HOW'S THAT NATO NATION BUILDING COMING ALONG 

Libya Loses 1.1 Million Bpd As It Shuts Down Nearly All Its Oil Fields

By Irina Slav - Jun 13, 2022,

Libya is losing oil production at the rate of 1.1 million barrels daily, the country’s oil minister Mohammed Aoun has said, adding that almost all of the country’s oil fields were shut down.

Libya’s largest field, El Sharara, was shut down last month along with El Feel, with reports saying that it was groups affiliated with the eastern parliament that shut down oil production, among them the Libyan National Army of Halifa Khaftar.

According to Aoun, however, “it appears that the closure instructions were issued by an official body, the Petroleum Facilities Guard in the closure areas.”

Libya is currently in the throes of yet another flare-up of violence as two politicians vie for the post of Prime Minister: interim PM Abdul Hamid Dbeibah and eastern-affiliated Fathi Bashaga. According to reports, the groups shutting down fields and export terminals are affiliated with the Bashaga camp.

Bashaga has been sworn in as the new prime minister of the country, but Dbeibah has refused to step down.

According to the oil minister, the only functioning fields right now in Libya are Hamada and the Mellitah complex, with the Wafa field producing from time to time.

This means that Libya is producing almost no oil, putting further strain on an already undersupplied oil market. The North African country was already producing about 600,000 bpd in May due to the large field and export terminal closures, and now, based on Aoun’s comments, its output rate is close to about 100,000 bpd.The impact of such outages on international prices could have been significant were it not for the fact that outages in Libya are frequent and the latest news from China, which is mass-testing citizens in a Beijing district after an outbreak of Covid. The latter sparked concern about China’s demand prospect in case it decides to impose more lockdowns to stem the spread of the virus.

Oilprice.com

The UK Goes After Fuel Retailers Over Price Gouging

By Tsvetana Paraskova - Jun 13, 2022

• UK Competition and Markets Authority to look into the implementation of the government's fuel duty cut.
• 
  
• The UK government cut fuel duty by the equivalent of $0.062 per liter in March.
• 
  
• The average UK gasoline price last week was the equivalent of more than $8.60 per U.S. gallon.

The UK is launching an urgent review into the retail fuel market to see whether retailers have passed on the government's fuel duty cut from March to filling stations, UK Business and Energy Secretary Kwasi Kwarteng said this weekend.  

Kwarteng asked the Competition and Markets Authority to conduct an urgent review of the retail fuel market, as well as a longer-term investigation under the Enterprise Act, to explore whether the retail fuel market has adversely affected consumer interests.

"Fuel prices are always quick to go up but slow to come down - let's see why," Kwarteng said.

"The British people are rightly frustrated that the £5 billion package does not always appear to have been passed through to forecourt prices and that in some towns, prices remain higher than in similar, nearby towns," the energy secretary said in a letter to the Competition and Markets Authority dated June 11.

The investigation comes as the average price of filling up the tank of a typical family car last week exceeded triple digits in UK currency for the first time ever.

The UK government cut fuel duty by the equivalent of $0.062 per liter in March, but prices have jumped by a lot more since then.  

Wholesale gasoline costs in the UK have already jumped fivefold the amount of the fuel duty cut, Simon Williams, fuel spokesperson at the UK's motoring organization RAC, said last week.

Gasoline prices in the UK—where total taxes on gasoline account for an average 46% of the retail price, per RAC—saw last week the highest daily price jump in 17 years. The average UK gasoline price last week was the equivalent of more than $8.60 per U.S. gallon.

Records continued to be broken in the following days until the average cost of filling a 55-liter family car passed the £100 ($125) mark, the first time in history that drivers are paying triple digits for a full tank. 

 Oilprice.com

Natural Gas Prices Tank Again As Freeport LNG Remains Shut For Almost A Month

By Irina Slav - Jun 09, 2022

• Natural gas prices fell another 7.5% percent on Thursday morning.
• 
  
• Freeport LNG outage to lead to drop in exports to Europe and Asia
• .
• The cause of the explosion on Wednesday remains unclear.

Amid robust demand for U.S. LNG, one  biggest liquefaction facilities on the Gulf Coast, Freeport LNG, will be out of commission for at least three weeks following an explosion yesterday.

An explosion rocked the Freeport LNG liquefaction plant yesterday morning, with its cause as of yet unclear. An investigation is ongoing, but according to the operator of the facility, Freeport LNG, the facility will remain shut down for weeks. It accounts for a fifth of total U.S. liquefaction capacity.

The Freeport facility has three liquefaction trains, and a fourth is being constructed. Its current gas processing capacity is 2.1 billion cu ft daily. With the outage, the situation with U.S. LNG exports will become problematic, as evidenced by the gas market’s reaction to the news of the explosion.

Initially, prices fell as traders worried that the outage would reduce American LNG’s market share, per a Financial Times report from earlier today. Bloomberg noted that the fire means a lot of gas will remain stranded at the fields amid surging demand for gas overseas.

Yet prices on international LNG markets might react differently because the Freeport LNG outage effectively means there will be less natural gas for export, especially to energy-thirty Europe and Asia.

In Europe, gas prices have been on the decline for the past few days as an early start of summer reduced immediate demand. An ample supply of LNG has also contributed to the price trend. With the outage, this trend might at some point reverse.

Asian demand, however, is on a strong rise as buyers seek to build inventory for the winter season, Bloomberg reported this week, which is lending further upward support to prices.

“LNG prices remain well above where they normally are, even adjusting for higher crude oil prices,” Sanford C. Bernstein analysts said in a note, as quoted by Bloomberg. “We expect this to be a lull before what looks like a tough winter ahead for consumers.”

Oilprice.com

U.S. SPR Release Is Creating A Problem For Canada’s Heavy Crude Oil

By Julianne Geiger - Jun 09, 2022

• Heavy crude released from the U.S. SPR is competing with Canadian heavy crude.
• 
  
• WCS discount to WTI has increased to $20 per barrel.
• 
  
• Steep discount of WCS to WTI isn't bringing down crude prices in general.

The Strategic Petroleum Reserve release in the United States—a large one designed to release a million barrels per day from storage into the commercial markets—is creating a bit of a problem for the Canadian oil industry.

All crude oil grades aren’t equal, and a large share of what the SPR is releasing into the Gulf Coast area is heavy sour crude—a similar grade to the oil shipped down from Canada.

The heavy Mars and Poseidon grades—both hailing from the GoM area and both heavy grades—are getting lost in the sea of heavy crude flooding the market from the SPR. So is Western Canadian Select (WCS)—the Canadian crude oil that traverses pipelines from Hardisty, Alberta, to the U.S. Gulf Coast.

The WCS discount to the U.S. crude benchmark West Texas Intermediate (WTI) is now the steepest in years at $20 per barrel.

“It’s not great timing,” Rory Johnston, founder of the Commodity Context newsletter based in Toronto, told Reuters. “The vast majority of what’s coming out of the SPR is medium sour crude. It’s hitting directly at that marginal pricing point for WCS.”

Canada is no stranger to battling steep discounts—also referred to as wide spreads—compared to U.S. crude oil. For several years, their lack of pipeline capacity into the United States created a situation where all their pipelines were full, and the bottlenecking in this midstream segment created a pricing situation most unfavorable to Canada.

By 2020, Canada had increased its storage capacity and slacked crude oil production, which dragged up the price of WCS—and shrunk the gap between WCS and WTI. Compared to today’s steep $20 discount, June 2020 contract pricing for WCS was just $3.80 per barrel.

For those thinking that the steep discount to WTI means the SPR is working to bring down crude oil prices, that is not the case. As of Thursday morning, WCS was trading at $108.01—nearly double what it was trading this time last year.

By Julianne Geiger for Oilprice.com

 BP Quits Canada’s Oil Sands

By Tsvetana Paraskova - Jun 13, 2022

BP is divesting its last interest in Canada’s oil sands to Canadian firm Cenovus Energy as part of a portfolio reshaping that will see it buy into an offshore oil project in eastern Canada.

BP has agreed to sell its 50-percent interest in the Sunrise oil sands project in Alberta to Cenovus Energy, the UK supermajor said in a statement on Monday.

BP’s exit from Canada’s oil sands follows other divestments from one of the most carbon-intensive oil production types, such as the ones that Shell and Equinor have made in recent years, as international oil majors look to lower their emissions profile under intense pressure from investors and campaigners.

As part of its net-zero plan, BP has said its oil and gas production would decline by 40% by 2030 through active portfolio management.

After the oil sands exit, BP is not abandoning the Canadian oil sector and is shifting its focus to future potential offshore growth. As part of the deal with Cenovus, the UK major will buy the Canadian firm’s 35-percent interest in the undeveloped Bay du Nord project offshore Newfoundland and Labrador. The deal includes 467 million (C$600 million) in cash, a contingent payment with a maximum aggregate value of C$600 million expiring after two years, and Cenovus’s 35-percent position in Bay du Nord.

The project Bay du Nord is led by Norway’s Equinor and received in April this year a positive environmental assessment by the Government of Canada. The project has yet to take a final investment decision, with first oil expected to be produced in the late 2020s.

“This is an important step in our plans to create a more focused, resilient and competitive business in Canada. Bay du Nord will add sizeable acreage and a discovered resource to our existing portfolio offshore Newfoundland and Labrador,” said Starlee Sykes, bp senior vice president, Gulf of Mexico & Canada. 

Currently, BP holds an interest in six exploration licenses in the offshore Eastern Newfoundland Region.

By Tsvetana Paraskova for Oilprice.com

NEWFOUNDLAND

L’Anse aux Meadows Reduced to One Lane for Oil Spill Clean-Up

Jun 11, 2022 | 2:00 PM

L’Anse aux Meadows Road near Gull Pond is down to one lane due to an oil spill.

St. Anthony RCMP say that clean-up efforts continue to deal with a massive amount of fuel that spilled when an oil tanker tipped over Friday.

It is unknown when the process will be completed.

ONTARIO

Sheen from oil spill starting to dissipate: Ministry of the Environment

Echo Bay's mayor says calling a state of emergency was necessary as the community faces water shortages due to the spill

Kenneth Armstrong
06/13/2022

Shore of the Lake George Marsh at the mouth of the Echo River.

Carol Martin/SooToday

Echo Bay’s mayor says Monday’s state of emergency called in the wake of last week’s oil spill on the St. Marys River is necessary as the small community is running out of clean drinking water.

The community’s water treatment plant was shut down soon after the spill was discovered, said Mayor Lynn Watson.

“We were told to shut down our systems when they identified the spill in the river,” said Watson. “Of course, we are unable to start it up until we get assurances from the Ministry of the Environment and the Algoma health unit.”

He said nothing like it has happened in his 34 years as mayor of the community just east of Sault Ste. Marie.

In the meantime, Echo Bay is warehousing clean water in its iconic water tower and a holding facility at its water treatment plant. Those storage methods can hold about four days’ worth of water at normal usage.

“We have asked our residents to cut back on the use of water, but even that — the necessities of life require you to use water — so we are just making sure by bringing in water that we have a clean supply of fresh water for everyone,” said Wheeler.

The Environmental Centre in Echo Bay treats water for about 600 residents in the town.

Currently, that clean water is being brought in from nearby Bruce Mines, and Wheeler said the community has been in talks with Sault Ste. Marie to bring in more.

Sault Ste. Marie's drinking water was not affected by the spill because its intake is near Gros Cap, upriver from where the incident occurred.

“In case this goes on because there is no light at the end of the tunnel as of yet, we have to keep bringing water in,” Watson said. “The longer this goes on, the more cost there is. Our little municipality really can’t afford the additional costs we hadn’t counted on.”

“The sooner we can get the okay to start our system back up, the better it will be for all of us,” he added. “We shut it down very shortly after they identified the spill, so we haven’t had any contaminants in our system, but we can’t turn it back on until they make sure there are no contaminants out where our water intake is.”

By declaring a state of emergency, Watson hopes to be able to recoup some of those costs from the provincial government.

“By declaring a state of emergency, it opens the doors for provincial funding and assistance if this goes on for an extended period of time or if we need to bring in more trucks to haul water,” he said.

On Monday, Ministry of the Environment, Conservation and Parks spokesperson Gary Wheeler told SooToday that the visible oil on the river is beginning to disperse.

”As of June 13, there are no reports of any impacts to fish or birds from the oil spill,” said Wheeler.

Algoma Steel is currently engaged in daily monitoring to assess the clean-up.

”In addition to implementing clean-up and monitoring plans, the ministry is requiring that Algoma Steel prepare and submit a report that outlines the cause of the spill and preventative measures to prevent a re-occurrence,” said Wheeler.

PLASTIC AND ASPHALT

Plastic pollution now combining with tar to form ocean-threatening 'plastitar'

Plastitar found in Arenas Blancas, El Hierro, Canary Islands. (University of La Laguna)

Michael Lee
CTVNews.ca Writer
Published June 11, 2022 

Scientists have identified a new type of coastal pollution composed mainly of tar and plastic, material so unique in its combination that researchers are suggesting it receive its own name: "plastitar."

A research group from the University of La Laguna in the Canary Islands, a Spanish region located west of Morocco, recently published details of the pollution in the journal Science of the Total Environment.

And they say it could pose a wide-ranging threat to the marine ecosystem "with unknown environmental consequences."

RELATED LINKS Plastitar: A new threat for coastal environments

They found that "plastitar" originates from crude oil spills from ships. Once the oil reaches coastlines it covers rocks, allowing plastics to embed in the tar.

The study found evidence of "plastitar" in several areas of the Canary Islands, including a nature reserve and some beaches.

These areas were identified as hotspots due to the large amount of plastic waste they receive as a result of year-round dominant north and northeast winds, the study says.

However, the researchers say they are not ruling out other coastal areas where "plastitar" may be located.

"A relevant aspect about the presence of tar on coastal environments is the fact that it contains hydrocarbons that can be photo-oxidized and impact negatively the marine ecosystem altering the ecological equilibria," the study says.

The researchers point to the example of polycyclic aromatic hydrocarbons (PAHs), which are present in tar and can be toxic to aquatic organisms. PAHs also act as endocrine disruptors and can be carcinogenic.

The combination of tar and plastic also has a negative visual impact, the scientists say, and is likely present in other coastal areas around the world.

"Its combination with plastic materials clearly supposes a double threat to the marine ecosystem with unknown environmental consequences, since plastics can be ingested by marine organisms causing intestinal blockage, internal injuries, oxidative stress and damage, inflammatory responses, among other important issues," the researchers say.

"Therefore, further research is necessary to fully understand the potential effects of this particular plastic formation, which is probably present in many parts of the globe.

The plastic found included polyethylene and polypropylene microplastics, types of low-density polymers that are among the most commonly used in the world.

The microplastics ranged between one and five millimetres in size. Further analysis found nearly 91 per cent of the microplastics studied were polyethylene and more than nine per cent were polypropylene.

The researchers say this matches previous studies they have done, which found these types of microplastics on beaches of the Canary Islands.

Wood, glass, rocks and sand also were found in the "plastitar" but to a lesser extent, along with small pieces of rope.

The researchers say "plastitar" can be included as one of several other new formations linked to plastic waste in the marine environment.

These include plastiglomerates, which mainly form from the uncontrolled burning of waste and can include melted plastic, beach sediment or sand, basaltic lava and organic debris; plasticrusts or plastic fragments embedded in wave-exposed coastal rocks; pyroplastics or melted plastic with a rocky appearance; and anthropoquinas or sedimentary rocks containing plastics, which gets its name from the Anthropocene or the unofficial geological epoch defined as when human activity began to have a significant impact on the climate and ecosystems.

THE NEVER ENDING SEARCH

Working on nuclear fusion is a 'moral obligation' for this CEO

TAE is one of the leaders in the race for nuclear fusion, and its CEO sees a viable path for the technology in the next decade.

“It's not false confidence,” TAE CEO Michl Binderbauer said. 

“The building blocks we need — they’re coming.”

 | Photo: TAE Technologies

Sophia Chen
June 13, 2022

Michl Binderbauer has made an audacious promise. Within the next decade, his company, TAE Technologies, will create a nuclear fusion reactor that delivers energy to the power grid.

“It's not false confidence,” said Binderbauer, the CEO of TAE. “The building blocks we need — they’re coming.”

Nuclear fusion is the process that makes the sun shine. At temperatures higher than 25 million degrees Fahrenheit, our star mashes together hydrogen atoms to form helium to generate energy. Harnessing that power in a controlled setting would give the world a major tool in the fight to get to net zero emissions by midcentury, one that comes without the downsides of nuclear fission (such as long-lived nuclear waste).


TAE, a California-based company that formed in 1998, aims to make a mini-sun that fuses hydrogen and boron atoms at nearly 2 billion degrees Fahrenheit to generate net energy for the grid by the late 2020s. Other companies have similar ambitions. A 2021 survey of the industry conducted by the Fusion Industry Association and the U.K. Atomic Energy Authority found that most private fusion companies expect the technology to be supplying electricity to the grid in the 2030s.

It’s an aggressive goal, particularly for TAE, a company that would have folded years ago by conventional metrics. The company has pursued a hydrogen-boron fusion reactor for 24 years without delivering a commercially viable product — though to be fair, no other company or research group has been able to generate more energy than the test reactors consume either. “The rate of progress would have to be remarkably faster than has ever been accomplished in fusion,” said physicist Stewart Prager of Princeton University.

But fusion is no ordinary industry. During the Cold War, scientists first harnessed fusion to build thermonuclear bombs, the most powerful weapons known to humankind. Following successful bomb tests, they began to consider how to release that energy not in deadly explosions, but in a controlled manner for the benefit of humankind.


Fusion would provide a zero-carbon, low-waste form of energy that could help the world meet its climate goals.Photo: TAE Technologies



On paper, fusion seems to offer the answer to humanity’s energy needs. Engineered as envisioned, fusion would be a self-sustaining process, where fusing atoms produce enough energy to fuel more fusion indefinitely, all with zero carbon emitted.

As Binderbauer tells it, it was a happy accident that he ended up working in fusion. A physics major at the University of California, Irvine, he got into Johns Hopkins University to study astrophysics in graduate school. But after touring the school, he found that he disliked the Baltimore area. While Binderbauer mulled over his next steps, a former professor, Norman Rostoker, invited him to become his next Ph.D. student.

Rostoker had been studying fusion since the 1950s. Over decades, he had guided some 40 graduate students through research topics in the field. Within three weeks of working with Rostoker, Binderbauer discarded his astrophysics dreams to devote his studies to fusion. He loved how the work combined hands-on engineering and complex physics concepts. “I got deeply bitten by the bug,” he said

In 1998, Binderbauer, Rostoker and a few other fusion advocates founded TAE during an ebb in government funding. Early on, TAE relied on what Binderbauer called “altruistic” funding. More recently, it has begun to sell secondary technology to stay in business. In 2018, TAE spawned a biotech company based on particle accelerator technology developed for fusion.

After decades of research and tests, Binderbauer said that fusion power is about to truly come of age. Investors seem convinced, too. TAE has raised $880 million, and rival companies have gathered comparable funds. Commonwealth Fusion Systems in Massachusetts has raised $1.8 billion, and Helion Energy in Washington has raised $2.2 billion. This money builds on more than $40 billion of government funding since 1953.

The industry has drawn comparisons to private space exploration. Like rocketry, fusion power research began in the public sector before capturing the attention of venture capitalists. But space travel was long proven before SpaceX ever formed. In contrast, the government’s many fusion projects have never produced net energy.

The world needs to have a realistic view of fusion's promises.

Photo: TAE Technologies

Fusion is an unprecedented commercial gamble, according to journalist Charles Seife of New York University, who has covered fusion since 1995 and authored a book about the field, “Sun In A Bottle,” in 2008. “I’ve never seen this amount of money flowing without even a single product,” he said. “[There are] no prototypes. Can you think of another industry where billions of dollars have been spent upon a promise of something that hasn't been built yet?”

Prager counters that fusion researchers have made significant progress in recent years. “I think it’s legitimate for all this money to flow into fusion,” he said.

The field has made strides in controlling plasma, the state of matter required for fusion to occur. Plasma, which consists of a fluid of charged particles, tends to expand and blow apart. The sun contains its plasma due to its immense gravitational field, but puny human-made plasmas require other techniques.

TAE accelerates its plasma in a ring-like trajectory to keep the material together. Collaborating with Google in 2017, TAE developed AI software that controls the plasma on short timescales to keep it stable. In 2021, Commonwealth made headlines for creating powerful superconducting magnets that could enable more compact and cheaper fusion machines.

Though TAE and other companies think fusion will become viable in the next decade or so, Prager thinks 20 years is a more realistic timeline to produce net electricity from fusion. “I do have a fear that after five, 10 years when these companies don't deliver, it could smear the field a little bit,” said Prager.

Indeed, fusion already has a “boy who cried wolf” reputation. Physicist Homi Bhabha’s 1955 prediction that fusion power would exist within two decades has become a running joke about how fusion is always 20 years away.

Despite flashy announcements from companies and the recent rush of investments, Seife remains skeptical. He said that the industry suffers from a Silicon Valley-esque “tunnel vision.”

“It’s the culture of startups, where they believe they can bully nature into compliance,” said Seife. “It works when you're talking about regulations or code, but physics is harder to bully.”

Instead of pouring money into fusion, Seife thinks the money would be better spent on more near-term strategies for mitigating climate change. For example, a United Nations report published this year shows that existing clean energy technology as well as demand-side tweaks could cut carbon pollution between 40% and 70%.

Binderbauer said that TAE has consistently met incremental goals, which include a recent demonstration that they can hold a stable plasma for 35 milliseconds. Now, the company is constructing a $250 million machine called Copernicus that’s expected to go into operation around 2025. TAE’s goal is to have Copernicus generate net energy by fusing tritium and deuterium, two types of hydrogen. After that, it will pivot to fusing hydrogen and boron, which requires a higher temperature, but may offer other engineering advantages.

Binderbauer’s motivation also comes from what he said is a “moral obligation” regarding climate change. He and his wife have two children, and they often talk about protecting their future. “I'd like to at least be on the side that says, ‘Hey, I may have failed, but I tried. I really tried hard,’” said Binderbauer.


“I do have the deep conviction that fusion can be done,” said Binderbauer. “I wouldn't sit here wasting my time on this if I didn't absolutely believe we can do it.”

At the very least, the influx of cash means the industry has bought some time to test those beliefs.

Sophia Chen is a freelance journalist.
Sophia Chen is a science writer who cover physics, space, AI, and anything involving numbers. She has a master’s degree in physics and is based in Tucson, Arizona.

Nutrien will boost fertilizer production capacity as prices soar
Bloomberg News | June 9, 2022 | 

Storage facility at Nutrien’s Rocanville, one of Canada’s lowest-cost potash mines. (Image courtesy of Nutrien (Former Potash Corp.)

The world’s largest fertilizer company will increase production after months of supply disruptions and skyrocketing commodity and food prices.


Nutrien Ltd. will ramp up potash production capability to 18 million tons by 2025, a 40% increase compared to 2020, the company said in a Thursday statement, citing “structural changes in global energy, agriculture and fertilizer markets.”

“The challenge of feeding a growing world has never been clearer as global supply constraints have contributed to higher commodity prices and escalated concerns for global food security,” said Ken Seitz, Nutrien’s interim president and CEO. “There is no simple or fast solution to overcome this challenge and we see potential for multi-year strength in agriculture and crop input market fundamentals.”

The announcement comes as fertilizer prices have been soaring after Russia’s invasion of Ukraine. Russia is an important exporter of every major kind of crop nutrient. Market players have been concerned about how much supply will make it out of the country and how global supply chains might change in the aftermath. Some prices have dropped off of records, but they’re still high.

Nutrien will be well-positioned to fill supply gaps, Seitz said.

“Financial sanctions and other restrictions on Russia and Belarus will create more lasting changes to global trade patterns as customers prioritize reliability of supply,” Seitz said on an investor call Thursday.

The Canadian company also says there’s a potential for delays in new potash capacity coming online from the region, which was supposed to account for 60% of new supply in next five years, he said.

Canada is the world’s largest potash producer, followed by Russia and then Belarus. Belarus accounts for about a fifth of global supply, but in January, Lithuania cut off a key transit route for the nutrients amid US sanctions imposed on the country in 2021. That’s tightened the market.

Nutrien’s move could help serve a growing deficit as high commodity prices encourage farmers to purchase fertilizer to grow more crops and conflict in Europe threatens supply, Bloomberg Intelligence analyst Jason Miner said in a note.

“The key is remaining a low-cost producer,” Miner said. “Nutrien held potash cost per metric ton to $94 in 2021, yet construction and wage inflation are increasingly challenges to expansion projects across chemicals.”

(By Elizabeth Elkin and Jen Skerritt)