Talos Energy begins early oil, natural gas production at two U.S. Gulf of Mexico discoveries

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The Lime Rock and Venice wells were brought safely online in late December 2023 and have achieved an initial combined gross production rate of over 18,500 boed, averaging about 45% oil and 55% liquids. The estimated combined gross ultimate recoverable resources of these two discoveries are approximately 20 to 30 MMboe. In addition to Talos’s net production, the company will collect volume-based production handling fees (“PHA fees”) from non-operated partners in both discoveries.

The Lime Rock prospect was acquired in Lease Sale 256 in November 2020 and is approximately seven miles from the Ram Powell facility. The Venice prospect was identified within the existing Ram Powell unit acreage approximately three miles from the Ram Powell facility. Talos initially held a 100% working interest in both prospects before successful farm-downs to achieve its targeted 60% working interest.

Talos President and Chief Executive Officer Timothy S. Duncan commented, “The safe start-up of Lime Rock and Venice in less than 12 months is an extraordinary achievement by our operations team, which included new subsea installation and facility upgrade work. These prospects exemplify our strategy of utilizing purchased infrastructure and seismic imaging technology expertise to identify new and valuable investment opportunities to grow reserves and production to meet growing energy demand.”

“With these production additions, the Ram Powell facility is expected to achieve the highest combined sustainable production rate since approximately 15 years ago. Demonstrating our ability to successfully leverage existing infrastructure also provides a blueprint for future optimization, development, and exploration opportunities around our existing and potential new assets.”

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Eurozone recession likely – S and P

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Business activity in Europe’s 20-nation single currency bloc continued to contract at the end of 2023, as a downturn in the dominant services industry stretched into the final month of the year, data compiled by S&P Global has revealed.

The Flash Composite Purchasing Managers’ Index (PMI) for the bloc, a measure of manufacturing and services activity, was revised up for December to match November’s 47.6 after a preliminary estimate of 47.0. However, the gauge remained below the 50 mark, which separates growth from contraction, for a seventh consecutive month.

The data shows that the Eurozone saw a contraction of 0.1% in the third quarter of 2023, and likely shrank again last quarter, having met the technical definition of a recession.

Meanwhile, the Services Business Activity Index moved up to a five-month high of 48.8 compared to 48.7 recorded in November, as demand was seen to further weaken in the euro area.

“Activity levels were constrained at the end of the year by a further weakening of demand conditions. The latest survey data signaled a further solid drop in new business receipts by both eurozone manufacturers and service providers,” the report reads.

Although the decline in demand for services slightly eased in December with the new business index rising to a five-month high of 47.1 from 46.7, it remained below 50 for a sixth month.

“It’s not quite recession territory yet for services, but the vibe is far from growth-oriented. There are a lack of clear signals indicating an imminent return to robust expansion,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank.

“The Composite PMI… is sounding the recession alarm for the euro zone though,” he added saying his economic modelling forecast a contraction in the fourth quarter.

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Maine towns band together to offer ‘energy navigators,’ extra funding for home energy upgrades

Energy News Beat

​Communities in southern Maine are collaborating on a pilot program that aims to help residents overcome cost and logistical barriers to accessing climate-friendly home energy upgrades.

Five towns and two regional nonprofits received a three-year, $800,000 grant from the U.S. Department of Energy’s Energy Efficiency and Conservation Block Grant Program in late 2023. The budget for the program is now being finalized for launch this summer or fall.

The grant will fund AmeriCorps members to provide one-on-one energy coaching for residents. These “navigators” will help identify the best cost- and emissions-cutting retrofits for each home, and will help residents apply for a range of accompanying tax credits, rebates and other incentives. The grant also includes about $500,000 to directly offset residents’ remaining costs.

“The pilot program, as we envision it, will remove the up-front capital barrier and help homeowners navigate the process with confidence,” said Kendra Amal, the town manager in Kittery, one of the towns participating in the grant. “We expect to see a significant increase in the number of households able to make energy-reducing and cost-saving improvements to their homes through this program.”

Kittery joins the towns of Kennebunk, Kennebunkport, Wells and Ogunquit in working with Southern Maine Planning and Development Commission on the project, along with York County Community Action Corporation. SMPDC will host the AmeriCorps navigators, while the county action agency will set up a new Southern Maine Energy Fund to help pay for projects and will provide energy services staffers to oversee actual retrofits and installations.

“We’ve heard from all of our communities that home weatherization and heat pumps are really important, but they didn’t feel like they could do it themselves,” said SMPDC sustainability coordinator Karina Graeter. “(This program) provides the opportunity for these smaller communities that don’t have their own sustainability staff or their own capacity to undertake big outreach and education efforts … to try and address the energy issues that have been shown to be really important to the community.”

Maine relies more on home heating oil than any other state, and residential emissions are the state’s top contributor to climate change after transportation. In recent years, Maine has been nationally lauded for successful efforts to incentivize efficient electric heat pumps as a replacement for oil. State heat pump and weatherization rebates can total thousands of dollars per project, especially for lower-income people, and federal tax credits can offer thousands more.

But even hefty incentives may not cover everything, and energy bill savings from these upgrades can take months or years to materialize — meaning many people still can’t afford remaining project costs, said Amal and Graeter.

During Kittery’s climate action planning process, the town discovered that many residents weren’t taking advantage of state energy rebates, Amal said. And costs were not the only problem; Amal said residents also cited “the confusing and often rigid process required to qualify” for incentives as another reason they chose not to pursue home efficiency or electrification work.

“There are so many great incentives out there, but they’re always sort of changing depending on what funding is available, you know, who’s running the program,” said Graeter. “Helping people navigate that requires a certain amount of skill and knowledge.”

The program’s navigators will be trained to help residents make the most of these complex offerings, she said.

The grant proposal envisions connecting with interested residents through whatever way they reach out to a participating group, whether it’s via the county agency or a town. Residents of any income would be paired with a navigator, who would answer their questions, assess their needs and provide technical assistance on designing a project with the greatest energy savings impact.

For low- and moderate-income families, the program would also provide instant rebates to offset upfront project costs. The county agency’s energy technicians would do the actual installation work on the project and follow up on other assistance options, including tax credits as needed.

In the next six months of setting up the program, Graeter said her cohort plans to seek inspiration from other regional groups — like the county agency partnering on the grant, or WindowDressers, which builds heat-saving window inserts for low-income people — to design a community engagement approach that will reach the most people.

“The idea is to have a ‘no wrong path’ sort of option for people; meeting people where they’re at in terms of their energy needs, and figuring out what assistance they need most,” she said.

The participating towns have been working toward this program for years, since initially collaborating to fund Graeter’s position at SMPDC, Graeter said. This regional approach lets them learn from each other and build on shared progress rather than duplicating effort, she said.

Amal noted that the pilot nature of the program also aims to help officials evaluate impact and potentially scale up similar efforts elsewhere in the state.

Graeter stressed that the grant doesn’t seek to replace federal energy tax credits or existing state programs offered by Efficiency Maine, the quasi-governmental agency that oversees Maine’s energy incentives.

“Our focus is really to increase access to those programs, and then provide some additional financial support to help bridge the gap between current incentives and the true cost of these upgrades, which is always shifting and changing,” she said.

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Job Openings by Industry: From Construction at New Highs to Information where Openings Vanished

Energy News Beat

The vast differences between industries.

By Wolf Richter for WOLF STREET.

Earlier today, we discussed how job openings, voluntary quits, layoffs & discharges, and new hires showed that power in the labor market has shifted from workers back to employers.

Now we look at job openings by industry for November, based on data released today by the Bureau of Labor Statistics as part of its Job Openings and Labor Turnover Survey (JOLTS), which is based on a large survey of employers and not on internet job postings.

We’ll start with construction, because that’s the good news, and we’ll follow up with information, an industry that includes some tech and social media companies, where job openings collapsed.

And then we’ll look at some the major industry categories in between. All charts are the three-month moving averages (3MMA), which iron out the month-to-month ups and downs and show the trends. We also compare the 3MMA of November job openings to the same period in 2019.

Construction (8 million employees in all types of construction) is looking for you!  We discussed the eyepopping boom in factory construction in December. Investment in buildings and infrastructure has been growing. Growth in single-family residential construction has resurged in the second half of 2023. And the labor market for construction workers is tight.

Job openings 3MMA: +28,000
To 434,000 openings, highest in the data
From 2019: +44%

“Information,” a small sector with only 3 million employees, includes companies engaged in web search portals, data processing, data transmission, information services, software publishing, motion picture and sound recording, broadcasting including over the Internet, and telecommunications.

The three-month moving average has dropped so sharply in 2023 that in November, it was 20% below the same period in 2019!

Job openings 3MMA: -23,000
To 127,000 openings.
From 2019: -18%

Professional and business services, a huge category with 22 million employees. The category includes Professional, Scientific, and Technical Services; Management of Companies and Enterprises; Administrative and Support, and Waste Management and Remediation Services.

This industry category includes some of the tech and social media companies. Others are in the “information” sector or in other categories.

The job market in this sector has loosened up some but still remains tight, with job openings still 35% higher than in the same period of 2019:

Job openings 3MMA: -43,000
To 1.64 million openings
From 2019: +35%.

Manufacturing, 13 million employees. The labor shortages have vanished, but the job market remains fairly tight. Compared to 2019, job openings were up by 36%.

Job openings 3MMA: -19,000
To 570,000 openings
From 2019: +36%

Healthcare and social assistance, 21 million employees:

Job openings 3MMA: -32,000
To 1.71 million openings
From 2019: +49%.

Leisure and hospitality, 16 million employees:

Job openings 3MMA: -30,000
To 1.25 million openings
From 2019: +25%.

Retail trade, 15.5 million employees. About half of this sector has been under relentless pressure from ecommerce for years. The other half (gas stations, auto dealers, and grocery stores) have largely weathered the onslaught of ecommerce.

Job openings 3MMA: -20,000
To 596,000 openings
From 2019: -26%.

State & local government, mostly in Education, 20 million employees. You can still see the signs of some teacher shortages:

Job openings 3MMA: -13,000
To 829,000 openings
From 2019: +27%.

Wholesale trade, 6 million employees.

Job openings 3MMA: +12,000
To 233,000 openings
From 2019: +15%.

Arts, Entertainment, & Recreation, 2.6 million employees.

Job openings 3MMA: -1,000
To 179,000 openings
From 2019: +38%.

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Daily Energy Standup Episode #279 – OPEC Monitoring, Legal Setback for Gas Ban, Chevron’s Regulatory Woes, and Oil Price Surge

Energy News Beat

Daily Standup Top Stories

OPEC+ set to hold monitoring meeting in early February

Nasdaq LONDON/DUBAI, Jan 2 (Reuters) – OPEC+ plans to hold a meeting of its Joint Ministerial Monitoring Committee (JMMC) in early February, though an exact has not been decided, three sources from the alliance said. […]

Appeals court delivers fatal blow to California city pushing natural gas ban

Afederal appeals court rejected a petition Tuesday to rehear a case related to a natural gas ban proposed by the City of Berkeley, California, which the panel ruled was illegal last year. The U.S. Court of Appeals […]

Chevron impairs California oil, gas production assets due to regulatory challenges

(Bloomberg) – Chevron Corp. will book fourth-quarter charges of $3.5 billion to $4 billion, citing assets it sold in the Gulf of Mexico and policies in California prompting the company to slash investments in the […]

Libya’s largest oil field halts production followings protests

(Bloomberg) – Libya’s largest oil field halted production after protesters entered the facility, according to a person with direct knowledge of the operations. Libya’s Sharara oil field The country’s National Oil Corp. had warned earlier […]

Highlights of the Podcast

00:00 – Intro
02:11 – OPEC+ set to hold monitoring meeting in early February
03:57 – Appeals court delivers fatal blow to California city pushing natural gas ban
06:25 – Chevron impairs California oil, gas production assets due to regulatory challenges
08:00 – Markets Update
08:38 – Libya’s largest oil field halts production followings protests
10:04 – Outro

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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.

Michael Tanner: [00:00:14] What is going on, everybody? Welcome to another edition of the Daily Energy News Beat Standup here on this gorgeous Thursday, January 4th, 2024. As always, I’m your humble correspondent, Michael Tanner, coming to you from an undisclosed location here in Dallas, Texas, rocking a solo show. Stu has the night off, but we have an excellent menu for you lined up. First up, Opec+ are set to hold monitoring meeting in early February. Own dun dun dun and be back at it again. Next up, appeals court delivers fatal blow to California pushing natural gas ban. I hate to see that. Then finally, Chevron impairs California oil and gas production assets due to regulatory challenges is an absolutely hilarious story. I will then quickly cover what happened in oil and gas finance guys. We had we had prices up a little bit, mainly due to some Libyan oilfield disputes. So we will we will talk about all of that and a bag of chips. Guys, before I do that couple thing, remember the news and analysis you are about to hear brought to you by the world’s greatest website www.energynewsbeat.com The best place for all of your energy news do in the team do an absolutely tremendous job curating that site to make sure it stays up to speed with everything you need to know to stay up to speed with the energy business. We also cover the oil, gas industry and finance extensively. We got a lot of really cool projects that we’re working on content wise on that’ll be coming out over the next couple of weeks of Stand By There. You can hit the description below to see all of the timestamps links to the articles that we are about to cover. So, you know, we’re not just blowing smoke. You can also check out Dashboard.EnergyNewsBeat.com the best place for all of your data news combo. Go ahead and subscribe to us. YouTube, Apple Podcasts, Spotify or wherever you get your podcast. We really appreciate it. [00:02:11][116.5]

Michael Tanner: [00:02:11] But let’s go ahead and let’s go ahead and just dive in here, guys. At first I want to talk about OPEC’s asset monitoring meeting in early February. You know, I read kind of the top headlines. This is from our favorite brands over at Routers, OPEC, plus plans to hold a joint ministerial monitoring committee meeting in early February. An exact date has not been provided, according to three sources from the alliance. What this committee really is, it brings together within OPEC, it brings together Saudi Arabia, Russia and the UAE to specifically talk about OPEC cuts. It’s mainly what that kind of a procedural thing. The last full ministerial meeting was at November 30th. That was, you know, again, led by Saudi Arabia rolling over its current voluntary cut. You know, it’s basically what they’re supposed to do is assess these cuts in January and see kind of where things are going. You know, the interesting part about what happened with OPEC is we know last month Angola quit mainly because it was unhappy with all these production cuts. So again, we production cuts are great, but you’re also losing money at the same time. Sure. If prices go up, there’s an offset. But how much of the price increase offset is actually because of the cuts? So I think that’s partly where I think some of these smaller countries outside of the, you know, the four big ones, Saudi Arabia, UAE and Russia, they’re maybe not able to take the hit as much. So it’s clearly there’s some you know, they haven’t sealed up the ranks yet. They’ve got to they got to come within their own. I don’t know if we’re going to see more cuts. I’d probably lean towards. Yes. If only because they want prices to go. You know, they’re more prices up. I mean, bread sitting just a little bit below $80 right now. They’d love to see that $90 level. But we will be monitoring this joint meeting to see if anything interesting comes out. [00:03:56][105.7]

Michael Tanner: [00:03:57] Next up, we’ve got appeals court delivers fatal blow to California’s city pushing natural gas ban or Berkeley, California. And a federal appeals court rejected their petition on Tuesday to rehear a case related to a natural gas ban that was proposed by Said city. The U.S. Court of Appeals for the Ninth Circuit ultimately denied Berkeley’s position petition excuse me, for rehearing this ban, which was a motion that it received from the Biden administration Democratic love states after it failed to receive a majority support in the courts. Non recuse active judges. The Berkeley filed a motion last year basically that said their law it was overturned. Their law banning natural gas violated a federal statute that was then appealed by Berkeley. They worked it all the way up until the federal appeals court. It got turned down, which means it’s either going to be taken up by the Supreme Court or if what they do most likely is not pick it up. And this is going to stand as a win for your natural gas burner, you know, win for all the cooks and diners in California making imagine going to a diner and having my eggs cooked on a flat top. I got a flat top or a steak cooked without a gas grill. Unbelievable. Guys, I’m quote, coming out of the air. Is joining heating refrigeration instead. Absolutely. They’ve got lobbyists for everything, folks. The h r i. Naturally, the eight is a quote. Naturally, the h r i in particular are member companies that manufacture products of companies that use natural gas are very pleased, although they do come out and say who they’re lobbying for. People will use equipment that uses natural gas. They’re very pleased. The full court order denied Berkeley’s request, thereby allowing the brokers residents elsewhere to You have choices with respect to their energy choices, according to the president and CEO over there. Stephen, you’re a, you know, absolute this was you know, Ban was originally enacted in July 2019. They went ahead and I passed and said if Ban was going to go into effect January 20, well, that came and went a little thing called COVID pie got in the middle of that. You know, the California Restaurants Association stepped up. I mean, when people said they’re coming for your natural gas stoves, this is the stuff we were talking, you know. Yes, I know everybody. You know, everybody, like on the Democratic side like to use that as a trope that all they said we were coming for natural gas stoves, but we’re not. You’re kind of or at least in California. Luckily, the good people of the ninth Circuit over there in California came to force. We all get to enjoy our gas because even the people in our favorite state, California. [00:06:24][147.5]

Michael Tanner: [00:06:25] Speaking of that, Chevron just impaired. California’s there, their California oil, gas and production assets due to regulatory challenges. Absolutely unbelievable. They said in a filing today that Chevron will book fourth quarter charges of 3.5 to 4 billion, citing assets that it said sold in Gulf of Mexico and policies in California, prompting the company to slash investments. Mainly they come out and said that it’s mainly taking the charges due to the California assets. You know, they’re going to continue to take this. But it goes to show you folks there specifically saying this, what is this? They said in the filing it will impair oil and gas production assets mostly in California because of, quote, continuing regulatory challenges. If Stu is here, he would say legislation to regulation or regulation to legislate. He’d be pounding it regulation through legislation. This is what’s happening. And when you do this too much, the only companies that can afford to do this type of stuff are Chevron. And guess what? Even they’re going to get out of the business. Even they’re telling you we’d rather walk away and slash our investments by for the move of $1,000,000,000 when it and walk away instead of attempting to work. That means that there’s nothing to be done here. It means there’s zilch to be done. I’d be super nervous if I was a California producer. Even your cat. Even Chevron can’t figure out how to make it work. Now. There’s still some companies there that are making it work. You know, we we will we know a lot of people that produce a lot of oil in California. I’m not saying in a boat, but I would be very nervous if I was, because even the bigger companies can’t quite figure out what to do. [00:07:59][93.9]

Michael Tanner: [00:08:00] Speaking of oil prices, let’s move to finance. Oil was up about 3% today. Absolutely wonderful. Overall stock market, though, saw the second consecutive days of losses. S&P 500 drops about 8/10 of a percentage point. NASDAQ down a full percentage point dollar index, actually up about 1/10 of or 1.1 percentage points, which makes the jump in crude, albeit more interesting. Crude up half a percentage point currently trading as we recorded at about 530 on the third 73 on the nose, Brant trading about 7/10 of a percentage point, up 79.5, natural gas up a full percentage point $6 and 60 excuse me $2.69 on the nose. [00:08:38][37.7]

Michael Tanner: [00:08:38] Mainly the jump in crude price was off of Libya’s largest oil field, halting production. You know, I’m trying to get the name of the facility. I think it was I don’t know the name of the oil field. What is their largest their largest oil field? You know, basically it’s the Cheraw oil field. There’s 270,000 barrels of oil today per day. And yesterday, protesters showed up and basically occupied to the point where they have to do a complete full stoppage in a warning of a force majeure if they’re not able to meet the demands of the protester. According to a letter signed by the National Oil Corporation’s board and obtained by Bloomberg, they had 20 vehicles demanding job services, new refineries. Basically what it is, is they’re holding out for better wages. So this isn’t a protest for the workers there. This is other people in the country saying, hey, we want a better life. I’m all for that now. You know, I’m all for them protesting about it. Very interesting here, you connector going on Libya right now. You’ve got a non work protest happening, shutting down the largest oil field and we see prices run a little bit. It’s again, it’s how much we teeter on this. You know I think the other interesting thing is, is we’ll see tomorrow we will see the EIA crude oil storage numbers. So we’ll be able to get an idea. We also know that that Red Sea stuff is still going on. So we’ve got a lot of what I would say, teetering macro events that could possibly push us pirates. What really drove prices up today. But you got got to love it, folks. You know, protests in Libya driving up prices. That’s really all I’ve got today. [00:10:04][85.5]

Michael Tanner: [00:10:04] You know, we’ve got some other stories that should drop, but I’ll let us cover that next week. We got plenty of stuff, guys. You’ll hear. I don’t know what. Interview we have coming up tomorrow. You’ll hear our weekly recap on Saturday and then we’ll be back in the chair Monday mornings for you guys for the news and to keep you guys up to speed with everything going on. So with that, guys, have a great weekend. We’ll talk to you on Saturday for the weekly recap and we’ll be back in your inbox on Monday. Until then, folks, so you. [00:10:04][0.0][586.9]

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More Signs that Power in the Labor Market Has Shifted from Workers back to Employers

Energy News Beat

People quit quitting, so fewer job openings to fill, fewer people to hire, less churn. Good for employers, not so good for workers. Layoffs & discharges dropped below Good-Times lows.

By Wolf Richter for WOLF STREET.

Job openings edged down in November, but remained relatively high, workers quit quitting maybe because they’re worried about their jobs, and with voluntary quitting back to normal, the churn in the workforce at companies is also back to normal: with fewer people quitting, there are fewer vacant slots that need to be filled, so fewer job openings and fewer hires. Layoffs and discharges fell sharply in November and are well below the Good-Times lows before the pandemic. A labor market that isn’t quite back to normal yet, but is getting there, as the pandemic-era churn that had shifted power from employers to workers is subsiding.

Job openings dipped by 62,000 in November from October, after the drop of 498,000 in the prior month, to 8.79 million openings, the lowest since March 2021. Openings were still 27% higher than in November 2019, according to data by the Bureau of Labor Statistics today as part of its Job Openings and Labor Turnover Survey (JOLTS), based on a large survey of employers and not on internet job postings.

The three-month moving average, which irons out the month-to-month ups and downs and shows the trend, fell by 236,000 in November, after having stabilized in the prior three months:

People quit quitting. The layoff headlines since mid-2022 scared workers into hanging on to their jobs, and fewer of them went chasing after the greener grass on the other side of the fence. There is a lot of anecdotal reporting about workers who don’t want to return to the office biting the bullet and returning to the office at least a few days a week, rather than quitting to find a remote job.

Voluntary quits fell by 157,000 to 3.47 million, after having stabilized over the prior four months. The three-month moving average (3MMA) fell by 64,000 to 3.58 million. Quits are now back in the range where they had been during the Good Times before the pandemic.

Fewer quits translates into fewer newly vacant slots – so fewer job openings – and employers have to hire fewer people to fill those job openings – so fewer hires – and it means less churn and a more stable workforce, and that’s good for employers, but not so good for workers. It’s a sign that power in the labor market has shifted from workers back to employers.

Layoffs and discharges dropped by 116,000 in November to 1.53 million, and are in a historically very low range.

Businesses across the US fire workers for a variety of reasons all the time. When discharges are done for economic reasons, they’re “layoffs,” and when they’re done for other reasons, such as performance, they’re “discharges.” During the Good Times in 2014-2019, layoffs and discharges averaged 1.8 million per month. That was just part of a normal labor market. During the Great Recession, at the peak, layoffs and discharges exceeded 2.5 million a month. In March 2020, they exceeded 13 million.

The three-month moving average dropped by 52,000 to 1.59 million, well below the low points in the years before the pandemic:

New hires… With fewer people quitting and fewer people getting fired or laid off, there were fewer vacant slots to fill, and so hires dropped further. Hires in November fell by 363,000 to 5.46 million.

The three-month moving average fell by 128,000 to 5.73 million, in the middle of the range of 2018 and 2019.

This is another sign that the incredible churn in the labor market during the pandemic has subsided and that demand for labor has returned to normal-ish levels, and that workers no longer enjoy the power they used to have a couple of years ago.

But job openings vary widely by industry, surging to a record in construction, dropping in most other sectors, and plunging in information (a sector that encompasses many tech and social media companies). We will post this by-industry detail shortly, stay tuned.

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Commentary – Lithium Prices: What They Tell Us About the Popularity of Electric Vehicles – Jim Warren

Energy News Beat

The online database, Trading Economics, indicates that in June 2023 the global price for lithium had risen to $59,212 per tonne. But by November it had fallen by more than half to $27,218. Prices have continued to plummet. As of December 31, lithium was selling for just $18,242 per tonne.

How could this be? Electric vehicle (EV) mandates established in many rich developed countries over the past few years had analysts predicting that if targets were actually met, the world would need 388 new lithium mines by 2035. A Fraser Institute study suggests that getting enough mines built to satisfy all the mandates will be a problem. It takes from seven to ten years to get a mine financed, approved and built.

Canada’s Environment Minister, Steven Guilbeault is certainly trying to drive up demand for lithium. The federal government’s Zero Emissions Vehicle Standard insists that by 2030, 20% of all new passenger cars, SUVs and light trucks sold in Canada must be greenhouse gas emissions free. New battery plants are being handsomely subsidized in Canada to power all of the new electric cars that will presumably be required. With similarly aggressive mandates in Europe and US states led by California there should be heavy demand for lots of batteries and a mountain of lithium.

The most likely explanation for collapsing lithium prices is US consumers’ reluctance to embrace electric vehicles. The Economist reports that EVs accounted for just 8% of new vehicle sales in America this past year. GM was only able to sell 20,000 EVs, but it did manage to sell over half a million fossil-fueled vehicles. Disappointing demand for EVs prompted GM to shelve plans to spend $4 bn to convert one of its plants to electric pickup truck production. Ford has similarly lost enthusiasm for EVs. This past fall it decided to delay plans to invest $12bn in EV production. Companies that make lithium batteries for EVs have responded accordingly. This past fall battery plants in Georgia and Michigan laid off hundreds of employees. Fewer batteries translated into less demand for lithium.

It would appear that EV adoption goals established under Joe Biden’s eye-wateringly expensive green transition initiative (disguised as the “Inflation Reduction Act,”) are not being met. The Biden plan offers tax credits of up to $7,500 for people who purchase EVs. However that hasn’t been a sufficient sweetener. The average EV sold in the US has a $52,000 price tag and that doesn’t account for additional costs like wiring a home charging set up. California, Florida and Texas account for over half of US EV sales and are also responsible for high average sticker prices. Ostensibly virtuous EV buyers in the US have a bit of hypocrisy going on. They’ll happily drive EVs as long as they are full size SUVs. Batteries are heavy which makes EVs heavier than gas and diesel fueled vehicles. And, electric SUVs are especially heavy—heavy enough to increase the chances of deadly collisions. Tesla has apparently created a super-sized SUV, designed for wealthy California drivers, that makes the Hummer look like a toy. And, because they are extra heavy, driving them uses more electricity and it takes extra energy and materials to build them. Furthermore, given that fossil fuels still account for 60% of the electricity generated in the US, EVs are less environmentally friendly than advertised. They are far from being “emissions free.”

EVs are indeed more popular in Europe and China. In Europe 1.5 million EVs were sold this past year and 3.5 million were sold in China. The models sold in China are small, zippy units that don’t weigh much. However, like in the US, around 60% of the electricity consumed in China is generated by burning fossil fuels (mostly coal).

Despite having a copycat EV mandate that mirrors those in Europe, Canadian sales have been even less stellar than what the US has been able to achieve. In 2021, EVs accounted for just 5.3% of new car sales in Canada. Most of them were sold in Ontario, BC and Quebec (55,229) which makes sense—those are the provinces where most Canadians and most climate-alarmed Canadians live. In all the rest of Canada just 7,301 electric vehicles were purchased.

Clearly, the adoption of electric vehicles has failed to meet the overly ambitious targets set by environmentally-friendly policy makers. This result lines up with the litany of missteps and missed targets that have plagued green transition projects over the past two years. The failures include the big decline in demand for new solar and wind power projects and the reversal of greenhouse gas emissions reduction projects in the UK and Europe. An issue this could raise for us in Canada is that Steven Guilbeault might see the international data and worry that his transition plans need to be beefed-up. He could make them even more onerous, expensive and ludicrous.

Source: Energynow.ca

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The post Commentary – Lithium Prices: What They Tell Us About the Popularity of Electric Vehicles – Jim Warren appeared first on Energy News Beat.

 

Libya’s largest oil field halts production followings protests

Energy News Beat

(Bloomberg) – Libya’s largest oil field halted production after protesters entered the facility, according to a person with direct knowledge of the operations.

Libya’s Sharara oil field

The country’s National Oil Corp. had warned earlier that a full stoppage and a force majeure were likely if the north African country was unable to meet the demands of protesters, according to a letter from the company signed by an NOC board member and obtained by Bloomberg. A group of people had entered the field in 20 vehicles, demanding jobs, services and a new refinery, according to a letter signed by a board member at the state company.

The Sharara oil field was producing roughly 270,000 bpd on Tuesday before the protests began.

Libya’s energy facilities have been the focus of conflict since the fall of dictator Moammar Al Qaddafi in 2011, with armed factions shutting down oil production to press their political and economic demands. Operations at Sharara — run by a joint-venture between NOC with Spain’s Repsol SA, France’s TotalEnergies SE, Austria’s OMV AG and Norway’s Equinor ASA — were also stopped by protesters in July.

Continuing agitation will result in “a tumbling of exports, in addition to shaking the confidence of foreign partners and impeding efforts to stabilize production,” according to the NOC letter.

Force majeure is a legal term allowing companies not to meet their contractual obligations due to issues outside of their control.

OPEC member Libya kept production stable at around 1.2 MMbpd for most of the last year. NOC Chairman Farhat Bengdara said last month that the country is targeting at least 1.4 MMbpd by the end this year.

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The Needs of the Grid Are Changing — Our Infrastructure Must Change With Them

Energy News Beat

When I bought my first home — a 50-year-old fixer-upper ­in a small town — I couldn’t run my hair dryer and the microwave at the same time without tripping a circuit. I had to get creative with how I used electricity; such electric use was unheard of when the house was built, let alone using a smart home system or charging an electric vehicle.

Changes in how Americans use energy are occurring even faster than we expected, for reasons we may not have even seen coming, and our electric grid is woefully unprepared to handle it. Electricity consumption has more than doubled since my first home was built, and according to a new report from Grid Strategies, it’s expected to grow 4.7% over the next five years – an increase that’s nearly double what was projected just last year.

The energy generated by renewable sources is an important part of meeting this future electricity demand cheaply. However, there are over 1,350 GW of generation waiting in U.S. interconnection queues, more than 95% of which are zero-carbon energy. The core problem with connecting these sources to the grid is a lack of transmission.

A complex network of transmission lines power our daily lives, but many of the existing lines — constructed in the 1950s and 1960s — have reached or exceeded their lifespan. To make matters more complicated, our current electric grid looks more like a patchwork quilt than a cohesive system that can efficiently transfer energy from where it’s generated to where it’s used. In order to ensure the electricity reliability that Americans have come to expect, it’s crucial that FERC and Congress put the right policies in place to accelerate buildout of high-capacity transmission lines.

More recently, headlines have focused on states’ and cities’ all-electric mandates and electric car incentives as a catalyst for growing energy consumption, but that’s just the tip of the iceberg. The U.S. is enjoying a manufacturing boom that will require significantly more energy, as well as the infrastructure to deliver it. Energy consumption from U.S. data centers is expected to double from 17 GW in 2022 to 35 GW by 2030. Furthermore, use of artificial intelligence has increased, which requires a sizable quantity of power to operate — training a single model can consume more electricity than 100 homes use in an entire year.

In parallel with increased consumption, the energy mix has shifted since the start of the century. When it comes to changes in how our energy is generated, we often think of state mandates — and this is understandable. Renewable development policy first began with a 1970’s federal law, through which progressive state requirements, called renewable portfolio standards, were levied on their in-state utilities to develop renewable resources. Relatedly, transmission development was characterized around 2011 as being for reliability, economic, or public policy purposes — it was envisioned that a line might be for one purpose or another, but that the streams would not always meet.

Fast forward a decade and the landscape is dramatically different. While state mandates continue to stimulate renewable development, they are not necessarily the dominant force. Since 2014, energy customers have voluntarily procured more than 71 GW of clean energy — with nearly 17 GW purchased last year alone. Even without the obligation of state mandates, utilities are setting their own clean energy goals, such as Xcel in North Dakota, Entergy in Arkansas, and PacifiCorp in Utah.

In its current state, the U.S. electric grid will not be able to keep up with Americans’ increasing energy consumption. However, with so many GW of renewable generation sources waiting to be connected to the grid, the solution is simple: transmission must be expanded to move this energy from where it’s created to where it’s consumed.

There are a number of policies that, if enacted, would help clear the current backlog and accelerate transmission buildout. FERC should finalize a strong regional transmission planning and cost allocation rule that requires a long-term look at the changing resource mix and load, specifies economic and reliability benefits, and creates a backstop cost allocation method. Moreover, Congress could create a transmission tax credit or reform current siting and permitting guidelines to give the federal government primary jurisdiction over regionally significant power lines.

Simply put, the needs of the grid are changing, and our energy infrastructure must change with them. If we fall any further behind, we risk leaving households and businesses across the country in the dark. America needs a grid to power America.

Source: Realclearenergy.org

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Expect Legal Challenges to New EPA Rules on Emissions

Energy News Beat

The U.S. Environmental Protection Agency (EPA) in May 2023 published a proposed rule that would establish new source performance standards (NSPS) and existing source performance standards (ESPS) for greenhouse gas (GHG) emissions from new, modified, reconstructed, and existing fossil-fuel fired electric generating units (EGUs).

The proposed rule, which EPA plans to promulgate pursuant to section 111 of the Clean Air Act (CAA), would replace the Affordable Clean Energy (ACE) Rule, which EPA proposes to repeal.

Carter Clements

The emission reduction requirements included in the proposed rule would be achieved through performance standards and emission guidelines based on EPA’s predictions regarding the future availability and capacity of various systems of emission reduction, including carbon capture and sequestration (CCS) and hydrogen co-firing. EGUs would be required to meet these standards in phases between 2024, when a final rule is expected, and 2038.  The proposed standards include the following:

New and reconstructed fossil-fuel fired stationary combustion turbines (primarily new natural gas-fired units) would be subject to updated NSPS for GHG emissions based on the capacity of the unit and the function it serves, with NSPS for new natural gas units based on the use of highly efficient generating practices and lower emitting fuels. Beginning in 2032, these requirements would include hydrogen co-firing, as well as CCS for higher capacity and baseload units.
Large and frequently used existing fossil fuel-fired stationary combustion turbines (primarily existing natural gas turbines larger than 300 MW with a capacity factor of greater than 50%) would be subject to emission guidelines based on either 90% capture of carbon dioxide (CO2) using CCS by 2035, or co-firing of 30% by volume low-GHG (also referred to as “green”) hydrogen beginning in 2032, and co-firing 96% by volume low-GHG hydrogen beginning in 2038.
Existing fossil fuel-fired steam generating EGUs (primarily existing coal units) would be subject to new emission guidelines starting in 2030, with the applicable standard determined by the unit’s federally-enforceable retirement date. Beginning in 2030, units retiring before 2032, and units retiring between 2032 and 2035 that commit to operate with an annual capacity factor limit of 20%, would be prohibited from increasing CO2 emission rates. Units retiring between 2032 and 2040 would be required to reduce CO2 emissions by 16% based on co-firing natural gas. Units retiring after 2040 would be required to reduce CO2 emissions by 88.4% based on CCS with 90% recapture.
Modified coal-fired units would be subject to an 88.4% reduction in CO2 emissions, based on implementation of CCS with 90% recapture, required immediately. (The proposed rule states that it does not include any revisions to EPA’s earlier new performance standards for new or reconstructed coal-fired EGUs because EPA does not anticipate construction of any such units.)

Although EPA does not propose to establish emission trading programs associated with the new GHG standards, it suggests that states may establish trading programs to ease the impact of the rule. EPA also says that states may ease the impact of the rule by setting mass-based emission limitations, to allow the CO2 reduction requirements to be met by reduced utilization. EPA will hold a virtual public hearing on the proposed rule on June 13 and 14, 2023, and has announced a 60-day public comment period on the proposed rule, ending July 24, 2023.  A final rule is expected by summer 2024.

Petitions for judicial review of the final rule may be filed within 60 days after its publication in the Federal Register. Based on recent trade press articles, the rule is expected to face widespread legal challenges in the circuit court for the District of Columbia. Among other things, commentators have opined that, if EPA issues a final rule that is consistent with the proposed version of the rule, it could be challenged at least in part because the proposed systems of emission reduction have not been “adequately demonstrated,” as required by section 111 of the CAA. In addition, the rule is viewed by some as similar to the Obama administration’s Clean Power Plan’s “generation shifting” approach that encouraged fossil retirements in favor of other sources of generation, which the Supreme Court held was too broad to be covered under Section 111’s limited authority. See West Virginia v. EPA, 142 S.Ct. 2587, 2615-2616 (2022).

The effects of the rule may begin to be felt before a final rule is issued, as EGU owners and operators face decisions regarding whether and when to retire existing fossil-fuel fired units, and how to plan for future generation capacity.

Many stakeholders are making these sorts of decisions now, and others will be forced to make these decisions in the next couple of years, as EPA accepts and considers public comments on the proposed rule, as EPA finalizes the new GHG rule, and as judicial review of the final rule proceeds. The regulatory uncertainty created by the proposed rule may be great enough to cause some operators to shutter units that otherwise would have remained available for several more years in order to provide reliable sources of electricity during the ongoing energy transition, even if EPA ultimately finalizes a rule that is less stringent than the proposed rule.

Source: Powermag.com

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The post Expect Legal Challenges to New EPA Rules on Emissions appeared first on Energy News Beat.