IMO 2020:

[ronwagn + 6,290]

59 minutes ago, ceo_energemsier said:

South Australia wants to be major supplier of certified green hydrogen

 

South Australia is already a world leader in wind, solar and battery storage to the point where excess renewable energy is often shed during peak production periods.

The South Australian Government has released its Hydrogen Action Plan in a bid to use that cheap renewable energy to generate hydrogen, which can be used as fuel or to generate electricity at a later time and place.

South Australian Premier Steven Marshall used his opening address at the International Conference on Hydrogen Safety in Adelaide this morning to launch the plan.

He said while other jurisdictions were looking at non-renewable hydrogen as a steppingstone to renewable hydrogen, South Australia was well placed to move straight to certified renewable hydrogen.

"In doing so, South Australia can be a trusted, long-term trading partner who shares the values of the hydrogen economy," Premier Marshall said.

"We are ready to go on renewable green hydrogen and to develop a clean and safe hydrogen supply chain in South Australia, which gives confidence to consumers and investors.

"Green hydrogen will fast move from being an alternative fuel to being a mainstream zero carbon fuel, becoming increasingly cost competitive with traditional generation."

Four key hydrogen projects are already underway in South Australia, utilising $17 million in government grants and $25 million in loans. They include:

+ An $11.4 million hydrogen park at the Tonsley Innovation District south of Adelaide to build a 1.25MW electrolyser as the first Australian demonstration project of its scale and size. By mid 2020 small quantities of renewable hydrogen will be produced and blended into the local gas distribution network.

+ An $8.7 million facility at the University of South Australia's Mawson Lakes campus incorporating a solar installation, flow batteries, a hydrogen fuel storage cell stack and thermal energy storage to demonstrate the value of hydrogen storage paired with other new storage technologies.

+ H2U is developing a 30MW water electrolysis facility near Port Lincoln using wind and solar to generate up to 18,000 tonnes of green ammonia a year to supply local agriculture and industrial sectors. The plant will also feature two 16 MW open-cycle gas turbines operating 100 per cent on hydrogen at the site to provide electricity generation to the grid during periods of low wind or solar output.

+ Neoen Australia is investigating the introduction of a 50MW hydrogen super hub to produce about 25,000kg of hydrogen a day at its proposed Crystal Brook Energy Park in the Mid North of the South Australia.

One third of South Australian homes have rooftop solar, which, when added to the state's 22 major wind farms and three large scale solar PV producers, often supply more than 100 per cent of the state's daytime demand. The state is also home to the world's biggest lithium-ion battery and has more than 40 further wind and solar projects under construction or in development.

This has sparked a greater focus on energy storage and interconnection with other states.

Premier Marshall said South Australia was on track to reach 90 per cent renewable energy generation in the mid 2020s and become a net renewable energy exporter in the 2030s.

"In this scenario, storage technologies such as hydrogen are extremely attractive to our state and as a large state in area with remote communities, prospective mineral regions and long transport routes, hydrogen is an exciting, flexible fuel for the future," he said.

"We are focused absolutely on making sure that consumers are protected and that the transition is orderly and affordable.

"We've heard loud and clear our traditional trading partners signalling their enormous ambitions for hydrogen and we want to deepen our existing relationships by together demonstrating and growing a hydrogen economy."

South Australia was the first Australian jurisdiction to develop a plan to accelerate a hydrogen economy with the release in 2017 of a Hydrogen Roadmap. Last year, Australia's national science research agency CSIRO released its National Hydrogen Roadmap and several other states have also since released their own plans.

"Since South Australia's strategy was launched there has been considerable momentum here and internationally, now we're ready to take the next steps to accelerate transition from a roadmap to a plan of action," Premier Marshall said.

"We are at ground zero for this transition."

The 2019 International Conference on Hydrogen Safety this week is the first time the event has been hosted in Australia and has attracted hundreds of delegates from 22 nations.

Australia's Chief Scientist Dr Alan Finkel told the opening session, Australia had a proud history of using hydrogen.

In 2005, using energy from wind turbines, and through the process of electrolysis, the Australian Antarctic Division was able to generate renewable hydrogen in Antarctica and transport it in cylinders using a hydrogen-powered quad bike.

The hydrogen was then used to power the everyday activities of Australia's Antarctic scientists on Mawson Station - fuelling cooking stoves and generating electricity to run heaters, lights and computers.

"What a staggering feat of ingenuity - proving that even in the coldest, darkest, most-hostile continent on Earth, where special materials and construction techniques are often required, hydrogen energy can be safely and effectively harnessed for human benefit," Dr Frankel said.

"Decades of experience and continuing progress in technologies have shown that hydrogen power is reliable and secure.

"I am confident that this record can be maintained as we seek to open new frontiers and expand our energy horizons."

The President of the International Association for Hydrogen Safety (HySafe) Stuart Hawksworth told the conference that for hydrogen to realise it's full potential as an energy solution it needed to be seen as safe.

He said global collaboration on hydrogen safety was needed on an open international stage.

"In just the past two years, the pace at which new hydrogen technologies and hydrogen fuel applications have emerged is indicative of just how important this fuel source can be for the future, including increasing reliance on renewable energy sources," Hawksworth said.

"Clearly, it is also a fuel with enormous clean energy export potential as countries all over the world seek to increase renewables in their total energy mix.

"However, we need to prove up our social licence around hydrogen's safety and all the issues around that."

Geoscience Australia's has also released a report recently showing prospective hydrogen production regions of Australia. This map showed many parts of South Australia as being highly suitable for hydrogen production and export.

The big question, in my mind, is what is the ultimate cost to the consumer versus natural gas. I don't see much, if any, value in hydrogen and other renewables versus natural gas. Storage is a great help to renewables but natural gas already meets that need. CO2 is not a worry in my estimation. 

[ceo_energemsier + 1,818]

 

[ceo_energemsier + 1,818]

FreightWaves Oil Report: More Signals Of IMO 2020 Impact On Diesel Prices

 

Much of the commentary surrounding IMO 2020 is that nothing has happened so far in oil markets. But this seems rooted more in a belief that when the market sees an impact from IMO 2020, it's going to be all at once. It will be the type of event that everyone will know when it happens and can say "IMO 2020 is here."

It tends not to work that way. As we've written in this space previously, there are movements in physical distillate markets that are showing reaction to the new rule. And a few market observers are starting to take notice. 

Refineries are coming off their heavy fall maintenance season. It's been common to see some of these price movements attributed almost exclusively to that maintenance season, when a drop in refining runs inevitably tightens up supplies. For a few weeks at the start of maintenance season, making the case that IMO 2020 was knocking on the door was supported by the fact that while diesel spreads were strengthening, gasoline spreads were not. 

That has mostly ended, and gasoline's spreads against benchmark crudes are starting to show significant gains, in some cases greater in percentage terms than that of diesel. That is a movement that might suggest that the strength in diesel is related to maintenance and not to IMO 2020. 

But those basic visible spreads, known in the industry as cracks, are less interesting than some other signals. And those signals were highlighted in a recent report by Tudor Pickering Holt & Co. (THP), a boutique investment bank that focuses solely on the oil industry.

"With less than three months until the IMO's new low-sulfur marine shipping regulations power up, we are seeing a number of positive price signals that indicate IMO impacts are beginning to roll into the market," THP said in a recent report.

Among the market shifts that THP says are a sign of IMO 2020 preparation is the fact that the price of vacuum gasoil (VGO) is at a five-year high relative to Brent. VGO is a key product in the shift to lower sulfur marine fuels under IMO 2020. It can be used to make very low sulfur fuel oil (VLSFO), a quasi-fuel oil product that can displace the high sulfur fuel oil now used by ships and which will not be compliant with IMO 2020. We refer to it as quasi-fuel oil because the biggest part of it is going to be VGO, which is a diesel-like product that now can be used to make either gasoline or diesel. The assumption is that when IMO 2020 starts to kick in, you'll see movement in VGO prices. According to THP, that's happening.

There are other signs in the market. As THP points out, both high-sulfur fuel oil and Mars crude (which is a high-sulfur crude) are plummeting in value relative to international crude benchmark Brent. And S&P Global Platts this past week carried an article that said the bidding for Azeri crude out of Azerbaijan had put that market at six-year highs relative to Brent. Azeri crude is sweet (meaning it has a low sulfur content) and is rich in middle distillates, so it would produce a good amount of VGO in the refining process. 

The story contained a quote from a trader that pretty much said it all, "Maybe the IMO effect has arrived already. Everybody is looking for Azeri." 

—————————————–

The January 1 deadline for IMO 2020 compliance is close enough that compliant fuels are available at multiple ports around the world, according to Unni Einemo, who is a writer but also a representative to the IMO for the International Bunker Industry Association. She recently spoke at a symposium of the IMO on the sulfur cap rule and Petroleum Argus reported that she gave a long list of areas that are selling compliant fuels. According to Argus, quoting Einemo, "IMO-compliant fuel is increasingly selling in Singapore and Fujairah, the two biggest bunkering ports, and at smaller ports in China, Japan, South Korea, Colombia and Brazil." The story went on to say that it's available in Europe as well. 

The irony is that while U.S. diesel consumers might be impacted by IMO 2020, this country is not a significant bunkering port. But diesel, like all petroleum products, is a global market so shifts in the bunker market will reverberate through the entire fuel supply chain.

—————————————–

The U.S. Energy Information Administration (EIA) has been the most up-front in predicting what the price of diesel would do under IMO 2020. Its monthly Short Term Energy Outlook (STEO) has long had a prediction for the average retail price of diesel. If they're right, we're getting near the peak.

 

The latest DOE/EIA weekly retail diesel price, the basis for fuel surcharges, was $3.051/gallon. Last week, Timothy Hess, an EIA official who is one of the lead analysts in producing the STEO, said at a New York networking event that the agency's calculations on how much diesel prices would rise relative to crude benchmarks like Brent and WTI were mostly driven by their calculations on the cost of making complaint marine fuels and how that would kick back down into the diesel market. That is about the most conservative approach that can be taken though it leaves little room for any sort of projection on how markets might react.

The EIA's current estimates, which have changed little over time, is that the wholesale spread between diesel and Brent will rise from about 14 cents/gallon from 2018 to a 57.5-cent spread.  But in terms of retail, that spread was seen actually declining to about $1.02/g from $1.05.

The end result is that if the EIA is right in all its forecasts, we've seen just about the highest diesel prices for the switch until next October. Because of projections of declining crude prices, even with the wider projected wholesale spread, the retail price of diesel projected by EIA drops down to $2.95/g in May before rising to $3.095 a year from now. 

It's a reminder that if the price of crude falls, the price of diesel can rise relative to it but still might not seem so bad, particularly coming after warnings of a significant spike. The price of crude will always be the main determinant in the price of products like diesel. One caveat: if the diesel market goes berserk because of IMO 2020, it can pull the price of crude up with it.

 

[Douglas Buckland + 6,308]

 

"The shipping industry is going to change, because we have to address climate change," said Edmund Hughes,

 

Can Edmund provide the scientific basis for this comment? I doubt it.

[Boat + 1,323]

On 10/19/2019 at 1:30 PM, Gerry Maddoux said:

Finally found that quote I was looking for:

"Did you know? Just one of the world’s largest container ships can emit about as much pollution as 50 million cars. Further, the 15 largest ships in the world emit as much nitrogen oxide and sulphur oxide as the world’s 760 million cars."

This is probably old-hat to those of you who have been discussing this, but to me it is just astonishing that EV's are attracting all the ink and this maritime pollution has received so little attention. Or maybe I just went to sleep for a while . . . 😀

 

I agree 100%. This is probably the most significant win for the left since the idea of climate change began. In spite of trade wars and geopolitical tensions you could also argue this is the biggest step in a New World Order since the UN was founded where allmost all the countries of the world agreed to comply with global similar regulations on shipping fuels. 

[ceo_energemsier + 1,818]

 

 

the United States has exported crude oil to more destinations because of growing demand for light-sweet crude oil abroad. Several infrastructure changes have allowed the United States to export this crude oil. New, expanded, or reversed pipelines have been delivering crude oil from production centers to export terminals. Export terminals have been expanded to accommodate greater crude oil tanker traffic, larger crude oil tankers, and larger cargo sizes.

More stringent national and international regulations limiting the sulfur content of transportation fuels are also affecting demand for light-sweet crude oil. Many of the less complex refineries outside of the United States cannot process and remove sulfur from heavy-sour crude oils and are better suited to process light-sweet crude oil into transportation fuels with lower sulfur content.

 

The United States now exports crude oil to more destinations than it imports from

 

https://www.eia.gov/todayinenergy/detail.php?id=41754