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- 19th January 2024
19th January 2024
The ârenewablesâ marketing genius | Port Talbotâs net-zero sacrifice | Coal breaks new records | Norwegian O&G licences revoked

Rise and shine. Itâs Friday. Hereâs what Iâve got for you today in all things oil, gas, and energy:
đ§ The ârenewablesâ marketing genius
đľ Port Talbotâs net-zero sacrifice
𪨠Coal breaks new records
â Norwegian O&G licences revoked
â plus Italy selling Eni stake, IEA sees a well supplied oil market in 2024; AkerBP invests in seaweed
See you Monday.

đ THE NUMBERS

As of 04:50 ET on 19/01/2024. N.B. prices for JKM LNG and uranium can be delayed by a day or two.
Wondering why natural gas prices are under pressure despite it feeling like the entire Northern Hemisphere is in a polar vortex right now? This is why:

European gas storage levels are far above average for this time of the year. Compare that with 2022, when the energy crisis peaked.

đď¸ WELL-HEADLINES
đ˝ North America
15% of Gulf Coast refining offline - the cold snap has frozen ~1.5 mmb/d of refining capacity in the key US crude processing region. With temperatures finally beginning to recover, the outages arenât expected to last long. Let the thaw begin!
EIA confirms oil stock draw - US crude inventories fell by 2.5 mmbbls last week, while gasoline stocks rose by 3.1 mmbbls to multi-year highs. Cold weather tends to result in increases in fuel inventories as transport demand falls.
đ° Europe
Italy selling Eni stake - the government is aiming to raise $2.2 billion from selling a 4% interest in the oil major as part of a broader privatization push. The Italian Treasury currently owns a 4.7% stake in Eni, while state lender Cassa Depositi e Prestiti holds 27.7%.
Norwegian O&G field permits revoked - a court has ruled in favour of climate groups and invalidated the licences for the Breidablikk, Yggdrasil, and Tyrving fields on the grounds there wasnât sufficient assessment on future emissions from the projects. Production at the ~55 kboe/d Breidablikk must stop at the end of the year and so must the development of the other two fields. The verdict is likely to be appealed.
Shell starts job cuts - the major has begun making the previously announced cuts, starting with ~200 in its low-carbon division. The new CEO has promised to be âruthlessâ in improving performance and boosting investor returns at a âleaner overall organisationâ. Sounds like there may be more to come.
âŠď¸ Asia & Oceania
Eni and Kazakhstanâs gas-renewable hybrid deal - the Italian major will jointly develop with KazMunayGas a 250MW gas-renewable power station in the country.
đŚ Africa
Nigeriaâs government supports Shell divestment - the government will approve Shellâs exit from onshore Nigeria, according the countryâs Petroleum Minister.

đ GEOPOLITICS & MACRO
IEA ups oil demand forecast but sees well supplied market - in its latest oil market report the agency again revised upwards its 2024 oil demand growth estimate by 180 kb/d to 1.24 mmb/d. This is the third upwards revision in as many months but is still well below OPECâs forecast of 2.25 mmb/d. Despite the growth, the IEA expects a well supplied market in 2024 thanks to climbing output in the US, Brazil, Guyana and Canada. The report reiterated the agencyâs (very dubious) prediction that oil demand will peak in 2030.
Indiaâs demand for domestic air travel set to double by 2030- this is why peak oil demand by 2030 is a pipe dream. Over 80% of the worldâs population have never been on a plane. Thereâs soooo much more demand to come.
Houthis not backing down - theyâve fired more missiles at US ships as Biden admits the US airstrikes this week in Yemen have so far failed to deter the aggression but will continue nevertheless. Meanwhile, the Houthis have promised safe passage for Russian and Chinese shipsâŚ
US enforces more shipping sanctions - a UAE company that owns 18 crude and chemicals vessels has been hit by US sanctions for breaching the Russian crude price cap. Any company hit by the sanctions will have all its US assets blocked and be barred from doing any business with US citizens or companies.

Damage done to the MV Genco Picardy by a Houthi drone attack in the Red Sea | Source: Indian Navy

In 30 years, global oil demand has only fallen during the Financial Crisis and Covid. Peak demand in just 6 years? I highly doubt it.

đ¨ CARBON, CLIMATE, & OTHER ENERGY STUFF
UK loses 3,000 steel jobs to net zero - Europeâs sorry de-industrialization continues, as Tata Steel confirms it will be closing the blast furnaces at its steel plant in Port Talbot, UK, and replacing them with electric versions. They will be âgreener and cleanerâ apparently but are incapable of making virgin steel (only recycled steel) and will result in the loss of 3,000 local jobs. I can practically hear the laughs of steel producers in China and the US.
Germanyâs last solar manufacturer to close - back in the early 2000s when Germany embarked on its ill-fated Energiewende, politicians promised a green economy jobs boom. Today, the last of Germanyâs major solar manufacturers, Meyer Burger, has succumbed to the inevitable and is set to close. Like many others that have gone before it, European business conditions mean the company cannot compete with international producers.
Global coal power generation and exports hit record high in 2023- letâs face it, king coal isnât going anywhere fast...82% of all coal-fired electricity generation occurred in Asia in 2023, up from an average of around 75% in 2019. The Westâs expensive efforts to reduce emissions are being drowned out by Asiaâs energy-hungry juggernauts.
AkerBP is investing in seaweed carbon offsets - the idea is that the fast growing seaweed absorbs CO2 and then sinks to the bottom of the ocean where the carbon is trapped permanently.

đ˘ď¸ BOTTOM OF THE BARREL
Whoever managed to convince the world to call wind and solar power ârenewableâ deserves all the marketing awards now and forever more.
Sure, the wind and the sun are renewable, but the technologies used to harness them are not:

Lots of steel, lots of concrete, lots of land.
Thanks to their inherent low energy densities, wind and solar require large quantities of finite raw materials and land per unit of power output.
And, after ~20 years, they need to be dismantled and replaced, with only a small share of the inputs being recycled. Plenty ends up in landfill like these turbine blades in Texas:

âRenewableâ you say?
All these resources have to come from somewhere, of course.
Enter, the mining industry.
Which, apart from being an inherently dirty business with plenty of waste and local destruction, runs on giant diesel-powered trucks, crushers, drills, and dozers.

Wind and solar, brought to you by diesel and mining
Yes, wind and solar are low carbon, but unless you can convince me that steel, cement, copper, and diesel are self-replenishing and infinite, or that the mining industry runs on unicorn farts, letâs not pretend that these technologies are ârenewableâ.
Words matter.
Rant over, have a lovely weekend!

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