Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav

[Tom Nolan + 2,443]

California law bans small off-road gas engines, including lawnmowers and chainsaws

Asher Notheis

Sun, October 10, 2021, 12:46 PM

https://www.yahoo.com/news/california-law-bans-small-off-174600432.html

 

This 11 minute video was embedded into the article...

Google's Climate Crackdown: A conversation with Marc Morano

https://youtu.be/6DCg41mNvZA

 

[bloodman33 + 22]

I just love low natural gas reserves and heating oil reserves!  Money! Does anyone know how to get 100 dollar bills stuck on skin using motor oil,  off your body.  I also love Green people.  AOC she is my gale, she looks hotter than a big fat whale!  Again the writing's on the wall for burning stuff for energy, eventually.  No reason to not invest.  My guess is by the time governments get their act together with carbon emissions the damage will have been done most likely in 15 to 30 years.  Glad I live in the North in a deep blue state with a strong economy with lots of fresh clear drinking water to wash off my 100 dollar bills from my body.  Seems like most of the red states are a drain on the US tax base taking far more than they put in.  We should sell them to Mexico.  Most were Mexico's anyway before we stole them.   Who needs them.

[Tom Nolan + 2,443]

Gazprom Hikes Export Prices As EU Gas Crisis Deepens

By ZeroHedge - Oct 11, 2021, 1:00 PM CDT

• Russia's natural gas giant, Gazprom, raised its 2021 price guidance for natural gas exports
• Gazprom reiterates that shoring up inventories at home is its top priority
• The Kremlin’s ambassador to the EU called on Europe to mend ties with Moscow in order to avoid future gas shortages

https://oilprice.com/Energy/Natural-Gas/Gazprom-Hikes-Export-Prices-As-EU-Gas-Crisis-Deepens.html

[Tom Nolan + 2,443]

Russia's Energy Influence In Europe Is Growing

By Haley Zaremba - Oct 11, 2021, 2:00 PM CDT

• The Nord Stream 2 pipeline is playing a growing role in Russia’s energy influence in Europe.
• As the European energy crunch has intensified, Russia has not increased its supply to meet the region’s demand, in a move that many experts have interpreted as a form of “energy blackmail.”
• Increasing reliance on Moscow is not only a geopolitical danger -- the increase of demand for fossil fuels also poses a serious threat to climate goals. 

https://oilprice.com/Energy/Natural-Gas/Russias-Energy-Influence-In-Europe-Is-Growing.html

 

[Tom Nolan + 2,443]

Why $80 Oil Won't Destroy Demand

By Tsvetana Paraskova - Oct 11, 2021, 7:00 PM CDT

• Global oil demand is on course to recover to pre-pandemic levels by the end of the year

• U.S. demand is leading the way, with petroleum product demand approaching all-time highs this summer

• The rollout of vaccines across Asia is only going to speed up the  recovery of global oil demand

https://oilprice.com/Energy/Crude-Oil/Why-80-Wont-Kill-Oil-Demand.html

The $80 per barrel threshold may not be the limit for oil prices in the coming months as global demand recovery continues and record natural gas prices spur more demand for oil products for power generation and heating. 

Despite the still lingering concerns over the Delta variant in many countries, mobility in developed economies continues to narrow the gap with 2019 levels amid higher vaccination rates and strong economic recovery. Although developing economies in South and Southeast Asia are still imposing intermittent localized lockdowns, oil demand globally continues to grow and is set to reach pre-pandemic levels within a few months.  

So, 2019 was not the year of peak oil demand, as some analysts predicted in the first half of 2020 when COVID had most of the world on lockdown.  

In addition, the skyrocketing natural gas and power prices are boosting the overall energy market rally and are set to result in more oil product demand in a gas-to-oil switch, especially in parts of Asia. 

On Friday, the U.S. benchmark, WTI Crude, broke above $80 per barrel for the first time since 2014 as the world scrambles for energy supplies for the winter. Early on Monday, oil continued to rise in Asian trade, with Brent Crude topping $84 and WTI at $82. 

The rally in prices is not only the result of the energy supply crisis in Europe and Asia. 

Global oil demand continues to recover at a healthy pace, although the pandemic is still with us, Ed Crooks, Wood Mackenzie’s Vice-Chair, Americas, notes. 

The pandemic is still a factor on the global oil market, but “its impact on the world economy and on energy demand is fading,” Crooks wrote in a commentary on Friday. 

WoodMac - like many other consultancies, analysts, and oil majors - expects global demand worldwide, even at its uneven pace across regions, to reach pre-COVID levels by the third quarter of 2022. 

This quarter, global oil demand is forecast to grow to around 99 million barrels per day (bpd), up from 97 million bpd in the third quarter, when demand rose by 6 percent compared to the third quarter of 2020, according to Wood Mackenzie.

Oil demand globally is recovering from the summer Delta variant spike faster than some observers had expected. Then, soaring prices of natural gas and coal in Europe and Asia are forcing more gas-to-oil switching at power generating units globally, further pushing up demand for oil. 

Many analysts and oil companies see global oil demand returning to the pre-crisis levels of 2019 as early as the start of next year, if not earlier, by the end of 2021. 

Oil demand in the United States is at the forefront of recovery, with petroleum product demand over the summer approaching its all-time highs at about 21 million bpd, Wood Mackenzie’s Crooks notes. 

“Mobility data show that even as the Delta variant of Covid-19 caused a surge in US infections, people kept driving,” he added. 

The rollout of vaccines in developing economies in Asia will likely ease the pressure for intermittent lockdowns in the region. The countries with slower demand recovery than the U.S. can be expected to catch up, according to Suzanne Danforth, Wood Mackenzie’s Americas markets lead for downstream oil. 

“The rebound in high-income countries with high vaccination rates is giving an indication of what other countries can look forward to,” WoodMac says. 

As demand recovery continues, the supply side is also putting upward pressure on oil prices, after OPEC+ decided last week to keep plans for easing the cuts unchanged, despite calls for more supply from consuming countries, including the United States. OPEC+ will increase supply in November by 400,000 bpd - the minimum the market was expecting ahead of the meeting.  

Tightening oil and other energy commodity markets have rekindled speculation about how high oil prices could go and whether they could reach $100 a barrel, especially if this winter in the northern hemisphere turns out colder than usual. 

The $80 a barrel threshold is typically seen as the trigger of demand destruction, but with tight natural gas and coal markets globally, this winter’s demand-destruction price point could be higher. 

By Tsvetana Paraskova for Oilprice.com

[Tom Nolan + 2,443]

Are Algorithms To Blame For Europe’s Natural Gas Crisis?

By Cyril Widdershoven - Oct 11, 2021, 6:00 PM CDT

• While it appears that Russia has been refusing to send extra natural gas to Europe during the current shortage, the continents energy crisis may have been caused by something else
• Putin has long understood the significance of the liberalization of European gas markets, and algorithmic trading may have played a part in soaring prices
• If Russia was indeed able to manipulate prices higher by using ‘paper volumes’, then the security of Europe’s broader energy market will have to be looked at

https://oilprice.com/Energy/Energy-General/Are-Algorithms-To-Blame-For-Europes-Natural-Gas-Crisis.html

[Tom Nolan + 2,443]

A Successful Energy Transition Will Need Oil Demand Destruction

By Irina Slav - Oct 11, 2021, 5:00 PM CDT

• The global energy transition away from fossil fuels and towards low-emission energy sources appears to be a primary target for a majority of nations
• Unfortunately, these nations are reluctant to acknowledge that a successful energy transition will require a significant reduction in demand 
• Reducing energy demand without sparking major riots or reducing the standard of living of their citizens continues to be a problem for governments

https://oilprice.com/Energy/Crude-Oil/A-Successful-Energy-Transition-Will-Need-Oil-Demand-Destruction.html

There’s a dark secret about the energy transition that politicians and energy regulators all too frequently shy away from. Unfortunately, unless this issue is dealt with the energy transition may never take place.

The world consumes ever-growing amounts of energy as its total population increases, led by emerging markets that, in addition to strong population growth, are seeing an increase in the average wealth of their citizens. Any increase in wealth leads to more consumption of everything, energy included. And if countries are distracted by climate change discussions and rush into emission targets and renewable capacity, a shortage of energy supply follows.

This is what we are currently witnessing in Europe and Asia. Stringent carbon dioxide emission regulations and a campaign to discourage investment in fossil fuel development in Europe have increased the continent’s heavy dependence on imported energy despite ambitions to increase self-sufficiency in energy by building massive wind and solar power capacity.

Meanwhile, in Asia, economies were getting back on their feet after pandemic-prompted lockdowns and energy consumption surged. Suddenly, there was too much demand and too little gas, coal, and even oil. And while oil supply could be boosted relatively quickly because OPEC+ has been holding back supply, gas and coal have turned out to be trickier because of things like underinvestment and plant closures.

Related: WTI Crude Oil Price Hits 7-Year High

Despite the underinvestment, the cold shoulder of asset managers, the environmentalist protests, and the denunciation of natural gas as a bridge fuel between the fossil fuel era and the post-fossil fuel era, demand for these - demand for energy of any kind as long as it’s reliable - has been on the rise. And this is what needs to change if the Paris Agreement agenda is to be met.

A group of UK researchers put it bluntly last year. In a report calling for not net-zero but absolute zero, they suggested that “We need to switch to using electricity as our only form of energy and if we continue today’s impressive rates of growth in non-emitting generation, we’ll only have to cut our use of energy to 60% of today’s levels.”

An energy consumption cut of “only” 40 percent would be quite a feat. The authors of the above report proposed things like switching to heat pumps and smaller cars among the things people can do to affect this particular change, along with using public transport more and buying more efficient equipment.

Let’s forget for a moment the concept of planned obsolescence, which makes some of the proposals impossible to put into practice, and focus on the whole idea of reducing energy consumption. There is a reason this idea is not among the most popular energy transition topics among those in charge of decision-making. No politician has ever won elections by telling voters to consume less of anything. The reason no politician has done this is that telling people they should consume less of anything causes anxiety and fear, and ultimately loses elections.

Yet as the current situation with energy availability in Europe and Asia shows, unless we somehow kill demand for energy the chances of the energy transition succeeding are slim. Human history is a clear example that, without state intervention, the trend is always towards growing consumption - except during recessions, when we tighten our belts, only to loosen them again as soon as the economy starts looking up.

Related: Gas Prices In Europe Are Now The Equivalent Of $205 Oil

What’s more, there are already hundreds of millions of people without access to electricity. A lot of transition talk has been focused on getting clean, affordable power to these hundreds of millions of people, and yet little has been done because it is simply unprofitable. And more millions are coming.

There has been a concerted effort on the part of politicians and institutions to present the energy transition as a straightforward no-brainer. We simply replace dirty oil, coal, and gas power plants with solar and wind farms, and voila, we get clean and affordable power. As Britain’s PM Boris Johnson put it, it’s easy to be green. Only it’s not.

Being truly green would require, in addition to massive investments in utility-scale renewable installations and storage, a substantial reduction in energy demand. Whether this would mean giving up cars and dryers in favor of bicycles and natural drying in the sun and wind - and whether this would be enough - is yet unclear.

For now, the idea is to switch to electric cars rather than shun personal transportation as a whole. And there is already opposition to the mandatory phasing out of ICE vehicles in parts of Europe. Remember the yellow vest protests in France? They were ignited by a proposal to increase fuel taxes for environmental purposes. That was perhaps supposed to sap demand for fuel but instead led to quite violent protests.

Energy demand destruction is the only way the energy transition would work. And yet, it is the one thing no one wants to do, not directly, at least, because it could be dangerous. 

By Irina Slav for Oilprice.com

[Tom Nolan + 2,443]

https://www.zerohedge.com/markets/yet-another-worry-price-ship-fuel-soaring-highest-2014

Yet Another Worry: Price Of Ship Fuel Soaring To Highest Since 2014

by Tyler Durden

Monday, Oct 11, 2021 - 05:00 AM

By Greg Miller of FreightWaves,

Commodity prices are surging around the globe, so it should come as no surprise: Marine fuel is getting a lot more expensive. That’s bad news for ship operators on the cost side, and, in the container business, yet another headache for cargo shippers.

Marine bunker prices are “soaring,” said Alphatanker on Thursday. “This has not just impacted 3.5% [high-sulfur fuel oil or HSFO] but also 0.5% VLSFO [very low sulfur fuel oil]."

[Tom Nolan + 2,443]

How Big Is The Impact Of Soaring Nat Gas Prices On CPI

https://www.zerohedge.com/markets/how-big-impact-soaring-nat-gas-prices-cpi

[Tom Nolan + 2,443]

China Coal Futures Hit Record High As Mines Flood; Worsening Power Shortages Hit Rust Belt 

by Tyler Durden

Monday, Oct 11, 2021 - 11:05 AM

China's top coal-producing region has been devastated by torrential rains and flooding this past week. About 9% of the coal mines in Shanxi province, an area responsible for producing 30% of China's supply, have closed operations. The direct effect of this has been a spike in coal futures.

Heavy rainfall flooded Shanxi over the weekend. More than 120,000 people have been evacuated, and 60 of the 682 coal mines in the province have been closed. Industrial yards and manufacturing complexes have also been shuttered due to flooding. 

The province is usually a dry area but record-breaking rain last week complicated things for the mining industry. This also comes at a time when Beijing has called on mining companies to boost output amid a nationwide power crunch. 

https://www.zerohedge.com/commodities/china-coal-futures-hit-record-high-mines-flood-worsening-power-shortages-hit-rust-belt

[Tom Nolan + 2,443]

Geomagnetic Storm Hitting Earth Today Could Cause Power Grid And Satellite Disruptions 

by Tyler Durden

Monday, Oct 11, 2021 - 12:24 PM

Forecasters at the Space Weather Prediction Center (SWPC) warn a solar flare will hit Earth Today, potentially affecting power grids and could bring dazzling Northern Lights to northern latitudes.

SWPC issued a "G2 (Moderate) geomagnetic storm watch" for Monday and Tuesday. The geomagnetic storm could affect power grids primarily poleward of 55 degrees Geomagnetic Latitude. Satellite "orientation irregularities" may occur; increased drag on low Earth-orbit satellites is possible, it said, adding, "high-frequency radio propagation can fade at higher latitudes."

https://www.zerohedge.com/weather/geomagnetic-storm-hitting-earth-today-could-cause-power-grid-and-satellite-disruptions

[Tom Nolan + 2,443]

Qatar powerless to ease global energy crisis

https://www.yahoo.com/news/qatar-powerless-ease-global-energy-132823242.html

DOHA/LONDON (Reuters) -Qatar, the world's largest seller of liquefied natural gas (LNG), told consumers it was powerless to cool energy prices prices as British steelmakers said they could be forced to halt output in the face of soaring costs.

The rebound in economic activity after the easing of coronavirus lockdowns has laid bare a shortage of natural gas stocks and other fuel supplies, causing blackouts in some countries.

To keep factories open and homes heated, industry executives and governments are having to pay much more for energy and revert to coal and oil, the most-polluting fossil fuels.

As some generators switched to burning oil, crude futures jumped to multi-year highs on Monday, with analysts predicting that prices will stay strong.

LNG prices, which sank to record lows at the height of pandemic lockdowns, have surged this year to record highs, but Qatar said it has no supplies available to calm the market. https://www.reuters.com/world/middle-east/qatar-energy-minister-kaabi-unhappy-with-high-gas-prices-2021-10-11

"We are maxed out, as far as we have given all our customers their due quantities," said Qatar energy minister Saad al-Kaabi. "I am unhappy about gas prices being high."

Across the globe, the high prices are pressuring governments and industry, which has warned of the risk of job losses and costs being passed on to customers and consumers.

Steelmakers in Britain https://www.reuters.com/business/uk-steel-makers-warn-crisis-due-power-prices-2021-10-11 said they may have to shut down production and would face dire consequences unless the government helped.

The government was listening to industry concerns and discussing whether further action was needed, Prime Minister Boris Johnson's spokesman said on Monday.

In Spain, steelmaker Sidenor https://www.reuters.com/article/spain-energy-sidenor-idAFL8N2R72S9 said it had already suspended production at a plant near Bilbao in the north of the country after increased energy costs had driven up overall production costs by 25%.

In China, the world's second-largest economy and top exporter, the government has sought to boost coal supplies, but the largest provincial economy in China's northeast rust belt https://www.reuters.com/business/energy/china-rust-belt-province-warns-more-power-shortages-energy-crisis-2021-10-11 on Monday said it was grappling with worsening power shortages.

The shortfalls sent Chinese energy and petrochemicals futures to multi-year and record highs on Monday.

Demand from data processing added to the strain.

The Dutch Data https://www.reuters.com/world/europe/dutch-data-centres-feel-pinch-electricity-price-surge-2021-10-11 Center Association has asked political leaders to cap electricity prices, provide corporate tax breaks or introduce subsidies in support of businesses investing in cleaner energy.

[Tom Nolan + 2,443]

India Faces Rolling Blackouts As Coal Shortage Forces Power Plants To Adopt Emergency Measures

by Tyler Durden

Sunday, Oct 10, 2021 - 03:00 PM

Due to a combination of factors - including environmentalists' push for "green" energy like wind and solar, plus the COVID-inspired collapse in global supply chains leaving countries around the world desperate for badly needed energy supplies (from LNG to coal to unrefined crude oil) - energy crises have been unfolding in China, the UK, Continental Europe and now India, the world's largest democracy.

https://www.zerohedge.com/energy/india-faces-rolling-blackouts-coal-shortage-forces-power-plants-adopt-emergency-measures

[Tom Nolan + 2,443]

Gazprom Hikes Export Prices As Moscow Urges Europe To Fix Ties To Avoid More Gas Shortages

by Tyler Durden

Sunday, Oct 10, 2021 - 08:11 PM

Russia's nat gas giant, Gazprom, raised its 2021 price guidance for natural gas exports, while signaling caution on volumes it could ship, as Europe’s energy crisis worsens.

According to Bloomberg, the Russian state-controlled exporter that supplies 35% of European gas needs, reiterated that shoring up inventories at home was its top priority, and only after it has refilled its own storage facilities by the end of October, would the company look at potentially increasing exports to continental Europe, Wood & Co. and BCS Global Markets wrote in separate notes Friday following a webinar with Gazprom managers. It would, in theory, explain why Russian supplies to Europe remain well below recent levels.

https://www.zerohedge.com/markets/gazprom-hikes-export-prices-moscow-urges-europe-fix-ties-avoid-more-gas-shortages

[Tom Nolan + 2,443]

Is America Doomed To Replicate Europe’s Energy Crisis?

By Irina Slav - Oct 09, 2021, 6:00 PM CDT

• What is happening in Europe—including the UK, by the way, one of the most active energy transitioners—right now is a cautionary tale of magnificent proportions.
•  Europe was in no particular rush to top up its gas reserves at the time, and neither was Asia.
• The quick deterioration in the energy situation in Europe should make anyone planning major energy system overhauls think twice before following the exact same scenario that Europe did.

https://oilprice.com/Energy/Natural-Gas/Is-America-Doomed-To-Replicate-Europes-Energy-Crisis.html

For weeks now, there has been virtually no other news but the energy crunch that surprised Europe in September and has since then gone on to roil every market and industry and spur fears of blackouts, astronomical utility bills, and rising food prices.

The official version of events is that rising energy demand coincided with tight energy supply. The unofficial version has to do with Europe’s energy transition agenda and the possibility it may have rushed to it without enough long-term planning. And now, the U.S. has basically an identical agenda, focusing on boosting wind and solar power generation capacity, reduce demand for oil and gas, and encourage people to buy EVs instead of cars with internal combustion engines.

David Blackmon wrote earlier this week for Forbes that “The energy crisis in Western Europe this summer has been brought on by premature retirements of hundreds of coal and natural gas power plants in favor of massive over-reliance on wind power and, to a lesser extent, solar.”

He went on to note that, “Ironically, this crisis is taking place just as House Speaker Nancy Pelosi and congressional Democrats attempt to ram through their massive $3.5 “budget reconciliation” bill that is in large part designed to recreate the European model in the United States.”

Europe currently has some 220 GW in wind power, according to Wind Europe. Solar capacity stood at close to 131 GW at end-2019 but rose strongly last year, prompting media praise of how not even the pandemic could slow down the rollout of cheap solar farms that would bring Europe closer to its net-zero ambitions for 2050. And then suddenly all changed.

Right now, there are factories closing in Europe—including greenhouses in the Netherlands that produce, not to put too fine a point on it, food—and utilities desperately looking to buy coal—those lucky enough to still have coal-fired power plants. Some are switching from gas to oil derivatives, as the latter have become cheaper than natural gas. And official figures such as the IEA’s head Fatih Birol are cautioning against anyone blaming renewables. If anything, the narrative for ever more renewables remains as strong as ever, at least in some circles.

What is happening in Europe—including the UK, by the way, one of the most active energy transitioners—right now is a cautionary tale of magnificent proportions. Even Bloomberg, which a few weeks ago came out with an article stating that Europe’s Energy Crisis Shows the Downside of Fossil Fuels, recently published another, cautioning that Global Energy Crisis Is the First of Many in the Clean-Power Era.

The energy crisis in Europe and, to a considerable extent in China, is showing the rest of the world how not to do an energy transition at a time when many parts of that rest of the world are planning their own transitions. The American plan is, by all means, the most ambitious and generous one, as befits the world’s largest economy. But this also makes it the riskiest transition plan in light of recent European events.

“This massive piece of legislation [the $3.5-trillion Biden administration bill] is loaded up with hundreds of billions of dollars in new subsidies, mandates and incentives for these very same intermittent, low-density energy sources, along with new taxes and draconian regulatory actions designed to drive up the cost of fossil fuels in power generation and transportation,” Blackmon wrote.

Essentially, then, the current U.S. administration is repeating the mistake that the EU made in its ambition to green itself up and cut emissions both deeply and quickly. The consequences of this rushed transition will begin with higher emissions, by the way, as the continent leans heavily on fossil fuels and supply remains tight because of transition efforts that led to years of underinvestment in new production.

In all fairness, there has been a speculative element to the gas price crisis in Europe. In mid-September, Reuters’ Clyde Russell wrote a column that must have passed relatively unnoticed as the noise around price began getting louder. What Russell noted in the column was despite rising prices for LNG on the spot market, flows of the fuel to both Asia and Europe were steady.

In other words, Europe was in no particular rush to top up its gas reserves at the time, and neither was Asia. Everything was business as normal. Europe was importing LNG at a rate of 5-6 million tons monthly over the second quarter, which, Russell said, was the usual seasonal amount. There was no crisis until September.

The speculative element of the crisis deserves separate attention. Its mention here is for the sake of fairness. Because something else happened this year: the wind didn’t blow as much as everyone expected. Major wind power industry players suffered profit drops because of that, and utilities suffered output drops. Demand, however, did not drop, and apparently, solar farms could step in to shoulder the weight, so it was gas that had to be used, however grudgingly, to keep the lights on.

The quick deterioration in the energy situation in Europe should make anyone planning major energy system overhauls think twice before following the exact same scenario that Europe did. It should motivate the development of alternative paths to net zero or maybe even reconsider the necessity for net-zero commitments. Sadly, this is unlikely to happen.

By Irina Slav for Oilprice.com 

[Tom Nolan + 2,443]

Russophobia Absurdity… As Russian Gas Rescues Europe’s Energy Crisis

Strategic Culture

October 11, 2021

https://www.lewrockwell.com/2021/10/no_author/russophobia-absurdity-as-russian-gas-rescues-europes-energy-crisis/

Europe’s energy crisis and Russia’s readiness to alleviate vividly demonstrates a fundamental win-win partnership.

Russophobia and geopolitical cynicism know no bounds among certain Western politicians and media commentators. Thankfully, however, such a negative mindset is increasingly exposed for its ridiculous irrationality.

This week as Europe’s energy crisis broke new records in terms of soaring consumer prices, Russian President Vladimir Putin stepped in with a promise to increase exports of natural gas. The news had an immediate calming effect on Europe’s energy markets which saw prices whipsawing to lower levels.

Rather than simply greeting the development as a positive move, there were predictably sinister comments from some quarters. Russia was accused in Western media of “holding Europe hostage” over the continent’s energy crisis and using its vast supply of natural gas as a “geopolitical weapon”.

Jake Sullivan, the United States national security advisor to President Biden, told the BBC that Moscow was “exploiting” Europe’s energy crunch.

This is an overwrought, convoluted way of interpreting what is normal economic interplay of supply and demand. But the irrationality betrays an obdurate mindset of Russophobia that is untenable. If politicians and experts are so possessed of such foolish bigotry then their assessments on the subject and much else besides are hopelessly unreliable.

Europe’s current energy crisis and market turmoil have nothing to do with Russia as a primary factor. The pent-up demand after a year of economic quiescence due to the coronavirus pandemic, the low storage of natural gas by European countries due to government policies, the switch to renewable energy sources not being able to meet demand, and the approach of winter – have all compounded the overall supply of gas. This has, in turn, caused benchmark prices for the fuel and other forms of energy to skyrocket. Gas prices are up more than five-fold. What has that got to do with Russia? Nothing, at least in causality.

Russia is historically Europe’s biggest supplier of natural gas. It accounts for about 40 percent of the continent’s consumption. As President Putin pointed out this week, Russia’s state-owned Gazprom has met all its contractual deliveries of natural gas to Europe.

The allegation from some quarters that Russia is withholding gas supplies to Europe in order to exert political pressure on Europe is a baseless lie that stems from anti-Russia prejudice and propaganda.

The fact is Europe is faced with an energy crisis – partly of its own making – and Russia is able to alleviate it by increasing its already substantial supply of natural gas. What is there to complicate about a straightforward economic relation?

This week saw a technical step being completed for the opening of the new Nord Stream 2 pipeline from Russia to Germany and the rest of Europe. The new pipeline will greatly expand the existing flow of Russia gas to the European Union. German regulatory authorities are reviewing the new supply route and it may take a few months for delivery to become operational. The ball is in the EU’s court. If Europe wants more Russian gas that is its prerogative. How is that supposed to be Russia holding someone hostage? The slander is not only insulting, it is moronic.

Russia has proven to be a reliable supplier of energy to the rest of Europe over several decades, including during the former Cold War period when Western ideologues demonised the Soviet Union as an “evil empire”. Russia presently is ready to meet increased demand with a new supply route under the Baltic Sea while also honouring existing contracts for overland transit. The notion that Ukraine will lose out on transit fees is groundless as Moscow has repeatedly stated it will honour existing contracts with Ukraine up to 2024. Russia is not obligated to keep paying transit fees indefinitely if logistically more efficient supply routes are innovated. That is a reasonable exercise of Russia’s or any nation’s sovereign right.

The main obstacle to improving efficiency in energy trade between Russia and Europe is the negative political attitude of certain European politicians and successive American governments. Washington and its European surrogates have been playing anachronistic Cold War politics with a matter of vital interest for the whole of Europe. The Nord Stream 2 pipeline should have been completed over a year ago but was not only because of U.S. sanctions and the negative attitude of eastern European states. The irony is that the detrimental impact of Europe’s energy crisis on households and industries is attributable to the irrational objection by Washington and certain anti-Russian European states towards Russia as a natural strategic partner with Europe. Yet these culprits persist in their perversely pejorative mindset towards Russia, accusing the latter of wielding energy trade like a geopolitical weapon.

It is the United States that is cynically using Europe’s energy market as a geopolitical weapon with a view to selling its own expensive and environmentally dirty liquified natural gas. There is also a bigger ideological aspect to all this skulduggery. If Russia and Europe were permitted to develop their naturally mutual partnership in energy trade the consequence would undermine the contrived propaganda construct of Russia as a “threat” to European security. That construct is vital to maintain for the purpose of promoting the U.S.-led NATO military alliance and lucrative American weapons sales to Europe. It is also vital for Washington’s hegemonic influence over European allies by polarising relations with Russia.

Europe’s energy crisis and Russia’s readiness to alleviate vividly demonstrates a fundamental win-win partnership. That reality has become so obvious that objections to the relationship look increasingly irrational and ridiculous from their congenital Russophobia.

The views of individual contributors do not necessarily represent those of the Strategic Culture Foundation

[Boat + 1,323]

On 9/13/2021 at 11:56 AM, Tom Nolan said:

In case you haven't noticed, on Monday September 13th, Natural Gas prices shot up AGAIN!  Up about 6% depending upon the timestamp.  https://tradingeconomics.com/commodity/natural-gas

High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year

By Irina Slav - Sep 13, 2021, 11:00 AM CDT

https://oilprice.com/Energy/Natural-Gas/High-Natural-Gas-Prices-Today-Will-Send-US-Production-Soaring-Next-Year.html

Natural gas production is set for a significant increase over the next year thanks to the current imbalance between demand and supply, which has pushed prices to record highs, Reuters’ John Kemp reports, citing energy traders.

Meanwhile, however, gas supply for this winter season will be tight, Kemp also said, adding that as a result and in anticipation of next year’s supply recovery, Henry Hub futures had swung into a backwardation, with contracts for delivery in January 2023 round $1.15 per mmBtu lower than contracts for delivery next January. Current Henry Hub prices are around $5 per mmBtu, which is double the price from a year ago, according to the Wall Street Journal.

Natural Gas Prices At Record Highs

The Journal’s Jinjoo Lee noted in a recent report that natural gas could “really use an OPEC-style, coordinated production ramp-up right now.” While U.S. natural gas prices were double those a year ago, the increase in Asia and Europe was even larger, at four times for Asia and five times for Europe, which is already suffering the consequences of gas shortages, with electricity prices spiking, prompting protests in parts of the EU.

It is this tightness of supply that will be one of the biggest motivators for higher U.S. gas production next year, although, per Kemp, the ramp-up in production has already started, with the active rig count topping 100 as of early September and average daily output at 79 billion cu m.

Over the last year, gas producers have boosted production by 1.4 billion cu ft, Canary LLC CEO Dan Eberhart reported for Forbes, and the EIA expects the average daily production for the second half of the year will be 92.9 billion cu ft, up from 91.4 billion cu ft during the first half.

Exports are also set to rise next year, from 14 billion cu ft this year to 19 billion cu ft in 2022, including pipeline and LNG exports.

By Irina Slav for Oilprice.com

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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So the first 1/2 of 2021 had slight net exports of oil. The US also has a healthy export business in nat gas. Mostly to Mexico but a growing market around the world. Let me explain. The US is net FF independent. So higher prices are driven by policy, not a lack of resources or actual production. Heck the US even allows pollution in the form of nat gas flaring just to sell the gas to foreigners. Imagine that. These Biden claims are BS. Heck investors are just selling the oil and gas in storage to foreigners. Once again, we produce enough of gas and oil to cover US consumption. Let’s just be honest, anybody that says any different is just lying. Typical behavior but lying. 
Investors get excited about storage levels which are controlled mainly by the Saudi. The classic tail wagging the dog. 
Personally I would keep our resources for future generations but don’t have the votes. I still have the truth. Unlike some I don’t plan a Coup to force FF to stay home. I will not attack the Capital and lie about it. I would end flaring though. Why ruin our own lungs in a COVID world that attacks lungs. Get the connection? 😊

[Boat + 1,323]

Let’s say we should die from our own oil and gas that provides for our consumption. Let’s also point out less pollution is less death from that pollution. A goal of less pollution means longer life. Kinda cool goal that in theory should resonate. Less death should not cost more money like what happened in Europe. Over 1/2 the population can’t afford high energy prices. But where the sun shines and the wind blows there is a cheaper and cleaner alternative. Several states have growing renewable markets that have not driven up electricity prices. Much of that tech is already old and better tech for growth keeps getting better. Be happy your kids and their kids will have a cleaner future. This growth needs to stay measured and competitive with FF and only in areas that match that criteria. This is called being smart and practical. Yea, yea, woke.

[Tom Nolan + 2,443]

6 hours ago, Tom Nolan said:

Is America Doomed To Replicate Europe’s Energy Crisis?

By Irina Slav - Oct 09, 2021, 6:00 PM CDT

• What is happening in Europe—including the UK, by the way, one of the most active energy transitioners—right now is a cautionary tale of magnificent proportions.
•  Europe was in no particular rush to top up its gas reserves at the time, and neither was Asia.
• The quick deterioration in the energy situation in Europe should make anyone planning major energy system overhauls think twice before following the exact same scenario that Europe did.

https://oilprice.com/Energy/Natural-Gas/Is-America-Doomed-To-Replicate-Europes-Energy-Crisis.html

For weeks now, there has been virtually no other news but the energy crunch that surprised Europe in September and has since then gone on to roil every market and industry and spur fears of blackouts, astronomical utility bills, and rising food prices.

The official version of events is that rising energy demand coincided with tight energy supply. The unofficial version has to do with Europe’s energy transition agenda and the possibility it may have rushed to it without enough long-term planning. And now, the U.S. has basically an identical agenda, focusing on boosting wind and solar power generation capacity, reduce demand for oil and gas, and encourage people to buy EVs instead of cars with internal combustion engines.

David Blackmon wrote earlier this week for Forbes that “The energy crisis in Western Europe this summer has been brought on by premature retirements of hundreds of coal and natural gas power plants in favor of massive over-reliance on wind power and, to a lesser extent, solar.”

He went on to note that, “Ironically, this crisis is taking place just as House Speaker Nancy Pelosi and congressional Democrats attempt to ram through their massive $3.5 “budget reconciliation” bill that is in large part designed to recreate the European model in the United States.”

Europe currently has some 220 GW in wind power, according to Wind Europe. Solar capacity stood at close to 131 GW at end-2019 but rose strongly last year, prompting media praise of how not even the pandemic could slow down the rollout of cheap solar farms that would bring Europe closer to its net-zero ambitions for 2050. And then suddenly all changed.

Right now, there are factories closing in Europe—including greenhouses in the Netherlands that produce, not to put too fine a point on it, food—and utilities desperately looking to buy coal—those lucky enough to still have coal-fired power plants. Some are switching from gas to oil derivatives, as the latter have become cheaper than natural gas. And official figures such as the IEA’s head Fatih Birol are cautioning against anyone blaming renewables. If anything, the narrative for ever more renewables remains as strong as ever, at least in some circles.

What is happening in Europe—including the UK, by the way, one of the most active energy transitioners—right now is a cautionary tale of magnificent proportions. Even Bloomberg, which a few weeks ago came out with an article stating that Europe’s Energy Crisis Shows the Downside of Fossil Fuels, recently published another, cautioning that Global Energy Crisis Is the First of Many in the Clean-Power Era.

The energy crisis in Europe and, to a considerable extent in China, is showing the rest of the world how not to do an energy transition at a time when many parts of that rest of the world are planning their own transitions. The American plan is, by all means, the most ambitious and generous one, as befits the world’s largest economy. But this also makes it the riskiest transition plan in light of recent European events.

“This massive piece of legislation [the $3.5-trillion Biden administration bill] is loaded up with hundreds of billions of dollars in new subsidies, mandates and incentives for these very same intermittent, low-density energy sources, along with new taxes and draconian regulatory actions designed to drive up the cost of fossil fuels in power generation and transportation,” Blackmon wrote.

Essentially, then, the current U.S. administration is repeating the mistake that the EU made in its ambition to green itself up and cut emissions both deeply and quickly. The consequences of this rushed transition will begin with higher emissions, by the way, as the continent leans heavily on fossil fuels and supply remains tight because of transition efforts that led to years of underinvestment in new production.

In all fairness, there has been a speculative element to the gas price crisis in Europe. In mid-September, Reuters’ Clyde Russell wrote a column that must have passed relatively unnoticed as the noise around price began getting louder. What Russell noted in the column was despite rising prices for LNG on the spot market, flows of the fuel to both Asia and Europe were steady.

In other words, Europe was in no particular rush to top up its gas reserves at the time, and neither was Asia. Everything was business as normal. Europe was importing LNG at a rate of 5-6 million tons monthly over the second quarter, which, Russell said, was the usual seasonal amount. There was no crisis until September.

The speculative element of the crisis deserves separate attention. Its mention here is for the sake of fairness. Because something else happened this year: the wind didn’t blow as much as everyone expected. Major wind power industry players suffered profit drops because of that, and utilities suffered output drops. Demand, however, did not drop, and apparently, solar farms could step in to shoulder the weight, so it was gas that had to be used, however grudgingly, to keep the lights on.

The quick deterioration in the energy situation in Europe should make anyone planning major energy system overhauls think twice before following the exact same scenario that Europe did. It should motivate the development of alternative paths to net zero or maybe even reconsider the necessity for net-zero commitments. Sadly, this is unlikely to happen.

By Irina Slav for Oilprice.com 

Zero Hedge Features this Irina Slav article

Is America Doomed To Replicate Europe's Energy Crisis?

by Tyler Durden

Tuesday, Oct 12, 2021 - 05:00 AM

Authored by Irina Slav via OilPrice.com,

• What is happening in Europe - including the UK, by the way, one of the most active energy transitioners - right now is a cautionary tale of magnificent proportions.

•  Europe was in no particular rush to top up its gas reserves at the time, and neither was Asia.

• The quick deterioration in the energy situation in Europe should make anyone planning major energy system overhauls think twice before following the exact same scenario that Europe did.

https://www.zerohedge.com/energy/america-doomed-replicate-europes-energy-crisis

[Tom Nolan + 2,443]

https://www.zerohedge.com/weather/snow-blanket-uk-weeks-rare-polar-vortex-collapse-could-spell-trouble-power-grid

Snow To Blanket UK As Rare Polar Vortex Collapse Could Spell Trouble For Power Grid 

by Tyler Durden

Tuesday, Oct 12, 2021 - 02:45 AM

A sensation headline from UK's tabloid newspaper, Daily Star, sums up a possible rare weather event that could throw the UK into a more profound energy crisis. The headline states: "As gas supply chaos sends price sky-high a -10c polar vortex is heading our way..." 

Meteorologists warn a stratospheric warming event could generate a polar vortex split that pours freezing weather into the country later this month or early November. 

[Rob Plant + 2,756]

17 minutes ago, Tom Nolan said:

https://www.zerohedge.com/weather/snow-blanket-uk-weeks-rare-polar-vortex-collapse-could-spell-trouble-power-grid

Snow To Blanket UK As Rare Polar Vortex Collapse Could Spell Trouble For Power Grid 

by Tyler Durden

Tuesday, Oct 12, 2021 - 02:45 AM

A sensation headline from UK's tabloid newspaper, Daily Star, sums up a possible rare weather event that could throw the UK into a more profound energy crisis. The headline states: "As gas supply chaos sends price sky-high a -10c polar vortex is heading our way..." 

Meteorologists warn a stratospheric warming event could generate a polar vortex split that pours freezing weather into the country later this month or early November. 

Oh Tom you should know better than to believe even a tiny shred of what this rag produces!!

[Tom Nolan + 2,443]

Is $80 The New Normal For Oil?

By Tom Kool - Oct 12, 2021, 2:00 PM CDT

• Private producers with acreage in West Texas and southeast New Mexico are spearheading oil production growth in the US on the back of high oil prices and increased financing access, Bloomberg writes. 
• According to Rystad forecasts, private companies will make up more than half of US supply increments next year as their rig fleet is already on par with that of established US majors. 
• Total Permian Basin production is expected to reach its pre-pandemic high of 4.9 million b/d over the upcoming weeks, only to continue its upward movement over 2022. 
• Publicly traded companies, ranging from ExxonMobil to Pioneer and Diamondback, have opted to pay back debts they incurred and pass profits back to shareholders rather than to invest in new wells. 

https://oilprice.com/Energy/Energy-General/Is-80-The-New-Normal-For-Oil.html

Oil prices have settled comfortably above the $80 mark as fears of demand destruction are countered by forecasts of a cold winter.

Energy Chart of the Week

Energy Market Movers

- South Korean tech firms LG Chem and LG Electronics will pay $1.2 billion for General Motors’ (NYSE:GM) Bolt EV recall, the majority of costs associated with recalling more than 140,000 cars worldwide. 

- Global trading major Trafigura is planning to invest heavily in ammonia production as it sees the low-carbon gas as the shipping fuel of the future, already developing ammonia-fueled engines with Germany’s MAN Energy. 

- Russian gas giant Gazprom (MCX:GAZP) mulls the expansion of its upcoming Ust-Luga LNG plant that is currently expected to have two 6.5mtpa trains coming online in 2024-2025, though it did not provide any details on the assumed capacity of the presumed third train.

Oil Prices Today, Tuesday, October 12, 2021

Crude prices seem to have settled quite comfortably above the $80 per barrel mark, despite growing calls from US officials on OPEC+ to increase production so as to ease the ongoing appreciation of transportation fuels. The supply restraint of the oil group has been largely offset by the Chinese power crunch and production mandates for refiners across the country. It takes several weeks for demand disruptions to be visible in crude flows, yet one can be certain Chinese buying for December-loading barrels will be even weaker than the already-meager levels of Q3. With this, Brent prices have been hovering around the $84 per barrel mark, whilst WTI is trading around $81 per barrel. 

Related: High Natural Gas Prices Could Lead To 2 Million Bpd Extra Oil Demand

China Set to Liberalize Power Prices Amid Ongoing Crunch.

Chinese authorities have decided to further liberalize power pricing for coal-fired electricity plants and force industrial consumers to buy from the market in a bid to ramp up production and render its pricing transparent.

La Nina Event Increasingly Likely This Winter.

Japan’s meteorological agency JMA has increased its probability forecast for a La Nina weather event from 30% to 60%, indicating that spells of cold weather in Northeast Asia are increasingly more likely in December 2021-February 2022 which spells trouble for electricity demand in the Asia Pacific.

Reliance Backs Up Commitment towards Solar.

India’s largest private refiner Reliance Industries (NSE:RELIANCE) paid $771 million to acquire Norway-based REC Solar, a solar-grade polysilicon producer, and separately agreed to buy a 40% stake in Sterling and Wilson, an Indian solar-focused engineering company, on the back of its $10 billion photovoltaic commitment as it seeks to diversify away from oil.

Aluminum Prices Soar on China’s Power Crunch.

Aluminum prices rose to a 13-year high this week as global supply continues to be severely hit by mandated cuts in China, power outages in India, and exorbitant energy costs in Europe, pushing the benchmark LME contract above $3,070 per metric ton.

There Is No Stopping for Coal Prices.

Coal prices have been increasing for 23 straight weeks already, with Australia’s benchmark Newcastle thermal coal prices traded around $230 per metric ton recently, gaining 400% year-on-year and some 12% week-on-week as high LNG prices incentivize coal switching.

Oxy Signs Up for Four Offshore Blocks in Colombia.

Colombia’s national hydrocarbon agency stated that US firm Anadarko, a subsidiary of Occidental Petroleum (NYSE:OXY), signed four exploration and production deals with expected investment commitments of $1.4 billion, less than a year after the parent company sold its onshore assets to the Carlyle Group.

Chinese Firm Signs 13-Year LNG Supply Deal with Cheniere.

China’s natural gas distributor ENN (SHA:600803) signed a 13-year supply deal with US firm Cheniere Energy (NYSE:LNG) for 0.9 million tons of LNG per year on a FOB basis, with prices pegged to Henry Hub prices plus a fixed liquefaction fee.

Angola Fails to Attract Majors’ Interest in Farm-Out Round.

Just as Angolan oil exports have dropped to a 30-year low this month, the African nation’s national oil company Sonangol disclosed the names of companies that bid in its upcoming farm-out bid round, with no Western majors being present. 

Chevron Commits to 2050 Net-Zero Goal.

Wary of following in ExxonMobil’s (NYSE:XOM) footsteps, US major Chevron (NYSE:CVX) pledged to cut its operational emissions, coming predominantly from the upstream and power generation segments to a net-zero by 2050.

Freeport Starts Construction of Giant Indonesia Smelter.

US mining firm Freeport McMoran (NYSE:FCX) launched the construction of a $3 billion copper smelting facility in Gresik, East Java, with an assumed capacity of 1.7 million tons of copper concentrate. The plant will be designed by Chiyoda and should be commissioned in late 2023-early 2024.

Mexican President Accuses Trading Firms of Smuggling Fuel.

Mexico’s President Andres Manuel Lopez Obrador has accused trading major Trafigura of transporting contraband fuel into the Latin American country, adding that the import permit of the Swiss-based firm had already been suspended.

Norwegian Indigenous Group Turns Against Wind Energy.

In a landmark ruling for European law practice, Norway’s Supreme Court ruled that two wind farms, owned by a consortium led by Statkraft and built on territories inhabited by Sami people – whose grazing animals are frightened by the sight and sound of wind turbines – should see their licenses revoked. 

Qatar Petroleum Rebrands as It Seeks to Expand Competence.

Qatar Petroleum changed its name to Qatar Energy to reflect a broader strategy scope as the Qatari NOC intends to move beyond hydrocarbon extraction and to expand its international presence in energy efficiency and CCS technologies.

By Tom Kool for Oilprice.com

[Tom Nolan + 2,443]

https://community.oilprice.com/topic/24614-gas-stoves-and-water-heaters-face-a-climate-change-reckoning-bidens-new-world-order-plans/

 

[Tom Nolan + 2,443]

Why U.S. LNG Is Going To Asia Instead Of Europe

By Irina Slav - Oct 12, 2021, 4:00 PM CDT

• Most American gas has been going to Asia, where buyers have been more generous with prices.
• U.S. LNG has never been particularly competitive in most of Europe because of the availability of pipeline gas.
• Asia’s insatiable appetite for energy and its willingness to pay a premium for U.S. LNG because of the lack of major pipeline supplies, it is likely to remain as the ultimate market for U.S. LNG.

https://oilprice.com/Energy/Natural-Gas/Why-US-LNG-Is-Going-To-Asia-Instead-Of-Europe.html

U.S. shale drillers appear to be worried about losing market share in Europe to Russia, Bloomberg reported last week, citing data from a Kansas Fed survey. But this worry may be more of a hypothetical than actual problem.

“Associated gas will increase as the U.S. shale drilling ramps up in future years,” an executive from the oil and gas industry told the Kansas Fed. “European demand will be further satisfied from Russian supply, reducing the U.S. market share.”

Yet most U.S. gas exports haven’t been going to Europe at all this year. Instead, most American gas has been going to Asia, where buyers have been more generous with prices.

In September, the Financial Times reported that Asian gas buyers have been outbidding European buyers precisely for U.S. gas. 

“They have more purchasing power now,” one LNG broker told the FT, referring to Asian gas buyers. “Europe has pipeline supplies and China and Japan don’t have alternatives.”

In other words, the European market may not be as key for U.S. gas exports as some media coverage would have you believe. Some of that coverage includes a report that U.S. energy companies are once again in a rush to build more liquefaction capacity in a bid to take advantage of Europe’s gas shortage.

Additional gas export capacity would certainly be in order in a scenario featuring growing global demand for gas. However, the current shortage of gas in Europe will be over long before any of that new capacity comes online. After all, LNG projects take years and billions of dollars to complete, so any capacity boost should be based on the long-term outlook for the commodity.

The Real Reason OPEC+ Refused To Boost Production Further

This outlook seems quite bullish right now. The energy crunch in Europe and Asia has shown that Europe may have rushed a bit with its energy transition, making itself vulnerable to high commodity prices when renewables fail to deliver as expected. So, it does make sense for U.S. LNG companies to build more export terminals.

As for capitalizing on the current crisis, the opportunities are limited, and it’s not because of Gazprom. Analysts point to the output loss resulting from this year’s hurricane season in the Gulf of Mexico as one constraint on U.S. gas exports, and to the continued production discipline among shale drillers.

“At any other time, we would have seen a huge surge in investment,” Kristen, Holmquist, LNG forecasting manager at broker Poten & Partners, told Natural Gas Intelligence. “What we’re seeing instead is that companies are being very disciplined,” she added, as a direct consequence of last year’s industry crisis.

Related: Is America Doomed To Replicate Europe’s Energy Crisis?

U.S. LNG has never been particularly competitive in most of Europe because of the availability of pipeline gas. Still, in earlier years, the major boost in global LNG capacity brought prices to comfortable lows on spot markets, making U.S. gas a welcome addition to European sources of energy. That did not—and could not—last because of how demand developed. Now, spot cargos are mostly prohibitively expensive for European buyers.

Going forward, a rebalancing of the gas market could once again make U.S. gas popular with European buyers, for diversification reasons if nothing else. Yet, with Asia’s insatiable appetite for energy and its willingness to pay a premium for U.S. LNG because of the lack of major pipeline supplies, it is likely to remain as the ultimate market for U.S. LNG.

This means shale drillers needn’t worry about Russian competition in Europe — Europe is, after all, on a quest to wean itself off gas, so whatever dominance Russia has on European energy markets should be over by 2050 if all goes well.

By Irina Slav for Oilprice.com

[Tom Nolan + 2,443]

Is Decarbonization Threatening Europe’s Energy Security?

By Haley Zaremba - Oct 12, 2021, 3:00 PM CDT

• The energy crisis that is unfolding across the globe could set the world back in terms of carbon emissions as coal and gas demand skyrockets.
• China will burn and import more coal this year than it did last year, seriously imperiling the nation’s own emissions pledges as well as the world’s chances of avoiding the worst impacts of climate change.
• Achieving net-zero is going to require an extremely delicate balancing act as the world struggles to move away from fossil fuels while keeping the economy running smoothly.

https://oilprice.com/Energy/Energy-General/Is-Decarbonization-Threatening-Europes-Energy-Security.html