European Commission President Says Fossil Fuel-Centric Growth Is Dead

By Julianne Geiger - May 15, 2023

Economic growth cannot be carried by a fossil fuel energy mix, according to European Commission President Ursula von der Leyen.

“A growth model centered on fossil fuels is simply obsolete,” von der Leyen said on Monday at an event in Brussels designed to speak about coordinating economic development with environmental goals, according to Reuters.

Von der Leyen added that the EU’s Green Deal transition had a goal of creating “a different growth model that is sustainable far into the future.” That EU Green Deal has a grand plan to cut emissions by more than half by 2030 on the bloc’s way towards reaching an ambitious net-zero goal by 2050. While there is no other interim benchmark goal, the bloc is trying to implement another midpoint target for 2040, which the block would be legally required to hit.

According to Reuters, one of the highlights of Monday’s conference that was cheered on by von der Leyen was a controversial 1972 MIT-derived Limits to Growth report that discussed a computer simulation of a world destabilized by material consumption with finite resources supply.

Just a couple of weeks ago, the European Union finalized the approval of a carbon tax reform that would see polluting industries face higher costs for continuing to generate emissions. It also incentivized the switch to wind and solar. 

That tax reform extends the EU’s carbon permit regime to even more industries than before, including air and maritime transport and would look to reduce carbon permits and even phase them out by 2034. Within four years, the carbon permitting reform would extend even further to emissions from cars and buildings.

Von der Leyen has been a champion of the green deal and the EU’s hopes of becoming a leader when it comes to the energy transition, although her zeal for the movement began prior to the pandemic and prior to the war in Ukraine, which has shifted focus away from the energy transition and towards energy security.  

By Julianne Geiger for Oilprice.com

Australian Gas Giant Wants To Import Carbon Dioxide From Asia

By Irina Slav - May 16, 2023

Santos, an Australian energy major with a focus on gas, wants to import carbon dioxide from Asia and store it in local reservoirs.

The idea may have sounded somewhat eccentric a few years ago but it seems that carbon capture and storage is gaining traction thanks to government support for such projects.

The support comes despite the scarcity of such projects in operation, with Bloomberg reporting there were only 30 carbon capture and storage projects across the world last year.

Santos, however, has ambitious plans: it wants to collect carbon dioxide from Asia and ship it to a storage facility in the Cooper Basin in South Australia. At the same, Santos plans to store some 1.7 million tons of its own carbon dioxide emitted during gas production activities in the basin.

Hard to abate sectors such as fertilizer, such as cement, such as steel manufacturing, all require solutions beyond what’s being currently offered,” said Santos energy solutions president Brett Woods as quoted by Bloomberg.

He went on to add that the Moomba facility in the Cooper Basin has the capacity to store 20 million tons of carbon dioxide annually for 50 years.

One of the arguments of carbon capture critics is that the technology is too expensive to be worth the investment. Santos, however, says that the first stage of the Moomba capture facility will cost less than $150 million (A$220 million) and the cost of storing CO2 there would be as little as $16 per ton.

Despite the track record of limited success, carbon capture may be beginning to take off. Governments are providing subsidies and companies are being pressured into reducing their emissions footprints by any means available.

The schemes face criticism from environmental advocates who say that carbon removal credits do not address the problem of emissions reduction and could lead to more greenwashing from the big polluters. Some have slammed the technology as an excuse for the oil industry to continue existing.

By Irina Slav for Oilprice.com

Equinor Reopens Gas Field In A Boost For Exports To Europe

By Tom Kool - May 16, 2023

Norway’s energy major Equinor this week officially reopened the Njord gas field in the Norwegian Sea, aiming to more than double the field’s production and raise Norwegian gas exports to Europe.

The Njord field, which started production in 1997, was originally planned to produce until 2013. But systematic work with increased recovery means that there are still large volumes of oil and gas left. New discoveries in the area can also be produced and exported via Njord, Equinor said in a statement.

In 2016, the platform and the floating storage and offloading vessel (FSO) were disconnected to undergo extensive upgrades. The field is now ready to produce oil and gas for the next 20 years.

Equinor now plans to drill new wells on Njord from an upgraded drilling facility and to carry out more exploration close to the field.

“With the prices we anticipate in the coming years this comprehensive upgrading project will be repaid in just under two years after startup,” said Grete B. Haaland, Equinor’s senior vice president for exploration and production north.

The oil produced at the field is piped to the Njord Bravo FSO and onwards by tankers to the market. Gas from the field is exported through a 40-kilometer pipeline connected to the Åsgard transport system (ÅTS) and from there to the Kårstø terminal.

Commenting on the resumption of production at the field, Terje Aasland, Norway’s Minister of Petroleum and Energy, said,

“With the war in Ukraine, the export of Norwegian oil and gas to Europe has never been more important than now. Reopening Njord contributes to Norway remaining a stable supplier of gas to Europe for many years to come.”

Equinor is now the single biggest provider of natural gas to Europe after Russia’s Gazprom cut off most of its supply to the EU after the Russian invasion of Ukraine early last year.

By Tom Kool for Oilprice.com

Iraq And Iran Ignore U.S. Sanctions In Talks To Expand Energy Ties

By ZeroHedge - May 13, 2023,

• Iran and Iraq signed an agreement on Wednesday to expand energy ties.
• 
  
• As a result of harsh US sanctions, billions in Iraqi funds owed to Tehran have been frozen.
• 
  
• Due to the sanctions on Iran, Iraq is only allowed to receive Iranian energy imports and pay for them via waivers that extend up to 120 days.

Iran and Iraq signed an agreement on Wednesday to expand energy ties and establish a joint office aimed at overlooking cooperation between the two countries, the Iraqi Oil Ministry announced, coming as part of Iranian Oil Minister Javad Owji’s visit to Baghdad.

Upon arriving in the Iraqi capital, Owji was received by Prime Minister Mohammed Shia al-Sudani and discussed with him “the overall cooperation between Iraq and Iran, and ways to develop them,” as well as the ability to jointly confront “global economic challenges.”

The energy agreement was signed between Owji and Iraqi Oil Minister Hayan Abdul Ghanni. The meeting between Sudani, Owji, and Abdul Ghanni “resulted in an agreement to establish committees to discuss the development of joint fields under international agreements and cooperation in refining, petrochemicals, as well as oil exploration and infrastructure development,” an Iraqi Oil Ministry statement reads.

According to the statement, the Iranian oil minister expressed his country’s desire “to expand the horizons of cooperation in the implementation of joint projects in oil and gas sectors, projects for the construction and development of oil refineries, the expansion of oil and gas pipelines, and environmental cleanup.”

On Tuesday, Iran’s President Ebrahim Raisi called for expanding energy ties between Iraq and Iran.

Raisi also emphasized the need for Baghdad “fulfill its commitments” regarding gas and electricity payments owed to Tehran.

As a result of harsh US sanctions, billions in Iraqi funds owed to Tehran have been frozen as an attempt by Washington to pressure Iraq into avoiding energy cooperation with the Islamic Republic.

Iraq has paid around $1.6 billion out of the staggering debt; however, US sanctions continue to complicate matters. Due to the sanctions on Iran, Iraq is only allowed to receive Iranian energy imports and pay for them via waivers that extend up to 120 days, a policy implemented by former US president Donald Trump and kept in place by current President Joe Biden.

In March, an Iranian trade official announced that a US sanction waiver resulted in Iran receiving another $500 million from Iraq. Iran provides a third of Iraq’s electricity and gas supplies, and the two countries continue to cooperate despite the complications.

As a result of US economic hegemony, Iraq is one of the many regional countries considering the path of de-dollarization and fiscal independence from the west.

By The Cradle via Zerohedge.com

Refinery Utilization Plans Tell Story Of Strong Oil Products Demand in U.S.

By Julianne Geiger - May 16, 2023

U.S. crude oil refineries are planning to run at a rate of 94% utilization this quarter, according to company forecasts and analysts, Reuters said on Tuesday. U.S. total refining capacity is estimated at 17.9 million barrels per day.

U.S. refiners have been running at 91% of their operable capacity for the week ending May 5, according to the latest EIA data presented in its Weekly Petroleum Status Report published on Wednesday mornings.

Gasoline production was on the rise, averaging 9.8 million barrels per day for the week, while distillate production also rose to an average 4.6 million barres per day. Total products supplied rose over the four-week period ending May 5 to 19.9 million bpd—up 2.5% year over year, with gasoline seeing a 2.2% rise for the same period last year, and distillates up just 0.1%.

While the United States has yet to undertake a major project such as a new refinery, some refiners have added units to their existing refineries or upgraded to increase their throughput.

Last year at this time, U.S. refinery utilization was at 90%, although utilization often increases in the second quarter as we head into summer travel season. It often isn’t until September that we see refinery utilization dip back below the 90% threshold, EIA data shows. But last year, refinery utilization was up above 95% into the winter months.

This year, with gasoline inventories 7% below the five-year average for this time of year, and distillate inventories a staggering 16% below the five-year average, refiners are anticipating that utilization rates will remain high.

Marathon Petroleum has said it plans to run at 91% of capacity, Reuters said, while Valero plans to run between 90% and 93%. Phillips 66 said it plans on a utilization rate in the mid-90s.

By Julianne Geiger for Oilprice.com

The Great Potential Of Tidal Energy

By Haley Zaremba - May 12, 2023

• The potential of tidal energy is huge, but the U.S. currently doesn’t have a single tidal power plant operational.
• 
  
• the total energy potential of marine sources is estimated to be more than double (57%) the amount of energy currently being produced in the country each year.
• 
  
• Breakthroughs in tidal energy will almost certainly be piecemeal and low-impact, but tidal energy eventually could become a larger part of the renewables puzzle

As the world begins to feel the urgency of the decarbonization imperative, more investing dollars and public support are available than ever before for renewable energy research and development. As a result, even some of the most futuristic and far-fetched ideas are getting real backing – with real results. Already, technologies that feel ripped out of the pages of science fiction are being proven feasible – from creating an artificial sun here on Earth, to beaming solar power straight from the stars to our own energy grids. But it turns out that space is not the only final frontier for clean energy extraction – and the other one is a lot closer to home. 

Looking to the ocean to solve some of our biggest global crises is not a new idea. Seawater – a vast and seemingly inexhaustible resource – has been a source of hope and experimentation for extracting everything from fresh drinking water in the face of a mounting water crisis to creating limitless green hydrogen to replace industrial fuels. The constant motion of the ocean through waves and tides has also been viewed as a potential source of renewable energy, but scaling tidal energy in a practical and affordable way has remained elusive. But the promise and allure of harnessing the full potential of tidal energy is so great that scientists and researchers around the world have persisted in finding a way to do it. In the United States alone, the total energy potential of marine sources is estimated to be more than double (57%) the amount of energy currently being produced in the country each year. These findings came from a groundbreaking report from the National Renewable Energy Laboratory (NREL) released in 2021. The numbers released by NREL are particularly flooring when you consider that the United States has particularly low tidal energy potential compared to other countries. 

That’s why the United States has no tidal plants, while other countries including South Korea and France have had tidal plants online for years now. But that may not be the case for long. For one thing, there is currently unprecedented government support for exploring marine energy sources in the United States. he Biden administration has given special attention through the promise of marine energy sources through its Ocean Climate Action Plan, which notes the potential of offshore wind power as well as sourcing renewable energy from ‘less-explored sources’ such as waves, tides and currents. 

These three phenomena – waves, tides, and currents – present numerous different methods of potential energy production. Each is suited to different parts of the coast and ocean where the waters behave differently, allowing for more ways to create marine energy in more places. But each also presents certain challenges for achieving efficient and scalable energy production. Waves certainly pack a wallop, but they’re unsteady and still quite unpredictable despite scientists’ best modeling efforts, which makes machine design for wave energy extremely difficult. Tides are far more predictable, which is why tidal energy is way further along its own R&D trajectory. However, tidal energy is only feasible in very specific conditions that don’t exist in very many places on Earth. Currents, too, are predictable and constant, but scientists worry that harvesting too much of that energy could alter important oceanic patterns that regulate the climate, ultimately making matters worse.

While none of these energies provides a silver bullet solution, scientists are constantly working to refine and improve their methods in the hope that one day, one of these technologies could make a real impact. One example is a groundbreaking wave power project called PacWave, currently underway off of the Oregon coast. According to recent reporting from CNET, the ‘ambitious’ project is “an offshore experimental testbed built to develop and demonstrate new technology that converts the power of waves into onshore electricity.” Seven miles of conduit have already been laid between the testbed out in the Pacific and the Oregon coast using “pioneering horizontal drilling techniques.” The project could be fully operational as soon as 2025, when it would have an energy production capacity of 20 megawatts. This isn’t enough to revolutionize the energy sector by any means, but it will be able to provide a few thousand homes with clean and renewable energy. 

This is likely indicative of the trajectory of marine power on the whole. Breakthroughs will almost certainly be piecemeal and low-impact, but hopefully they will snowball into what is eventually a robust energy alternative. It likely will never provide a silver-bullet solution to fix the energy sector and the climate, but it’s one more piece of a diverse clean energy puzzle that is slowly but surely developing strong enough technologies to replace fossil fuels over time. And that’s a good thing. A diverse energy mix is a resilient energy mix. Relying too much on any one energy source is a very dangerous game. In this sense, a little bit of tidal, a little bit of wave energy, and a little bit of current energy could go a very long way. 

By Haley Zaremba for Oilprice.com