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)
Saturday, April 17, 2021
Mercedes rolls out luxury electric car in duel with Tesla
Mercedes-Benz has a new luxury car and it's electric powered
ByThe Associated Press
15 April 2021, 11:09
• 2 min read
FRANKFURT, Germany -- Daimler AG on Thursday unveiled a battery-powered counterpart to its top Mercedes-Benz luxury sedan as German carmakers ramp up their challenge to electric upstart Tesla.
The EQS is the first Mercedes-Benz vehicle to be built on a framework designed from the start as an electric car, rather than using components from an internal-combustion vehicle.
Mercedes underscored the car's technological features by equipping it with a sweeping touchscreen panel that stretches across the entire front of the car's interior in place of a conventional dashboard. Tesla and other carmakers are also adding large screens to their interiors.
The EQS is the sibling to the company's S-Class large internal-combustion sedan, the luxury brands flagship model that sells for $110,000 and up. The two cars aim at the same upper end of the market, though the EQS is set apart by being build on the company's electric-vehicle architecture, or EVA. Mercedes isn't saying yet how much the EQS will cost when it reaches customers later this year.
Daimler said the vehicle will get 770 kilometers (478 miles) on a full charge under testing standard used in the European Union. The company is offering a year's free charging through Ionity, a network of highway charging stations built by a group of major automakers.
German carmakers were slower to develop all-electric models until tougher environmental regulations and sales lost to California-based Tesla pushed them to ramp up their efforts. Volkswagen sold 422,000 electric vehicles last year and developed the ID.3, a compact it hopes will win over mass-market buyers, while its Porsche division has come out with the Taycan sports car. BMW launched the iX3 electric SUV.
Another bout of power supply shortages hit Texas this week amid power plant maintenance season, prompting the Electric Reliability Council of Texas to call on Texans to conserve energy
However, unlike during the February Freeze, this time, the shortage was a lot more temporary, with things returning to normal within a day, the Houston Chronicle reports.
Power supplies tightened on Tuesday afternoon, the daily reports, causing electricity prices on the wholesale market to reach up to $2,000 per megawatt-hour. That was up from about $25 per kWh earlier in the day. By the evening, however, supply had ramped up.
Unfortunately, there is a chance for a repeat of yesterday's power supply situation, at least according to ERCOT's vice president in charge of grid planning and operations.
"These (power plants) are big complicated machines," Woody Rickerson said, as quoted by the Chronicle. "They require maintenance. You can't run them continuously. There may be days like today where (power) margins are tighter than we like," the ERCOT official added. "We could be in the same situation in the next few weeks."
Massive power plant outages were among the worst effects of the February Freeze, which left millions of Texans without light and power, and saddled some with huge bills. The Freeze—and the outages—also led to a slew of lawsuits as utilities and gas distributors pointed fingers at each other as the culprits behind the crisis.
Warren Buffet, meanwhile, offered to build 10 GW in new gas-fired generation capacity to boost Texas' energy security.
"We really want to make sure that this never happens again. So we're really wanting to partner with the state," Chris Brown, CEO of Berkshire Hathaway Energy Infrastructure Group, told Bloomberg in an interview last month. "The proposal is simple: state residents should have a reliable source of backup power."
By Irina Slav for Oilprice.com
Big Oil Is Dead Set On Exploiting The Wind Power Boom
Lately, the solar sector has been hogging the renewable energy limelight, and for good reason. Experts such as the International Energy Agency (IEA) have predicted that solar energy will lead to a surge in renewable power supply in the next decade, with IEA Executive Director Fatih Birol tipping solar to become the “new king of the world’s electricity markets”.
But make no mistake about it: Wind energy will play an equally critical role in the shift to clean energy, with the IEA saying that wind and solar will make up a staggering 80% of the electric energy market by the end of the decade.
Wind power is not only the easiest to tap and most efficient renewable fuel for electricity generation. Still, it is also one of the lowest carbon emitters. Offshore wind, in particular, has been enjoying its moment in the sun, with investments quadrupling to $35 billion in the first half of 2020, representing the most growth by any energy sector during the Covid-19 crisis.
Not surprisingly, Big Oil has been one of the investors making a mad dash into offshore wind.
As per a Reuters report, Europe’s top oil firms, including Total SA (NYSE:TOT), BP Inc. (NYSE:BP), and Royal Dutch Shell (NYSE:RDS.A) are looking to quickly ramp up their renewable power portfolios and lower their reliance on oil and gas to satisfy governments and investors are among the leading investors in offshore wind.
Indeed, governments worldwide are expected to offer a record of more than 30 gigawatts (GW) in tenders for offshore wind sites and capacity this year alone. For perspective, that is almost as much as the total existing UK wind capacity of 35 GW.Related: Investors Rush To Oil Stocks Despite ESG Push
But some experts are now warning that Big Oil’s love affair with offshore wind could come with undesirable consequences, especially for the consumer.
High option fees
Deep-pocketed oil majors are increasingly willing--and able--to part with huge sums of money to gain a foothold in the offshore wind market, even though margins there are much smaller than their legacy oil and gas businesses.
A good case in point is a leasing round held by the Crown Estate earlier this year for seabed options around the coast of England, Wales, and Northern Ireland whereby BP and German utility EnBW paid around 1 billion pounds ($1.38 billion) to secure two offshore sites representing 3 GW.
Interestingly, traditional offshore wind developers, Orsted, Iberdrola, and SSE were all unsuccessful in the leasing round.
But, perhaps, the biggest revelation: Zero option fees were paid at the last previous Crown Estate offshore round that was held more than a decade ago.
High energy costs
Obviously, option fees are a huge cost component that adds to the overall cost of onshore wind development.
In fact, Mark Lewis, Chief Sustainability Strategist at BNP Paribas, has estimated that the Crown Estate option fee could add as much as 35% to project development costs, at today’s building costs.
The worst part: The consumer could end up bearing the brunt of it all.
“Someone is going to have to pay and it’s probably, at least in part, the consumer,” Duncan Clark, Orsted’s UK head, has warned.
The high fees now threaten to erode the massive cost reductions the wind sector has realized over the past decade and helped it to become cost-competitive with fossil fuels.
Ali Lloyd, Senior Principal, Renewables, AFRY Management, has estimated that the option fees could increase the levelized cost of energy (LCOE) of an electricity generation project as a measure of the total lifetime cost of energy, by 4-8%.
Source: AFRY Management
On a brighter note, Lloyd notes that the developers could end up paying the increased cost since many of the winning bidders are relatively new entrants into the UK offshore wind development sector and might be willing to accept lower returns as they look to gain a foothold into the industry.
In other words, we will probably have to wait a bit before we can accurately tell who is paying these massive costs.
By Alex Kimani for Oilprice.com
Executives' Pay Deters Big Oil From Acting On Climate Change
The way executives at large oil companies are paid encourages these companies to extract more fossil fuels, a study has suggested, as reported by The Guardian, who said it was given exclusive access to the findings.
The study came from the Climate Accountability Institute, an organization that says about itself that it "engages in research and education on anthropogenic climate change, dangerous interference with the climate system, and the contribution of fossil fuel producers' carbon production to atmospheric carbon dioxide content."
According to it, the remuneration packages for Big Oil CEOs are tied to metrics that are mutually exclusive with climate action, or, as one of the authors, Richard Heede, puts it:
"We show that executives have personal ownership of tens or hundreds of thousands of shares, which creates an unacknowledged personal desire to explore, extract and sell fossil fuels," Heede said. "That carbon mindset needs to be revised by realigning compensation towards success in lowering absolute emissions."
The study focused on the four biggest oil companies globally: BP, Shell, Exxon, and Chevron. According to the Guardian, it has been tracking these companies since 1990, and until 2019, the four had made combined profits of $2 trillion, only a tiny portion of which was invested in low-carbon energy.
In all fairness, however, at least one of the four has started untying its remuneration scheme from oil and gas production. Back in 2018, Shell said, under pressure from several institutional shareholders, that it would link executive pay to emission reduction targets with reports estimating that some 1,300 senior executives could be affected by the change.
Now, Shell has said it would tie the bonuses for its top executive directors more closely to the group's performance in reaching its net-zero goals, if shareholders approve the plan at the annual general meeting in May.
By Irina Slav for Oilprice.com
Shell To Put Energy Transition Plan To Shareholder Vote
Shell has pledged to become a net-zero energy company by 2050, and said eits oil production peaked in 2019 and was set for a continual decline over the next three decades.
Oil supermajor Shell will put its Energy Transition Strategy to a non-binding shareholder vote at its annual general meeting next month, the first time an energy firm will be seeking an advisory approval of its plan to go to net zero.
Shell has pledged to become a net-zero energy company by 2050, and said earlier this year that its oil production peaked in 2019 and was set for a continual decline over the next three decades.
“As we transform our business, it is more important than ever for shareholders to understand and support our approach,” Shell’s chief executive officer Ben van Beurden said in the preface of the company’s Energy Transition Strategy.
“We are asking our shareholders to vote for an energy transition strategy that is designed to bring our energy products, our services, and our investments in line with the goal of the Paris Agreement and the global drive to combat climate change,” van Beurden added.
According to Shell’s strategy, the target for carbon intensity reduction is
6-8 percent by 2023 for the short term, 20 percent by 2030, and 45 percent by 2035, until reaching carbon intensity reduction of 100 percent by 2050.
“The vote is purely advisory and will not be binding. Shell’s Board and Executive Committee remain responsible and accountable for setting and approving Shell’s energy transition strategy,” Shell said in a statement today.
The supermajor will also seek every year, beginning in 2022, an advisory vote from shareholders on its progress in achieving its energy transition strategy.
The Church of England Pensions Board, a shareholder in Shell, will likely support the energy strategy, Adam Matthews, chief responsible investment officer, told The Wall Street Journal.
Shell is also set to tie the bonuses for its top executive directors more closely to the group’s performance in reaching its net-zero goals, if shareholders approve the plan at the annual general meeting in May. The weighting of the progress in the energy transition performance measures in the long-term incentive plans (LTIP) for executive directors is set to grow to 15 percent from 10 percent.
By Charles Kennedy for Oilprice.com
Shell To Exhaust Dwindling Oil & Gas Reserves By 2040
Shell expects to have produced 75 percent of its current proved oil and gas reserves by 2030, and only around 3 percent after 2040, the supermajor said in its Energy Transition Strategy that it will put to a non-binding shareholder vote next month.
Discussing the risk of stranded assets in the energy transition, Shell said that every year it tests its oil and gas portfolio under different scenarios, including prolonged low oil prices, and cross-references assets with break-even prices to assess if they would still be viable in case of low oil and gas prices.
At December 31, 2020, Shell estimated that around 70 percent of its proved plus probable oil and gas reserves, known as 2P, will be produced by 2030, and only 5 percent after 2040.
In 2020, Shell’s proved reserves—taking production into account—decreased by 1.972 billion barrels of oil equivalent (boe) to 9.124 billion boe at December 31, 2020, the firm’s annual report showed.
That’s reserves for just seven years of production, lower than most peers.
The declining reserves life is not unique for Shell. The largest international oil companies have seen their average crude reserves drop by 25 percent over the past five years, which could be a challenge for Big Oil’s production and earnings in the coming years, Citi said earlier this month.
The supermajors reported lower reserves in their most recent reports, also due to the 2020 oil price and oil demand collapse, which forced all of them to write off billions of U.S. dollars off the value of assets.
In Shell’s case, the declining reserves life is not in contradiction to its assessment from earlier this year that its oil production peaked in 2019 and is set for a continual decline over the next three decades.
Fracking crews are increasing their activity in U.S. shale basins, finishing off a slew of DUC wells, according to the EIA’s latest Monthly Drilling Report. As oil and gas companies focus on finishing off wells they’ve already drilled, on the sidelines, observers are wondering whether this is a fluke or whether the industry has really learned its lesson about drilling rigs that they do not intend to complete.
Are we seeing typical industry behavior, which may indicate that we are in for another DUC increase now that drilling activity has picked up?
Tackling the Fracklog
The way to describe the DUC count is a “fracklog” because it measures the number of wells that have been drilled but not yet completed—essentially creating a backlog of half-finished wells that are not producing oil or gas. The higher the DUC count, the more money oil companies have spent drilling wells that are not yet working—ostensibly while drilling more wells, which they also may not complete.
For the U.S. shale industry, the DUC count has been a bellwether for the oil industry; the higher the DUC count, the more money oil and gas companies are sinking into wells that are stuck in limbo and not producing. This could either mean fiscal irresponsibility or a rapidly changing shift in the markets that too quickly rendered wells once deemed wise as obsolete.
Of course, there are always DUCs. The logistics behind scheduling drilling and completion crews necessitate a certain number of drilled wells be made available to later complete. Companies often like to keep several months of drilled wells in inventory. And most wells that are drilled are finished within a year.
But an excessive number of DUCs could signify that something is amiss in the industry.
The Whole Story
The true fracklog didn’t boom during the pandemic. The DUC counts started climbing ever higher sometime in 2017—around the time the U.S. shale industry was catching flack for out of control debt loads.
True, during the pandemic, there were certainly a high number of DUCs. But the EIA reported DUC count of 7,685 in July 2020—after oil demand crashed, rendering foolish the process of spending more money to complete a well that a company didn’t need for production—is just par for the course, according to earlier EIA data. According to the EIA, the DUC count has been over 7,500, for the most part anyway, since mid-2018.
The Dead DUC is Still a DUC
But there are some, like Raymond James analyst John Freeman, who claimed this year in a note to clients that the United States’ true DUC count is much lower, given that many of the wells included in the EIA’s DUC count are dead in the water and many years old, likely never to be completed. According to Freeman, this figure is as much as 22% too high.
A 2019 Federal Reserve of Dallas survey of oil and gas company executives suggests that half of the respondents agree that the EIA is overestimating the number of DUCs.Related: Investors Rush To Oil Stocks Despite ESG Push
In a low oil price environment, oil and gas companies may spend money on finishing off an already drilled well, rather than on drilling a new well. But companies will continue to strive to keep that DUC inventory in their back pocket should the market call for it. But when oil prices have been low for a long time—and demand for crude or gas remains low, those low oil prices may never justify completing a well, resulting in another dead DUC.
Still, those DUCs are counted.
Where We Are Now
In 2014, the number of wells being drilled exceeded the DUC count. When drilling slowed at the end of that year, the number of DUCs continued to rise. There was a period leading up to 2017 that saw a dip in the DUC count. But before too long, DUCs were again on the rise.
The latest data suggests that the number of DUCs began to fall in July 2020 as oil inventories boomed, oil prices were ultra-low, and drilling and fracking activity had slowed to levels not seen in years. The DUC count has continued to fall since then, while drilling and completion activities have started to pick up. The gap between drilling and completion activity has closed over the last few years, while the gap between drilling activity and DUCs has inverted.
But there is an unmistakable correlation between drilling activity and DUCs, with an anywhere from 20 to 50-week lag from rig count shifts to corresponding DUC shifts. If that pattern holds true, we may be in for another increase in the number of DUCs in the next few months. Unless, that is, the EIA revaluates the method it uses for establishing its DUC counts. Or, as some suggest, shale has learned to belt tighten, and spending is shifted more heavily toward completing rather than drilling.
Canada’s crude oil imports fell by 20 percent in 2020 due to lower demand in the pandemic, but the United States further cemented its position as top oil supplier to Canada, supplying nearly four out of every five barrels of oil, the Canada Energy Regulator said on Wednesday.
Canada is a major crude oil producer and exports much more oil than it imports, almost exclusively to the United States. Yet, Canada imports oil from abroad to feed refineries in its Atlantic Provinces, Quebec, and Ontario.
“Less than one third of Canadian crude oil is processed by Canadian refineries for a variety of reasons, such as lack of pipeline access to domestic supplies, specific product requirements of refineries, or because it costs less to import,” the regulator said in its analysis.
Last year, total Canadian crude oil imports plunged by 20 percent annually to 555,000 barrels per day (bpd), down from 693,000 bpd in 2019, because the pandemic crushed demand for fuels.
As imports dropped in volumes, the share of imports from the United States jumped to 77 percent of all imports in 2020 from 72 percent in 2019.
The second-biggest oil supplier to Canada was the world’s top oil exporter, Saudi Arabia, with a 13-percent share of Canadian oil imports, followed by Nigeria with 4 percent of imports and Norway with 3 percent, the Canada Energy Regulator said.
“The source for Canada’s crude oil imports has changed dramatically over the past decade. The United States has moved from a bit player in 2010 to a major supplier today, with the majority of oil imported into Canada coming from our southern neighbour,” Darren Christie, Chief Economist at the Canada Energy Regulator, said in a statement.
The surge in U.S. crude oil production in recent years was the key driver of the U.S. becoming the top provider—by a wide margin—of foreign oil to Canada.
This year, demand for oil in Canada is returning, and with it, optimism in the Canadian oil sector.
“But the million-dollar question now in terms of what’s going to happen with demand is really what’s going to happen with the pandemic,” Canada Energy Regulator’s Christie told CBC in an interview.
By Charles Kennedy for Oilprice.com
Shock Of The Week: Poll Reveals U.S. Pipelines Aren’t Actually Unpopular
When it comes to oil pipelines, it seems that the American people really haven’t lost that loving feeling after all, according to new research conducted by Wakefield on behalf of the Association of Oil Pipe Lines (AOPL).
AOPL’s new data suggests that oil pipelines have a 70% approval rating, despite the hoopla surrounding many of the pipelines that would lead one to believe that Americans are fed up with fossil fuel’s safest and most economical transportation mode.
That approval rating is higher than the maximum approval rating of President Biden, President Trump, or President Obama.
As it turns out, the American people seem to understand that right now, pipelines are the safest, most economical way to transport fossil fuels. And they are not ready to throw in the towel just yet.
That’s despite the appearance in the media that most people are behind President Biden’s cancellation decision of the Keystone XL. And it’s despite the protests at various oil pipeline sites throughout the United States, including the protests over the Dakota Access Pipeline a few years ago that monopolized news headlines.
Other than finding that 70% of all Americans have a “positive impression” of pipelines, the study found the intensity of support to be increasing.
But that’s not to say that Americans are unconcerned with climate change—they are. According to the poll, 68% of all Americans reported steady concern over the past year. But, as one might assume if left unattended, Americans are also concerned with how a climate change battle might affect their utility bills and steady supply of electricity.
As far as concerns go, the study found that Americans rank safety, affordability, and reliability as the three most important aspects of energy.
The survey also found that ultimately, Americans feel that canceling oil pipelines is not a good way to combat climate change, and oppose measures that would see oil and gas jobs cut.
By Julianne Geiger for Oilprice.com
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THEY SHOULD ONLY USE MIDDLE SEAT Blocking middle seats on planes reduces risk of COVID-19 spread: CDC
Leaving the middle seat empty could reduce virus spread by up to 57%
As airlines continue to allow passengers to book middle seats on planes, new research says that leaving the middle seat empty could reduce the spread of the virus by between 23% to 57%, according to the CDC’s report released Wednesday.
Blocking middle seats on planes reduces the risk of exposure to COVID-19, a new CDC report suggests. (iStock)
"Research suggests that seating proximity on aircraft is associated with increased risk for infection with SARS-CoV-2, the virus that causes COVID-19," the CDC said in the report.
In the study, conducted with Kansas State University, researchers measured how far airborne virus particles traveled inside the aircraft using mannequins that emitted aerosol inside a mock plane cabin. The study did not take vaccinations or face mask-wearing into account.
Delta is currently the only airline in the U.S. that’s continued blocking middle seats, however, it will begin to allow passengers to book them after May 1. Other airlines have justified the re-booking by suggesting that air filters on most planes are safe to travelers wearing a facemask, a federal regulation. American Airlines ended its middle seat booking ban in July, allowing flight bookings at 100% capacity while United Airlines did not limit seating on planes during the pandemic at all. Southwest Airlines started rebooking middle seats in December.
U.S. travel continues to rebound with airports across the country seeing more than 1 million travelers daily, a milestone not seen since March 2020, the Transportation Security Administration reported. And it’s unclear if airlines will go back to blocking the middle seat on planes as the industry continues to bounce back. Trade group for the largest U.S. carriers, Airlines for America, referred to a Harvard University report that found a low transmission rate of the virus on planes citing the use of preventative measures to prevent the spread like face mask requirements and cleaning protocols, the Associated Press reported.
The CDC earlier this month released new travel guidance suggesting that fully vaccinated passengers can travel safely in the U.S. without getting tested or self-quarantining. The health agency continued to urge all travelers to continue wearing masks, hand washing and social distancing.
