Japan’s Crude Oil Imports Increase For The First Time In A Decade

By Tsvetana Paraskova - Jan 19, 2023

Crude oil imports in Japan, the world’s fourth-largest crude buyer, jumped by 8.5% annually in 2022, the first yearly increase in a decade, while the value of crude imports nearly doubled to a record, data from the Japanese Finance Ministry showed on Thursday.

Last year, many large energy importers – including resource-poor Japan – focused on energy security after the Russian invasion of Ukraine and the spike in commodity prices as a result of the war.

So Japan imported last year a total of 156.62 million kiloliters of crude oil, or 2.7 million barrels per day (bpd), according to the data. The value of the imports surged by 91.5    % compared to 2021 and hit $103 billion (13.27 trillion yen), due to the jump in oil prices and a weakening of the Japanese yen.  

The average price of crude per kiloliter of imports hit the highest level on record in data going back to 1979, according to the finance ministry.

Meanwhile, Japan’s imports of LNG fell by 3.1% in volume but almost doubled in value as it surged by 97.5%.

Thermal coal imports for power generation rose by 2.5% but the value jumped by 196.7% after global thermal coal prices hit records last year following the Russian invasion of Ukraine and the EU ban on coal imports that came into effect in August.

To limit its dependence on fossil fuel resources it has to import, Japan is bringing back nuclear power as a key energy source, looking to protect its energy security in the crisis that has led to surging fossil fuel prices.

The Japanese government confirmed in December a new policy for nuclear energy, which the country had mostly abandoned since the Fukushima disaster in 2011. A panel of experts under the Japanese Ministry of Industry decided that Japan would allow the development of new nuclear reactors and allow available reactors to operate after the current limit of 60 years.   

By Tsvetana Paraskova for Oilprice.com

Strikes In France Halt Fuel Deliveries From Three Refineries

By Tsvetana Paraskova - Jan 19, 2023

On Thursday, a strike in France halted wholesale fuel deliveries from three refineries operated by TotalEnergies on the first day of a series of planned nationwide strikes in many sectors against President Emmanuel Macron’s plan to raise the retirement age.  

The Donges, Normandy, and Feyzin refineries of TotalEnergies stopped the wholesale supply of gasoline and diesel today, and the refinery at Feyzin had to reduce processing rates to a minimum, the CGT trade union told Bloomberg.

TotalEnergies and the French unit of ExxonMobil hold most of the refining capacity in France. The strikes against Macron’s unpopular pension reform are expected to continue with new industrial actions later in January and in early February, and they could further disrupt fuel supply in France, just as the EU embargo on imported Russian oil products by sea comes into force on February 5.

According to the CGT union, France will see a 48-hour strike on January 26, and a three-day strike in February. 

On Thursday, fuel supply was disrupted from TotalEnergies refineries, but there were fewer signs of disruption at the Exxon refineries.

The nationwide strike, which affected public transportation and schools, too, comes three months after refinery workers went on strike for weeks in September and October amid a pay row.

Strikes at refineries in France in the autumn of 2022 left more than 60% of the country’s refining capacity offline while gas stations in and around Paris and in the northern part of the country began to run out of fuel. France moved then to requisition essential workers to staff Exxon’s French oil depot and threatened to do the same for TotalEnergies’ French refineries if talks failed to progress. Strikes at Exxon’s refineries ended after some of the French trade unions reached an agreement with the company for a 7% pay rise.

By Tsvetana Paraskova for Oilprice.com

The Deadly Consequences Of Saving Energy

By Tsvetana Paraskova - Jan 19, 2023, 

Energy conservation in hot weather could raise mortality rates, a new study that has reviewed data from Japan showed this week.

The study, which will be published in the American Economic Journal: Applied Economics, argues that the Japanese government’s energy-saving campaigns since the country closed most of its nuclear power plants after the 2011 Fukushima disaster have led to higher death rates.

“Exploiting the electricity-saving targets across regions and over time, we show that the campaigns significantly increased mortality, particularly during extremely hot days,” study co-authors Guojun He and Takanao Tanaka wrote.

Guojun He, the director of research at EPIC-China, the Energy Policy Institute at the University of Chicago, and an associate professor at the University of Hong Kong, said, “Climate change is already upon us and encouraging less use of air conditioning or other means of adapting to extreme temperatures can kill people living right now.

“A better approach when designing climate policies is to speed up the transition to clean energy and encourage people to use more clean energy to protect themselves, rather than limiting individuals’ electricity or energy consumption,” He added.  

Japan has regularly called on its residents to conserve energy to avoid blackouts at times of extremely high power demand, such as on hot summer days or in the winter.

Ahead of the summer of 2022, Japan called on households and companies to conserve as much electricity as possible, seeking to prevent blackouts as spare reserve capacity was expected to drop to critically low levels. Ahead of this winter, Japan called on people and businesses to repeat the energy conservation drive from the summer, as energy scarcity and LNG price inflation continued to take a toll.

Japan is now bringing back nuclear power as a key energy source, looking to protect its energy security in the crisis that has led to surging fossil fuel prices.   

By Tsvetana Paraskova for Oilprice.com

Zelensky Questions Whether Putin Is Still Alive

By Charles Kennedy - Jan 19, 2023

Ukrainian media is citing President Volodymyr Zelensky as questioning whether Russian President Vladimir Putin is even alive and who is responsible for decision-making in Moscow these days. 

Cited by Ukrainian media during the World Economic Forum (WEF) in Davos, Switzerland, Zelensky is said to have told an audience: “I don’t quite understand who to talk to and about what. I’m not sure tha the Russian president who sometimes appears against a green screen … is actually the [right] one.”

"I don't quite understand if he is alive or whether he makes decisions, or whoever else makes decisions there. What group of people [could be making any decisions in Russia]? I don't have that kind of information,” the Ukrainian president continued. 

“I just don’t quite understand with whom we are dealing. When we say ‘peace talks’, I don’t quite understand with whom [we should be negotiating],” Zelensky was quoted as saying. 

The statements, cited by Ukrainska Pravda and the Kyiv Independent, prompted a rebuttal from Kremlin spokesman Dmitry Peskov, saying that Zelensky “would prefer that neither Russia nor Putin exist”. 

Peskov insisted that the war will end when the Ukrainian regime “shows readiness to take into account the demands of Russia – which will be achieved one way or another …”

Still, Zelensky’s statement, considered to have been delivered in the heat of the moment, will have media impact and raise additional challenges for Putin at home, where speculation abounds over high-level reshuffles as Moscow’s becomes bogged down in a protracted war in which any real notion of victory remains elusive. 

Fox News surmises that Zelensky’s comments questioning whether Putin is still alive may have been rooted in the Russian president’s recent withdrawals from public events, including a traditional annual press conference that was cancelled in December. 

Earlier this week, Putin was quoted as saying that victory in Ukraine is guaranteed, while Zelenksy this week vowed to retake Crimea, the first territory that Russia occupied in 2014 to a muted Western response. 

By Charles Kennedy for Oilprice.com

Is Artificial Intelligence A Net-Positive For Carbon Emissions?

By Haley Zaremba - Jan 18, 2023

• Artificial Intelligence is already playing a major role in the energy industry with smart grids, efficiency improvements, and helping to locate new energy resources and sites.
• 
  
• Artificial Intelligence requires vast amounts of energy to fuel the training and machine learning processes that make the model useful, meaning it could add to the carbon problem.
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• Ultimately, AI can be a net positive if used responsibly and efficiently, but it needs to be implemented in a manner that is not wasteful and that considers its energy sources.

Artificial Intelligence is increasingly becoming an essential component of the energy industry. As world leaders get more serious about meeting climate goals, the energy industry is facing the mandate to completely transform the way it operates at an unprecedented scale which will require massive, complex and nuanced computing power. AI is already playing a major role in renewable energy forecasting, smart grids, coordination of energy demand and distribution, maximizing efficiency of power production, and research and development of new materials. 

A 2021 explainer from the World Economic Forum laid out three key driving factors which are “huge strategic and operational challenges to the energy system and to energy-intensive industries,” thereby making AI an essential component of the energy transition: 

1. Scale. The almost unfathomable scale of the energy transition required for rapid decarbonization: in the energy sector alone, reaching net-zero greenhouse gas emissions will require infrastructure investments costing between $92 trillion and $173 trillion of by 2050, according to estimates by BloombergNEF. AI has a massive role to play here, as “even small gains in flexibility, efficiency or capacity in clean energy and low-carbon industry can therefore lead to trillions in value and savings.”
2. A changing power sector. Electricity is overtaking fossil fuel-powered energy, creating new demand for highly complex computations for “forecasting, coordination, and flexible consumption” which are far beyond the capabilities of traditional grids. This is made all the more complex by the variability of renewable energies like wind and solar, as well as the changing producer-consumer relationship created by decentralized power production through solar panels. 
3. Distribution and decentralization. New demands on the grid are made all the more complex by the variability of renewable energies like wind and solar, as well as the changing producer-consumer relationship created by decentralized power production through solar panels. Decarbonization is increasingly driving “rapid growth of distributed power generation, distributed storage and advanced demand-response capabilities, which need to be orchestrated and integrated through more networked, transactional power grids.”

AI is therefore essential for the unprecedented demands of decarbonization, which will depend on an intelligent, responsive, and flexible computing system able to recognize and predict complex patterns of production and consumption. But there’s a problem. While AI is necessary to curb emissions, AI itself requires vast amounts of energy to fuel the training and machine learning processes that make the model useful. Certain single AI training models have been shown to use the equivalent of 125 New York-Beijing round-trip flights, or the lifetime carbon footprint of five cars. 

So, is AI a net positive for energy efficiency and greenhouse gas emissions? Not always, according to a recent report from Semiconductor Engineering. Using AI responsibly and efficiently requires a number of considerations and calculations. Starting with the simple question: does this system actually need AI? While artificial intelligence undeniably has much to offer to the energy industry, it can also be more seductive than strictly necessary in certain contexts. In the words of Semiconductor Engineering, “we can no longer afford to be profligate with our resources; we need to ensure that the benefit outweighs the cost.”

If the system in question would indeed have net benefits from AI, engineers will next have to consider where the energy for the training is sourced, whether workloads are designed efficiently and effectively, calculate and consider embedded emissions, and maximize performance per watt. 

If AI is optimized for maximum energy efficiency and trained using clean energy sources, it’s a no-brainer for the energy transition. But making responsible, effective, and climate-conscious AI capable of catalyzing the clean energy revolution will require ‘clear policy incentives,’ but these have not been forthcoming, as AI is still relatively poorly understood and somewhat mistrusted in public spheres. Employing AI to its fullest potential will require a deep understanding of the enormously positive potential benefits it offers, in addition to its potential pitfalls.

By Haley Zaremba for Oilprice.com

Rising Steel Prices Threaten Wind Turbine Production

By Ag Metal Miner - Jan 19, 2023

• Volatility in steel markets is creating additional stress for wind turbine manufacturers.
• 
  
• 2022 plate prices managed to be less volatile than other steel forms.
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• Wind turbine demand is particularly strong thanks to a renewed push for green energy.

Via AG Metal Miner

The Renewables MMI (Monthly MetalMiner Index) began showing signs of a possible reversal month-over-month, edging up 3.42%. Renewable resources, meanwhile, continue to see significant global investment.

MetalMiner noted in its Raw Steels MMI that steel prices found a bottom month-over-month. This impacted the renewable resources index heavily. After all, much of the index consists of steel plate, one of the main components for manufacturing wind turbines. Other parts of the index, like silicon, dropped in price. This could have been due to the rise in Chinese COVID cases, which also caused Chinese demand to falter. Ultimately, the U.S. inventory of these renewable metals remains heavily dependent on China.

Uncertain Steel Market Holds Wind Turbine Production in the Balance

Meanwhile, wind turbine construction remains dependent on steel. Therefore, having the steel market in an uncertain place creates stress for wind turbine manufacturers. Fortunately, 2022 plate prices managed to be less volatile than other steel forms. Still, many geopolitical factors remain in play, any one of which could impact plate prices in the near and distant future.

For the moment, wind turbine demand remains strong thanks to a renewed push for green energy. As a result, steel plate demand will likely remain high as well. However, Chinese steel plate buyers should stay on guard amid rising COVID cases and staggering steel production. The ongoing energy crisis in Europe also hampered both European steel production and the global wind turbine market in 2022. Thankfully, production has yet to come to a dead stop.

Companies Pushing Renewable Resources Need Metal Supply

Blastr is a Finnish steel manufacturer whose primary focus is decarbonizing steel production. Recently, the company invested 4 billion euros (or 4.3 billion USD) into a brand new green steel production facility. Blastr hopes to aid in decarbonizing the steel production chain, which would be a massive benefit to global renewable resources. However, this particular plant will not begin production until 2026. Therefore, it will not offer any immediate relief for European steel shortages or hasten global decarbonization.

While many markets have witnessed falling demand in recent months, green energy projects can’t hope to push forward without adequate supply. This is especially true of wind turbines, which are manufactured primarily of steel.

However, some renewable energy companies continue to seek steel alternatives. Aluminum, a more lightweight option, is a good fit for floating wind farms and mills, which often require lighter materials than steel. This is especially true in deep waters where anchoring windmills to the sea bed is not an option. For example, World Wide Wind, a Norwegian startup, is currently looking to use aluminum to build offshore windmills.

That said, aluminum could find itself on shaky ground regarding renewable energy uses, at least in the short term. Thanks to the recent Indonesian bauxite export ban and China raising aluminum export taxes, the long-term outlook for aluminum remains in question. If aluminum becomes squeezed down the line, it could end up being a far more expensive solution for generating wind power.

Grain-Oriented Electrical Steel MMI

The Grain-Oriented Electrical Steel MMI traded completely flat, with no change in price between December and January.

Experts anticipate that the GOES market will grow steadily throughout 2023 and onward. Despite energy shortages in places like Europe, the energy sector shows no signs of slowing down. Meanwhile, the demand for GOES and transformers will continue to rise. As other metal forms fluctuated wildly throughout 2023, GOES traded in a comparatively tight range. This was then followed by a huge spike in Q4.

By Jennifer Kary