U.S. Goes All In On Nuclear Power In Space Race With China

By Tsvetana Paraskova - Jan 02, 2021

The United States is doubling down on nuclear power and propulsion systems in the new space race with China.  The Trump Administration unveiled in the middle of December a National Strategy for Space Nuclear Power and Propulsion, the so-called Space Policy Directive-6, aiming to develop and use space nuclear power and propulsion (SNPP) systems to achieve scientific, national security, and commercial objectives.  

In the new space race between Western nations and China, the United States is betting on developing and demonstrating the use of new SNPP capabilities in space.  

The strategy on nuclear power and propulsion sets a goal for the U.S. to develop uranium fuel processing capabilities that enable fuel production that is suitable to lunar and planetary surfaces and in-space power, nuclear electric propulsion (NEP), and nuclear thermal propulsion (NTP) applications. Another objective is to “demonstrate a fission power system on the surface of the Moon that is scalable to a power range of 40 kilowatt-electric (kWe) and higher to support a sustained lunar presence and exploration of Mars.” 

Collaboration with the private sector is also a pillar of the nuclear power and propulsion strategy. 

NASA strongly supports the nuclear space strategy, pointing out the advantages of nuclear power and propulsion in driving spacecraft. 

“Space nuclear systems power spacecraft for missions where alternative power sources are inadequate, such as environments that are too dark for solar power or too far away to carry sufficient quantities of chemical fuels. Space nuclear systems include radioisotope power systems and nuclear reactors used for power, heating, or propulsion,” NASA said, commenting on the new national strategy. 

NASA believes that nuclear thermal propulsion (NTP) is an attractive option for in-space propulsion for exploration missions to Mars and beyond. NTP offers virtually unlimited energy density and specific impulse roughly double that of the highest-performing traditional chemical systems, according to NASA. 

As part of the U.S. strategy, NASA’s near-term priority will be to mature and demonstrate a fission surface power system on the Moon in the late 2020s, in collaboration with the Department of Energy and industry. Such a system could provide power for sustainable lunar surface operations and test the potential for use on Mars. 

Earlier in 2020, the Department of Energy said that NASA plans to build a base and a nuclear power plant on the Moon by 2026 and is inviting proposals from companies ready to take on the challenge. The plan will involve the construction of a 10-kW class fission surface power system to be used for demonstrative purposes. The plant is to be manufactured and assembled on Earth and then shipped to the Moon on a launch vehicle. This vehicle will take the plant to Moon orbit, from where a lander will take it to the surface of the satellite. The demonstration will continue for one year, and if successful, it could open the door to other missions on both the Moon and Mars.

“Space nuclear power and propulsion is a fundamentally enabling technology for American deep space missions to Mars and beyond. The United States intends to remain the leader among spacefaring Nations, applying nuclear power technology safely, securely, and sustainably in space,” Scott Pace, Deputy Assistant to the President and Executive Secretary of the National Space Council, said in a statement, carried by SpacePolicyOnline.com.

The U.S. should continue to enable American entrepreneurs and innovators to further bolster its commercial space industry to continue leading the space race, U.S. Secretary of Commerce Wilbur Ross wrote in an op-ed in December.  

“Competition is increasing, especially between Western nations and China. Our advantage in this new space race is the U.S. commercial space industry. It is critical that we continue to enable American entrepreneurs and innovators, lest we miss the opportunity and potentially lose the race,” Secretary Ross said. 

By Tsvetana Paraskova for Oilprice.com

The U.S. Senate Just Gave Nuclear Power A Major Boost

The US Senate Committee on Environment and Public Works (EPW) has approved a bipartisan bill that, among other provisions, advances the federal initiative to establish a US national strategic uranium reserve.

Under the American Nuclear Infrastructure Act (ANIA), the US Department of Energy will be restricted to only buy uranium recovered from facilities licensed by the Nuclear Regulatory Commission or equivalent agreement state agencies as of the date of enactment.

Uranium from companies owned, controlled, or subject to jurisdictions in Russia or China are excluded from participating in the program.

Senate committee chairperson Senator John Barrasso said that the ANIA preserves America’s nuclear fuel supply chain, prevents more carbon emissions from entering the atmosphere, and protect economic, energy, and national security.

“The bipartisan Nuclear Infrastructure Act is broad-reaching legislation, important for supporting the US nuclear fuel industry, national security and clean energy. The legislation will provide a clear path for the implementation of the US uranium reserve and provide a strong platform to revitalise the US uranium industry,” Uranium Energy Corp CEO Amir Adnani said in a media release.

Section 402 of the ANIA specifies that not later than 60 days after the date of enactment, the Secretary of Energy, subject to the availability of appropriations, shall establish a program to operate a uranium reserve with the authority outlined in the Atomic Energy Act of 1954.

The Trump administration released a report in April outlining its plan to revitalize the US nuclear energy industry and support domestic uranium mining amid concerns that the nation has lost its spotlight on the global nuclear technology stage.

Republican lawmakers and uranium producers have long called for measures to boost US uranium mining and the nuclear energy industry, which the report says was at “high risk of insolvency.”

Over recent years, US nuclear power producers and uranium miners have suffered from a lack of investment and support. Last year, Trump rejected a request by the county’s top two uranium producers Energy Fuels and Ur-Energy seeking 25% purchasing quotas for domestic uranium output.

By MINING.com - Dec 05, 2020, 

THREE MILE ISLAND

Process Banned By President Carter Could Solve U.S. Nuclear Waste Problem

The reprocessing of nuclear waste—a banned process—could solve the problem of its buildup in the United States, according to the head of the Nuclear Energy Institute, Maria Korsnick. NUCLEAR INDUSTRY ASSOC.

"Reprocessing is a very interesting part of the solution set," Korsnick told Reuters in an interview, noting that it closed the nuclear power cycle in a useful way.

Reprocessing of nuclear fuel waste was banned in the United States by President Jimmy Carter in the late 1970s on concerns that it could be used to make nuclear weapons. In France, however, a country reliant on nuclear power plants for most of its energy needs, the waste is being reprocessed to make new nuclear fuel.

In the United States, nuclear power accounts for about a fifth of the energy supply. Nuclear waste is currently stored at the power plants themselves, according to Reuters, first in pools and then in casks made from steel and concrete. There are dozens of spent fuel pools across the United States.

Years ago, a centralized nuclear waste repository was proposed in Yucca Mountain, in Nevada. The Yucca Mountain facility would have had a capacity to store up to 70,000 metric tons of spent nuclear fuel, according to the Environmental Protection Agency, some 1,000 feet below the mountain. However, the facility never reached the stage of going into operation because of the opposition of local communities.

There is opposition to other proposed nuclear waste repositories, too, as local communities fear what is advertised as a temporary solution to the nuclear waste problem could become permanent.

In this context, reprocessing the waste to make more nuclear fuel is a no-brainer. The Nuclear Energy Institute's Korsnick told Reuters the industry was eager to work with the next federal administration on nuclear energy issues, including the handling and possible reuse of waste.

By Irina Slav for Oilprice.com

See all

The Three Mile Island accident was a partial meltdown of reactor number 2 of Three Mile Island Nuclear Generating Station (TMI-2) in Dauphin County, Pennsylvania, near Harrisburg and subsequent radiation leak that occurred on March 28, 1979. It was the most significant accident in U.S. 

Date: March 28, 1979, (41 years ago)

Location: Londonderry Township, Dauphin County, Pennsylvania

Outcome: INES Level 5 (accident with wider consequences)

Time: 04:00 (Eastern Time Zone UTC−5)

Three Mile Island accident - Wikipedia

en.wikipedia.org/wiki/Three_Mile_Island_accident

SUSTAINABILITY

Researchers Are Harvesting Precious Metals From Industrial Waste

Researchers from Kanazawa University in Japan have developed a mechanism to improve the recovery of silver and palladium ions from aqueous acidic waste.

In a paper published in the Chemical Engineering Journal, the scientists said that the process they developed involves chemically modifying ultrasmall particles of cellulose – an abundant and nontoxic biopolymer – to selectively adsorb silver and palladium ions at room temperature. Adsorption was nearly complete at acidic pH with acid concentrations of around 1 to 13% by volume.

“The adsorbent selectively chelated the soft acid silver and palladium cations,” Foni Biswas, lead author of the study, said in a media statement. “Of the 11 competing base metals we tested, only copper and lead cations were also adsorbed, but we removed them with ease.”

According to Biswas, maximum metal ion adsorption was fast compared to other approaches. It took only one hour for silver, a metal that also showed substantially higher maximum adsorption capacities at 11 mmol/g.

After adsorption, the researchers incinerated the cellulose particles to obtain elemental silver or palladium powder. Subsequent higher-temperature incineration converted the powder into pellets. Spectroscopic analyses indicated that the final metal pellets were in metallic rather than oxide form.

“We then removed nearly all of the silver and palladium from real industrial waste samples,” Biswas said. “Obtaining pure and elemental metals proceeded as smoothly as in our trial runs.”

By MINING.com - Dec 26, 2020

A REASON FOR CYBERWAR

Russia Cries War As U.S. Tries To Kill Nord Stream 2

The widening U.S. sanctions on the Russia-led natural gas pipeline project Nord Stream 2 are a kind of hybrid warfare used by the United States, Vladimir Putin’s Press Secretary Dmitry Peskov said

“This is indeed a variant of hybrid warfare, it is used as a hybrid war by the United States,” Peskov said, as carried by Russian news agency TASS, asked about if the Kremlin agreed with a previous statement by Russian businessman Oleg Deripaska that the sanctions were hybrid warfare.

“Let's take the sanctions against Nord Stream - it is a pure hybrid war that goes on like a war accompanied by unfair competition,” TASS quoted Peskov as saying on Monday.

The U.S. continues to try to kill the project by slapping sanctions on anyone or any company helping the pipeline in any way.

U.S. sanctions have delayed offshore construction works as the United States looks to thwart the completion of the pipeline by broadening the scope of the sanctions against service providers and those funding vessels involved in the construction of Nord Stream 2, and including the project as a target of more sanctions in the U.S. defense bill.

However, work off the coast of Germany, the endpoint of the pipeline, resumed earlier this month, with the pipe-laying vessel Fortuna laying a 2.6-kilometer (1.6-mile) section of the pipe.

Potential new U.S. sanctions on Russia because of recent cyber attacks, as well as plunging oil prices because of fear of a new coronavirus strain, sent the Russian ruble to its steepest drop since March this year. Additionally, the ruble was further pressured by the growing risk aversion toward emerging-market currencies and other asses on the markets on Monday.

Early on Monday, oil prices dropped by 3.5 percent amid growing concerns over the new virus strain in the UK, which prompted many European countries to suspend all flights from the UK.

By Tsvetana Paraskova - Dec 21, 2020

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews

GREEN CAPITALI$M

The EV Boom Is Sending Battery Metals Into The Stratosphere

The MINING.COM EV Metal Index, which tracks the value of battery metals in newly registered passenger EVs (including hybrids) around the world surged to an all-time high in September, rebounding from two-year lows struck at the height of the pandemic in April.

There was a massive sequential jump in battery raw material deployed in September, according to data from Adamas Intelligence, which tracks demand for EV batteries by chemistry, cell supplier and capacity in over 90 countries.

According to the Toronto-based researcher, during the month lithium used in newly-sold EVs nearly doubled from September 2019, at just over 9,500 tonnes. Deployment of cathode materials nickel and cobalt boomed by 88% and 67% year over year, while 96% more graphite was deployed in anodes compared to the same month in 2019.

All materials tracked by the index set new monthly records, with cobalt topping 2,000 tonnes and nickel 9,000 tonnes in one month for the first time.

Usage of battery metals was not only boosted by the overall increase in EV sales during the month, but also the relative outperformance of full-electric cars, which saw the total battery capacity of EVs sold increase 86% to over 15,000 MWh, according to the Adamas battery capacity tracker.

That, combined with a sharp year-to-date rally in cobalt and a recovery in the price of nickel used in battery supply chains lifted the value of the MINING.COM EV Metal index to $315 million for the month, beating the previous record set in December last year by nearly $70 million.

At $1.52 billion year-to-date, the index has now wiped its deficit compared to the same period last year and barring unexpected subsidy changes in China or strict lockdowns in Europe, 2020 should be another record year for the nascent industry.

By MINING.com - Nov 19, 2020

The Very Real Possibility Of Peak Oil Supply

By Alex Kimani - Dec 26, 2020

Three months ago, British oil giant BP Plc. (NYSE:BP) sent shockwaves through the oil and gas sector after it declared that Peak Oil demand was already behind us. In the company’s 2020 Energy Outlook, chief executive Bernard Looney pledged that BP would increase its renewables spending twentyfold to $5 billion a year by 2030 and ‘‘... not enter any new countries for oil and gas exploration.’’ That announcement came as a bit of a shocker given how aggressive BP has been in exploring new oil and gas frontiers.

The investing universe appears to concur with BP’s sentiments, with the oil and gas sector consistently emerging as the worst performer over the past decade. The sector suffered yet another blow after the largest investor-owned oil company in the world, ExxonMobil (NYSE:XOM), was kicked out of the Dow Jones Industrial Average in August, leaving Chevron (NYSE:CVX) as the sector’s sole representative in the index.

Meanwhile, oil prices appear stuck in the mid-40s with little prospects of climbing to the mid-50s that most shale producers need to drill profitably.

Delving deeper into the global oil and gas outlook suggests that it’s peak oil supply, not peak oil demand, that’s likely to start dominating headlines as the quarters roll on.



Source: Bloomberg

Peak Oil Demand

When many analysts talk about Peak Oil, they are usually referring to that point in time when global oil demand will enter a phase of terminal and irreversible decline.

According to BP, this point has already come and gone, with oil demand slated to fall by at least 10% in the current decade and by as much as 50% over the next two. BP notes that historically, energy demand has risen steadily in tandem with global economic growth with few interruptions; however, the COVID-19 crisis and increased climate action might have permanently altered that playbook.

BP has modeled 3 possible scenarios for the future of global fuel and electricity demand: Business as Usual, Rapid Transition, and Net-Zero. Here’s the kicker: BP says that even under the most optimistic scenario where energy policy keeps evolving at pretty much the pace it is today (Business as Usual) oil demand will still suffer declines—only at a later date and a slower pace compared to the other two scenarios.

The oil bulls, however, can take comfort in the fact that under the Business-as-Usual scenario, BP sees oil demand remaining at 2018 levels of 97-98 million barrels per day till 2030 before falling to 94 million barrels per day in 2040 and eventually to 89 million barrels per day three decades from now. That’s a loss in demand of less than 1% per year through 2050.

However, things could look very different under the other two scenarios that entail aggressive government policies aimed at reaching net-zero status by 2050 as well as carbon prices and other interventions aimed at limiting global warming.

Under the Rapid Transition scenario (moderately aggressive), BP sees oil demand falling 10% by 2030 and nearly 15% under Net Zero (most aggressive).

In other words, the decline in oil demand is bound to be catastrophic for the industry over the next decade under any other scenario other than Business-as-Usual.

Luckily, this is the scenario that’s likely to dominate over the next decade.

David Blackmon, a Texas-based independent energy analyst/consultant, has told Forbes that many analysts are skeptical about BP’s grim outlook. Indeed, Blackmon says a “Business as Usual” scenario appears the most likely path for the time being, given the time the global economy might take to recover from Covid-19 as well as the trillions of dollars that would be required to implement the other two cases.

Further, it’s important to note that BP made those projections before Covid-19 vaccines had entered the fray. With several viable vaccine candidates now on the scene, there’s a good chance that the global economy might recover at a faster-than-expected clip and thus help oil demand to recover more rapidly than earlier estimates.

Peak Oil Supply

Though rarely discussed seriously, Peak Oil Supply remains a distinct possibility over the next couple of years.

In the past, supply-side “peak oil” theory mostly turned out to be wrong mainly because its proponents invariably underestimated the enormity of yet-to-be-discovered resources. In more recent years, demand-side “peak oil” theory has always managed to overestimate the ability of renewable energy sources and electric vehicles to displace fossil fuels.

Then, of course, few could have foretold the explosive growth of U.S. shale that added 13 million barrels per day to global supply from 1-2 million b/d in the space of just a decade.

It’s ironic that the shale crisis is likely to be responsible for triggering Peak Oil Supply.

In an excellent op/ed, vice chairman of IHS Markit Dan Yergin observes that it’s almost inevitable that shale output will go in reverse and decline thanks to drastic cutbacks in investment and only later recover at a slow pace. Shale oil wells decline at an exceptionally fast clip and therefore require constant drilling to replenish the lost supply. Although the U.S. rig count appears to be stabilizing thanks to oil prices rebounding from low-30s to mid-40s, the latest tally of 320 remains far below the year-ago figure of 802.

Although OPEC+ nations currently have about 8 million barrels of oil per day of spare capacity, the current price levels do not support much drilling at all, and the extra oil might only be enough to cover the shortfall by U.S. shale.

By Alex Kimani for Oilprice.com

Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com

Why President Biden Won’t Be Bad For Natural Gas

By Irina Slav - Jan 01, 2021, 4:00 PM CST

The U.S. natural gas industry seems to have a brighter future than its oil sister under a Biden administration, even though the president-elect has made a pledge to push an ambitious emissions-cutting agenda during his term, aiming for a net zero electricity sector by 2035 and net zero economy by 2050. According to industry sources, the sharp rise in investor appetite for environmental, social and governance investments will not affect the natural gas space too much, with opportunities opening up for a consolidation of the sector, Mergermarket reported for Forbes this week.

A consolidation is already underway in the oil sector, prompted by the latest news from the pandemic front, with vaccines widely seen as a solution to the demand loss problem that has made some smaller players in the field attractive for buyers.

While oil is falling out of favor fast with the new breed of environmentally conscious investors, natural gas will simply be indispensable for the observable future to provide the reliability of electricity supply that solar and wind simply cannot offer at this point.

Industry advisers point to California’s blackouts as a case in point here: the state that leads in renewable power also leads in grid unreliability. While some state administration officials have defended the shift to renewables saying it has nothing to do with the increased risk of blackouts, others have blamed the rush to go renewable for the blackouts.

Reliability of power supply is what many experts argue will ensure the long-term future of natural gas even in a world that is setting increasingly ambitious climate change fighting goals  which can only provide storage for a couple of hours, in case of a sudden outage, for example for itself. Solar and wind only produce power intermittently and they need energy storage to become as reliable as fossil fuels. However, storage technology needs to advance a lot from current level. 

Gas, on the other hand, is not intermittent and the United States has abundant supplies of it, especially in the shale plays. Thanks to forecasts for a rebound in demand for natural gas, especially overseas, producers have been ramping up their output, while still keeping a cap on oil production.

“Demand has remained pretty robust. Supply has been starved for capital,” the chief executive of energy investment firm Banpu Kalnin Ventures told Reuters last month. The Thailand-listed company recently acquired the natural gas assets of Devon Energy.

The positive sentiment on natural gas goes beyond the energy industry, too. A recent Deloitte survey revealed that most executives believed natural gas had an essential role to play in the world’s energy transition, Natural Gas Intelligence reported, noting the survey also suggested this role will be reduced or evolving as gas is pitted against renewables.

Essential it may well be but for now, natural gas is trapped between the power industry’s “decarbonization strategy of focusing on low-carbon fuels and the broader impetus to replace gas with renewables for electricity generation,” Deloitte noted in the survey.

“Other challenges include the ongoing problem of fugitive methane emissions associated with gas, as well as the growing electrification of the broader energy system.”

The methane issue has been garnering growing attention from various stakeholders and the energy industry has been doing a lot more to reduce emissions. In fact, this year U.S. oil producers managed to capture a record amount of associated gas.

USUAL BIG OIL BULLSHIT 

The electrification issue, on the other hand, may well turn into an opportunity for more natural gas demand if renewables’ inherent disadvantages prevent them from meeting this additional demand for electricity.

Emission-cutting targets are all well and good until the actual fact that the world’s energy demand is growing sinks in. Solar and wind cannot meet this growing demand on their own for the above mentioned intermittency reason as well as because even in the Sahara, the sun does not shine 24/7 and even in the North Sea there may be windless days. Until these problems are solved, the world will continue to need fossil fuels and natural gas is the best placed among them to fit in with the transition to a less fossil-fuel intense energy sector.

By Irina Slav for Oilprice.com

Iraqi Kurdistan Finally Moves To Develop Massive Gas Resources

By Simon Watkins - Dec 29, 2020 

In tandem with Iraq’s reiterated target for crude oil production of 7 million barrels per day (bpd) by 2025, from the previous 5 mbpd, Baghdad has also stated that it will stop flaring gas by the same point (and to halt importing fuel from Iran by 2025 as well). These moves would be in line with Iraq’s endorsement in May 2017 of the United Nations and World Bank ‘Zero Routine Flaring’ initiative aimed at ending this type of routine flaring by 2030 and with the commitments made by Prime Minister, Mustafa al-Kadhimi, during his recent visit to Washington to reduce Baghdad’s dependence on Tehran. Since making the commitment to reducing gas flaring nearly three years ago, little of real significance has yet been achieved in the south of the country but there is some reason for optimism founded on economic necessity and on recent progress made in the semi-autonomous region of Kurdistan in northern Iraq.

Iraqi Kurdistan profile - BBC News

Iraq's 2005 Constitution recognises an autonomous Kurdistan region in the north of the country, run by the Kurdistan Regional Government.

The gas sector across Iraq as a whole can be regarded as a lost opportunity of epic proportion, as the official estimates are that its proven reserves of conventional natural gas amount to 3.5 trillion cubic metres (Tcm) - or about 1.5 per cent of the world total, placing Iraq 13th among global reserve-holders – with around three-quarters of these proven reserves consisting of associated gas. The International Energy Agency (IEA), though, estimates that ultimately recoverable resources will be considerably larger, at 8.0 Tcm, of which around 30 per cent is thought to be in the form of non-associated gas. Despite its commitment to reduce gas flaring, Iraq still ranks as the second worst offender for flaring associated gas in the world, after Russia, burning off around 18 billion cubic metres (Bcm) in 2019 alone (up from 16 Bcm around a year before). In practical terms, this costs the economy billions of dollars in lost revenue and has also contributed to the frequent power outages in Iraq, particularly during the summer months, which is difficult to equate with Iraq’s status as a leading global oil and gas power.Related: The Worst Performing Energy Stocks Of 2020


In the semi-autonomous northern area of Iraqi Kurdistan, though, there have been some more tangible achievements in recent months, with an announcement just last week being illustrative of progress. UAE-based Dana Gas announced that it has restarted a key gas expansion project in the region, having reached a record 430 million cubic feet per day (mmcf/d) output level from the Khor Mor field in the middle of December. According to the company, it is looking to expand its capacity by another 250 mmcf/d by the first quarter of 2023, as part of its overall first phase expansion of Khor Mor gas production (to 650 mmcf/d) that had been scheduled for completion by the first quarter of 2022 but had been delayed due to the outbreak of the COVID-19 pandemic. The second phase of the Khor Mor gas expansion - from 650 mmcf/d to 900 mmcf/d – is now likely to occur in the fourth quarter of 2025, according to a comment last week from Dana Gas’s chief executive officer, Patrick Allman-Ward.

This progress comes after a slew of delays from various other developers in the region in recent years, despite the huge gas resources in the area. Kurdistan’s Ministry of Natural Resources estimates that there is 25 Tcf of proved gas reserves and up to 198 Tcf of unproved gas resources, around 3 per cent of the world’s total deposits. The figures look realistic, given that the US Geological Survey (USGS) believes that undiscovered resources in just the Zagros fold belt of Iraq, a large part of which falls in the KRG area, amounts to around 54 Tcf of gas. Discovered reserves, though, total less than 10 Tcf of proved plus probable reserves, and less than 30 Tcf of contingent resources, with the bulk of this being non-associated gas located in the Iraq Kurdistan region’s central and southern areas, especially those in the Bina Bawi, Khurmala, Miran, and Chemchemal fields, in addition to the Khor Mor site. Additionally, judging from the 65 per cent success rate of drilling activity in its oil operations, the IEA believes that a high degree of prospectivity in gas operations is also likely.

In the south of the country, there are initiatives underway but, as with so many such projects in the endemically-corrupt business environment in the country in the past it remains to be seen whether anything particularly tangible will emerge. The latest major announcement came in August from Iraq’s new Oil Minister, Ihsan Ismaael, that the long-stalled Ar Ratawi project is finally set to move forward. According to Ismaeel, the Ar Ratawi project – that will initially produce 300 mmcf/d before increasing output to 1 billion cubic feet per day (Bcf/d), which will allow for the production of 1.2 gigawatts (GW) GW of electricity – is still going to be pushed forward by Honeywell. This would likely be achieved, he added, by the same time that Iraq is able to produce 7 million bpd of oil – that is, 2025 – and 5 Bcf/d of gas, which is capable of generating 20 GW of electricity (although Iraq’s estimated power requirement by 2030 will be at least 35 GW).Related: The Very Real Possibility Of Peak Oil Supply

The in-principle agreement with Honeywell was struck at around the same time as a range of other similar in-principle agreements between Iraq and the U.S. in the run-up to al-Kadhimi’s visit to Washington in August. Specifically, four other U.S. companies – Chevron, General Electric (GE), Baker Hughes, and Stellar Energy - signed agreements with the Iraqi government for deals aimed at boosting Iraq’s energy independence from Iran, worth at least US$8 billion. Among the most noteworthy of these was that Chevron was to examine the potential for exploration work in the long-sidelined Nassiriya oilfield, estimated to hold about 4.4 billion barrels of crude. GE, meanwhile, said it had signed two new agreements with the Iraqi Ministry of Electricity valued at over USD1.2 billion to undertake maintenance programs across key power plants in the country and to bolster its transmission network. This said, the fact that the Honeywell deal might well involve the participation of Saudi Arabia at an oil field lying just 100 kilometres from the Iranian border is reason enough to conjecture that it will absolutely not go ahead, and the future of all of these deals is unclear, given Iraq’s signing of the longest ever deal with Iran – just after al-Kadhimi’s Washington visit – to continue to import electricity and gas from its neighbour.

These U.S. deals would have followed similarly announcements earlier in 2020, including from Iraq’s Oil Ministry that it had signed a natural gas capture deal with oil services provider Baker Hughes to harness 200 mmcf/d from the Gharraf field, and the neighbouring ThiQar site, Nassiriya and other oil fields north of Basra. Although this was the first gas capture facility deal to be concluded on the basis of the Oil Ministry’s updated engineering, procurement, construction and finance contract, then-Oil Minister, Jabbar Al-Luaibi, stated that Iraq was also negotiating similar gas capture deal for the state-run Nahr Bin Umar field with Houston-based Orion Gas Processors. Additionally, according to Iraq’s South Oil Company, gas-processing facilities are to be constructed in the Missan and Halfaya fields that will have a combined capacity of 600 mmcf/d of gas when completed, and the construction of gas-processing facilities in the West Qurna, Majnoon, and Badra fields will also move ahead, with respective overall capacities 1,650 mmcf/d, 725 mmcf/d, and 85 mmcf/d.

By Simon Watkins for Oilprice.com

Simon Watkins is a former senior FX trader and salesman, financial journalist, and best-selling author. He was Head of Forex Institutional Sales and Trading 

FRACKING

PetroChina Looks To Double Shale Gas Output By 2025

By Irina Slav - Dec 30, 2020


State energy giant PetroChina plans to increase the natural gas output from its shale operations in the Sichuan province twofold to over 22 billion cubic meters in the next five years, Reuters reported, citing state Chinese media.

China has been looking to boost domestic natural gas production in the face of rising demand and with it, rising dependence on imports. Most recently, Beijing eased restrictions on foreign companies to invest in the country’s gas industry and offered subsidies for natural gas developments.

The incentives include extending the period for exploration for the companies to five from three years, and allowing foreign oil and gas firms to directly operate in the country as long as they have an office registered in China.

China has abundant shale gas reserves, but the geology is tricky, making the development of these reserves challenging. Despite the challenges, PetroChina alone last year announced new additions of almost 741 billion cubic meters to its shale gas reserves in the Sichuan province.

This year, PetroChina drilled more than 240 new wells in Sichuan, which boosted its daily gas production in the province by 40 percent. Earlier this month, the state major announced a new shale gas discovery in the Xinjiang province, with reserves estimated at more than 100 billion cubic meters.

The other state energy major, Sinopec, also has ambitious plans for natural gas, expecting total output of 30 billion cubic meters this year, to rise to 40 billion cubc meters by 2023, representing half of the company’s total hydrocarbons production.

Boosting domestic gas production, including from shale deposits, has become essential for China as it has seen its gas imports rise from 15 percent of supply in 2010 to as much as 45 percent in 2018. Thanks to its efforts in this respect, Rystad Energy recently reported that China will become the top market for seismic exploration onshore over the next two years, while exploration activity remains subdued elsewhere in the world.

By Irina Slav for Oilprice.com

WHY?

Cambodia Prepares To Produce Its First Oil

By Felicity Bradstock - Jan 02, 2021


As Asian oil demand looks set to increase over the next decade, Cambodia is taking advantage of the opportunity with its first crude oil production. Cambodia’s plan is to extract oil from the Gulf of Thailand oil fields in a joint project with Singapore's KrisEnergy Ltd, a plan that has seen several years of delays.

The development was announced by Prime Minister Hun Sen on social media, "The year 2021 is coming and we have received a huge gift for our nation — the first oil production in our territory". Going on to say, “Key benefits include national budget revenue, economic benefits from the diversification of the oil industry and national capacity building in this sector”. This came after production started in the region on Monday.

The venture was initially proposed in 2017 when KrisEnergy and the Cambodian government signed a pact to develop 3,083 square kilometers of the Khmer basin in the Gulf of Thailand, also known as Block A. The government hopes this project will earn around $500 million in revenue in the first phase of the project, with an initial production rate of 7,500 bpd.

KrisEnergy already has several ongoing exploration, appraisal, development and production projects across Asia, in Bangladesh, China, Thailand, Vietnam and Indonesia. The company hopes to increase its Asia portfolio with a 95 percent stake in block A, having purchased Chevron’s stake in the zone for $65 million in 2014.

Oil was initially discovered in the region in 2004 by U.S. energy giant Chevron. Despite this early discovery, Chevron was unable to reach an agreement with the Cambodian government to develop its oil capabilities. Additionally, due to the drop in oil prices in 2014, few companies have been willing to invest in the unestablished oil region.

The project is not without risk, with the production commencing in the midst of a global pandemic that has significantly threatened oil demand. However, the government believes there to be hundreds of millions of barrels of crude in Cambodia’s waters, making the outlook promising.

The drilling program is expected to be completed by February 2021. The exploration and production of oil in Block A is being carried out in phases to collect and assess data to mitigate risk, due to the unknown production performance in the basin.

Cambodia currently produces three-quarters of its energy needs, split between around 44% coal production and 45% hydropower. Earlier in 2020, Cambodia announced plans for the future of its energy industry, embracing new coal power projects. The Cambodian government stated plans to triple the country’s coal output in the coming years. The move comes following failures in Cambodia’s hydropower industry due to drought.

However, Cambodia’s reliance on fossil-fuel over renewable alternatives has led the country to appear less attractive to international brands that manufacture in the country. Companies worry that Cambodia will not keep up with international trends and that it is not considering environmental concerns for the future of its energy, with no clear renewable energy target stated at present.

In contrast, neighboring country Vietnam is embracing its solar potential with production levels increasing from 100 megawatts to 4.5 GW between 2016 and 2019. A clear move to renewables going into the next decade therefore makes Vietnam a more attractive option for many international brands.

As Cambodia’s hydropower industry is faltering in the face of drought, its new oil potential could offer a bright alternative for the country’s energy future. While the government has faced criticism over its move to increase coal output, the new oil venture looks set to improve Cambodia’s energy outlook.

By Felicity Bradstock for Oilprice.com

Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK.

Will Batteries Kill Off Traditional Power Plants?

By Alex Kimani - Dec 28, 2020

Many of us typically do not give much thought to the batteries that power our electronic devices other than when our cell phones, laptops, or EVs run out of juice. Fewer still associate them with our power supply since they tend to be tucked away from sight and are not nearly as imposing as the towering smokestacks of fossil fuel power plants.

Yet, the humble lithium-ion battery is beginning to threaten coal and natural gas power plants as utilities everywhere increasingly plug them into the electric grid.

Indeed, there’s an unfolding trend whereby cheap grid-scale batteries are beginning to replace fossil fuel power plants as the more economical option for supplying extra power during times of peak usage thanks to falling costs. The trend is gaining serious momentum as the transition to renewables shifts into higher gear.

The U.S. Energy Information Administration (EIA) has reported that there were 125 battery storage systems deployed in the United States, accounting for 869 MW of installed power capacity in 2019, a sharp increase from 7 systems accounting for 59 megawatts of power capacity just a decade ago.

In other words, Big Battery is beginning to rival Big Oil for dominance in our power grids, partly thanks to quirks in our power usage patterns.

Peak demand is pricey

Variations in the amount of electricity we consume according to the time of day, between weekdays and weekends, and seasonally can be huge.

For instance, peak power consumption in many regions is nearly double the average amount of power they typically consume. To meet the surge in demand, utilities mostly rely on natural gas-powered plants due to their ability to operate as and when needed and also because of their lower construction costs. However, this practice is expensive and inefficient - and the consumer ends up bearing the extra costs.Related: The Worst Performing Energy Stocks Of 2020

For instance, the California Public Utilities Commission requires all major utilities such as Southern California Edison, Pacific Gas & Electric, and San Diego Gas & Electric to hike electricity prices during weeknights between 4 p.m. and 9 p.m. and also during summer. They also require them to lower costs during non-peak hours and over the winter. The new regulation, also known as time-of-use pricing, is meant to curb the high demand for electricity in the evenings, which forces utility companies to activate additional generators that rely on fossil fuels and release greenhouse gases. Electricity is also more costly to produce during this time. Further, increasing bouts of extreme weather are proving to be costly for utilities, with droughts reducing hydropower, and heat waves causing electricity usage to spike.

But maybe all that California needs is to deploy more battery storage.

When grid-connected batteries supply enough electricity to meet peak demand, utilities neither have to build as many power plants and transmission lines nor fire devices that emit copious amounts of planet-warming gases.

Cheaper batteries

Despite the nearly 15-fold increase in battery-based capacity additions over the past decade, grid-scale lithium-ion battery projects in the U.S. amount to the equivalent of just two medium-sized gas-powered plants.

The United States boasts approximately 1.2 million megawatts of generation capacity, with natural gas accounting for 44% of that, followed by coal at 21%. In other words, the country’s entire grid-scale lithium-ion battery network has a capacity equivalent to just 0.16% that of natural gas.

However, the momentum is clearly shifting to battery storage.

Across California, Texas, New England, and the Midwest, battery grid storage has been proven to be an effective solution for improving operations and bridging gaps when consumers need more power than usual.

Luckily, battery costs as well as solar and wind power costs have come down quite dramatically over the past half-decade. Whereas lithium-ion batteries at 2019 prices are still more expensive than natural gas peaker plants, the battery cost trajectory suggests that by 2030, energy storage will be the more cost-effective option.

Source: The Conversation

As usual, California is leading the way in the green trend of hooking up giant storage systems to power grids.

Pacific Gas & Electric has already received the green light from regulators to build a massive 567.5-megawatt energy-storage battery system near San Francisco, though its bankruptcy could complicate matters.

Hawaiian Electric Company is seeking regulatory approval for a similar project that could establish several hundred megawatts of energy storage. Meanwhile, Puerto Rico Electric Power Authority and Arizona Public Service and both exploring storage options as well.

The mega-battery trend could also mean big business for Tesla Inc.’s (NASDAQ:TSLA) SolarCity.

A month ago, Tesla, in partnership with French renewable energy company Neoen, won yet another contract to install another giant battery storage facility for the Australian Energy Market Operator (AEMO). The 300 MW/450 MWh Victorian Big Battery Project in Geelong will use Tesla’s Megapack technology. Independent analysis has shown that for every $1 invested in the giant project, Victorian homes and businesses will reap more than $2 in benefits.

Neoen’s Hornsdale Power Reserve was able to deliver more than $150 million AUD in cost savings during its first two years of operation.

By Alex Kimani for Oilprice.com

Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com

ISN'T EVERYBODY

Russia Looks To Become Leader In Hydrogen Tech

NATURAL GAS = HYDROGEN

By Vanand Meliksetian - Dec 30, 2020

Russia’s mineral and energy wealth has given it a second chance in global affairs after the Cold War and the implosion of the Soviet Union. Oil and gas exports have provided the necessary income to rebuild the country and exert influence abroad. The energy transition is the ‘Sword of Damocles’ hanging over the Russian fossil fuel industry. Moscow, therefore, is trying to find a new purpose for its energy industry by early investments in hydrogen technologies.

Russia’s energy ministry is working on a hydrogen strategy in cooperation with foreign partners in Japan and Germany. The tools for this transformation are the country’s energy titans Rosatom, Novatek, and Gazprom. Each of these companies, with the support of Moscow, is looking into different technologies to produce and export the hydrogen.

According to deputy prime minister Alexander Novak, “experts say that hydrogen may constitute 7 to 25 percent of the global energy balance by 2050, as soon as the issues of high production costs and the challenges related to transportation are resolved.”

To develop a hydrogen sector, Russia intends to use the assets it already possesses such as the world's largest natural gas reserves, strong nuclear know-how, and high-class energy research facilities. The country’s energy mix is a reflection of the current state of affairs.



Russia has one of the world’s largest nuclear plant fleets which is built and operated by state-owned Rosatom. A significant order portfolio for new plants both domestically and abroad is an incentive to develop and improve existing technologies. Therefore, nuclear energy is seen as an asset which through the process of electrolysis could be used to produce ‘yellow’ hydrogen.

Russian and Japanese officials and representatives of their respective industries are already in talks for cooperation opportunities. In this regard, Rosatom and Japan’s Kawasaki Heavy Industries intend to export the first shipment by 2024. The Japanese intend to expand their knowledge of the industry and build on the experience of importing hydrogen from their enterprise in Australia that will start operations in 2021.

Furthermore, Novatek, Russia’s largest independent gas producer, is already looking for new opportunities to supplement its LNG activities. According to CEO Leonid Mikhelson, the company is planning to build steam-methane reforming facilities on the Yamal peninsula to produce hydrogen. Additional carbon capture and storage projects will be required to produce so-called ‘blue’ hydrogen and meet the necessary standards. Mikhelson expects hydrogen to represent “a noticeable share in global energy consumption between 30 and 40 years from today.”

Russia’s unchallenged gas champion Gazprom, however, is pursuing a different path. The company already operates extensive pipeline infrastructure to Europe and is expanding capacity to China. Due to the lifetime of the pipelines, hydrogen could be used to extend operations well after natural gas has been phased out. Before pure hydrogen can be pumped, admixing is a good alternative to reduce the carbon footprint and meet the requirements of customers.

The technology Gazprom is looking into, however, is a process called methane pyrolysis. For this technique, natural gas is still used as the starting point of the process but the byproduct is different from methane reforming. By using heat, natural gas molecules are broken down into hydrogen and carbon which is not gaseous but solid. The carbon then can be used for other industrial processes and increase the value of the process.

Lastly, while renewables are not a big part of Russia's energy mix and the government hasn't announced ambitious plans, there is a bright future for wind in the country. Especially the coastal regions in the northwest are highly suitable for ‘green’ hydrogen production through electrolysis. The existing natural gas pipelines could be reused to pump hydrogen to consumers.

Despite the potential and intentions to become a hydrogen exporter, there is a very long way to go. Russia is one of the country’s most seriously affected by the energy transition due to its sizeable fossil fuel exports. Moscow realizes, therefore, that the current modus operandi is not sustainable. The current hydrogen plans are imperative to diversify the economy and develop new industries.

By Vanand Meliksetian for Oilprice.com

Vanand Meliksetian has extended experience working in the energy sector. His involvement with the fossil fuel industry as well as renewables