Alboran Energy Strategy Consutlatns

Energy Musings

An eclectic collection of stories and analyses by Allen Brooks, dealing with issues and developments within the energy industry that have potentially significant implications for executives operating oilfield service companies.

  • Energy Musings, July 26, 2023

    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    July 26, 2023

    Should We Stop Building New Homes?

    Real estate creates 30% of our carbon emissions and uses 40% of our energy, so it has become an important target of climate activists. An important ingredient in the emissions is concrete because of the coal burned to heat the limestone that forms the basis for Portland cement and the energy needed to turn it into concrete. Because cement accounts for between 4-8% of global emissions. Startup companies are working to find fewer polluting ways of making cement and concrete. One approach is to switch to building using ‘mass timber’. Wood can be a great way to reduce carbon emissions in building conventional buildings. And now there is a move to encourage remodeling that releases much less carbon than building new with significant embedded carbon in the construction materials. Look for a housing transition. READ MORE

    Should We Stop Building New Homes?

    Investors and economists focus on the latest housing data – new home starts, building permits, used and new home sales, and housing vacancy rates – for indications of the health of the real estate sector. Real estate represents 17% of the nation’s GDP, but importantly is the foundation of wealth building for the middle class and provides insight into the health of the flow of goods, services, and income for millions of Americans.

    According to the United Nations Environmental Program, the real estate sector produces around 30% of the world’s annual greenhouse gas emissions and consumes nearly 40% of the world’s energy. Ten percent of those emissions come from cement, a key building material for world economies. Concrete is the second most used material in the world after water and it is the most used construction material. It is estimated we produce around four tons, or just under 60 cubic feet (a cube measuring four feet on each side), for each person in the world annually. It represents between 4-8% of global emissions. If cement were a country, it would rank fourth in annual carbon emissions.

    As the world focuses on decarbonization in addressing climate change, cement and real estate are moving into the target zone, after aviation and shipping (industries we addressed in Energy Musings, July 19, 2023). Eliminating carbon emissions from cement is hard. That’s because manufacturing it is highly energy- and emissions-intensive since extreme heat is needed to produce it. Emissions come directly from the heating of the limestone that releases CO2. The burning of fossil fuels to heat the kiln indirectly results in the release of CO2.

    Producing a ton of cement requires about 4.7 million BTU of energy because the kilns must be heated to 2700o F to break down the limestone which is then mixed with gypsum to make clinkers that are ground up to make cement. The energy needed to heat the kilns is the equivalent of burning 400 pounds of coal, which releases nearly a ton of CO2. One way to cut emissions is to switch the kiln’s fuel source from fossil fuels to renewable electricity, but that can be a challenge because of the energy density of coal that allows it to burn extremely hot and the level of heat needed.

    In Greece, according to a European energy podcast, the government is working on a plan to switch kilns from coal to renewable electricity. The problem, according to the owner of the nation’s largest cement manufacturer, is that amount of renewable energy currently available is insufficient to power all his kilns, let alone any of those of his competitors. Therefore, the government is trying to ramp up investment in new renewable energy plants. However, because renewable energy is part-time, the grid is susceptible to brownouts and blackouts. The cement company’s CEO said the loss of power for four hours will destroy a kiln. To protect his kilns, he is contracting backup power to the supply he receives from the electric company because he expects more outages. This becomes expensive insurance which will force him to raise the price of his cement.

    Cement companies worried about the destruction of their kilns from blackouts have few alternatives other than independently securing backup power or praying a lot. Could there be other solutions to cement’s emissions problem? Are there ways to make the process more efficient, such as improving how kilns work? Maybe cement can be made from lower-carbon raw materials, or produced differently, such that when blended with the other necessary materials it will still make a product equal to traditional concrete.

    Read the full article on Energy-Musings.com »

  • Energy Musings, July 19, 2023

    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    July 19, 2023

    IMO Pursues Carbon Emissions “Deal of the Decade”

    The IMO’s recently completed a meeting where it agreed to a revised GHG emissions reduction plan, reaching net zero by about 2050. We explored some of the actions and challenges facing the global shipping industry. Green fuel technologies remain immature and expensive. Their use will boost global shipping costs when other remedies exist. Slow steaming, adding sails to assist propulsion, and increased use of compliant fuels will help reduce emissions. This industry remains difficult to decarbonize. Yielding to the demands of climate activists to accelerate the pace of cutting may lead to expensive mistakes, not just for shipping but for the world’s economy.  READ MORE

    IMO Pursues Carbon Emissions “Deal of the Decade”

    Having failed to get on board with the 2015 Paris Climate Agreement, the United Nations International Maritime Organization (IMO) came under severe criticism. Instead of chasing CO2 emissions, the IMO elected to attack the shipping industry’s sulfur emissions problem first, recognizing this as a far greater pollution problem for coastal nations. Putting CO2 emission second, however, was not popular, especially with climate activists.

    Given the criticism, in 2018, the IMO embraced a greenhouse gas (GHG) emissions reduction plan calling for a 50% cut from 2008 levels by 2050. Even then, climate catastrophists demanded a 100% reduction by 2050. Forget whether such a target was or even is achievable. But in a world of virtue signaling, just saying you will get to net zero emissions by 2050 seems to be enough. Leave the details to others and ignore the costs until they bite the activists.

    The relentless climate catastrophe talks of its boss, United Nations Secretary-General António Guterres, have driven the IMO’s actions. In July, it convened the 80th meeting of the Marine Environment Protection Committee (MEPC) with the mission to advance the IMO’s GHG reduction target. The committee agreed to reduce shipping’s GHG emissions to zero “by or around, i.e., close to, 2050.” The plan includes interim “checkpoints” ‒ cutting emissions by at least 20% but hopefully, 30% by 2030, and then by 70% if not 80% by 2040. Although cheered by some, the IMO’s agreement was called “wishy-washy,” “falls short of expectations,” and even “a great disappointment” by climate activists and their media friends.

    Shortly after the meeting, we attended a webinar discussing various aspects of the IMO agreements plus the European Union’s (EU) ‘Fit for 55’ emissions reduction plan approved in 2021. The Fit for 55 plan, a template for the IMO’s new GHG strategy, includes various actions.

    Extending the EU Emissions Trading System (ETS) to maritime transport, thereby capping maritime transport emissions as part of the overall ETS cap, creating a carbon price signal that should foster the reduction of GHG emissions in a flexible and cost-effective manner, and generating revenues to tackle climate change and encourage innovation.

    Boosting demand for marine renewable and low-carbon fuels, by setting a maximum limit on the greenhouse gas content of energy used by ships calling at European ports and by encouraging zero-emission technology at berth (where boats stay in ports), with a technology-neutral approach.

    Read the full article on Energy-Musings.com »

  • Energy Musings, July 14, 2023

    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    July 14, 2023

    SouthCoast Wind Paused But Not By Lies

    Rhode Island Energy Facility Siting Board pauses SouthCoast Wind cable approval process until late 2024 over financial uncertainty and not potential management lies to the board. READ MORE

    Renewables Make New England Electricity Expensive

    New England electricity prices have climbed rapidly despite power consumption falling. The cost of meeting renewable energy mandates is driving those rapid price increases. READ MORE

    Tale Of Whale Deaths Not Pleasant Reading

    From December 1 to July 12, whale deaths off the East Coast totaled 56, or about eight a month, yet government regulators continue ignoring the possibility of a link to offshore wind construction. READ MORE

    SouthCoast Wind Paused But Not By Lies

    Recently, it came to light that a staff member of Rhode Island’s Coastal Resources Management Council (CRMC) sent an email to the administrator for the Rhode Island Energy Facility Siting Board (EFSB) claiming that the testimony of representatives of SouthCoast Wind at its June 12 show-cause hearing included several lies. The nature of the claims and how they arrived required the EFSB to notify all parties involved and make the email public. At the end of the day, it wasn’t this controversy but rather the uncertain future for the project that sank its transmission cable permit application.

    On Thursday, the EFSB voted unanimously to pause the cable application process until October 1, 2024, to give SouthCoast Wind time to secure new power purchase agreements (PPA) to finance the $5 billion, 804-megawatt (MW), 147 wind turbine project assuming it is selected in Massachusetts’ next offshore wind auction. It was this uncertain status that convinced the three EFSB members that it was inappropriate to use the agency’s limited resources to process the application only to have the project fail to secure new PPAs and be built.

    Read the full article on Energy-Musings.com »

  • Energy Musings, July 9, 2023

    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    July 9, 2023

    Costly Decarbonization Of Aviation And Shipping

    The two most difficult transportation sectors to decarbonize are stepping up their efforts. Aviation and shipping are embarking on aggressive steps that will reduce their emissions by 2050, but those efforts are challenged by technology, supply chains, industry growth, long-lived assets, and costs. Both planes and ships will operate for decades, so totally changing their fuel options to reach net zero emissions by 2050 means immediate actions. But none of the technologies or fuel supply chains and quantities exist. Moreover, we do not know the optimal technology, nor do we have the infrastructure to service the new industries. The biggest problem is the cost of these new technologies and fuels. How will we handle the pending inflationary spike that will come from these decarbonization efforts? READ MORE

    Costly Decarbonization Of Aviation And Shipping

    Heading into the Fourth of July holiday, the number of Americans flying exceeded 2019 pre-pandemic levels. June’s passengers increased 7% month over month and was 1% above 2019’s level. Passengers going through TSA checkpoints for the first half of 2023 slightly exceeded 2019’s traffic. In Europe, daily flights in June rose 9% month over month but remained 9% below 2019 levels. June’s global flights were 4% higher month over month and 14% above 2019’s flights. People are traveling, despite higher airfares. Airline executives are upbeat given record reservations for the rest of 2023.

    Offsetting air traffic’s gains, cargo, and container shipping are experiencing slower demand after the consumption-driven Covid-recovery surge wanes. China’s economic reopening lags, which is depressing shipping volumes. Forecasts call for global shipping volumes to only grow about 2.2% annually for 2023-2027, down from the historical growth rate of 3+%.

    Overhanging both industries is the push to decarbonize them in keeping with the world’s Net Zero emissions goal. Although most emissions reduction efforts within transportation target cars and trucks, the shipping and air transportation industries are also pledging to cut emissions by 2050. The challenge is how to do it.

    Transportation emissions account for roughly a quarter of global emissions. Of that share, road transportation emissions represent about three-quarters while aviation and shipping are each slightly over 10%. For those industries, whose assets are very long-lived and require them to transport their fuel, managing decarbonization will necessitate new fuels and new technologies.

    Exhibit 1. Transportation Sector Emissions Share By Mode

    Source: ICCT

    Read the full article on Energy-Musings.com »

  • Energy Musings, July 5, 2023

    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    July 5, 2023

    China Demographic Data Will Impact Our Future World

    The latest Chinese population data shows that the aging exhibited in its old data has gotten worse. Moreover, the Shanghai Academy of Sciences says the country overcounted the 45 and younger population by 100 million making the aging worse and contributing to a rapidly shrinking labor force. As a result, China’s labor costs are rising rapidly erasing its global competitive advantage that forces us to reassess our outlook for the country. READ MORE

    Energy Stocks Struggle: Will The Struggle Continue?

    June marked the best month for Energy stocks this year. Still, Energy was the second worst-performing sector for the second quarter and the first half of 2023. Many investment strategists believe Energy will continue to underperform. But there are possible green shoots in the stock market. Additionally, crude oil price action suggests we could easily experience a sharp move upward. READ MORE

    China Demographic Data Will Impact Our Future World

    The latest demographic data from China suggests we need to revise our thinking about the world’s trajectory. That means thinking differently about China’s role in the geopolitical sphere, which may explain why it has become more aggressive in courting some and threatening other countries. The population data has implications for future world inflation rates, as well as energy demand and carbon emissions predictions. It does not mean all future global scenarios are wrong. More likely, we need to consider others – ones not now considered mainstream.

    Peter Zeihan, a geopolitical strategist, and author of The End of The World Is Just The Beginning, obtained the population data China recently sent to the United Nations Population Division. In a recent presentation, he showed the following three charts. The first was China’s old population pyramid data that displays the number of people in 5-year increments reflecting the youngest birth year. The pyramid showed how China’s population age groupings peaked in 1990 and have consistently been smaller with each five-year increment. The 2025 data shows the smallest

    Read the full article on Energy-Musings.com »

  • Energy Musings, June 29, 2023

    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    June 29, 2023

    Body Blows To Wind Energy And Net Zero

    Turmoil has engulfed the offshore wind industry and its extent has become evident in the past several weeks. More dead whales washed ashore only days after foundations to support offshore wind turbines began being hammered into the ocean floor off Martha’s Vineyard. The leading offshore wind developer told financial analysts its U.S. offshore wind portfolio was not profitable, which was forcing the company to redesign, shrink, and terminate contracts. Ørsted has cut its 2030 offshore wind installed capacity target by 7%, and its actions impact its developments in Europe, too. Most telling was the CEO announcing a new U.S. project would go forward after the state agreed to give the company its 80% share of federal government tax credits.

    Compounding the industry’s problems was the announcement by Siemens Gamsea, the leading wind turbine manufacturer, that it would wipe out 40% of its profits due to the cost of correcting component failures and failure to meet productivity goals. The full extent of its problems remains unknown. Lastly, the U.S. Government Accountability Office announced it would commence an extensive investigation of offshore wind and its impact on the military, air transportation, marine ecology, the commercial fishing industry, and the resiliency of the wind turbines. This investigation comes after other government agencies have rebuffed the need for deeper inquiries into these issues. READ MORE

    Body Blows To Wind Energy And Net Zero

    Recent weeks have not been kind to the offshore wind industry. The stretch of bad news was capped by the following Financial Times headline: “Siemens Energy shares plunge after wind turbine problems deepen.” Siemens Gamsea announced late last Thursday it was withdrawing its financial profit guidance for 2023. The move was in response to its need to reserve $1.1 billion for warranty claims and expenses arising from technical problems with many of its onshore wind turbines. The next day, Siemens Energy, owner of Siemens Gamsea, saw its share price drop 37%. The stock price slide continued Monday with the share price down 3%, bringing to $8 billion the market value wiped out. Analysts worry that all the bad news is not out.

    Earlier, Ørsted, the Danish wind energy giant, told analysts at its annual capital day that it was scaling back its installed offshore wind goal for 2030 by redesigning, shrinking, and abandoning projects because they are uneconomic. Ørsted is terminating offshore wind project power purchase agreements in multiple U.S. states and pushing for higher subsidies in European wind markets. It presented a chart showing its U.S. offshore wind portfolio of projects will barely earn its weighted average cost of capital, an unacceptable financial return.

    Economics is not the only challenge offshore wind faces. Two dead humpback whales washed ashore on Martha’s Vineyard only days after the first Vineyard Wind turbine foundation was hammered into the ocean floor. Are the two connected?

    Because the whale carcasses remained in the surf, the National Oceanic and Atmospheric Administration (NOAA) announced it was abandoning plans to examine them in search of the cause of death. NOAA said such an investigation would be too difficult, despite NOAA being charged with protecting endangered marine mammals.

    Three other dead whales washed ashore on Long Island bringing the total of known dead whales since last December to 46. Senior NOAA and Bureau of Ocean Energy Management (BOEM) officials have stated there is no connection between offshore wind construction activity and dead whales. Yet, their researchers acknowledge they do not have a full understanding of how underwater noise may impact the behavior of marine mammals, especially whales. They want to undertake more studies. Is that the science we are supposed to follow?

    Read the full article on Energy-Musings.com »

  • Energy Musings, June 24, 2023

    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    June 24, 2023

    Don’t Outlaw Private Cars, Target EV Subsidies Better

    The idea we should outlaw the ownership of private vehicles and only depend on vehicle-use services has resurfaced recently. The World Economic Forum idea was promoted last year as part of a push to create a circular economy that would reduce the need for hundreds of new critical mineral mines to supply them for the green energy transition. Recently, two studies emerged suggesting that our government’s electric vehicle subsidies and tax credits could be used more effectively to reduce carbon emissions and at a lower cost for taxpayers. We examine these analyses that focus on vehicle miles driven, household ownership of EVs, and alternative powertrains. One-size fits all government emissions policies will not work and may worsen the problem. It is time to reassess these policies. READ MORE

    Don’t Outlaw Private Cars, Target EV Subsidies Better

    We are in the Fourth Industrial Revolution claims Klaus Scwab, founder of the World Economic Forum (WEF). Therefore, we should “take dramatic technological change as an invitation to reflect about who we are and how we see the world.” Such a guiding principle is driving the green revolution, including banning internal combustion engine (ICE) vehicles because they dump tailpipe emissions into the atmosphere. We should only drive electric vehicles (EV), and they should be powered by the grid of the future fueled only by wind and solar.

    A year ago, the WEF produced a paper about building a circular economy to reduce the need for a 500% increase in critical minerals to support the green energy revolution. Buried in the paper was the idea that people should cease owning vehicles and switch to vehicle-use services. Fewer vehicles being driven more miles might help speed up the emissions reduction effort. Some commentators jumped on the WEF’s idea as a justification for banning the private ownership of vehicles, a heavy-handed government intrusion into people’s lives, as if telling the people what kind of car they may buy isn’t. Support for this idea has split along political lines.

    Subsidies Drive The EV Market

    To promote the EV-only policy, governments are slathering subsidies across the automobile industry – from tax credits and point-of-sale benefits to cash for new manufacturing and battery plants. The problem is governments seem to have overlooked the scale of the critical minerals supply chains necessary for this redo of the automobile industry, and thus how quickly such supply chains can be built. If this redo aims to cut transportation emissions, could there be a better way?

    The misnamed U.S. Inflation Reduction Act, signed into law in August 2022, created a plethora of subsidies and tax credits for individuals, states, and companies to foster renewable energy growth. The Congressional Budget Office’s initial estimate is that the bill would cost $391 billion from 2022 to 2031. Analyses by Goldman Sachs, Credit Suisse, the Mercatus Center, Americans for Tax Reform, and others have suggested that the cost will be more like $1.2-$1.4 billion over the decade, or more than three times the CBO estimate.

    The tax credits for battery production for EVs were estimated by the CBO to cost $30.6 billion. The analyses project the subsidy will cost $196.5 billion, a 540% miss! Every subsidy and tax credit estimate is too low because the CBO underestimated the volume of projects that will be eligible. In some subsidies, the projects are eligible for 10 years of payments if the projects meet construction thresholds before 2031, thus ensuring subsidy money will be flowing until possibly 2041. Can we do better with the taxpayer’s money?

    Read the full article on Energy-Musings.com »

  • Energy Musings, June 20, 2023

    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    June 20, 2023

    Offshore Wind Confronts A Deteriorating Market

    Last week, a show cause hearing for SouthCoast Wind was held by the RI EFSB to understand why the company wants the approval process for its transmission cables to go forward while the financial viability of the project is in doubt. SouthCoast Wind, as well as other Massachusetts, Connecticut, and New York projects, are terminating or renegotiating their power purchase agreements because the price of the electricity contracted to be sold to utilities will not finance the wind farms’ construction.

    The unfinanceable status of these wind farms arises because the power was sold on the assumption that construction costs were always declining and would continue that trend. Billions of dollars of capital have been wagered on that assumption, and now developers are looking at huge financial losses. They do not want to admit any responsibility for the financial disasters. They want to be rewarded for terminating PPAs and given reconfigured bidding procedures to save them.

    We watched the two-plus hour hearing. We analyze the issues raised, the challenges facing the market today, and how developers expect to be absolved of mismanagement. SouthCoast Wind’s CEO was the star witness, and he delivered an impressive Alfred E. Newman imitation.

    The offshore wind market is in turmoil like never before. Utility regulators face Hobson’s Choices, suggesting no one is going to be happy where the industry lands and especially its upcoming journey. Given shifting attitudes toward “green energy,” wrapping oneself in the flag of public policy may not be the answer as much as developers try. READ MORE

    Offshore Wind Confronts A Deteriorating Market

    Up and down the East Coast, offshore wind developers are waking up to find their power purchase agreements (PPA) underwater. Trying to avoid financial disasters, they are scrambling for solutions. Why the turmoil? Simple. Actual project costs are wildly off from the estimates when PPA prices were locked in. Penalties to get out of PPAs are a cheaper option, especially if you are not going to be penalized for terminating the contracts. Even the inflated renewable energy subsidies in the misnamed Inflation Reduction Act won’t save these bad deals.

    The turmoil’s magnitude was at the center of a hearing before the Rhode Island Energy Facility Sitting Board (RI EFSB) last week. SouthCoast Wind, a 1,200 megawatt (MW) project in federal waters off Rhode Island to supply nine Massachusetts utilities with clean electricity, needs the RI EFSB’s approval to land its transmission cables and allow their passage across the state to connect with the regional power grid at Brayton Point in Somerset, Massachusetts.

    The two-plus hour “show cause hearing” on June 12 had twice been rescheduled at the request of SouthCoast Wind – December 19, 2022, and February 27, 2023 – as the company’s assessment shifted from a viable project to an unfinanceable one. As the RI EFSB outlined in its show cause hearing notice, the need arose when it learned from the media on November 10, 2022, that SouthCoast Wind was requesting the Massachusetts Department of Public Utilities (MADPU) to suspend their review of the PPAs given the company’s realization the project was no longer financeable, i.e., unprofitable.

    Read the full article on Energy-Musings.com »

  • Energy Musings, June 15, 2023

    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    June 15, 2023

    Energy Transition Not Going As Smoothly As Expected

    Pressure is building to accelerate the green energy transition. Moving away from the use of fossil fuels and replacing them with renewables, primarily wind and solar, is demanded. The pressure increased last week with the arrival of Eastern Canadian wildfire smoke that enveloped the Eastern and Middle Atlantic regions forcing people indoors and back to using face masks. The problem with this push is that many of the critical ingredients for a successful transition have been overlooked and are beginning to bite. Start with inflation in critical commodity prices and add in the lack of sufficient components for an expanded electric grid. Permitting the massive expansion of the grid is a problem. Less obvious, but critical, is the lack of skilled and trained workers needed to build and operate the new energy system. The list of overlooked issues is growing and resolving them will not be easy or quick. The green energy transition is experiencing a bumpy road. READ MORE

    Energy Transition Not Going As Smoothly As Expected

    The yellow haze that descended on East Coast cities last week sent environmental activists into overdrive claiming the smoke from eastern Canadian wildfires was proof of climate change. Wildfires are caused by fossil fuels and burning them needs to end immediately they claimed, ignoring weak forest management issues. Residents west of the Mississippi River might laugh at the claims that wildfires create unacceptable smoke. Those Western U.S. residents have been living with wildfire smoke for years, but now that smoke is in the East, it is a national emergency.

    Exhibit 1. Canadian Wildfire Smoke Covers New York City

    Source: Getty Images

    At the heart of the climate change movement is the belief we must transition the globe’s energy system to save the planet. It means abandoning fossil fuels and powering our economies with only “green” energy – primarily wind, solar, and hydrogen. While there are other green energy sources, they are geographically limited and often involve agriculture, another greenhouse gas-producing industry.

    The energy transition is embraced by politicians worldwide who are acting on this belief, but primarily in developed economies. Leaders of these countries are willing to sacrifice their citizens’ standards of living for clean energy. This is a sore point for developing economies which are told to transition before they have reached developed economies’ standards of living, capping economic improvement.

    Wind and solar are preferred in the energy transition push. Their fuels are free, and the technologies seem simple. They are considered the cleanest of all the green fuel options. However, to power grids, these part-time energy sources require backup power – more expensive and producing more carbon emissions – and subject to increasing blackouts. We know the wind does not always blow and the sun does not always shine. During those times, consumers need other energy sources to generate their electricity. Thus, the cleanest green energy fuels are hurting family budgets.

    Read the full article on Energy-Musings.com »

  • Energy Musings, June 10, 2023

    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    June 10, 2023

    Our Next Open Border Courtesy Of Offshore Wind? 

    While the focus of national security has been on the illegal crossings of our southern border by terrorists and others, the East Coast may become vulnerable because of radar interference from offshore wind turbines. The issue of radar interference from onshore wind turbines has been known for years, but offshore turbines are more challenging. They are larger and there are no solutions for radar interference caused by them even after two decades of searching. Regardless, the Biden administration is racing ahead with building offshore wind farms, even over the objections of the Department of Defense because of their concern about radar interference. READ MORE

    Our Next Open Border Courtesy Of Offshore Wind?

    “The border is not open,” declares Homeland Security Secretary Alejandro Mayorkas as the media shows video of thousands of illegal migrants crossing our southern border with Mexico. Do not worry, nothing bad is going to happen. But many unsavory people, including some on the terrorist watch list, have crossed, let alone the drugs and sex trafficking.

    Is it possible the Biden administration will open another border? I am not talking about our Canadian border. I am focused on the East Coast where offshore wind turbines can interfere with our long-range radar (LRR) and short-term radar (SRR) which are key to our national defense. Only recently has the Department of Defense expressed serious concern about offshore wind impacting its ability to execute its mission, but they have been worried for years. Radar interference from offshore wind turbine generators (WTG) is a serious issue with no apparent solution.

    Exhibit 1. Schematic For Cape Wind Farm Off Massachusetts Coast

    Source: Getty Image

    We first delved into the radar interference issue when writing about the Cape Wind offshore wind farm in the early 2000s and its struggles for approval. The 468 megawatts (MW) wind farm would have been the first U.S. offshore wind farm. The power was to come from 130 3.6 MW WTGs installed in a 25-square mile section of Horseshoe Shoal in the federal waters of Nantucket Sound bounded by Cape Cod, Nantucket Island, and Martha’s Vineyard. Fierce political opposition from Massachusetts Senator Edward Kennedy (D), former Massachusetts governor Mitt Romney (R), conservative industrialist William Koch, and philanthropist Rachel “Bunny” Mellon helped kill the project.

    One issue that emerged during Cape Wind’s approval process was concern about radar interference by WTGs expressed by the Coast Guard and U.S. Navy. They were concerned about the impact on their operations and training. During the approval process, two radar interference studies were “submitted that attempt to assess the impact of the proposed wind turbines on typical marine radars used in the Nantucket Sound area.” Because “(n)either of the two documents fully evaluated the impact of the actual wind turbines proposed for the Cape Wind project,” the Coast Guard commissioned a third study, the results of which were reported in January 2009. A key conclusion of the study conducted by Technology Service Corporation (TSC) was:

    Read the full article on Energy-Musings.com »

  • Energy Musings, June 2, 2023

    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    June 2, 2023

    Oil Prices Are Crashing As Headwinds Grow Stronger

    Rapidan’s Robert McNally laid out the thesis for higher oil prices once we get beyond the next 3-6 months of macro-economic headwinds. Russia is feared as a quota-buster, but it will become a non-factor as global oil demand rises. The biggest threat to the oil industry is higher taxes, not climate change. READ MORE

    Energy Suffers In May As Oil Prices Fall After Rally

    During May, WTI oil prices fell by 11% which contributed to the Energy sector being the worst performer in the month. It is also the worst performer for the first five months of 2023. What will it take for better performance? READ MORE

    Latest Developments In The U.S. Offshore Wind Market

    New offshore wind farms along the New England coast are starting construction. However, political, economic, and now a proposed environmental protection area for whales could disrupt the timing of projects. We are following the multitude of developments. READ MORE

    Oil Prices Are Crashing As Headwinds Grow Stronger

    When the oil market opened following the Memorial Day holiday, oil prices dropped by more than 4%. From around $73 a barrel, oil prices fell to the $69 level before falling again on Wednesday. There are numerous reasons for oil price weakness including disappointing economic data from China, continued strength in the U.S. dollar’s value, concerns over the U.S. debt ceiling saga, persistent inflation, and the risk of further central bank interest rate hikes, capped off by uncertainty about the upcoming OPEC+ meeting. The prospect of an in-person gathering of OPEC+ officials has some oil watchers speculating that this meeting could lead to a further cut in production quotas or another period of market-share battles between Russia and Saudi Arabia. The banning of several media outlets from covering the gathering has further added to the mystery of what may happen this weekend in Vienna.

    Given the uncertainty about these macro issues, the commodity futures market remains susceptible to increased volatile moves reflecting trader sentiment shifts. For the past several years – essentially since the start of the pandemic in 2020 – oil trading has experienced a shrinking market as traders have retreated from participation or have reduced the amount of their commitment. In fact, according to the commitment of traders’ data, the net bullish positions are the lowest they have been since 2011.

    Read the full article on Energy-Musings.com »

Site by Pharéo | Hosted on The Permanently Moving Network