Good morning team - this is Both Barrels. Your daily dose of all things oil, gas, and energy, without the hot air.

Here’s what hit the wires today:

• ⚡Texas warns of more power shortages

• 🥖 France is prioritizing energy security

• 🙈 Germany isn’t.

Let’s get to it…

📈 The numbers

Oil prices have edged up, despite the US dollar strengthening in anticipation of further interest rate hikes from the US fed.

The US dollar and oil prices tend to move in opposite directions as a strong US dollar makes oil more expensive for holders of other currencies, thus reducing demand.

🗞️ Well-headlines

 🇺🇸 North America

• The US government has proposed new measures to increase the safety of natural gas pipelines across the country. It aims to mitigate risk through the improvement of emergency response plans, integrity management plans, operation manuals and more.

🇪🇺 Europe

• Norway’s Vaar Energy is replacing its CEO, Torger Rod, with Nick Walker. Rod will remain at the company as COO. Walker was previously CEO of Lundin. Vaar, which recently acquired Neptune Energy, is Eni’s Norwegian vehicle.

• Equinor expects to increase total output from its mature Statfjord Ost field in Norway by a total of 26 mmboe through a life extension project. The initiative will increase the fields recovery rate from 58% to 63%.

• Aker Solutions and Mocean Energy are exploring ways to increase the life of mature oil & gas fields by using wave energy to power subsea infrastructure. A pilot project in the UK could kick-off within the next 2 years.

🇸🇦 The Middle East

• QatarEnergy has awarded a $560 million contract to Tecnicas Reunidas for additional facilities required for its North Field South (NFS) expansion programme. The expansion of the giant North Field is targeting to increase Qatar’s LNG capacity to 110 mtpa from 77 mtpa today.

• Iraq has reached an agreement to begin importing gas from Turkmenistan to fuel its power station. Details have not been disclosed. The US has been pushing Iraq to reduce its reliance on Iran for gas and power imports.

• ADNOC has awarded a significant FEED contract to Wood for the upgrade of its existing gas facilities across multiple assets. The facilities are being upgraded to handle an expected 1 bnbcf/d of additional associated gas production that will arise from the UAE’s plan to increase its oil production capacity to 5 mmb/d by 2027 (from ~4.5 mmb/d today).
  

🇨🇳 Asia

• Sinopec has made a major discovery of 33 bcm of proven gas reserves at its Bazhong gas field in northern China. China is making a big push to increase its domestic gas production and reduce reliance on imports.

📍Everywhere else

• Unions at Chevron’s LNG plants in Australia have warned that strikes would cost the company billions if demands over wages and conditions were not met. The comments follow an agreement made yesterday between the unions and Woodside to avert strikes at Woodside’s NWS facility.

🌍 Geopolitics & macro

• A top official at the US Federal Reserve, Susan Collins, has suggested that interest rates may need to rise further to tackle inflation. She said she was “surprised” by the economy’s resilience. More clarity is expected when US Fed Chairman Jerome Powell speaks at the Jackson Hole gathering later today.

• India and China have agreed during the BRICS conference to deescalate tensions along the contested border in the Himalayas. Deadly clashes between troops along the 3,440km border have occurred in recent years, sparking concerns that the spat could escalate.

💨 Carbon, Climate & other energy stuff

• To ensure energy security during the upcoming winter, France has extended the use of some of its coal plants. The country’s nuclear output is still lower than normal as it continues to fix problems that reduced output for much of the past year.

• German Chancellor Schulz has said that the energy-strapped country will focus on developing as much geothermal energy as possible in the coming decade. Or it could just turn back on its nuclear plants…German energy policy has lurched from disaster to disaster over the past decade as it unsuccessfully tries to reduce it’s hydrocarbon use.

• Saudi Arabia is considering hiring a Chinese company to build a nuclear plant. The Kingdom would apparently prefer to partner with South Korea and the US, but US non-proliferation demands have stalled the process. There’s nothing like creating a bit of competitive tension.

• Texas’ power grid operator, ERCOT, has warned of upcoming power shortages amid low wind output and high demand. ERCOT has called for voluntary power use reduction to ease the strain. Welcome to the inevitable consequence of relying on weather for your power generation.

• Problems with its offshore wind business could end up costing Siemens $4.5bn, according to new reports. Previously, Siemens announced that the costs would be ~$1.5bn. The European wind industry is struggling as rising input costs and maintenance problems hammer economic viability.

🛢️Bottom of the barrel

Want to see some chart crime? Here the prestigious Lancet journal misleadingly displays the amount of heat deaths vs cold deaths in Europe by adjusting the chart axis:

This sort of slight of hand is sadly typical of much of the media discussion around climate and energy today.

Love him or hate him (we’re fans), Alex Epstein has a lot of interesting points to make about our energy systems:

👋 Before you go

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