15th February 2024

Morning, morning,

• 🎉 Europe’s energy crisis is over (sort of)

• 🤫 Green’s Malthusian secret

• ⏫ Surge in US crude stocks

• 🛰️ Spotting methane from space

• ➕ plus Putin prefers Trump over Biden; Israel withdraws from peace talks; compensation for Groningen; 20k job losses in UK offshore.

Let’s take a look…

📈 THE NUMBERS

🗞️ WELL-HEADLINES

 🗽 North America

• Massive build in US crude inventories - they rose by 12 mmbbls last week, compared with expectations of just a 2.6 mmbbls increase, according to the EIA. Gasoline stocks, meanwhile, fell by 3.7 mmbbls.

• Some earnings highlights - Oxy beats estimates following production increase; Energy Transfer reports earnings rise on NGL demand growth.

• Exxon and Enbridge accused of anti-trust behavior - a lawsuit from Ducere alleges the two companies blocked it from building a crude oil terminal near Chicago.

• Chesapeake signs LNG supply deal with Gunvor - the 0.5 mtpa of LNG will be sourced from a planned LNG export terminal being developed by Delfin LNG in the US, starting in 2028 and lasting for 20 years.

🏰 Europe

• Europe’s energy crisis is over - it’s been a rough couple of years in Europe dealing with a once-in-a-generation energy crisis following Russia’s invasion of Ukraine. Gas and power prices skyrocketed, businesses and households went cold and bust, riots hit streets across the continent. After two years of pain and this mild winter mostly in the rear-view mirror, it looks like the worst is thankfully behind us. Europe’s challenges of systemically high energy prices will persist but the risk of a total collapse of parts of the energy system has been averted.

• 20k job losses is “best case scenario” for UK offshore sector - this is the bleak outlook given by investment bank Stifel under the Labour Party windfall tax plans. In addition, a cumulative £40bn of investment will be lost.

• Shell and Exxon seeking Groningen compensation - Netherlands forced the premature closure last year of the giant gas field due to earthquake risks. Now the partners in the field are looking to reach an agreement with the government to compensate them for the future profits they will miss out on.

• Operations resume at attacked Russian oil complex - the huge Ust-Luga facility on the Baltic Sea was hit by a Ukrainian drone attack in January. I’m always amazed at how quickly these things are repaired. The pothole outside my house has been there for 3 years…

• Cyprus targeting first gas in 2026 - a string of large gas discoveries have been made in the East Med near Cyprus over the past decade and the island nation may soon finally start benefiting from them. The 2.5 tcf Cronos field is set to be tied back to Eni’s Zohr facilities in Egypt.

⛩️ Asia & Oceania

• Naughty Kazakhstan - the OPEC producer has said that it will make up for a recent lack of compliance with its production quota by reducing its output in the coming months. OPEC output fell by 350 kb/d in January, but several members, notably Iraq and Kazakhstan, haven’t been pulling their weight.

🌍 GEOPOLITICS & MACRO

• Putin prefers “more predictable” Biden over Trump - I’m not sure what kind of 4D-chess mind games the Russian president is playing here but he said he would prefer Biden to win the US election because he’s a “more experienced, predictable person, a politician of the old school”. There are plenty of allegations that Russia tried to interfere in the 2020 election in favour of Trump…

• Israel pulls out of peace talks on “delusional” Hamas demands - the talks in Cairo were aimed at pausing the fighting in Gaza and releasing Israeli hostages. But after days of negotiations, Israel withdrew its delegate saying Hamas’ demands were “delusional” and contained no new proposals.

• Shell warns of “quite an impact” of US LNG ban - a senior Shell exec has said that if the US moratorium on LNG approvals lasts much longer than a year, it will have material impact on the global LNG market. The US House is set to vote tomorrow on a bill that would take the power of LNG approvals away from the White House and give it to an independent panel instead.

💨 CARBON, CLIMATE, & OTHER ENERGY STUFF

• Google to help spot methane leaks from space - data from satellites will be sent to Google for processing in a new operation to help identify methane leaks around the world. The data will be made available for free later this year.

🛢️ BOTTOM OF THE BARREL

You’ve probably heard of Thomas Malthus. Or at least his eponymous theory.

He believed the size of the human population was limited by the availability of food.

When the global population grows too large, he said, famine, war and disease, would kill off millions and bring our numbers back down to a sustainable level. And the cycle repeats.

Malthusianism, and its belief that the natural world cannot cope with too many people, is the dirty little secret at the heart of the much of the environmental movement.

Most activists won’t say it so explicitly because its implications are sinister: if today’s population is unsustainably large, then who has to go? Who shouldn’t be allowed to breed?

Instead they label their desires as “degrowth”. Which ultimately amounts to the same thing, especially for billions in the developing world who are still living medieval standards of lives.

Don’t take it from me, here’s what one of the leaders of Friends of the Earth said back in 1970:

“If you ask me, it'd be a little short of disastrous for us to discover a source of clean, cheap, abundant energy because of what we would do with it.”

Disastrous to discover clean, cheap and abundant energy?

The organisations were founded on anti-human and anti progress ideas.

Of course the world’s natural resources are finite and a growing population adds environmental strain but I’m optimistic about our ability to handle it for two reasons:

1. Technology allows us to do more with less. More growth, fewer resources. Think about what your tiny smartphone has replaced: camera, clock, calculator, computer, landline etc etc.
   

2. The earth is not a closed system. We are part of a much larger solar system with boundless natural resources that I have no doubt we’ll eventually tap into.

Be wary about the true intentions of organisations that try to cloak themselves in virtue.

It’s often got nothing to do with energy. It’s about population control.

And if you think there are too many people on this planet, then, well, you first.

👋 BEFORE YOU GO 

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Thanks for reading. Have a day out there. 🛢️🛢️