It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Sunday, February 12, 2023
Israel authorises nine ILLEGAL West Bank outposts, despite US opposition
Israel granted retroactive authorisation on Sunday to nine Jewish settler outposts in the occupied West Bank and announced mass-construction of new homes within established settlements, moves likely to draw US admonition.
The first to publish the decisions by Prime Minister Benjamin Netanyahu's security cabinet were two pro-settler politicians whose inclusion in the coalition he built after a Nov. 1 election had already signalled a hard-right tack.
Most world powers consider the settlements illegal for taking up land where the Palestinians seek statehood. Israel disputes this. Since capturing the West Bank in a 1967 war, it has established 132 settlements, according to the Peace Now watchdog group.
In recent years, settler zealots have erected scores of outposts without government permission. Some have been razed by police, others authorised retroactively. The nine granted approval on Sunday are the first for this Netanyahu government.
A statement from Netanyahu's office also said a planning committee would convene in the coming days to approve new settlement homes. Far-right Finance Minister Bezalel Smotrich said these would number 10,000.
Palestinian President Mahmoud Abbas's administration, whose US-sponsored statehood talks with Israel broke down in 2014, said Sunday's announcement should be "condemned and rejected".
"It is a challenge to US and Arab efforts and a provocation to the Palestinian people and it will lead to more tension and escalation,” said Abbas spokesperson Nabil Abu Rudeineh.
There was no immediate comment from the US Embassy. But the ambassador, Thomas Nides, had made clear last month that the US administration would oppose such moves.
"We want to keep a vision of a two-state solution alive. He (Netanyahu) understands that we understand that massive settlement growth will not accomplish that goal," Nides said.
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"We have been very clear about the ideas of legalising outposts, massive settlement expansion - it will not keep the vision of the two-state solution alive, in which case we will oppose it and we will be very clear about our opposition," he told Israel's Kan television in a Jan. 11 interview.
Statements by Smotrich, fellow ultranationalist Itamar Ben-Gvir and Netanyahu's office deemed the settlement push in part as a response to recent Palestinian attacks. But they had agreed on such plans before their coalition was sworn in on Dec 29.
While welcoming the Netanyahu government's announcement, West Bank settler leader Yossi Dagan urged "a total removal of curbs on construction, to enable construction in full swing".
The other Palestinian territory, Gaza, is under Hamas Islamists who reject peacemaking with Israel.
(REUTERS)
On climate, most corporations more talk than action
Marlowe HOOD Sun, February 12, 2023
The world's biggest and richest companies are failing to deliver on their climate pledges, according to an in-depth analysis released Monday that calls on governments to crack down on corporate greenwashing.
Under growing pressure from shareholders, governments and consumers, companies are racing to roll out strategies to reduce the carbon emissions of their operations, along with their products and services.
Twenty-four multinationals examined have all endorsed the Paris treaty target of capping global warming at 1.5 degrees Celsius, and aligned themselves with UN-backed campaigns to ensure that business plays its part in decarbonising the global economy.
Staying under that critical temperature threshold will require slashing global greenhouse gas emissions 45 percent by 2030, and reaching "net zero" -- with any residual emissions balanced by removals -- by mid-century, the UN's IPCC science advisory panel has said.
But the 2030 pledges of the 22 companies that made them would only slice 15 percent off their collective emissions, the report found.
And net zero targets adopted by all 24 multinationals -- if met -- would barely remove a third of their current emissions.
"The overwhelming majority of these corporations are simply not delivering the goods they promised," the 2023 Corporate Climate Responsibility Monitor concluded.
Climate think tanks Carbon Market Watch and NewClimate Institute did a deep-dive into sectors ranging from the auto, shipping and aviation industries, to retail fashion, high tech and food, to steel and cement. No oil or gas companies were included.
- Vague 'net zero' pledges -
With combined earnings of more than $3 trillion, the two dozen companies under the microscope account for some four percent of all global emissions -- two billion tonnes of CO2 or its equivalent each year.
Analysts assessed the integrity of each corporation's climate plan, looking at the accuracy of self-reported emissions, targets set for reducing them, progress to date, and how heavily pledges depend on questionable compensation schemes known as carbon offsets.
"At a time when corporations need to come clear about their climate impact and shrink their carbon footprint, many are exploiting vague and misleading 'net zero' pledges to greenwash their brands while continuing with business as usual," said Carbon Market Watch executive director Sabine Frank.
Earning the best overall marks was shipping giant Maersk, whose plan for erasing its carbon footprint by 2040 was deemed to have "reasonable integrity".
The climate plans of eight corporate giants -- including Apple, Google, Microsoft and steel-conglomerate ArcelorMittal -- were judged to have "moderate integrity".
Swedish fast-fashion retail giant H&M, also in this tranche, has very ambitious emissions reduction targets, but parts of its green strategy could undermine them, the report found.
"The company’s plans to switch to biomass and renewable electricity credits (RECs) in the supply chain could severely undermine those targets," NewClimate Institutes's Silke Mooldijk told AFP.
Biomass is associated with deforestation and CO2 emissions, and the purchase of RECs "allows companies to report emission reductions that are not real," according to a recent study in Nature Climate Change. - Junk carbon credits -
When asked to comment, H&M "welcomed" the new report and outlined steps it is taking to achieve its "100 percent renewable electricity goal for our and our supplier’s operations", but sidestepped the question of biomass and RECs.
The climate claims of another 11 companies were found to have "low integrity," and four -- American Airlines, Samsung Electronics, retail food giant Carrefour, and JBS, the largest meat processing company in the world -- were all tagged with "very low integrity".
Carrefour objected to the ranking, saying the company had set emissions reduction goals across its entire value chain, and was the only large French food retailer ready to cut off suppliers lacking their own climate strategies.
JBS said the report had not taken into account written clarifications provided to the authors, but did not say what they were.
American Airlines and Samsung did respond when contacted by email.
"Regulations are needed requiring companies to reduce their emissions, and regulating what they can -- and cannot -- say to consumers," Carbon Market Watch policy lead Gilles Dufrasne told AFP.
"The short term action that's needed is to ban carbon neutrality claims," he added. "If the company wants to buy junk carbon credits that don't represent anything, they're free to do so, but they're not free to make false and misleading statements."
CHART: Copper exploration budgets jump, but major discoveries elusive
Frik Els | February 9, 2023 | A shining star. Escondida, Chile. (Image by BHP).
According to a report by S&P Global Market Intelligence, copper exploration’s total budgets increased 21% to just shy of $2.8 billion in 2022, the highest level since 2014.
The increase was driven by a strong recovery for the price of copper since hitting multi-year lows at the outset of the global pandemic.
The copper price has doubled from March 2020 when the bellwether metal briefly fell below $2/lbs ($4,400 a tonne) and prices are set to stay elevated given the rosy demand outlook through the end of the decade.
Last year saw two large copper mines start up operations – Anglo American’s 60%-owned Quellaveco in Peru and Cukaru Peki (Timok) in Serbia, which is wholly-owned by China’s Zijin Mining. Teck Resources’ Quebrada Blanca in Chile will follow this year, while two other major projects, Udokan’s eponymous mine in Russia and Rio Tinto’s Oyu Tolgoi underground expansion, are currently under construction.
S&P Global sees a market surplus over the next three years (–285kt this year) but after this bulge in additional tonnes coming online, the pipeline narrows substantially, with a nearly 400kt undersupply in 2026.
S&P Global points out that fatter exploration budgets over the past several years – most of which being spent in Latin America – have not led to a meaningful increase in the number of recent major discoveries:
“While copper reserves and resources have increased by 50 million tonnes compared with our analysis last year, most of the increase came from assets discovered in the 1990s,” say the authors.
Source: S&P Global Market Intelligence
SANCTIONS? WHAT F__KING SANCTIONS
Oil Shippers Rake In Billions From Russian Oil Trade
Oil shipping firms and Asian refiners are raking in billions of U.S. dollars from transporting and refining Russian crude.
Most of the shipping companies transporting Russian crude – without breaching the sanctions and price cap – are based in the United Arab Emirates, Greece, India, and China.
While shipping firms and refiners are making “crazy good” money off trade in Russian crude, the Russian budget revenues are sinking with the low prices of Urals.
While Russia looks to contain the loss of oil revenues as the price of its flagship crude plummeted after Western sanctions took effect, oil shipping firms and Asian refiners are raking in billions of U.S. dollars from transporting and refining Russian crude.
To attract customers in China and India ahead of and after the EU embargo and the G7 price cap, Russian exporters have been offering $15-$20 per barrel discounts, and they are also paying $15-$20 per barrel to shipping companies to transport the crude to Asia, traders in Russian crude have told Reuters.
“Crazy Good” Tanker Business for Russian Crude
The business of transporting Russian crude to Asia has become “crazy good,” a trader dealing with Russian oil told Reuters. Shipping firms are charging much higher rates to ship crude from Russia to refining hubs in Asia than they did a year ago. The profit for an oil shipping firm from a single voyage of a mid-sized tanker with 700,000 barrels of crude on board could be as high as $10 million, according to an invoice Reuters has seen.
Refiners in China and India are also believed to be big beneficiaries of the pivot of Russian trade to Asia as they get cheap crude to process into fuels.
Most of the shipping companies transporting Russian crude – without breaching the sanctions and price cap – are based in the United Arab Emirates (UAE), Greece, India, and China, and some of them are partially owned by Russian firms, according to numerous anonymous banking and trading sources who spoke to Reuters.
“Judging by the customs statistics, some of the benefit was captured by refiners in India and China, but the main beneficiaries must be oil shippers, intermediaries and the Russian oil companies,” Sergey Vakulenko, non-resident fellow at the Carnegie Endowment for International Peace, told Reuters.
Vakulenko, a former executive at Gazprom Neft, quit the Russian oil producer and left Russia days after the invasion of Ukraine.
Russian Budget Hit
While shipping firms and refiners are making “crazy good” money off trade in Russian crude, the Russian budget revenues are sinking with the low prices of Urals. Vladimir Putin seeks to amend the tax legislation to curb the fallout on the state finances, stretched thin to pour more money into the invasion of Ukraine.
The discounts at which Russian oil is being offered has led to the price of Urals to drop to around $30 per barrel below the international benchmark, Brent Crude.
As a result, the revenues for the Russian budget – with oil being the biggest revenue stream – are plunging.
Some of the shipping firms transporting Russian crude are either Russian or partly Russian-owned, or with unclear ownership, which makes the estimates of Russian losses more difficult—there could be indirect income for Russia from the shipment of crude.
The direct impact, however, is known, and it has become worse since the embargo and price cap on Russian crude oil came into effect on December 5.
The average price of Urals in January, at $49.48 per barrel, was 1.7 times lower than in January 2022, when it averaged $85.64 per barrel, the Russian Finance Ministry said last week.
The plunge in the price of Urals reduces Russia’s budget revenues from oil export taxes.
Russia’s budget revenues from oil and gas plunged in January by 46% compared to the same month last year. Budget revenues from energy sales – including taxes and customs revenues – plummeted last month to the lowest level since August 2020.
Due to the low price of Urals in January, Russia’s budget was $24.7 billion (1.76 trillion rubles) into deficit in January, compared to a surplus for January 2022, as state revenues from oil and gas plunged by 46.4% due to the low price of Urals and lower natural gas exports, the Russian Finance Ministry said in preliminary estimates this week.
Russia is considering taxing its oil firms based on the price of Brent – instead of Urals – to limit the fallout on the budget revenues due to the widening discount of Urals to Brent, Russian daily Kommersant reported last week, quoting sources.
In the budget estimate for January this week, the Finance Ministry confirmed parts of this report, saying that “considering the fact that the relevance of the price of Urals in calculating export prices has diminished, various other approaches are currently being studied to switch to alternative price indicators for tax purposes.”
The EU oil ban and price cap are costing Russia an estimated $172 million (160 million euros) per day due to the fall in shipment volumes and prices for Russian oil, Finland-based Centre for Research on Energy and Clean Air (CREA) said in a report last month. The revenue losses were expected to rise to $300 million (280 million euros) per day with the EU sanctions on imports of petroleum products as of February 5, according to CREA.
U.S. gas producers are getting increasingly interested in LNG exports.
Producers such as Devon Energy and Chesapeake are looking to get exposure to international LNG markets.
Market observers expect demand from Asia to start climbing, now that prices are off their peak from last summer.
Over the course of just a few years, the United States became one of the top three exporters of liquefied natural gas. Last year, it was the biggest supplier of LNG to Europe.This was made possible by a handful of companies that invested billions in liquefaction plants along the Gulf Coast, with another handful coming in the next couple of years. But competition is intensifying.
Energy Intelligence reported this month that U.S. gas producers are getting increasingly interested in LNG exports. The report cited the chief executive of Devon Energy as saying the company was looking into diversifying with LNG exports to get some exposure to international markets.
"We're not going to be big LNG players like Cheniere or Freeport or anything like that," Rick Muncrief said at the NAPE conference in Houston last week. "I mean, from our perspective, it's how can we get some exposure in international markets and help our allies around the world. We do the same thing with oil."
The decision makes perfect sense. Demand for liquefied natural gas globally is on the rise, and strongly, after Europe joined the LNG party. Even though the EU's emission-cutting plans discourage European buyers from securing long-term LNG import deals, which U.S. producers find to be a problem, U.S. LNG will continue to flow to Europe.
At the same time, market observers expect demand from Asia to start climbing, too, now that prices are off their peak from last summer. Indeed, Bangladesh recently bought an LNG cargo after months of abstaining from such imports because of prices. It also plans to buy several more if prices remain where they are. And if more U.S. gas producers enter the LNG space, chances are that prices will get a ceiling once their facilities start operating.
Earlier this year, BloombergNEF predicted that U.S. LNG export capacity would soar to 169 million tons by 2027. That would make the United States the world's biggest LNG exporter, far ahead of Qatar, which plans to expand its capacity to 110 million tons by 2026.
"The US is in the lead because of its flexible contract terms and the competitive landscape of project developers," said BloombergNEF global LNG specialist Michael Yip. "Its aggressive but transparent pricing and reliability as an LNG supplier has made it easy for these new projects to secure contracts."
That's just the big guns in LNG exports. Add to that the smaller gas producers that are diversifying into LNG exports, and the potential future dominance of the U.S. on international LNG markets becomes even more pronounced. As long as the gas flows as it does now.
Earlier this year, two gas CEOs warned there might be a slowdown in drilling activity because of prices. At such prices, profitability is hard to come by, Adam Rozencwajg, the natural resources investor from Goehring & Rozencwajg, told Oilprice. And that may put a lid on the supply of gas.
"Companies with remaining core Tier 1 acreage can make a return at today's gas price—those are few and far between," Rozencwajg said. "More importantly, companies have come to realize just how difficult it is to maintain high-quality drilling inventory. In light of that, they are reluctant to increase activity and pull forward the inevitable moment they'll be short of high-quality drilling prospects."
What this means is that sooner or later, prices will go up. This will make LNG exports even more lucrative. And shareholders who mind increased drilling might change their minds.
"Most of our investors get it and they think it's a good idea," Chesapeake's Nick Dell'Osso, one of those CEOs who warned about lower drilling activity this year said at NAPE.
"At the end of the day, the way I describe it to our investors, is this is not arbitrage capture. This is diversification of market. The US gas is being sold in international markets. We should have exposure to that. That's diversification of your product sales points and ultimately like any other portfolio diversification."
Indeed, diversification has proven to be the optimal strategy both for producers and for consumers, as any European Union official is sure to tell you if you ask them. By Irina Slav for Oilprice.com
Researchers Look To Turn Decommissioned Mines Into Batteries
Researchers are studying a new energy storage technique using decommissioned mines.
The technique called Underground Gravity Energy Storage aims to turn abandoned mines into long-term energy storage solutions.
The deeper and broader the mineshaft, the more power can be extracted from the plant, and the larger the mine, the higher the plant’s energy storage capacity.
Renewable energy sources are central to the energy transition toward a more sustainable future. However, as sources like sunshine and wind are inherently variable and inconsistent, finding ways to store energy in an accessible and efficient way is crucial. While there are many effective solutions for daily energy storage, the most common being batteries, a cost-effective long-term solution is still lacking.
UGES generates electricity when the price is high by lowering sand into an underground mine and converting the potential energy of the sand into electricity via regenerative braking and then lifting the sand from the mine to an upper reservoir using electric motors to store energy when electricity is cheap. The main components of UGES are the shaft, motor/generator, upper and lower storage sites, and mining equipment. The deeper and broader the mineshaft, the more power can be extracted from the plant, and the larger the mine, the higher the plant’s energy storage capacity.
Julian Hunt, a researcher in the IIASA Energy, Climate, and Environment Program and the lead author of the study explained, “When a mine closes, it lays off thousands of workers. This devastates communities that rely only on the mine for their economic output. UGES would create a few vacancies as the mine would provide energy storage services after it stops operations. Mines already have the basic infrastructure and are connected to the power grid, which significantly reduces the cost and facilitates the implementation of UGES plants.”
Other energy storage methods, like batteries, lose energy via self-discharge over long periods. The energy storage medium of UGES is sand, meaning that there is no energy lost to self-discharge, enabling ultra-long time energy storage ranging from weeks to several years.
The investment costs of UGES are about 1 to 10 USD/kWh and power capacity costs of 2,000 USD/kW. The technology is estimated to have a global potential of 7 to 70 TWh, with most of this potential concentrated in China, India, Russia, and the USA.
Behnam Zakeri, study coauthor and a researcher in the IIASA Energy, Climate, and Environment Program offered the conclusion, “To decarbonize the economy, we need to rethink the energy system based on innovative solutions using existing resources. Turning abandoned mines into energy storage is one example of many solutions that exist around us, and we only need to change the way we deploy them.”
***
This might be the furthest reach for the gravity method of storing electricity. Pumping water back above the generators has some merit as well. One might note that the mechanical losses are mentioned in the study paper for this idea, but hard to locate for the water method.
So far engineering hasn’t really started in on innovations to gain efficiency. That is a area in this field in dire need of attention.
The production costs are not covered in the press release. For those curious the study paper (Not behind a paywall at posting date.) offers much more information.
Both this type of idea and the hydro idea have yet to see a concerted effort in application. The tech isn’t at a high level and the “interesting” perspective isn’t terribly interesting.
This is simple, doable and fairly practical. One wonders why it isn’t being done. Oh, its not really needed, except where politics have cut the power supply. Good luck getting those places motivated to store some power at low cost. This is way cheaper than buying batteries even though the operation losses are noteworthy. Then getting personnel might be quite a problem as well.
It good to know it can be done. Maybe it will when politics pay more attention to practical needs than special interests’ hysterics and cash contributions.
The Permian Basin struggled to return to 2019 production levels last year, but a surprise spike in output in January pushed it over the threshold.
Plains All American Pipeline is predicting that Permian production could soar by 500,000 bpd this year.
Other U.S. basins have not seen the uptick in activity just yet, but outlook remains particularly bullish.
Houston, Texas-based pipeline company Plains All American Pipeline, L.P. (NASDAQ: PAA) has predicted that Permian crude output will surge by 500,000 barrels per day in the current year. The company revealed this during its latest earnings call whereby it reported that it’s been recording higher utilization for long-haul systems for its Cactus pipelines in Texas. PAA reported Q4 2022 revenue of $12.95 billion versus $12.98 billion a year earlier; unfortunately, fourth-quarter net income shrunk 42% to $263 million while net cash also contracted 47% to $335 million.
Although U.S. production in the oil-and-gas-rich Permian Basin grew in 2022, it remained below 2019 levels for most of the year. But later in the year, the Permian suddenly came alive with production last month climbing 12% to a record 5.6 mb/d. Unfortunately, the same cannot be said of other U.S. oil fields, a big reason why overall U.S. production has only been inching up slowly.
That said, the U.S. oil production outlook for the current year is generally bullish. The Energy Information Administration (EIA) has released its latest Short Term Energy Outlook (STEO) wherein it sees crude production clocking in at 12.49 and 12.65 million barrels of crude per day in 2023 and 2024, respectively, up from 11.90 mb/d in 2022.
Commodity analysts at Standard Chartered are also bullish, and have predicted that U.S. crude supply and shale oil supply have both yet to peak.
According to StanChart, total U.S. oil liquids supply surpassed the pre-pandemic high in July, with higher output of natural gas liquids (NGLs) and other liquids offsetting lower crude oil output. The analysts have further projected that U.S. crude output will exceed 13 mb/d by June 2024. StanChart has, however, not provided any insights into how they arrived at this decidedly bullish projection for the U.S. crude production.
Source: Standard Chartered
Other indicators are also bullish.
According to Wood Mackenzie’s ‘Oil and gas exploration 2022 edition, exploration well numbers in 2022 were less than half the numbers during pre-pandemic years, yet the total volume of 20 billion barrels of oil equivalent matched was comparable to the average in the 2013 – 2019 period, creating at least $S33 billion of value. Another interesting development: Liquids accounted for 60% of new discoveries, marking just the third time in two decades that liquids made up the majority of new discoveries.
Previously, Rystad Energy had warned that proven oil and gas reserves by the Big Oil companies namely ExxonMobil (NYSE: XOM), BP Plc. (NYSE: BP), Shell Plc (NYSE: SHEL), Chevron (NYSE: CVX) were rapidly falling due to produced volumes not being fully replaced with new discoveries.
According to the energy expert, only TotalEnergies ( NYSE: TTE), and Eni S.p.A (NYSE: E) avoided reductions in proven reserves over the past decade. ExxonMobil, whose proven reserves shrank by 7 billion boe in 2020, or 30%, from 2019 levels, was the worst hit after major reductions in Canadian oil sands and US shale gas properties. Shell, meanwhile, saw its proven reserves fall by 20% to 9 billion boe; Chevron lost 2 billion boe of proven reserves due to impairment charges while BP lost 1 boe.
Luckily, the latest exploration data suggests that the decline in reserves is likely to be arrested sooner rather than later.
U.S. Ramps Up Gas Output
Whereas U.S. crude production is expected to grow significantly over the next two years, the natural gas and LNG markets are where the real action will be.
The EIA has predicted that the U.S. will export 11.8 and 12.6 billion cubic feet of LNG per day in 2023 and 2024, respectively, up from 10.6 billion cubic feet per day in 2022. However, natural gas prices are expected to remain muted, averaging $3.40 and 4.04/MMBtu in 2023 and 2024, down from $6.42/MMBtu in 2022.
Last year, the United States overtook Qatar and Australia to become the world’s top LNG exporter, and appears set to cement its lead. Once again, the Permian will play a pivotal role, with the basin preparing to unleash a torrent of gas and gas projects to meet exploding LNG and nat. gas demand
Also last year, a consortium of oil and natural gas firms namely WhiteWater Midstream LLC, EnLink Midstream (NYSE:ENLC), Devon Energy Corp. (NYSE:DVN) and MPLX LP (NYSE:MXLP) announced that they had reached a final investment decision (FID) to move forward with the construction of the Matterhorn Express Pipeline after having secured sufficient firm transportation agreements with shippers.
According to the press release, “The Matterhorn Express Pipeline has been designed to transport up to 2.5 billion cubic feet per day (Bcf/d) of natural gas through approximately 490 miles of 42-inch pipeline from Waha, Texas, to the Katy area near Houston, Texas. Supply for the Matterhorn Express Pipeline will be sourced from multiple upstream connections in the Permian Basin, including direct connections to processing facilities in the Midland Basin through an approximately 75-mile lateral, as well as a direct connection to the 3.2 Bcf/d Agua Blanca Pipeline, a joint venture between WhiteWater and MPLX.”
Matterhorn is expected to be in service in the second half of 2024, pending the regulatory approvals.
WhiteWater CEO Christer Rundlof touted the company’s partnership with the three pipeline companies in developing “incremental gas transportation out of the Permian Basin as production continues to grow in West Texas.” Rundlof says Matterhorn will provide “premium market access with superior flexibility for Permian Basin shippers while playing a critical role in minimizing flared volumes.”
Matterhorn joins a growing list of pipeline projects designed to capture growing volumes of Permian supply to send to downstream markets. Earlier, WhiteWater revealed plans to expand theWhistler Pipeline’s capacity by about 0.5 Bcf/d, to 2.5 Bcf/d, with three new compressor stations.
Meanwhile, KMI has already completed a binding open season for thePermian Highway Pipeline (PHP), with a foundation shipper already in place for half of the planned 650 MMcf/d expansion capacity.
Hydrogen fuel cells are at last becoming a viable alternative....One day, these new energy technologies will toss the OPEC cartel in the dustbin of history.
Source: S&P Global Market Intelligence
