“Blackrock, Vanguard, and State Street utilized the Climate Action 100 and the Net Zero Asset Managers Initiative to signal their mutual intent to reduce the output of thermal coal, which predictably increased the cost of electricity for Americans across the United States.
These firms also deceived thousands of investors who elected to invest in non-ESG funds to maximize their profits. Yet these funds pursued ESG strategies notwithstanding the defendants’ representations to the contrary.”
Vom Winde verweht: Germany will pay as much as €20 billion to wind and solar operators through the end of 2024, twice what grid operators had forecast in last October.
The 19th century is known as the “century of coal,” but, as the technology scholar Vaclav Smil has noted, not until the beginning of the 20th century did coal actually overtake wood as the world’s No. 1 energy source. Moreover, past energy transitions have also been “energy additions”—one source atop another. Oil, discovered in 1859, did not surpass coal as the world’s primary energy source until the 1960s, yet today the world uses almost three times as much coal as it did in the ’60s.
Aissatou Sophie Gladima, the energy minister of Senegal, put it more pithily: Restricting lending for oil and gas development, she said, “is like removing the ladder and asking us to jump or fly.”
Christyan Malek, JPMorgan’s top energy strategist: That intrinsic demand that is not visible is so significant that we don’t see demand peaking – I don’t think we’ll see [oil] demand peaking in our lifetimes,” he said. “Particularly as demand growth in [emerging markets] continues to surprise the upside.”
Production from Equinor’s important Johan Sverdrup field, which accounts for 755,000 bopd (36% of Norway’s oil production), was shut-in on Monday as a result of a power outage. Production was in the process of being restored on Tuesday.
According to Equinor, the outage was caused by overheating at an electric converter station onshore.
A 2022 BOE post questioned Norway’s push to power offshore platforms with electricity transmitted from shore. This incident reinforces those concerns. Summary:
Most offshore platforms produce sufficient gas to support their power demands
Assuming gas that is not used to power a platform is marketed and consumed elsewhere, the net (global) reduction in CO2 emissions from electrifying offshore platforms is negligible. (Perhaps there is actually a small increase in net emissions given the power required to transport the gas to markets and the emissions associated with onshore power generation).
Offshore power demands are highly variable, especially when drilling operations are being conducted.
Gas turbines are reliable, and capable of responding to variable power demand. Excess generation capacity is typically provided.
Power from shore increases the cost of platform operations and could decrease ultimate recovery of oil and gas resources.
Per NPD, electrification of the shelf will increase electricity prices for onshore consumers and increase the need for onshore facility investment.
Gas turbines or diesel generators are still necessary to satisfy emergency power needs at the platforms.
Long power cables are vulnerable to damage (accidental or intentional), as are onshore power stations.
I hope the investigation of this incident considers some of these broader electrification policy issues.
Equinor diagram: The purple cable shows power from shore to Johan Sverdrup phase 1, established in 2018. The yellow power cable shows power from shore to Johan Sverdrup phase 2 and the Utsira High area solution, from 2022. The orange cable shows power from shore to the Sleipner field centre and connected fields from late 2022. Black cable shows existing power cables at Sleipner field centre and to the Gudrun installation.
Exxon CEO Darren Woods’ is concerned that US withdrawal from the Paris climate agreement would threaten carbon capture and sequestration (CCS), the foundation for which is government mandates and generous taxpayer subsidies.
Exxon sought an edge over CCS competitors by improperly acquiring 163 OCS oil and gas leases (map below) for carbon disposal purposes. Conversion of these leases is not authorized, which means they will expire at the end of their primary (5 year) term absent legislative or regulatory action.
The only solid support for CCS is from companies hoping to benefit from subsidies and charges to industries and individual energy consumers. It’s time to end the Federal government’s CCS programs.
199 oil and gas leases were wrongfully acquired at Sales 257, 259, and 261 with the intent of developing these leases for carbon disposal purposes. Repsol was the sole bidder at Sale 261 for 36 nearshore Texas tracts in the Mustang Island and Matagorda Island areas (red blocks at the western end of the map above). Exxon acquired 163 nearshore Texas tracts (blue in map above) at Sales 257 (94) and 259 (69).
As the table below illustrates, Denmark’s highly publicized oil and gas exploration ban is more pragmatic than has been reported in the media. The expansion of production from existing fields is not restricted.
Denmark has brought an immediate end to new oil and gas exploration in the Danish North Sea as part of a plan to phase out fossil fuel extraction by 2050.
TotalEnergies announces that the Harald East Middle Jurassic nearby exploration well (HEMJ-1X) has discovered additional gas condensate resources in the Harald field, in the Danish North Sea.“The success of the Harald East Middle Jurassic well, nearby our Harald facilities in Denmark, demonstrates the strength of our Exploration strategy.”
As a result of new exploration, Danish gas production is on the rise (graphic below) after two decades of decline. August 2024 production (165.8 MMCFD) was 21% higher than August 2023 production (136.9 MMCFD)
While Total has proven to be resourceful in sustaining North Sea gas production, Denmark’s refusal to hold new licensing rounds dooms their production over the longer term. This is consistent with Denmark’s intent to cease domestic production by 2050. (Those of you who are young enough can report on whether that deadline is met 😉).
The demand for fossil fuels, which has yet to peak, will still be strong in 2050 and beyond. Phasing out domestic production may be Denmark’s choice, but it’s not a good choice for much of the world.
Ultra-deep geothermal is arguably the renewable energy resource with the greatest long term potential. It is accessible everywhere, can replace thermal energy sources at existing power plants, and isn’t handicapped by the intermittency, space preemption, aesthetic, and wildlife protection challenges inherent in wind and solar development.
A new study found that rock that fractures at superhot conditions (see diagram above) can be ten times more permeable than rock that fractures at conditions closer to the Earth’s surface, and can also deform more readily.
Why is this important?
More water can pass through fractures and become supercritical (see diagram below)
The next big step for ultra-deep geothermal is demonstrating the technology to efficiently drill wells to depths of ~20 km. In that regard, we are awaiting Quaise Energy’s field test of their gyrotron drilling system.
Particularly noteworthy is Nord Stream’s response to the insurers’ claim (par. 22.2 (a) of their filing) that the pipeline damage was the result of “the conflict between Russia and Ukraine.” In par. 13.1 of their response (attached), Nord Stream called the insurers’ assertion “embarrassing for want of particularity.” (clever wording that may prove useful in the future 😉)
Nord Stream AG calls the insurers (Lloyd’s and Arch) failure to provide evidence for the country that blew up the pipelines “embarrassing.” (See above comment.)
Mahmoudi: “The defendants’ argument is prima facie irrelevant if one cannot prove that the damage is caused by a named government that has been directly involved in a war in the area. The burden of proof in this case is…on the defendant.”
Mahmoudi: “Even if the sabotage is an act of terrorism, the author of the act can be a state or a private entity.”
Mahmoudi: “If a private entity, the insurance company, is the only source for the compensation; if a state is responsible for the terrorist act, it is the insurance company & that state that have a legal obligation to compensate for the damage.”
Related comment by Erik Andersson: Nord Stream AG has consistently claimed they should receive compensation regardless of whether or not a government was responsible for the sabotage. Nord Stream AG does not seem interested in providing an alternative to Lloyds’ claim that Ukraine did thisas an act of war. (That horse might be too big to ride 😉)
199 oil and gas leases were wrongfully acquired at Sales 257, 259, and 261 with the intent of developing these leases for carbon disposal purposes. Repsol was the sole bidder at Sale 261 for 36 nearshore Texas tracts in the Mustang Island and Matagorda Island areas (red blocks at the western end of the map above). Exxon acquired 163 nearshore Texas tracts (blue in map above) at Sales 257 (94) and 259 (69).
Despite false starts by Exxon and Repsol (see above summary), no carbon sequestration (disposal) leases may be issued or developed until implementing regulations have been promulgated. In that regard, no news is good news for those who are less than enamored with CO2 disposal in the Gulf of Mexico.
The implementing regulations will be controversial. Most operating companies prioritize GoM production over GoM disposal. Most environmental organizations are strongly opposed to CO2 disposal schemes that sustain fossil fuel production and benefit fossil fuel producers. Taxpayers are leery of subsidizing these projects and absorbing increased costs for energy and consumer goods.
The Administration is, of course, well aware of this opposition and will not be publishing implementing regulations prior to the election. The next Administration, regardless of the election outcome, will no doubt take a hard look at these issues before proposing regulations.
The few oil and gas producers that are rather cynically hoping to cash in on CO2 disposal in the GoM will therefore have to wait, perhaps for a long time.
Bud's Offshore Energy (BOE) 