France Prepares To Nationalize Its Struggling Nuclear Industry

By Haley Zaremba - 

• The French government already owns 84% of Électricité de France, but it is now planning to fully nationalize the company just as the company warns of a huge 29 billion Euro loss.
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• After suffering through the global pandemic, France’s nuclear industry is now facing maintenance issues, an absence of new nuclear investment, and a lack of water for cooling due to drought.
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• France derives roughly 70% of its energy from nuclear power, and its nuclear power generation is now at an all-time low, highlighting why this is such a major issue for the French government.

France is working up to fully nationalizing the currently 84% state-owned nuclear energy company Électricité de France (EDF) at the same time that the company is anticipating a massive downturn in profits. EDF had already warned investors that its core profits would take a considerable hit this year, but just sharply increased that projected loss to a whopping 29 billion Euros (normally here we would say how much that is in dollars, but the European economy has taken such a downturn – largely thanks to energy woes – that the values of the Euro and the Dollar are virtually identical). The massive loss is thanks to a series of unfortunate events that have led to more than half of EDF’s 56 reactors being taken offline – a record shortage. 

France’s nuclear sector has been hit with multiple issues at the worst possible moment. The industry is dealing with a pileup of delays and stoppages thanks to the Covid-19 pandemic, a “series of maintenance issues including corrosion at some of France’s aging reactors, troubles at state-controlled energy group EDF and a years-long absence of significant new nuclear investment,” according to reporting from the Financial Times over the summer. In the few months since that FT report, the situation has grown even worse, as a severe drought has caused rivers around Europe to run dry, leaving some French and Swiss nuclear plants without enough water to keep their systems cool. 

As a result, French nuclear energy output is at an all-time low. This is a major issue for the nation, which derives about 70% of its energy from nuclear power. Generally, France is a net exporter of energy, thanks to its robust and heretofore reliable nuclear sector. Now it’s being forced to import energy in a historically tight market. The European continent is experiencing a crisis of soaring energy prices thanks to a game of chicken with Moscow. In the wake of the Russian invasion of Ukraine, the European Union has been working toward weaning itself off of its heavy reliance on Russian fossil fuels with the intention of instituting energy sanctions on the Kremlin. In response, Russia’s Gazprom has indefinitely cut off natural gas supply to the continent via the Nord Stream 1 pipeline, citing its own suspiciously timed maintenance issues. 

The timing of the French nuclear collapse is all the more tragic due to the political wrangling with Russia. France has long been the global poster child for nuclear energy, with the highest production rates per capita and an evangelical zeal for nuclear energy development to shore up energy security in the era of climate change. France was not tied in any substantive way to the dangerous reliance on Russian gas imports that made the continent’s energy security so fragile. In fact, it has prided itself on the energy independence that nuclear built. But now, just when it was most needed, French nuclear has failed to save the day. 

Now, the French government is going to make a bid to fully buy out EDF in order to take control of the company as it tries to right the ship. In the coming weeks, the French government is expected to launch a tender offer for the remaining 16% of the company it doesn’t already own so it can unilaterally (and quietly) make decisions pertaining to building new reactors and addressing the myriad issues with the existing fleet. “People close to the operation have said the company’s financial woes have added to incentives to remove it from the glare of markets,” the Financial Times reports. 

EDF has said that it plans to have its full fleet back up and running by early next year. In order to do so, the already heavily indebted company will have to take on a whole lot more debt at a time that the company is already under scrutiny for operational errors and oversights. At the end of the day, the issues in France are not a problem with nuclear power at all – they’re a problem of mismanagement.

By Haley Zaremba for Oilprice.com

Maduro: Venezuela Is Ready To Send Its Oil To The World

By Felicity Bradstock - 

• Venezuela is ready to ramp up its oil exports.
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• Hopes were high that the United States might lift sanctions on Venezuela, but this has not yet come to fruition.
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• President Maduro explained, “Venezuela is ready and willing to fulfil its role and supply, in a stable and secure manner, the oil and gas market that the world economy needs.”

Earlier this year there were high hopes around the U.S. lifting its sanctions on Venezuela in the face of oil shortages and rising prices, due to the Russian invasion of Ukraine, allowing black gold to once again flow out of the South American oil giant. But this has not yet come to fruition. While some allowances were made for oil trade, Venezuela’s statement to the world is clear – it is ready to pump and export huge amounts of its crude whenever given the chance. 

No matter how many times the U.S. government rejects Venezuelan pleas to end sanctions and fill the supply gap left due to sanctions on Russian energy, the South American oil major will not give up on its bid to boost crude exports. President Madero stated this week that Venezuela is ready to recommence its oil production and export to the rest of the world whenever given the opportunity. At an event held during the OPEC secretary-general’s visit to Caracas Maduro said “Venezuela is ready and willing to fulfil its role and supply, in a stable and secure manner, the oil and gas market that the world economy needs. 

The country’s dictator quashed fears that Venezuela’s oil industry was far from recovering, after years of low production and underinvestment. Its output currently stands at around 700,000 bpd compared to 2.3 million bpd two decades ago. This comes from U.S. sanctions imposed on the trading of Venezuelan crude, which previously provided around 96 percent of the country’s income.

In May, President Biden made some concessions to the sanctions, allowing Venezuela to export oil to Europe for debt. Italian firm Eni and Spanish oil major Repsol were allowed to ship Venezuelan crude to Europe in an oil-for-debt swap, helping to fill the gap in the region. This was not the change Venezuela had hoped for, but it provided greater optimism for more concessions to be made in the coming months. 

But in August, Maduro decided to suspend oil-for-debt shipments to Europe, stating that he wanted refined fuels from Eni and Repsol in exchange for crude in place of the current deal. Venezuela has had much difficulty in finding refined fuels in recent months, with many of its refineries in a state of disrepair. It has already been trading crude for condensate with Iran to meet its needs, circumventing U.S. sanctions on the two countries. If Venezuela can import more refined oils, it could better support its oil industry recovery, with several operations requiring dilutants to continue. So far, Europe has not agreed to this request, leaving a gap in supply once again. 

 But just how much oil potential does Venezuela have? The South American oil giant has the world’s biggest crude reserves, measured at around 18.2 percent of the world’s barrels of oil in 2016. And while the current output is low due to sanctions, Maduro believes the country could rapidly boost its output by several hundred thousand barrels of oil a day. However, a meaningful long-term increase in production would require large foreign investments in exploration and oil infrastructure. 

Broken equipment, derelict oil fields, and a lack of talent are just some of the challenges that energy experts highlight as the barriers to achieving long-term production success. This, coupled with political uncertainty, has deterred many oil companies from investing in the region, despite the abundance of reserves. Currently, U.S. oil major Chevron, Italy’s ENI, and Spain’s Repsol continue to operate in the country, with others, such as ExxonMobil, having withdrawn following sanctions on the industry.  

The question of the ‘lesser of two evils’ has risen in recent months. Many question whether sanctions on Venezuela should be eased to reduce the burden on Europe and North America felt due to the loss of Russian oil supplies. However, Venezuela’s close political connection with Cuba, China, and Russia has led many to be more critical of this option. This back and forth has put an ease of sanctions on hold for several months. Yet, some are now questioning whether the sanctions placed on Venezuelan oil have ever functioned. 

From the very beginning, there was no clear analysis of the anticipated outcome of the sanctions. Ex-assistant secretary of state for western hemisphere affairs Kimberly Breier suggested that the sanctions were enacted with little evaluation of the consequences or the potential impact on Venezuelan citizens. She said, “There was absolutely no evidence” that the oil sanction would bring about Maduro’s removal and yet Bolton “set the expectation that somehow this was magically going to occur”. 

This has led to a massive economic downturn in the country, a severe fuel shortage, and poor living conditions for Venezuelans. It has not, however, stopped the country from selling its oil, as it continues to foster trade relations with Iran and China. So, with the question of whether sanctions were functional to begin with, a global shortage of supplies, and the willingness of Madero to recommence the country’s oil operations as soon as permitted, the tides could soon change for Venezuela. 

By Felicity Bradstock for Oilprice.com 

More Top Reads From Oilprice.com:

ASTRO GEMOLOGY

Space Diamonds May Be The Future Of Mining And Manufacturing

By ZeroHedge - 

• Scientists from Australia and the UK have proven the existence of rare dwarf planet gems after examining a stony meteorite.
• 
  
• The lead scientist on the research team, Prof. Andy Tomkins, said the rare diamond's mysteries drove him to continue researching ureilite meteorites in his lab.
• 
  
• “This is exactly the sort of curiosity-piquing observation that sends scientists diving down rabbit holes for months on end,” Prof. Tomkins said.

Tiny folded diamonds that fell to Earth from an ancient dwarf star may sound like something from an intergalactic feature film, but researchers from Australia and the United Kingdom have proven the existence of the rare gems after examining a stony meteorite.

Scientists from Australia and the UK have established the existence of lonsdaleite, a rare hexagonal diamond, no bigger than a human hair, that researchers note is layered into a distinctive folded pattern, unlike the earth-formed diamonds that have a cubic structure.

The existence of Lonsdaleite—named after the pioneering British crystallographer Dame Kathleen Lonsdale—has previously been the subject of debate because its very existence could not be proven.

The lead scientist on the research team, Prof. Andy Tomkins, from Monash University’s School of Earth, Atmosphere, and Environment, said the rare diamond's mysteries drove him to continue researching ureilite meteorites in his lab.

Tomkins said it was a case of curiosity-driven science.

“This is exactly the sort of curiosity-piquing observation that sends scientists diving down rabbit holes for months on end,” he said.

Naturally formed ureilite meteorites contains a higher abundance of diamond than any known rock on Earth. They are also one of the few opportunities to study the mantle layer of dwarf planets.

The samples are created when asteroids collide with a planet while still hot, creating the ideal conditions for lonsdaleite and diamond growth due to moderate pressure and rapid temperature drops in the fluid and gas-rich environment.

“These findings help address a long-standing mystery regarding the formation of the carbon phases in ureilites that has been the subject of much speculation,” Tomkins said.

Tomkins also collaborated with researchers from the CSIRO, RMIT University, the Australian Synchrotron, and Plymouth University to discover samples of lonsdaleite in nature, offering an insight into potential replication of the process for industrial purposes.

“These diamonds are quite special,” said Alan Salek, physicist and RMIT PhD researcher.

“Normal diamonds that you would find here on Earth, like on an engagement ring, have a specific atomic structure that’s cubic. These special diamonds are hexagonal in structure.”

“It’s pretty exciting because it’s a new form of material.”

The unique shape is believed to be why lonsdaleite is stronger than any other diamond.

Significant Implications For Mining and Manufacturing

CSIRO scientist Colin MacRae in a media release, said the discovery has enormous potential for industries like mining.

“If something that’s harder than diamond can be manufactured readily, that’s something industry would want to know about,” MacRae said.

Macrae noted that the discovery meant they could find a way to reproduce the mineral.

“Lonsdaleite could be used to make tiny, ultra-hard machine parts if we can develop an industrial process that promotes the replacement of pre-shaped graphite parts by lonsdaleite,” he said.

At present, the current method for producing industrial diamonds involves chemical vapour deposition, in which diamonds are formed onto a substrate from a gas mix at low pressures.

By Zerohedge.com 

GREEN CAPITALI$M

What Are Climate Bonds?

By Felicity Bradstock - 

Green bonds could give lower-income countries the potential to help develop their renewable energy industries by incentivising new projects. As the world aims to transition away from fossil fuels to greener alternatives, many governments and private companies are looking to the Developing South for their vast renewable resources. Now, the under-talked-about concept of green bonds could be just what many developing economies need to help develop their energy sectors, as investors pump funds into the future of sustainable energy. 

So, what exactly are green bonds? Green, or climate, bonds are funds raised for new and existing projects that support the environment and the economy. They are typically used to encourage more sustainable development, with the aim of mitigating climate change. Green bonds go to funding climate-friendly construction projects, green transportation development, and renewable energy operations, among other things. Green bonds often come with tax incentives, including tax exemption and tax credits, making them more attractive than alternative bonds. 

In 2012, green bond issuance totalled $2.6 billion. However, over the last half a decade, green bonds have grown in popularity. China accounted for $32.9 billion in green bond issuances, or around a third of the global total, by 2016. But the concept is also becoming more attractive in the E.U. and U.S. In 2020, global green bond issuances reached an estimated total of $270 billion. 

And now Australia is becoming a keen green bond issuer. Thanks to the new government’s commitment to cutting carbon emissions and combatting climate change, interest in green bonds is increasing. A record $3.2 billion of green debt has been sold this year, around a 150 percent increase from the same period last year. And there is more momentum now than ever before to establish clear climate bond standards and tax provisions. The Green Party received a record number of votes in the last election, encouraging the new Labour Party Prime Minister Anthony Albanese to focus heavily on climate policy. And as a fourth banking institution, Westpac Banking Corp., joins the Net Zero Banking Alliance – targeting net-zero emissions by 2050, we are likely to see more green bonds issued in Australia over the next few years.  However, Australia still relies heavily on fossil fuels, the world's biggest exporter of coal. In 2020, fossil fuels accounted for 90 percent of the country’s energy consumption, with petroleum covering 33 percent of energy needs, followed by coal at 30 percent, and natural gas at 26 percent. Some are reluctant to support Australia’s green bonds as they believe it contradicts the country’s overarching energy industry aims.  

But as the developed world develops its green bonds industry, greater attention needs to be given to the potential for sustainable development in emerging economies. Green bonds are already being used in India, and some are now proposing a national blue bond standard, which could make climate bonds more accessible. The markets regulator Sebi has suggested the development of blue bond standards – which support oceanic resource mining and sustainable fishing – could support sustainable development in India. It believes that aligning national standards with the Green Bond Principles (GBP), published by the International Capital Market Association (ICMA), would attract greater interest in sustainable debt. With a 7,500-kilometre-long coastline, the introduction of a blue bond scheme could help India protect its waters, while still encouraging development. 

In 2021, India’s sustainable debt market increased to $7.5 billion, a 585 percent increase from 2020. The India Sustainable Debt Market State of the Market 2021 report, by the Climate Bonds Initiative (CBI), shows that 26 out of 29 Indian issuers surveyed have provided at least one green debt instrument since 2015. The CBI believes India’s sustainable debt market to be valued at $19.5 billion.

As well as in India, there is significant potential for the development of the green bonds market across several African countries. As a multitude of African governments look to develop their low-carbon oil and gas industries, greater attention is also shifting to the renewable energy prospective of the region, with the potential to develop fossil fuels and renewable resources hand-in-hand to ensure the longevity of Africa’s energy industry.

Despite having vast solar and wind resources, these industries are largely underdeveloped across the African region. While green bonds have grown in popularity in recent years, little investment has been directed toward Africa. Nigeria achieved the region’s first sovereign green bond funding in 2017, at $29 million. And since, green debt across the region has risen to $3.96 billion, which is still relatively low compared to bonds in other parts of the world, accounting for just 0.4 percent of the global green bond issuance. 

The African Development Bank (AfDB) has launched a green bond strategy aiming for sustainable growth across the continent. It aims to make economic development more sustainable “by helping Africa gradually transition to ‘green growth’ that will protect livelihoods, improve water, energy and food security, promote the sustainable use of natural resources and spur innovation, job creation and economic development”. However, substantially more financial support will be required to support this development. 

As green bonds grow in popularity, significantly more attention should be paid to the potential benefit of expanding the green bond market in the Global South, to support emerging economies in the successful development of sustainable energy industries. Greater market development could help build stronger economies worldwide, encourage the rollout of renewable energy operations, and ensure greater energy security for the future. 

By Felicity Bradstock for Oilprice.com