47 million boe, lower than the 56 million boe per discovery for the same period in 2022.

The exploration and production (E&P) industry is in a transitionary period, with many companies exercising increased caution and shifting their strategies to target more profitable and geologically better-understood regions. This strategic shift and the failure of several critical high-potential wells are contributing to the precipitous drop.

In the hunt for new resources, exploration companies are prioritizing the offshore sector, trying to capitalize on underexplored or frontier areas to unlock new volumes through high-risk, higher-cost offshore developments. The offshore industry accounted for about 95% of exploration spending this year to date but only about two-thirds of discovered volumes.

“Upstream companies are facing a period of uncertainty. They are eager to capitalize on the increased demand for fossil fuels and find additional resources, but recent results have been lackluster…

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Desertification: An Existential Crisis For Iran

Desertification: An Existential Crisis For Iran

  • Iran is grappling with severe desertification and water scarcity, leading to potentially uninhabitable territories, contributing to internal migration and posing a threat of mass exodus.
  • Tehran’s attempts to mitigate water scarcity have led to dam-building and water-intensive irrigation projects that have contributed to the drying up of rivers and underground water reservoirs, exacerbating the desertification problem.
  • Iran, one of the most water-stressed nations globally, faces potential conflict due to water scarcity, both internally and with neighboring states such as Afghanistan, adding to its socio-political challenges.
Iran

Temperatures in Iran are hitting record highs, rivers and lakes are drying up, and prolonged droughts are becoming the norm, highlighting a water crisis that is turning much of the country’s territory to dust.

The desertification of Iran is occurring at a staggering pace, with officials last month warning that more than 1 million hectares of the country’s territory — roughly equivalent to the size of Qom Province or Lebanon — is essentially becoming uninhabitable every year.

The situation has Tehran scrambling to gain control of the situation in a country where up to 90 percent of the land is arid or semi-arid. But the clock is ticking to stave off what even officials have acknowledged could lead to an existential crisis and the mass exodus of civilians.

The warning signs were on full display this month. Temperatures in southwestern Iran hit a staggering 66.7 degrees Celsius (152 degrees Fahrenheit), higher than what is considered tolerable for human life.

Iranian scientists warned that the water levels of Lake Urmia, which is in severe danger of drying up, are the lowest recorded in 60 years. And in what has become routine, advisories were issued about the threat of suffocating dust storms.

…click on the above link to read the rest…

China Snaps Up Record-High Volumes Of Russian Crude In The First Half Of 2023

China Snaps Up Record-High Volumes Of Russian Crude In The First Half Of 2023

  • In the first half of 2023, China imported 2.13 million barrels per day of Russian crude oil, making Russia its single biggest supplier.
  • In June, China once again imported record-breaking levels of Russian crude, a 44% increase compared to the same month in 2022.
  • Total Chinese oil imports are also soaring, with the country importing the second-highest monthly import figure on record in June.
Crude

Despite an apparent weakness in its economy, China is importing record volumes of oil and is buying record amounts of Russian crude to add to stockpiles.

During the first half of 2023, Chinese imports of Russian crude oil averaged 2.13 million barrels per day (bpd), which helped Russia oust its OPEC+ partner Saudi Arabia from the top spot as the single biggest supplier to the world’s top crude importer so far this year, per Financial Times estimates based on Chinese customs data. Imports from the world’s top crude oil exporter, Saudi Arabia, averaged 1.88 million bpd between January and June, according to FT’s calculations.

In June alone, China broke – for yet another month – the record for importing Russian crude oil, per data from the Chinese General Administration of Customs cited by Reuters. Chinese imports from Russia averaged 2.56 million bpd last month, a surge of 44% compared to the same month in 2022, the Chinese customs data showed.

The previous record, of 2.29 million bpd, was set in May as Chinese refiners continued to buy discounted Russian oil. The discounts for Russia’s crude narrowed relative to the benchmarks in June, but this didn’t stop China from boosting imports and breaking in June the record from May.

China’s imports from Saudi Arabia also rose in June, compared to May and June last year. But at 1.93 million bpd in June 2023, those imports still trailed behind the record-breaking Chinese crude oil imports from Russia.

…click on the above link to read the rest…

UK Looks To Boost Energy Security With Small Modular Nuclear Reactors

UK Looks To Boost Energy Security With Small Modular Nuclear Reactors

  • The UK has launched a competition for small modular reactor technology and created a new nuclear body.
  • The focus on small nuclear reactors is part of the country’s efforts to produce more zero-emission energy domestically.
  • As well as backing SMRs, the UK remains committed to traditional nuclear projects including Hinkley Point C and Sizewell C.
Nuclear

The UK launched on Tuesday a competition for small modular reactor (SMR) technology and created a new nuclear body, Great British Nuclear, in a bid to provide more zero-emission energy from locally-developed sources.

Great British Nuclear (GBN) is expected to drive the rapid expansion of new nuclear power plants in the UK, to boost UK energy security, reduce dependence on fossil fuel imports, create more affordable power, and grow the economy.

The nuclear industry is estimated to generate around $7.9 billion (£6 billion) for the UK economy, the government says.

As of today, companies can register their interest with GBN to participate in a competition to secure funding support to develop their SMR technology, which could result in billions of pounds of public and private sector investment in small modular reactor projects in the UK.

SMRs are considered to be the future of nuclear power technology because they are smaller than conventional reactors and can be manufactured in factories, making nuclear power stations cheaper and faster to build.

In the UK, Rolls-Royce has been developing SMR technology, which, the company says, can deliver cost-competitive and scalable net-zero power for multiple applications – from grid and industrial electricity production to hydrogen and synthetic fuel manufacturing.

…click on the above link to read the rest…

Exxon CEO Warns Overemphasis On Renewables Could Backfire

Exxon CEO Warns Overemphasis On Renewables Could Backfire

Exxon Mobil Corp. (NYSE:XOM) CEO Darren Woods has urged companies to stop focusing on certain energy sources, such as renewable energy, to save the climate, warning that it would be a “huge mistake to be picking winners and losers and focusing on specific technologies”.

Instead, “we need to look more broadly and let the markets figure out which solutions deliver the most emissions reductions at the lowest cost,” Woods told Nicolai Tangen, the CEO of Norway’s Wealth Fund,one of the largest mutual funds in the world, on his podcast.

An attempt to move away from oil and gas immediately, with unchanged global demand, could be disastrous for clean energy, Woods suggested, adding that if we produce less LNG, for example, something else–like coal–would have to step in to fill the demand gap.

According to Woods, Europe should follow the U.S. approach to climate policy, arguing that the continent risks driving companies away by regulating too hard. Woods told Bloomberg that one of the most important things the Americans (and ExxonMobil) are doing is developing technologies to capture and store carbon

Back in April, Woods caused quite a stir when he touted the company’s burgeoning Low Carbon business, saying it has the potential to outperform its legacy oil and gas business and generate hundreds of billions in revenues. According to Woods, the business has the potential to generate tens of billions of dollars in revenue after the initial 10-year ramp-up.

This business is going to look quite a bit different from the base business of Exxon Mobil. It is going to have a much more stable, or less cyclical, profile,” Dan Ammann,  president of Exxon’s two-year-old Low Carbon Business Solutions unit, has vowed.

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Labor Leader’s Oil Plans Spark Outrage In Scotland

Labor Leader’s Oil Plans Spark Outrage In Scotland

  • Labour leader Starmer said that his party would end oil and gas investment in the UK North Sea.
  • Scottish politicians called the plan a ‘job destroyer’.
  • Energy security could be at risk if the UK actually bans new upstream investment in the North Sea.
UK Parliament

In January this year, at the Davos summit, the leader of Britain’s Labour party, Keir Starmer, said that if Labour won the next elections, they would put an end to investments in oil and gas in the North Sea.

This month, Starmer reiterated the promise—or threat, as Scotland saw it. The official announcement that a future Labour government will not approve any new oil and gas licenses for the North Sea is due to be made next month.

“What we’ve said about oil and gas is that there does need to be a transition,” Starmer said back in January, as quoted by Reuters.

“Obviously it will play its part during that transition but not new investment, not new fields up in the North Sea, because we need to go towards net zero, we need to ensure that renewable energy is where we go next.”

This month, a high-ranking labour official and shadow work and pensions secretary told Sky News that the move to wind and solar would create jobs and bring energy bills down—something that new oil and gas exploration in the North Sea will not do, according to Labour.

Yet Scotland begs to differ. Right after Starmer said Labour would ban new oil and gas exploration in the North Sea, former Scottish First Minister Alex Salmond dubbed Starmer the “North Sea job destroyer” and accused Labour of trying to sabotage Scotland’s energy security.

…click on the above link to read the rest…

Europe’s Energy Troubles Continue: Hydro And Nuclear Output Declining

Europe’s Energy Troubles Continue: Hydro And Nuclear Output Declining

  • Europe’s hydro and nuclear output is declining, leading to mopre energy troubles.
  • Renewables are struggling to fill the gap as wind and solar output increase.
  • The EU may require increased LNG imports from the US to meet energy demands.

Last year, Europe was on the brink of an energy breakdown as Russian gas flows dried up and most of Europe doubled down on renewable energy.

The renewable energy bet paid off, in a way. Solar and wind electricity generation in Europe hit a record in 2022. In fact, for the first time in history, wind and solar together produced more electricity than natural gas-fired power plants.

There was just one problem with that. Lower hydro and nuclear output more than wiped out the significance of that record output.

Droughts were severe in Europe last year. They threatened major trade routes such as the Rhein in Germany and the Po in Italy. And they also caused severe declines in hydropower electricity output. For example, in Spain, hydropower output dropped by almost half because of the droughts. All this might repeat this year as well.

Meanwhile, nuclear wasn’t doing so swell, either. France suddenly found that years of underinvestment in maintenance would have consequences: emergency reactor shutdowns for repairs and maintenance.

The problems cost EDF a massive annual loss of $19 billion as half of its reactors had to be shut down for maintenance. Most blamed the pandemic, but nuclear experts such as Mark Nelson saw the roots of the problem much further into the past when France decided to bet on renewables over nuclear.

…click on the above link to read the rest…

MIT Study: Nuclear Power Shutdown Could Lead To Increased Deaths

MIT Study: Nuclear Power Shutdown Could Lead To Increased Deaths

  • A new MIT study indicates that retiring U.S. nuclear power plants could lead to an increase in burning fossil fuels to fill the energy gap, resulting in over 5,000 premature deaths due to increased air pollution.
  • Nearly 20 percent of current electricity in the U.S. comes from nuclear power, with a fleet of 92 reactors scattered around the country.
  • If more renewable energy sources become available to supply the grid by 2030, air pollution could be curtailed, but there may still be a slight increase in pollution-related deaths.

A Massachusetts Institute of Technology new study shows that if U.S. nuclear power plants are retired, the burning of coal, oil, and natural gas to fill the energy gap could cause more than 5,000 premature deaths.

The MIT team took on the questions in the text following in a new study appearing in Nature Energy.

Nearly 20 percent of today’s electricity in the United States comes from nuclear power. The U.S. has the largest nuclear fleet in the world, with 92 reactors scattered around the country. Many of these power plants have run for more than half a century and are approaching the end of their expected lifetimes.

Policymakers are debating whether to retire the aging reactors or reinforce their structures to continue producing nuclear energy, which many consider a low-carbon alternative to climate-warming coal, oil, and natural gas.

Now, MIT researchers say there’s another factor to consider in weighing the future of nuclear power: air quality. In addition to being a low carbon-emitting source, nuclear power is relatively clean in terms of the air pollution it generates. Without nuclear power, how would the pattern of air pollution shift, and who would feel its effects?

…click on the above link to read the rest…

EU Members Clash Over Nuclear Energy’s Role In Climate Policy

EU Members Clash Over Nuclear Energy’s Role In Climate Policy

  • The EU is in the process of expanding its renewable energy targets to reduce CO2 emissions.
  • Countries are divided over whether nuclear energy should be considered a part of renewable energy targets.
  • France leads the campaign to recognize nuclear energy as a CO2-free contributor, while Germany, Portugal, and others oppose it.

The European Union needs to work on a divide among its member countries regarding the role of nuclear energy in achieving their renewable energy goals. This disagreement may delay the progress of one of the EU’s primary climate policies.

On Wednesday, negotiators from EU countries and the European Parliament will engage in their final round of discussions to establish more ambitious EU objectives to expand renewable energy throughout the next decade. These goals are crucial for Europe’s commitment to reduce CO2 emissions by 2030 and to become independent of Russian fossil fuels. However, the negotiations have become bogged down by a dispute over whether fossil fuels produced using nuclear power should be considered part of the renewable energy targets.

France is spearheading a push to classify “low-carbon hydrogen” – hydrogen produced from nuclear energy – as equal to hydrogen created from renewable electricity. France is joined by countries such as Romania, Poland, Hungary, and the Czech Republic, all of which seek greater acknowledgment of nuclear energy’s CO2-free contribution to climate objectives.

On the other hand, Germany, Spain, Denmark, Portugal, and Luxembourg oppose this view, arguing that including nuclear power in renewable energy targets would divert attention from the urgent need to expand solar and wind energy across Europe significantly.

…click on the above link to read the rest…

 

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