CRIMINAL CAPITALI$M

Indian Oil Probes Allegations of Albemarle Bribes to State Firm’s Officials

By Charles Kennedy - Dec 23, 2024



Indian Oil Corporation (IOC), a state-owned oil giant, has launched an internal investigation over alleged bribes paid by Albemarle to IOC officials to secure contracts more than a decade ago, Indian media report.

Responding to news articles from last week, IOC said in a statement filed with the local stock exchange that “the Company is neither a party to nor these is any allegation against the Company in relation to the proceedings referred in the said news articles”.

The statement goes on to say that “However, the Company has initiated an internal fact finding review concerning the incident which allegedly occurred in 2009 to thoroughly understand the facts surrounding these allegations and to determine the appropriate steps to be taken.”

Last year, the U.S. Securities and Exchange Commission (SEC) announced that Charlotte-based Albemarle Corporation, a global specialty chemicals company and a top lithium producer, agreed to pay more than $103.6 million to settle the SEC’s charges that it violated the anti-bribery, recordkeeping, and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA).

In India, Albemarle used a third-party intermediary to corruptly retain catalyst business with India’s state-owned oil company by avoiding Albemarle being blacklisted, the U.S. Department of Justice said at the time.

“According to the company’s admissions in connection with the Department’s resolution, between 2009 and 2017, Albemarle, through its third-party sales agents and subsidiary employees, conspired to pay bribes to government officials to obtain and retain chemical catalyst business with state-owned oil refineries in Vietnam, Indonesia, and India,” DOJ said.

Albemarle is thought to have obtained profits of approximately $98.5 million as a result of the scheme, according to DOJ.

“Albemarle’s eventual voluntary disclosure of fraud and subsequent efforts to remedy its business practices abroad are a step in the right direction for the company,” said U.S. Attorney Dena J. King for the Western District of North Carolina.

By Charles Kennedy for Oilprice.com

Eni Launches Supercomputer to Improve Oil and Gas Exploration

SO MUCH FOR THE ENERGY TRANSITION

By Irina Slav - Dec 26, 2024



Italy’s supermajor Eni has launched the world’s most powerful supercomputer outside the United States in a bid to boost its oil and gas exploration results, the Financial Times reported, adding that the company will also use the supercomputer “to perform calculations to advance clean energy.”

Eni itself said back in November, when it introduced the supercomputer to the world, that the supercomputer will help it “optimize industrial plant operations, enhance the accuracy of geological and fluid dynamics studies for CO2 storage, develop more efficient batteries, optimize the biofuel supply chain, and develop innovative materials for applications in biochemistry.”

The machine costs more than $100 million and ranks fifth among the world’s biggest and most powerful supercomputers, Eni said back in November.

“A lot of the other companies realised it would be more efficient to rent time on someone else’s supercomputer,” Thunder Said Energy analyst Rob West told the Financial Times in comments on the Eni news. This even includes the U.S. supermajors, Exxon and Chevron, which have been using the supercomputers at the U.S. National Center for Supercomputing Applications.

Eni, however, has decided to stick with proprietary technology driving both its core oil and gas business and, apparently, its expansion into energy transition technology.

For years, Eni has been taking a different approach to conventional and green energy development, unlike any of the other major international oil and gas firms. The Italian major is divesting or creating joint ventures to operate oil and gas assets internationally while grouping some low-carbon initiatives and projects into separate firms.

Key to these spin-offs and the so-called ‘satellite strategy’ are the separate balance sheets of the companies.

“The satellite model is an approach we have built to have additional funding sources to keep together the need to meet demand for traditional products, while also developing new, greener products,” Eni’s chief financial officer Francesco Gattei told Reuters.

By Irina Slav for Oilprice.com

China Plans the World’s Biggest Hydropower Dam in Tibet

By Tsvetana Paraskova - Dec 26, 2024



China has approved the construction of a huge hydroelectric dam in Tibet, which would be the world’s largest hydropower plant with triple the capacity of the current biggest operational project, the Three Gorges Dam, which is also in China.

The Chinese government has now approved the construction of the new project in the lower reaches of the Yarlung Tsangpo River, the longest river in Tibet and the fifth longest in China, state news agency Xinhua reports.

The new mega-dam could produce 300 billion kilowatt-hours (kWh) of electricity annually, three times higher than the annual design capacity of the Three Gorges Dam.


China says that the huge new hydropower dam would align with its peak carbon emissions goals and carbon neutrality targets. The project is expected to boost the development of solar and wind energy resources in surrounding areas, thus creating a clean energy base featuring a complementary mix of hydro, wind, and solar power, the Xinhua agency quoted an official Chinese government statement as saying.

While hydropower can go a long way to provide a part of China’s electricity, periods of drought in recent years have highlighted the continued dependence on coal for reliable power supply in the world’s second-largest economy.

China has the biggest hydropower capacity in the world, at a total of 425 gigawatts (GW). Even in 2022, when drought shrank hydropower output, the country sourced 15% of its electricity from that segment, according to BloombergNEF.

Hydropower has recovered this year from the historic droughts in 2022 and 2023, but hydropower generation has been on a decline since September, leading to higher fossil fuel-powered electricity output.

Although the share of coal in China’s electricity generation has been declining in recent years with the renewables boom, Chinese coal power generation and demand remain strong. Coal still accounts for about 60% of China’s power generation, despite a surge in hydropower earlier this year after abundant rainfall, which reduced the share of coal in the country’s energy mix during the summer.

By Tsvetana Paraskova for Oilprice.com

China’s EV Uptake Is Years Ahead of Targets and Forecasts

By Tsvetana Paraskova - Dec 26, 2024,

For the first time ever, China’s electric vehicle sales are set to outpace traditional car sales on an annual basis in 2025, years in advance of the Chinese authorities’ targets and years ahead of analyst projections, according to the latest industry forecasts provided to the Financial Times by research companies and investment banks.

China’s combined EV and plug-in hybrid sales are expected to jump by around 20% to over 12 million units next year, HSBC, UBS, Morningstar, and Wood Mackenzie have projected.

Next year, the expected sales of the so-called new energy vehicles are set to more than double from the 5.9 million units sold in 2022.

At the same time, sales of conventional cars with internal combustion engines (ICE) are projected to fall by 10% next year to fewer than 11 million vehicles. This means that China will see EV sales outpacing conventional car sales for the full-year 2025, according to the four research firms and banks that have shared their latest insights with FT.

The second half of this year has already seen EVs outselling conventional cars in China. July 2024 was the first month ever in which new energy vehicle sales exceeded ICE car sales. Since July, China has consistently marked months of EV sales holding more than 50% of new car sales.

In November 2024 alone, the Chinese market once again beat its previous record set in October by over 50,000 vehicles, to reach almost 1.3 million EVs sold, EV research house Rho Motion said earlier this month.

The monthly growth in EV sales in November 2024 was almost entirely due to higher number of BEV sales, which rose by over 70,000 units. Most of the growth resulted from monthly increases in sales from Geely, Tesla, and Changan, according to Rho Motion.

Between January and November 2024, China’s EV sales jumped by 40% from a year earlier to 9.7 million units, Rho Motion noted.

Soaring EV sales in China have contributed in part to the weaker-than-expected oil demand in the world’s top crude oil importer. The other major factors have been wobbling economic performance and surging LNG-fuelled trucking.

By Tsvetana Paraskova for Oilprice.com

Nio’s Mass Market Push Draws Scorn as EV Maker Promises a Profit

By Bloomberg News

December 26, 2024 

(Bloomberg, NIO)

(Bloomberg) -- It’s a wonder three little headlights can stir up such debate. But that’s what many netizens in China have been driven to comment on following the launch of Nio Inc.’s newest sub-brand, Firefly.

The electric hatchback was unveiled last weekend at Nio’s annual gathering for its customers, partners and media. The compact car will start from 148,800 yuan ($20,400) and features a rather plain design punctuated by three little round lights at the front and rear, which look more cutesy than chic.

Nio watchers were quick to point out the resemblance to the Honda e and its symmetrical ‘eye-like’ LED headlights, which most said look a lot better. Many derided the car, saying it undermines Nio’s premium eponymous brand and the automaker’s positioning of itself as a luxury marque. (Also over the weekend Nio showcased its most expensive car ever, the ET9, a four-seater sedan meant to take on Porsche’s Panamera series or Mercedes-Benz’s luxury S range.)

But for Nio, passing its 10-year anniversary and yet to turn a profit, heading down into the mass market to ramp up sales volumes may be the most sensible way forward.

Once regarded as one of China’s brightest electric vehicle stars, Nio has had several near-death experiences.


The first came in 2019 after heavy spending on marketing and splashy showrooms failed to generate demand for its ES8 and ES6 electric sport utility vehicles, and the municipal government of Hefei stepped in with a $1 billion rescue package.

Prospects improved in 2021, when Nio recorded some its highest-ever gross margins, but by 2023, Nio was struggling financially again. In July of that year, Abu Dhabi-backed fund CYVN Holdings invested $738.5 million and later acquired shares in Nio from an affiliate of Tencent for $350 million. In December 2023, CYVN committed to invest a further $2.2 billion in return for a 20.1% stake.

According to Nio CEO William Li, the automaker has fallen short of its own expectations for three consecutive years and is now at least two years behind schedule. At home, BYD is a much bigger threat than it was a decade ago while Nio’s overseas expansion plans have encountered a number of setbacks, including, in Europe, tariffs on Chinese EV imports and a slower-than-expected build out of its battery-swap stations.

External factors, including lithium price hikes and Covid lockdown disruptions, have added to the challenge.

Fronting a media scrum earlier this month in Shanghai, Li was peppered with more than 200 questions and was at pains to assure the public. “We survived five years since 2019, and now with a healthy operating cash flow, we can for sure survive longer than another five, don’t worry,” he said.

That may be easier said than done.

Several Chinese EV brands, including WM Motor, have bowed out due to cut-throat competition domestically, leaving car owners in limbo when it comes to after-sales and maintenance. The most recent is Jiyue, a joint venture backed by giant Baidu Inc. and well-established Chinese player Geely Automobile Holdings Ltd.

Shortly after it displayed a new vehicle at the Guangzhou auto show in November and started taking pre-order deposits of 50,000 yuan, management abruptly cut staff, sparking employee complaints and a customer panic.

Nio also needs to spend money to make money, risking the 42.2 billion yuan it had in cash and cash equivalents as of Sept. 30.

Research and development into advanced driving semiconductors is a must, Li has said, calling that a “reasonable business decision” considering the procurement costs from Nvidia Corp. alone this year. Longer term, it will improve Nio’s gross margin and reduce supply chain risks, Li reasons.

Another thing Nio didn’t address as it launches new brands is, beyond price and specs, how they’re that different and the potential cannibalization between them. Will Firefly owners, who may pay as little as 100,000 yuan under a battery-leasing model, be allowed into the clubby Nio Houses, for example, the upmarket social spaces reserved for Nio car owners around the world?

Without those perks that, at least for Nio’s core customer base, are an important draw, it’s uncertain whether the new brands (there’s also Onvo) can translate into higher sales volumes. Nio is well behind larger rivals in China — its deliveries totaled almost 191,000 units for the first 11 months of 2024, versus around 1.6 million for BYD’s pure electric cars.

Nio is projecting to double sales in 2025 to at least 440,000 units, with Firefly adding “several thousand” deliveries per month, according to Li.

That’s still comparatively tiny but Li is bullish, maintaining that “profitability in 2026 is baseline” the EV maker “can’t afford to miss.”

--With assistance from Danny Lee.

©2024 Bloomberg L.P.

GOOD NEWS

Iraq Plans to Slash Gas Flaring

By Charles Kennedy - Dec 26, 2024

Iraq plans to cut gas flaring next year and eliminate the practice of burning off associated gas at oilfields by the end of 2027, government officials have said.

As of the end of 2024, Iraq, which is OPEC’s second biggest oil producer after Saudi Arabia, is capturing around 67% of the gas at its oilfields, Ezzet Saber Ismael, Iraq’s deputy minister for gas affairs told Bloomberg in an interview published on Thursday.

Earlier this week, Iraq’s Prime Minister Mohammed S. Al-Sudani chaired an energy policy meeting, at which officials discussed ongoing natural gas projects, the office of the Iraqi PM said.

“Current progress includes a significant reduction in gas flaring levels, reaching 67%, with projections to achieve 80% by the end of next year and complete elimination of flaring by the end of 2027,” the office of the prime minister said in a statement.

Iraq is one of the top ten countries in the world in terms of gas flaring, alongside Russia, Iran, Algeria, Venezuela, the U.S., Mexico, Libya, and Nigeria, according to estimates from the Global Gas Flaring Tracker Report by the World Bank.

Iraq has recently launched initiatives to reduce gas flaring, aiming to capture and use the natural gas instead of wasting it.

Despite being OPEC’s second-biggest producer and a major crude oil exporter, Iraq is importing natural gas – including from Iran under a special U.S. waiver – to meet its power generation needs.

Last year, Iraq signed a major deal with France’s supermajor TotalEnergies to develop a Gas Growth Integrated Project (GGIP), which includes the recovery of flared gas on three oil fields in order to supply gas to power generation plants.

Commenting on the agreement, the U.S. State Department said that “the United States strongly supports Iraq’s efforts to become more energy secure and minimize harmful emissions.”

“Minimizing the current practice of gas flaring by capturing the massive amounts of methane being burned away will significantly reduce emissions, improve public health for Iraqis, and utilize captured gas to power Iraq’s electrical grid,” the State Department added.

By Charles Kennedy for Oilprice.com

India’s Oil Demand Growth Set to Surpass China’s

By Alex Kimani - Dec 26, 2024


India’s oil demand growth is expected to exceed China’s for the first time in 2024, and continue in 2025. According to Kang Wu, global head of macro and oil demand research at SPGCI, India’s oil demand in the current year grew by 180,000 barrels per day, surpassing China’s growth at 148,000 bpd. India’s oil demand is expected to increase by 3.2% Y/Y in 2025 compared to a 1.7% clip by China.

Over the past couple of decades, China has carried the lion’s share of global oil demand growth thanks to the country’s remarkable economic boom. However, that is beginning to change. The factors that helped sustain China’s rapid growth since the global financial crisis are unlikely to be replicated in the next decade, particularly in sectors of property construction and local government investment. Indeed, China’s economic slowdown has mainly manifested in the property sector’s decline, hardly surprising considering that the industry represented 20 to 25 percent of GDP at its peak.

But China is now poised to lose its prominence in global oil markets.

“China’s role as a global oil demand growth engine is fading fast,’’ Emma Richards, senior analyst at London-based Fitch Solutions Ltd, has told The Times of India. According to the analyst, over the next decade, China’s share of emerging market oil demand growth will decline from nearly 50% to just 15% while India’s share will double to 24%.

But it’s not just a dramatic slowdown in its economy that will make China a less important player in global oil markets. The country’s booming EV sector will rapidly lower oil demand much faster than India’s: China sold 6.1 million EVs in 2022 compared with just 48,000 sold in India. India is nowhere near as aggressive with its clean energy push compared to China. Last year, India’s coal minister declared that the country has no intention of ditching coal from its energy mix any time soon. Minister Pralhad Joshi said that coal will continue to play an important role in India until at least 2040, referring to the fuel as an affordable source of energy for which demand has yet to peak in India.

By Alex Kimani for Oilprice.com

Airports Around the World Are Going Green

By Felicity Bradstock - Dec 26, 2024

Airports across the globe are transitioning to renewable energy sources, including solar power, to reduce their carbon footprint.

Initiatives like India's Flexible Use of Airspace and the Australian government's renewable energy agreements are contributing to decarbonization efforts.

While progress is being made, a more coordinated global effort is needed to encourage wider adoption of renewable energy across the aviation sector.


Many airports around the globe are now powered by wholly renewable energy, as the aviation and buildings sectors strive to decarbonize in line with aims for a green transition. The International Energy Agency (IEA), the International Civil Aviation Organisation (ICAO), and several other international bodies are encouraging developers to reduce the carbon footprint of their airports to support international climate goals.

The ICAO released a toolkit entitled “A Focus on the Production of Renewable Energy at the Airport Site” that offers developers advice on how to decarbonize airports. It refers to the Paris Agreement aims to keep a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels, which requires significant decarbonization efforts to take place across all sectors.

The document is aimed towards states, civil aviation authorities, and airports, and is “the first in a series of practical and ready-to-use information documents to support the planning and implementation of airport infrastructure projects that envisage significant environmental benefits.” The toolkit has been used by airport developers worldwide to support decarbonization efforts and develop more environmentally friendly airports.

In India, a reported 80 airports are operating on entirely renewable energy. The Airports Council International has accredited airports in Delhi, Mumbai, Hyderabad, and Bengaluru as carbon neutral. The Airports Authority of India (AAI) has supported the installation of solar energy projects on-site at several airports across the country. Multiple airports have adopted green building standards, invested in fleets of electric vehicles (EVs), and installed energy-efficient air conditioning systems, lighting, and other equipment.

According to a press release from the Indian Ministry of Civil Aviation, the government’s Flexible Use of Airspace initiative helped reduce carbon emissions by 90,000 tonnes between 2020 and 2023. The Implementation of 2017 Central Air Traffic Flow Management helped reduce delays and optimize capacity, resulting in lower fuel consumption and a decrease in emissions.

In Australia, CS Energy and Queensland Airports Limited (QAL) recently entered a seven-year agreement to power two of the country’s busiest airports using wholly renewable sources of energy from 2025. Gold Coast and Townsville airports on the east coast of Australia, which handle more than 8 million passengers a year, will be shifting to green in support of sustainable tourism aims. The two airports are set to undergo a significant expansion to prepare them for a significant increase in passenger traffic ahead of the 2032 Olympic and Paralympic Games. QAL has announced aims to achieve net-zero emissions by 2030 by offsetting almost 90 percent of the company’s Scope 1 and Scope 2 emissions.

In June 2024, Investment Fund Managers Investors and Queensland Investment Corporation, which have assets including Sydney and Adelaide airports, signed a $467 million renewable energy pact. The multi-state power purchase agreement will ensure the supply of over 500 GWh of green power annually to the companies’ infrastructure assets.

In the U.K., in 2019, Bristol Airport announced plans to make its operations carbon-neutral by 2025 by using 100 percent renewable energy. The Danish energy company Ørsted agreed to deliver 17 million kWh of annual electricity to the airport, generated from wind power, in a three-year agreement. This was expected to decrease Bristol Airport's carbon emissions by 14,000 tonnes over three years. London Gatwick Airport has also transitioned to using wholly renewable electricity, while Heathrow Airport aims to achieve net-zero emissions by 2050.

In the U.S., in 2019, Chattanooga Metropolitan Airport in Tennessee became the country’s first airport to be powered by 100 percent solar energy. The airport's 2.64-MW solar farm was developed with around $5 million in funding from the Federal Aviation Administration. At the time of the announcement, Terry Hart, the former CEO of the Chattanooga Airport, stated, “This project has immediate benefits to our airport and community, and we’re proud to set an example in renewable energy for other airports, businesses and our region. While generating a local renewable resource, we are also increasing the economic efficiency of the airport.”

In November this year, Boise Airport in Idaho announced that it had also shifted to 100 percent renewable energy sources. The City of Boise signed an agreement to power its airport using energy from the Black Mesa Energy solar project. Indianapolis International Airport is now home to one of the biggest airport-based solar farms in the world, providing enough power to supply 10,000 homes annually. Meanwhile, Denver International Airport produces over 10 MW of power via its solar installations. According to a 2020 study by the University of Colorado, 20 percent of public airports in the U.S. had adopted solar panels in some capacity.

While several airports around the globe have already shifted to green, there is no comprehensive effort for airport developers to transition to wholly renewable energy sources to power facilities. Better international guidelines and stricter national regulations could encourage greater cooperation from airports and help decarbonize facilities.

By Felicity Bradstock for Oilprice.com

Sanctioned Russian LNG Cargo Ends Across-the-World Trip Without Finding Buyer

By Tsvetana Paraskova - Dec 26, 2024



Arctic LNG 2 continues its struggles to sell gas from Russia’s newest but heavily sanctioned LNG export project.

In one of the latest pieces of anecdotal evidence, a sanctioned LNG carrier, which had loaded liquefied natural gas in the Artic in August, traveled for four months around north Europe, the Mediterranean, the Suez Canal, the Indian Ocean, along China’s east coast and north to Russia’s Far East, without finding a buyer for the cargo, tanker-tracking data compiled by Bloomberg showed on Thursday.

The LNG vessel, Pioneer, is sanctioned by the United States and so is the Arctic LNG 2 project, which is now put on ice.

After the journey from Europe to Russia’s Far East, Pioneer was spotted in December offloading the cargo in a Russian floating storage unit near Kamchatka, according to the vessel-tracking data compiled by Bloomberg.

As early as this summer, Russia started shipping LNG from its flagship Arctic LNG 2 project—but not to customers.

The shipments have been made from the Arctic project to floating storage units either in Russia or in European waters, as potential customers are unwilling to buy LNG from the facility, which has seen tightened Western sanctions in the past months.

In August, the U.S. State Department intensified efforts to derail Arctic LNG 2 exports by targeting companies involved in the development of the project and vessels found to have loaded LNG from the facility.

Pioneer was one of three vessels – Pioneer, Asya Energy, and Everest Energy – targeted by the U.S. sanctions in August, as well as their registered owners Zara Shiphoding and Ocean Speedstar Solutions.

Since then, the U.S., the EU, and the UK have further tightened the screws on Russia’s LNG vessels and Arctic LNG 2 exports in a series of additional sanctions.

Located in the Gydan Peninsula in the Arctic, the Arctic LNG 2 project was considered key to Russia’s efforts to boost its global LNG market share from 8% to 20% by 2030-2035.

By Tsvetana Paraskova for Oilprice.com

Can U.S. LNG Exports Really Fill the Gap Left by Russian Gas in Europe?

By ZeroHedge - Dec 26, 2024

The US is already the largest LNG supplier to Europe, and could theoretically replace Russian LNG imports.

Replacing Russian LNG with US LNG could increase shipping costs and European prices.

Europe's decarbonization goals may limit its willingness to make long-term commitments to US LNG.


Samantha Dart, co-head of global commodities research at Goldman, published a note to clients outlining five key questions and answers about the US-EU liquefied natural gas trade. This comes just days after President-elect Donald Trump threatened the EU with a barrage of tariffs unless Brussels ramped up purchases of American LNG.

For context, last Friday, Trump wrote on Truth Social:

"I told the European Union that they must make up their tremendous deficit with the United States by the large-scale purchase of our oil and gas. Otherwise, it is TARIFFS all the way!!!"

Dart told clients that the US is already Europe's largest LNG supplier and a key source of supply growth. She said replacing Russian LNG with US LNG imports could raise shipping costs and European prices to incentivize re-routing cargoes

Europe’s Natural Gas Prices Jump to 2024 High

She said such a shift would have minimal impact on US LNG export revenues, as total export capacity remains fixed, adding exporters with long-term contracts with proposed US LNG projects would benefit. However, Europe's decarbonization strategy may limit the willingness of European companies to make long-term NatGas commitments with US exporters.

Dart laid out key questions and answers about the US-EU LNG trade that help clients understand that US LNG Gulf exports can "theoretically" replace Russian NatGas flowing into the EU. How much US LNG is exported to Europe?

US LNG exports averaged 91 mt over the past year (Dec23-Nov24), of which 47 mt or 51% were delivered to Europe. US LNG exports to Europe have grown significantly in levels and as a share of total US LNG exports since the European energy crisis in 2022, peaking in 2023 (Exhibit 1).

Are US LNG volumes sold in the spot market or are they contracted?

The vast majority of US LNG sales are under contract. That said, US contracts typically have flexible destination ports, in that the buyer is not obligated to deliver to a particular location. This allows buyers of US LNG to re-sell or re-direct cargoes to higher-paying destinations. This was evident during the European energy crisis, when European gas prices increased sharply relative to the rest of the world. Even as total US LNG exports grew, this worked as an effective incentive for US LNG deliveries to non-European destinations to contract by 41%, while European deliveries increased by 197%[1], as seen in Exhibit 1.What portion of European LNG imports come from the US?

The US has become the single largest source of LNG to Europe, averaging 46% of imports into the region over the past 12 months (Exhibit 2). Most European LNG imports are sourced from Atlantic Basin suppliers to minimize shipping costs. Importantly, the US is also the primary source of likely European LNG import growth, based on long-term LNG contracts signed by European buyers since the start of the Ukraine war. US volumes contracted by European buyers in the period add to just under 16 mtpa, which is more than with any other single supplier globally (Exhibit 3).

Can US LNG replace Russian LNG imports into the EU?

Theoretically, yes. US LNG deliveries to non-EU countries are currently approximately 18 mtpa above the levels observed during the peak of the European energy crisis, suggesting there is enough flexibility in the market to replace Russia's current 17 mtpa of LNG exports to the region. However, such a reallocation of flows might offer little benefit, if any, to Europe or the US. Less optimal routes for LNG deliveries (for example, longer routes for Russian cargoes) would likely lead to higher freight costs. In addition, European import costs might go up in order to motivate the re-route of US cargoes that would have otherwise opted to deliver elsewhere.

Total US LNG exports would also not increase as a result of this reallocation, given that US LNG export capacity would not be impacted in the process.How could Europe support growing US LNG exports?

Additional long-term contracting by European buyers with proposed US LNG projects would be the most impactful measure the EU could take to support higher future US LNG exports, as this would increase the likelihood such contracted liquefaction projects reach a final investment decision (FID). As of now, the forward curve for European gas prices suggests new long-term US LNG export contracts are in the money through at least 2027 (Exhibit 4). That said, Europe's decarbonization goals might limit European companies' appetite for long-term commitments to grow natural gas use. In fact, when we look across all long-term LNG contracts signed since the start of the Ukraine war, European companies are far behind Portfolio player companies and Asia importers (Exhibit 5).




It appears that Goldman believes Trump's 'America First' policy of replacing Russian LNG to Europe with American LNG is "theoretically" possible.

By Zerohedge.com

BIDENOMICS

U.S. Oil Production Shattered Records Again in 2024

By Robert Rapier - Dec 26, 2024

The U.S. oil production reached a new record high in 2024, surpassing the previous record set in 2023.

Technological advancements, including precision fracking and enhanced recovery techniques, have played a significant role in increasing productivity.

The record-breaking production has contributed to job creation, economic growth, and strengthened national energy security, but environmental concerns remain.


Despite ongoing concerns about global economic volatility, energy transition policies, and fluctuating demand, the U.S. energy sector has demonstrated its unmatched resilience and innovation.

Building on the record-breaking momentum of 2023, 2024 has proven to be another landmark year for oil production, driven by technological advancements, strategic investments, and favorable market conditions.

A Second Consecutive Oil Production Record

In 2023, U.S. oil production reached a record high, surpassing 12.9 million barrels per day, solidifying the country’s position as the world’s top oil producer. One of my 2024 energy sector predictions was that the U.S. would set a second consecutive record this year.

According to preliminary data from the U.S. Energy Information Administration (EIA), production had averaged 13.249 million BPD year-to-date through December 13, 2024. Cumulative production for the year is estimated at 4.611 billion barrels by that date—just 110 million barrels shy of the previous annual record.

Given that producers have consistently exceeded 13 million BPD since January, the record likely fell by December 22, 2024. Even a conservative scenario of 12 million BPD would delay the milestone by under a day.

This achievement is a testament to the industry’s ability to adapt to shifting demand and market challenges while maintaining high levels of productivity.

The Driving Forces Behind the Production Record

The new record highlights the role of enhanced recovery techniques like precision fracking and improved drilling technologies, which have unlocked greater productivity from key oil fields. The Permian Basin continues to be the powerhouse of U.S. production, contributing a significant share of the growth through its cost-efficient operations.

High demand for U.S. crude oil, particularly from Europe and Asia, has spurred production. Geopolitical tensions and shifting trade dynamics have positioned U.S. oil as a reliable alternative for global markets. Robust pipeline infrastructure and export terminals have further supported this expansion, enabling seamless transportation to international buyers.

At home, steady consumer demand for refined products, supported by healthy refining capacity, has ensured domestic market stability. This dual focus on international and domestic needs highlights the versatility and reliability of the U.S. energy sector.

Economic Benefits and Future Challenges

The shale industry’s growth has provided numerous jobs, strengthened local economies in production hubs, and bolstered national energy security. The economic ripple effects extend from upstream exploration to downstream refining, reinforcing the energy sector’s importance to the broader U.S. economy.

While these achievements are commendable, challenges remain. Addressing environmental concerns and aligning production with long-term sustainability goals will require ongoing investment in emissions-reduction initiatives and cleaner technologies. Balancing these priorities with the need for short-term growth will be key for the sector’s future.

A Testament to Resilience and Innovation

The U.S. oil production record of 2024 is a triumph of adaptability, innovation, and global competitiveness. It underscores the energy sector’s pivotal role in meeting global and domestic energy needs while contributing to economic growth.

With its unparalleled ability to overcome challenges and seize opportunities, the U.S. energy sector has cemented its place at the forefront of the global market—proving once again that resilience and innovation are the hallmarks of its success story.

U.S. crude oil production has demonstrated the sector’s ability to balance growing domestic demand, export markets, and geopolitical uncertainties. This new record reflects not only improved drilling and extraction methods, such as precision fracking and enhanced recovery techniques, but also the continued productivity of key oil-producing regions.

By Robert Rapier