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Shell plans job cuts in offshore wind business as CEO refocuses on oil and gas

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

Stuart Turley: [00:00:15] Hello, everybody. Welcome to the Energy News Beat podcast daily stand up. My name’s Stu Turley, president CEO at the sandstone Group. Michael Sound. Having a little bit of fun today we’re getting ready for a visit with the Americans for prosperity tomorrow and Ted Cruz and all and 16 other CEOs. It’s going to be a blast. For tonight’s top stories, please. Let’s take a look. Shell plans to cut jobs in offshore wind businesses. CEO refocuses on oil and gas. Then we have Germany repurposes underground gas storage for green hydrogen. That’s a Hindenburg waiting to happen right there. True cost of abandoning the gold standard. This is a real problem. We should have never left the gold standard. Let’s take a look at the next one coming around the corner. How big tech has helped bring America’s new energy crisis. Oil falls on weak treasury auction, and it boosts the dollar. Conoco, Phillips to buy marathon oil and a $17 billion all stock deal that bolsters shale assets. I’ll tell you, this is kind of cool, but, Michael is going to go through this in a little bit more detail when he gets back. [00:01:37][82.6]

Stuart Turley: [00:01:38] So let’s get started and start running. Shell plans job cuts in northwest wind business as CEO refocuses on oil and gas. This is a Bloomberg story. And this is a quote British royal major begins the layoffs within months, mainly in Europe. Quote we are concentrating on select markets and segments to deliver the most value for our investors and consumers. A shell spokesperson said shell is looking amplification, meaning wind farms are not profitable and they are really focusing on money coming. Bang. That’s why you’re also seeing the they’re trying to, take a look and see if they want to list in the US to have access to the U.S investors. So this is going to be, very interesting to watch as another, major oil company is saying, hey, we’ve got to give money back to our investors. We’ve got to, be fiscally responsible. And that means not throwing your money down a wind turbine. [00:02:47][68.8]

Stuart Turley: [00:02:48] So let’s go over here and take a look at Germany. Germany repurposes underground gas storage for green hydrogen. Holy smokes. Batman. Germany’s government approved on Wednesday a draft law to enable faster deployment of hydrogen projects in infrastructure by fast tracking, permitting and environmental checks for hydrogen production, storage and transportation, and government sources told Reuters. I’ll tell you, I got one word Hindenburg. This is not a good thing. Hydrogen and pipelines and natural gas and renewing a natural gas storage plant, facility, in order to put in green hydrogen adds up to a lot of expense, a lot of technical corrosion. And is it going to be something that’s actually even going to make a difference on the overall, environment? I don’t think so. Germany, quote unquote, plans to spend €559,000,550 million, a direct grant and conditional payment mechanism, up to 157 billion, or €1.45 billion, to support the second Krupp steel Europe. And that’s trying to make you get to use, instead of natural gas, hydrogen. This has all the makings of another failure. My, transport, in repurposing underground gas storage for transporting and storing green hydrogen. If they pull it off, I want to be the first to admit and call up Edgar Lage. In the end, he’s the CEO of Saff. I would love to go visit with him. So if I’m wrong, I’d love to have him on the podcast. [00:04:48][119.6]

Stuart Turley: [00:04:49] Let’s go to the next one here. True cost of abandoning the gold standard. The gold standard is something that, we should have never left. Returning to the gold standard would limit the issuance of new currency. It’s the only way that we are going to get out of debt is to get a grip on our fiscal, sanity again. There are geopolitical reasons why the U.S abandoned the gold standard in 1971. I personally also think that we should have never left, and created the fed. You know, I believe that was 1913. And since the fed has been created, which is a different issue. We have lost 93% of the purchasing value of the dollar. So, I believe that we need to, I don’t know if we’ll ever get rid of the fed, but the fed is a non-government, governmental financial body. Here’s where we come into this. The conviction that the answer is yes is widespread in the fact that President Nixon closing the gold window in 1971, the convertibility of the U.S. dollar to gold in international foreign exchange markets, the original sin that doomed the inflationary hell of, fiat currency, i.e. currency unbacked by anything, tangible, such as gold or silver. It is the one of the biggest reasons that we are in trillions, $34 trillion worth of debt. And, we need to get back to it. We need to get back to, not being in debt. I don’t know that we’ll ever get there. So when we take a look at, this this is an excellent, story, from oil price.com. [00:06:46][117.7]

Stuart Turley: [00:06:48] Let’s go to the next story. How big tech has helped America’s new energy crisis. When we sit back and take a look. Big dig may be the single reason that we do not have an energy transition. I don’t believe that the word transition is properly used there. Tech giants have, propagandized against reliable fossil fuel power plants by falsely claiming to be 100% renewable and implying everyone to do, could do it. Epstein continued, in fact, this is Alex Epstein. In fact, they have just paid utilities to credit them for other solar and wind. Blame others for their coal and gas use. This is very much like Google. Google censors me, and they. I loved it when they said, green since 1977. And then they. Had to change it, and they’ve changed their stories and everything else. They’re not green. Do you know how much power they use and how much they. They don’t. Anyway, so Apple CEO Tim Cook got bragging, rights. California got brownouts. Even Texas, one of the better run states of the union, has made itself overreliant on unreliable energy sources. What a great quote in there. So, big tech firms have been loudly trumpeting on how green they have been quietly shopping. All the while they’ve been shopping for nuclear power to run their data centers. Nuclear is going to be the sustainable data center in a. I insurance companies are going to be the death of the energy transition. Either your electric vehicles won’t be able to be insured, or your insurance is going to go so high on your homes, and because of the fires and everything else. So anyway, big tech, insurance. You gotta love it. [00:09:01][133.1]

Stuart Turley: [00:09:01] Let’s go to Oil Falls as we Treasury auction, boost the dollar. I’ll tell you, this is kind of crazy. Oil retreated as another weak sale of treasuries raised. Concerned about raising yields, stoking, mood across the financial, markets. West Texas, WTI, settled about 80 bucks as equities declined. U.S. bench is up around 14%. U.S. benchmark crude is about 14% over 12 months because of the tensions across the Middle East and cuts, around, the Petroleum Exporting Countries, the producers group will hold an online meeting this Sunday and is projected to extend its, curbs into the second half of the year. So they’re not going to be doing that. I think it’s going to be pretty interesting. [00:09:55][54.1]

Stuart Turley: [00:09:56] Let’s go to Conoco Phillips to buy Marathon Oil in 17 billion almost stock deal that bolsters the shale assets. I have not gone through the details of this, but when they’re talking about it, it’s going to be reaching across Texas, New Mexico, North Dakota and adding 2 billion barrels of resources to, ConocoPhillips. Pretty strong purchase. I am going to be visiting tomorrow with Ted Cruz, Senator Ted Cruz and the folks over at Americans for prosperity and Steve Reese of Reese Consulting. And Steve knows a lot about this deal, and I will have some more information as we take a deeper dive on this. The acquisition of marathon deepens the portfolio. This is a quote, in fits within our financial framework, adding high quality, low cost of supply inventory adjacent to our leading U.S. unconventional position, ConocoPhillips CEO Ryan Lance said in a statement. Lance said the transition would grow Quantico Phillips earnings, cash flow and shareholder returns after the deal closes in the fourth quarter. ConocoPhillips expects shares buybacks worth 7 billion in the first year. That’s pretty strong. Anyway, hats off to ConocoPhillips for that. [00:11:19][83.2]

Stuart Turley: [00:11:20] Hey, with that like subscribe. Share. I’ll tell you what. Tell your friends, hug your pets, tell them about energy Newsbeat podcast. We appreciate one. And everyone, all of our fans. Thanks and have an absolutely wonderful day. [00:11:20][0.0][659.0]

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The post Big Tech Helped Bring On An Energy Crisis appeared first on Energy News Beat.

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Oil retreated as another weak sale of Treasuries raised concerns about rising yields, stoking a risk-off mood across financial markets.

West Texas Intermediate settled below $80 as equities declined. The drop pared Tuesday’s 2.7% gains, which were driven by renewed geopolitical risks, including ship attacks in the Red Sea and Israel’s advance into the Gazan city of Rafah.

US benchmark crude is up about 14% over the past 12 months because of tensions across the Middle East and output cuts by the Organization of the Petroleum Exporting Countries and its allies. Still, the conflict between Israel and Hamas has failed to disrupt flows, and supplies outside of OPEC+ have remained abundant, limiting the gains.

The producers’ group will hold an online meeting Sunday and is projected to extend its curbs into the second half of the year. The expectation has helped both WTI and Brent to break above their 100-day moving averages in recent days.

OPEC+ faces a darkening demand outlook in China as flagging factory strength and a housing crash reduce consumption of plastics and fuels used in construction. The Asian nation has also curbed some crude purchases from the de-facto leaders of the alliance — Saudi Arabia and Russia.

In the US, Federal Reserve Bank of Minneapolis President Neel Kashkari said the central bank’s policy stance is restrictive, but additional interest-rate hikes haven’t been ruled out. Fed policymakers are widely expected to keep rates at a 23-year high when they meet next month in Washington.

Prices:

WTI for July delivery fell 0.8% to settle at $79.23 a barrel in New York
Brent for July settlement declined 0.7% to $83.60 a barrel.

Source: Rigzone.com

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The post Oil Falls as Weak Treasury Auction Boosts Dollar appeared first on Energy News Beat.

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The White House on Wednesday plans to announce new measures to support the development of new U.S. nuclear power plants, a large potential source of carbon-free electricity the government says is needed to combat climate change.

The suite of actions, which weren’t previously reported, are aimed at helping the nuclear power industry combat rising security costs and competition from cheaper plants powered by natural gas, wind and solar.

Nuclear proponents say the technology is critical to providing large, uninterrupted supplies of emissions-free power to serve soaring electricity demand from data centers and electric vehicles and still meet President Joe Biden’s goal of decarbonizing the U.S. economy by 2050.

“In the decisive decade for climate action, we need to pull as many of the tools for decarbonization off the sidelines and onto the field,” said Ali Zaidi, Biden’s national climate adviser.

Critics worry about the buildup of radioactive waste stored at plants around the country and warn of the potential risks to human health and nature, especially with any accidents or malfunctions. Biden signed a law earlier this month banning the use of enriched uranium from Russia, the world’s top supplier.

At a White House event on Wednesday focused on nuclear energy deployment, the Biden administration will announce a new group that will seek to identify ways to mitigate cost and schedule overruns in plant construction.

The group of climate, science and energy policy experts from White House and Department of Energy will work with project developers, engineering, procurement and construction firms, utilities, investors, labor organizations, academics, and non-governmental organizations.

It also said the Army will soon solicit feedback on deploying advanced reactors to provide energy for certain facilities in the United States. Small modular reactors and microreactors can provide energy that is more resilient to physical and cyber attacks, natural disasters and other challenges, the White House said.

The Department of Energy also released a paper outlining the expected increased safety of advanced reactors. And a new tool will help developers figure out how to cut capital costs for new nuclear reactors.

The youngest U.S. nuclear power reactors, at the Vogtle plant in Georgia, were years behind schedule and billions over budget when they entered commercial operation in 2023 and 2024. No new U.S. nuclear plants are currently being built.

Vogtle is now the largest U.S. source of clean energy, the White House said.

Nuclear energy accounts for about 19% of U.S. power generation, compared with 4% for solar and 10% for wind.

Source: Cnbc.com

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Returning to the gold standard would limit the issuance of new currency.
There are geopolitical reasons why the US abandoned the gold standard in 1971.
Fiat currencies are backed by the interest payments made on sovereign bonds and the nation’s economic-political-social stability.

We all know the problem with fiat currency: the temptation to print more currency is irresistible, but ultimately destructive.

Money in all its forms attracts quasi-religious beliefs and convictions. This makes it difficult to discuss with anything resembling objectivity. But given the centrality of money (and its sibling, greed) in human affairs, let’s press on and ask: would returning to the Gold Standard (i.e. gold as money / gold-backed currency) resolve our most pressing monetary problems?

The conviction that the answer is “yes” is widespread. In this view, President Nixon “closing the gold window,” in 1971, i.e. ending the convertibility of the US dollar to gold in international foreign exchange (FX) markets, is the Original Sin that doomed us to the inflationary Hell of fiat currency, i.e. currency unbacked by anything tangible such as gold or silver.

In this view, the only way to avoid the consequences of this Original Sin–the eventual reduction of fiat currency to zero value via hyper-inflation as the currency is “printed” without restraint–is to return to the gold standard.

So far, so good, but from here on in it gets tricky. We have a long history of precious metals being the only form of money in various economies, and an almost as long history of paper money augmenting precious-metal “real money” (in China, for example) and the issuance of copper coinage to grease small transactions.

Gold-backed currency rolls off the tongue rather easily, but what exactly does this mean? In theory, it means every unit of paper / digital currency in circulation can be converted on demand to a physical quantity of gold or silver at an exchange rate either set by the nation-state’s government or by the market.

This conversion acts as a governor on the issuance of new currency: if the nation has $100 billion in gold/silver, it cannot issue $1 trillion in currency, as the whole idea of conversion is that each unit of currency can be fully converted to gold/silver. So in a truly gold-backed currency, the money supply in circulation must be limited to $100 billion.

There are various tricks that can be played here, of course. The government can assign a conversion rate that doesn’t align with the actual market value of gold/silver, for example. Or it can limit conversion to the settlement of foreign trade with other nations.

Let’s return to Nixon’s Original Sin and stipulate that there is no such thing as “free trade”, as all trade has geopolitical and domestic-economic elements. Those nations whose domestic growth depends on increasing exports, i.e. mercantilist economies, will naturally trumpet “free trade” as a cover for their exploitation of trade for domestic growth while they restrict imports.

Many observers seem to forget the US was engaged in an existential geopolitical struggle with the USSR in the 1950s, 1960s and beyond. Gaining and maintaining allies and “spheres of influence” were core dynamics in this global contest, and the US had over-riding reasons to support the war-devastated economies of its allies in Europe and Asia by enabling them to export goods to the US.

The US also had over-riding reasons to maintain the US dollar (USD) as a reserve currency, a currency that is available in sufficient quantity globally to grease commerce and credit and also act as a stable foreign exchange reserve for both private enterprises and nations.

Issuing a reserve currency offers an exorbitant privilege–what we might call monetary hegemony–but it comes with a price, a price explained by economist Robert Triffin as Triffin’s Paradox, which has two key paradoxical dynamics:

1. The issuing nation must run a sustained trade deficit in order to “export” sufficient quantities of its currency into the global marketplace to meet the expansive needs of global trade and other nations. (This helps explain why the USD is roughly half of all reserves (48%) while China’s RMB is only 2% of reserves: exporting nations running surpluses don’t “export” their currencies for use by others.)

2. This need to serve international trade / geopolitical goals is fundamentally in conflict with the goals of the domestic economy: the currency cannot serve two masters equally well.

Why did Nixon end USD conversion to gold? He had no choice, as the geopolitically necessary trade deficits were rising to the point that America’s gold holdings would have diminished to zero were the rising trade deficits settled in gold.

Existential challenges take precedence. To say that the US should have given up its reserve currency and insisted our struggling allies maintain balanced trade with the US is to ignore the geopolitical realities.

We must also recognize that markets discover the price/value of competing currencies, and so nations whose currency is priced higher than others will have difficulty exporting their goods, as these goods are priced in their own strong currency and are therefore more expensive in nations with weaker currencies. Nations with weaker currencies will have an easier time selling their goods to nations with stronger currencies, as their goods are cheaper as a result of their weaker / lower value currencies.

Those nations blessed with surplus essential commodities (energy, food, minerals, etc.) will naturally tend to run surpluses with nations less endowed with tradable goods, and as a result, the nations running trade surpluses will end up with the lion’s share of the gold and silver. This generates global “haves and have-nots,” with all the attending sources of conflict: “our lead will take your gold.”

We might also note that fiat currencies issued by the sale of sovereign bonds are not actually “backed by nothing”: they’re backed by the interest payments made on the bonds and the entirety of the nation’s economic-political-social stability and productivity which guarantee repayment of the bond at maturity.

We all know the problem with fiat currency: the temptation to print more currency is irresistible, but ultimately destructive: once currency is issued in excess of the actual expansion of goods and services, the result is devaluation / loss of purchasing power, a.k.a. inflation. Here’s a snapshot of global money supply:

In response, central banks are adding gold reserves: gold reserves are now larger than the reserves of the second-largest reserve currency, the euro:

Where does this leave us? Not with an easy answer, but with more complexities, starting with credit. As David Graeber explained in his book Debt: The First 5,000 Years, credit has been an essential element of commerce from the earliest days of commerce, for very compelling reasons. How do we graft credit onto “money” when credit is itself a form of “money”?

We’ll also have to consider the other crisis we face, soaring wealth-income inequality, which arose without restraint in ancient economies that used precious metals for money.

Looking at the history of Rome, we note that the wealth of Rome’s elite in the Republic era has been estimated as 30 times the wealth of the average free male citizen, where by the Imperial era the elites had amassed fortunes 10,000 times the wealth of the average free male citizen. There was no fiat currency, so we must accept that politics is part and parcel of “money,” social stability and economic vitality or stagnation.

We’ll grind through these additional complexities in my next post. I discuss these issues with Richard Bonugli in a new podcast: CHS on Gold and What Currency Systems Make Sense (31:37 min).

Source: Oilprice.com

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The post The True Cost of Abandoning the Gold Standard appeared first on Energy News Beat.

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Germany’s government approved on Wednesday a draft law to enable faster development of hydrogen projects and infrastructure by fast-tracking permitting and environmental checks for hydrogen production, storage, and transportation, government sources told Reuters.

The so-called Hydrogen Acceleration Law will give hydrogen projects priority in approvals, simplify permitting, and fast-track environmental impact assessments.

Germany, which aims to become a carbon-neutral economy by 2045 – five years ahead of the EU and other major developed economies – already has a National Hydrogen Strategy in place. The strategy will help create a domestic market as a first step in market ramp-up by building appropriate hydrogen production capacity and developing technologies for the use of hydrogen on the demand side. Germany also plans to implement a regulatory framework for the development and expansion of the necessary hydrogen transport and distribution infrastructure.

In a 2023 update of the National Hydrogen Strategy, Germany raised the target for hydrogen electrolysis capacities from 5 gigawatts (GW) to 10 GW by 2030, assuming that hydrogen demand in Germany will increase to 95-130 terawatt hours (TWh) by 2030, from around 55 TWh per year in 2023. The Strategy also sets out how hydrogen demand is to become even greater between 2030 and 2045.

Germany, Europe’s largest economy, bets big on hydrogen to decarbonize hard-to-abate industrial sectors including steelmaking and cement making.

Last year, the European Commission approved under the EU state aid rules two German measures to support ThyssenKrupp Steel Europe in decarbonizing its steel production processes and accelerating its uptake of renewable hydrogen. Germany plans a $597 million (550 million euros) direct grant and conditional payment mechanism of up to $1.57 billion (1.45 billion euros) to support ThyssenKrupp Steel Europe.

Separately, Germany’s state-controlled firm Securing Energy for Europe (Sefe) plans to invest around $543 million (500 million euros) in repurposing some of its underground gas storage sites and gas pipelines into infrastructure fit for storing and transporting green hydrogen, Sefe’s CEO Egbert Laege told Reuters in an interview earlier this year.

Source: Oilprice.com

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The post Germany Repurposes Underground Gas Storage for Green Hydrogen appeared first on Energy News Beat.

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America produces more energy than any other country in the world, has more energy reserves than any other country, and pioneered clean, inexpensive, and virtually unlimited nuclear energy. So why does even the Washington Post admit that “America is running out of power?”

The answer is simple. Take a look at your smartphone. Binge-watch the new season of Bridgerton on Netflix. Ask ChatGPT to produce an outline for your marketing plan.

“For years tech giants have been helping climate catastrophists shut down reliable fossil fuel electricity, falsely claiming they can be replaced by solar/wind,” Alex Epstein — energy expert and author of “Fossil Future” — reported on X a few days ago. “Now the grid they’ve helped gut can’t supply their growing AI needs.”

There are few things more destructive than a major corporation with lots of money to throw around making themselves look good on trendy social concerns.

“Tech giants have propagandized against reliable fossil fuel power plants by falsely claiming to be ‘100% renewable’ and implying everyone could do it, Epstein continued. “In fact, they have just paid utilities to credit them for others’ solar and wind use and blame others for their coal and gas use.”

Apple CEO Tim Cook got bragging rights. California got brownouts. Even Texas, one of the better-run states in the union, has made itself overreliant on unreliable energy sources like wind and solar.

Would it surprise you to learn that Apple’s vice president in charge of Environment, Policy and Social Initiatives is Lisa Jackson, who served as Barack Obama’s EPA chief?

Now there is good news buried deep inside all the doom and gloom. Nobody, not even the wishful-thinking experts in Washington or America’s C-suites, can keep power-hungry data centers running on windmills and unicorn farts. From Netflix to your cloud photo library to the latest AI chatbot, more and more of everything we do relies on data centers.

There’s simply too much money to be made from Big Data to make them rely on unreliable power sources.

The Biden administration is making useless (but expensive) pledges to “modernize America’s electrical grid, paving the way for clean energy and fewer outages” that fail to address the issue. A better grid would be nice. A harder grid would be better. But what we really need is more cheap and reliable power — and lots more of it.

Enter, at long last, the small modular reactor (SMR). “Due to their small size and modular nature,” Carbon Credits reported last week, “SMRs can be factory-assembled and transported to sites unsuitable for larger reactors, making them more affordable and quicker to construct.”

Those same Big Tech firms that have been loudly trumpeting how “green” they are have been quietly “shopping for nuclear power to run new data centers.” Plans are already being drawn up to build new data centers around SMRs.

The hypocrisy is stunning. But if the rest of us end up getting plentiful and reliable nuclear energy out of it, I suppose it might have been worth having to listen to Cook and Jackson’s little lectures.

Maybe.

Source: Pjmedia.com

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The post How Big Tech Helped Bring on America’s New Energy Crisis appeared first on Energy News Beat.

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(Bloomberg) – Shell Plc is preparing to cut staff from its offshore wind business as Chief Executive Officer Wael Sawan moves the company away from the capital-intensive renewable energy sector.

The British oil major is set to begin the layoffs within months, mainly in Europe, according to people familiar with the matter who requested not to be identified because the information is private.

“We are concentrating on select markets and segments to deliver the most value for our investors and customers,” a Shell spokesperson said. “Shell is looking how it can continue to compete for offshore wind projects in priority markets while maintaining our focus on performance, discipline and simplification.”

Shell had been spending heavily in offshore wind, aiming to leverage its experience extracting oil and gas at sea to become a leader in the technology. But soaring costs in the sector and a renewed focus on driving returns for shareholders under Sawan has led the company to back away from the green-energy source.

Since Sawan took on the CEO role at the beginning of last year, he’s put pressure on business divisions to improve performance and profitability. In June 2023, he laid out a plan to reduce “structural costs” by as much as $3 billion by the end of 2025. The cuts to offshore wind follow layoffs that started in the low-carbon solutions unit earlier this year.

Shell has built up a team, focused in the Netherlands to develop and build offshore wind farms. But the company limits on spending left a large team with less to do than previously expected.

The staff cuts follow departures of a number of key executives in the offshore wind business, including Thomas Brostrom, the head of its European renewable power division and Melissa Read, the head of its UK offshore wind unit.

Source: Worldoil.com

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The post Shell plans job cuts in offshore wind business as CEO refocuses on oil and gas appeared first on Energy News Beat.

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The US is working to build its own rare earth element supply chain to reduce dependence on China.
China currently dominates the market due to decades of investment and lax environmental regulations.
Researchers are exploring ways to extract rare earths from existing US coal mines as a potential shortcut.

Huge upticks in renewable energy capacity installations around the world are causing demand for key rare earth elements to skyrocket. While these materials aren’t as geologically rare as their name might suggest, their production is limited as a finite number of already developed supply chains struggle to keep up with demand. As a result, prices are skyrocketing. Not only is there therefore a huge economic opportunity in establishing new supply chains for rare earths, there are also major risks to allowing current market entities to continue consolidating influence over these essential clean energy building blocks.

Currently, China dominates rare earth element supply chains. According to the Oxford Institute of Energy Studies, Beijing alone is responsible for 70% of the world’s rare earth ore extraction and 90% of rare earth ore processing. Moreover, China is still the only large-scale producer of heavy rare earth ores on the planet. This isn’t just because of China’s own rich natural deposits of these ores. “This dominance has been achieved through decades of state investment, export controls, cheap labour and low environmental standards,” reports Oxford. The country has spent decades building up supply chains around the world, expanding its energy and industrial influence into emerging markets spread across Asia, Africa, and Latin America.

Now, the United States is making concerted efforts to build up its own homegrown rare earth supply chains for its own renewable energy needs, as well as considerable demand from the military. The Department of Defense has awarded more than $439 million to establish domestic rare earth element supply chains since 2020, and the Department of Energy has also been throwing billions of dollars into kickstarting the country’s lithium industry.

The United States has been scouting out supply chains for key rare earth elements around the globe, intensifying efforts to secure its own supply in recent years by turning to nations including Mongolia, South Africa, and Mexico for potential trade deals. However establishing trade agreements that China hasn’t already gotten to first has proven difficult. China has been busily expanding a green energy empire in lithium-rich Latin America, for example, but the United States has had a comparatively difficult time entering into the same market.

Luckily, the United States is also geologically rich in many rare earth elements – it will just require building an entire extraction and processing industry from the ground up. Considering the huge and rapidly growing demand for these elements, as well as the geopolitical risk associated with a one-nation monopoly on their supply chains, that kind of a timeline is less than ideal.

But researchers at the University of Utah may have found a shortcut. Ironically enough, the key to powering the U.S. renewable energy industry may require partnering with the U.S. coal industry for quicker and more cost-efficient ore extraction. The research team has found ‘elevated concentrations’ of rare earth elements in currently operational mines on the Uinta coal belt of Colorado and Utah. In theory, this could allow already active mines to extract rare earths along with the ore they’re already extracting with little additional overhead.

“The model is if you’re already moving rock, could you move a little more rock for resources towards energy transition?” said study co-author Lauren Birgenheier, an associate professor of geology and geophysics. “In those areas, we’re finding that the rare earth elements are concentrated in fine-grain shale units, the muddy shales that are above and below the coal seams.”

While the United States is making a major place to become competitive in the rare earth element market, however, it’s still many years and billions of dollars behind China in terms of industrial development as well as deal-making diplomacy with ore-rich nations. Plus, it can’t compete with the low labor costs, unilateral decision-making power, and lax environmental oversight that gives Beijing an edge on the market. But innovative approaches like the ones being tested by the University of Utah could open a potential avenue for regaining some of that ground.

Source: Oilprice.com

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The post Active Coal Mines Might Be Key to the Renewable Revolution appeared first on Energy News Beat.

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Humanity is almost a quarter of the way through the 21st century and Virginia — home to 70% of the world’s data centers — is on the frontlines of the latest emerging technology: artificial intelligence, or AI.

The prevalence of data centers and the rising role of AI don’t equate to a dystopian battle between humans and machine control, though (at least at the moment). Rather, these issues are at the center of a debate over localities’ authority and revenue benefits, historic preservation, environmental considerations, and electricity demand and utility rate projections, all shaped by ever-increasing internet use.

The state is studying data center development

Northern Virginia, the densely populated suburbs and exurbs located just outside the nation’s capital, is home to 70% of the world’s data centers, the huge warehouses that store computers’ processing equipment, internet network servers and data drives. With people increasingly using web-based programs on an average of 22 internet-connected devices in homes, data centers are seen to be needed more than ever.

While data centers are proposed as potential drivers of economic benefits for localities, a number of Virginians have expressed concerns about the proliferation of the warehouses in the state and their effect on communities where they’re located.

“Is it worth losing all your water, and having noise pollution and everything else to get revenue for some of the things you need?” said Mary Damone, 67, who moved to the Orange County area a few years ago, where a 732-acre data center park development has been proposed.

Fairfax County resident Chris Ambrose, 63, who, like Damone, was also at a recent press conference raising concerns over data center development, said the development of thousands of homes in the proposal is bad enough.

“Then you add the data centers to it, and the transmission lines, the impact on the battlefields,” Ambrose said. “If they need more revenue, you would think it would be something more measured. The magnitude is just crazy. It’s off the charts.”

Josh Levi, president of the Data Center Coalition, said the industry looks forward to supporting JLARC and discussing the findings when the study is done.

“Virginia continues to distinguish itself as one of the most dynamic and important markets for the digital infrastructure that enables our innovation economy and meets the growing, collective computing demands of individuals and organizations of all size,” Levi said.

This past legislative session, lawmakers introduced over a dozen bills to address some of the public’s concerns over how data centers could impact water demand, power delivery costs and more, but they were all sent to the Joint Legislative Audit Review Commission, the state’s policy research arm, to develop policy proposal recommendations.

“We have a number of research activities planned or underway for this study,” said Mark Gribbin, the JLARC project lead for the data center study, at a meeting last week outlining the study’s goals.

“Foremost, we’ll have a high level of engagement with local communities and data center companies,” said Gribbin. “We’re also working closely with utilities, local governments and state regulators, especially on questions related to development, water, air and energy,”

In the few months since those legislative deferrals, a battlefield in Orange County has been listed as one of the 11 most endangered sites in the country because of data center development, and Google announced a $1 billion investment to expand their data center campus in Reston.

Both events have re-upped the conversation over how to provide data centers their needed electrons, which could be delivered through an improved transmission system, after a recent regulatory overhaul of how such systems are planned.

“If the generation isn’t there to meet a proposed data center’s needs, the data center doesn’t [need to] locate in Virginia or anywhere else that can’t meet its load,” said Walton Shepherd, Virginia Policy Director with the Natural Resources Defense Council. “Virginia is not responsible for the running of the internet, the data center operators largely are. The solution we need to solve is a cleaner grid.  We have the tools to do so, and that’s with or without data centers.”

Local, historic concerns

In Orange County, Wilderness Crossing data center received national attention for its proposed development near a Civil War-era battlefield, fueled by concerns after data centers were built near other historic sites in Loudoun and Prince William counties in addition to other parts of the state.

The proposed Wilderness Crossing site near  Wilderness Battlefield sprawls across 2,600 acres, 732 of which  would accommodate data centers — which can typically have a footprint of over 100,000 square feet each and reach 90 feet tall —  and distribution warehouses. The site plan also envisions over 5,000 residential units and 200,000 square feet of mixed commercial use buildings, and a realigning of Route 20.

“If this development goes forward as approved, there will be intense pressure on the existing road network,” said Bob Lookabill, president of the Friends of the Wilderness Battlefield, at the press conference announcing concerns over the Wilderness Crossing proposal.

The development would also obstruct the views of Virginia’s hillside, take up forested land, sit on abandoned gold mines and draw on water from the Rapidan River, which experienced drought-like conditions last year. Concerns about data centers’ impact on local waterways have been echoed around the state.

The area’s water is served by the Rapidan Service Authority. According to its recently approved water permit, obtained by the Virginia Mercury, the Department of Environmental Quality rejected an initial request finalized after the Wilderness Crossing rezoning that sought to pull more water for projected demand increase.

“What if there is a drought?” said Tim Cywinksi, communications director for the Virginia chapter of the Sierra Club, while speaking about another data center proposal in Caroline County during a webinar. “Are we going to continue to supply what becomes a diminishing resource to an industry that’s powering AI? Or are we going to give it to families to make sure they need it? … This is why protective policy is so important.”

Other data center proposals appear to show that the developments would encroach on historic sites statewide, such as Manassas National Battlefield Park, Culpeper National Cemetery, Brandy Station, Sweet Run State Park and Savage Station Battlefield.

Two historic Black graveyards belonging to the Gaskins family in the Brentsville area of Prince William County are alleged to have been damaged from the construction of a data center and a nearby power substation.

“Without comprehensive action from our elected leaders, countless historic sites [and] national parks may continue to fall victim to this unchecked and unregulated data center growth,” said Kyle Hart, mid-atlantic field representative at the National Park Conservation Service during the May 1 press conference.

The pressure to these sites has already been largely seen in Loudoun and Prince William counties, which have been dubbed Data Center Alley, and recently approved a Digital Gateway rezoning in their respective jurisdictions.

“We have to have a better way [to] think it through and it needs to be transparent,” said Chris Miller, president of the Piedmont Environmental Council, a conservation organization focused on preserving central Virginia’s countryside. The group won a lawsuit against Orange County that forced the release of previously withheld information on the Wilderness Crossing proposal. “I think everyone wants a continued investment in the economy and [to be] prosperous, but you want it done in a way that doesn’t destroy the underlying quality of life.”

Data center developments have been continually proposed throughout Virginia and are welcomed by some communities. A 1,200-acre data center site was recently approved in Hanover County. The Delta Lab, an energy innovation initiative focused on Southwest Virginia, has studied locating one in that region that could use water from mines for cooling.

Del. Mark Sickles, D-Fairfax County, said at the recent JLARC meeting, two vacant buildings along the beltway in his district are being converted into an Amazon Web Services data center, without controversy.

“It was a perfect place for it, actually,” Sickles said. “We need to find more perfect places in Virginia that are close to power, and can be shielded from the public. It’s going to be a challenge for everybody because I don’t think we want to give up on this industry.”

$1 billion investment

Just days before the concern over Wilderness Crossing became public, Gov. Glenn Youngkin announced that Google, one of the biggest companies in the world, would expand its data center campuses from two facilities to three.

“We’re super excited about it,” said Ruth Porat, president, chief financial officer and chief investment officer of both Google and its parent company Alphabet, of the expansion. “The investments we’ve made today are not only important investments in infrastructure, but they’ve also added 3,500 jobs in Virginia, and they supported a billion dollars of economic activity.”

Google completed the first phase of construction on the first two data centers in 2019 with a $1.2 billion investment in the state.

The third center’s creation will usher in an AI Opportunity Fund seeded with $75 million from the company’s philanthropic arm, Google.org. The fund will help people around the county earn online training certifications. The program joins a separate Grow with Google program, already underway, that teamed with Northern Virginia Community College to offer a new free cyber security career certificate.

“Since 2019, this innovative public-private partnership has increased opportunities for students to join the technology workforce,” said Anne M. Kress, president of NOVA, in a statement. Kress added that the partnership  “helps close the skills gap and greatly expands the region’s talent pool.”

A driving force for the online certifications through the opportunity fund, would be leveraging AI. The governor leaned into the “accelerator” allegory during the announcement, highlighting AI’s ability to hasten the pace for certifications to be awarded.

“What’s been so exciting is that this parallel path, this moment of accelerator and brakes, is enabling confidence as we move forward to move forward with an expedited pace,” Youngkin said. “That is where breakthroughs can occur.”

Data centers in Virginia have provided $2.2 billion in wages for citizens, and 25% of revenue to Loudoun County have gone into “essential services” like schools, social services and other public programs, Youngkin added.

Impact on power demand

Increased internet usage, including AI, requires data centers to use more electricity. Computing for AI is measured by an entirely new computing graphic processing unit, or GPU.

“Historically, a single data center typically had a demand of 30 megawatts or greater,” Dominion Energy Virginia President Bob Blue said in the utility’s first quarter earnings call. “However, we’re now receiving individual requests for demand of 60 megawatts to 90 megawatts or greater, and it hasn’t stopped there.”

Larger data center campuses with multiple buildings can “require total capacity ranging from 300 megawatts to as many as several gigawatts,” Blue added.

The utility has connected 94 data centers to date and expects to connect another 15 this year, Blue also told investors. Power Engineering reported on a Securities Exchange Commision annual filing that in 2023 and 2022, 24% and 21% of electricity sales from Dominion were to data centers, respectively.

“The concentration of data centers primarily in Loudoun County, Virginia represents a unique challenge and requires significant investments in electric transmission facilities to meet the growing demand,” the SEC filing states.

While the data center computers have become more efficient through a power usage effectiveness score — a rate that determines how efficiently energy is processed for the web-based service to reach internet users — a study from McKinsey & Company found that data center power demand is expected to more than double across the country from from 17 GW to 35 GW. Some of that power could come from Dominion’s 176-turbine  offshore wind project,  expected to generate 2.6 GW of electricity, or enough to power 660,000 homes.

“The point is that they’re packing more and more into less space,” Miller said. “How are we going to meet that load?”

Dominion projects its load growth, which includes data centers and vehicle electrification, to increase from 17 gigawatts in 2023 to 33 gigawatt in 2048, though environmental groups are skeptical of growth proposals being modeled accurately.

Northern Virginia Electric Cooperative expects to increase its peak electric load by more than 12% per year over the next 15 years, “driven almost exclusively by data centers.”

“NOVEC works one-on-one with each new data center, as each new high-load customer presents unique issues to NOVEC and its distribution facilities,” said Jim East, communications manager at electric cooperative. “Part of this includes meeting the special energy supply and construction schedule needs, while always maintaining the high degree of reliability and affordability for all remaining customers.”

To meet the demand for data centers, Dominion has included renewable energy technology in its long-term, non-binding integrated resource plan, but is also proposing a natural gas plant, which environmental groups continue to oppose, including protests at a Richmond outdoor festival the utility sponsored.

Teresa Hall, a spokeswoman for Appalachian Power Company, Virginia’s second largest utility that serves Southwest Virginia, noted that “annual power generation over the last 20 years has stayed relatively flat until now.” The uptick, she said, is thanks to data centers.

“With data centers/increased internet use and AI, the landscape is changing quickly,” Hall said, adding that data centers present a unique challenge because they “require a lot of power – commonly 300 MW or more, which is enough to power all of the homes in a medium-size city.”

The company is facing the challenge head-on, Hall said.

“To date, we’ve been able to accommodate almost any size customer that has expressed an interest in our service territory. As we go forward, we know we will need additional cooperation.”

Virginia’s leaders have increasingly expressed the need for new technologies such as small modular reactors, tinier versions of traditional nuclear plants that could power a small city like Roanoke with a population of 100,000. Proponents say SMRs could provide baseload, around-the-clock power when renewable technology can’t produce it. The SMRs are intended to provide between 300 to 500 megawatts of power, but none have been turned on in the United States since NuScale pulled the plug on its effort to build one in Idaho due to cost concerns.

Shepherd, with the NRDC, said that if SMRs are built, “they’re so far off. I don’t think those are going to implicate the data center’s decision on where and when it builds in a place where it is able to get power.”

Another part of the dialogue focuses on technologies like battery storage and a recently announced 1920 rule from the Federal Energy Regulatory Commission, or FERC, to increase planning for transmission lines across state lines. FERC’s new guidance includes transmission lines that may need to be upgraded from a traditional 110 kilovolt to up to 500 kilovolt capacity, in order to supply data centers.

“Transmission developers can now plan projects that address a multitude of needs that are anticipated to develop over a long-term horizon more efficiently and cost-effectively for customers,” stated Ben Fowke, president and CEO of American Electric Power, the parent company of Appalachian Power Company, in U.S. Senate committee testimony this week.

The regional rule will also help areas pull on generation sources that may be located in other areas of the PJM Interconnection regional grid that Virginia is a member of.

“Every resource backs up every other, but only if you have the transmission required,” said Gamlich.

In 2023, Virginia’s legislature passed a bill to truncate a State Corporation Commission review of a transmission line proposal from PJM Interconnection. The line is needed to deliver power for data center development in Virginia and the $670 million project cost is recovered from ratepayers in Virginia.

There’s also an opportunity to strengthen existing transmission lines through grid enhancing technologies, or GETs, and separate ways to utilize a demand side management and energy efficiency programs to reduce the amount of strain on the grid. It can also help get around the 26 gigawatts of electricity stuck in a queue awaiting approval from PJM, 23% of which is from Virginia, said Kim Jemaine, director at Advanced Energy United.

“In the states where they have been adopted at a medium level, GETs have unlocked 30% additional capacity from existing infrastructure and have allowed twice as many new energy projects to be integrated,” said Kim Jemaine, director at Advanced Energy United. Jermaine said GETs “can be installed with little to no downtime and at a fraction of the cost of new infrastructure.

Utilities have said they can’t rely on energy efficiency efforts, like homeowners using smart thermostats to control consumption, because the end use may not keep up with those behaviors. But that dismissal is a “red herring,” Shepherd said. Measuring the load reductions delivered through energy efficiency programs and making actionable plans based on those measurements is not impossible, Shepherd added.

“I think folks need to chill out and recognize the regular nature of grid planning. It’s just a matter of rolling up our sleeves a little further to make sure it’s done correctly.”

Perhaps ironically, as manufacturing and society in general electrifies more, AI might be able to help with those demand side management programs, as noted by the U.S. Department of Energy.

“AI has the potential to significantly improve all these areas of grid management,” the report stated, and can be a tool that models for capacity and transmission studies, compliance and review for federal permitting, forecasting renewable energy production and creating applications to enhance resilience.

Levi, with the Data Center Coalition, said the “industry is committed to leaning in as an engaged partner at this pivotal time. Collectively, we can meet the moment and ensure a clean, reliable, affordable, and resilient electric system that supports the digitization of our economy, widespread vehicle and building electrification, the onshoring of advanced manufacturing, growth in controlled environment agriculture, and other 21st-century economic drivers.”

Local Revenue

But the money.

The local revenue generated by data centers supports Loudoun and Prince William counties — the latter of which could add $54 million in revenue, with $19 million going toward schools and $21 million offsetting a real estate tax increase — as a result of increasing its data center tax from $2.15 to $3.70 per $100 assessed value.

Henrico County created a $60 million affordable housing fund with revenue from data centers in order to waive water and sewer connection fees and building permit fees.

“We’re doing something different,” Board Chairman Tyrone Nelson said, according to Richmond BizSense. “We may be the only locality in the commonwealth, maybe in the country, dedicating a single revenue source to address a crisis like this in our community.”

Even property owners that sell their land for development of a data center can reap benefits. But, as evidenced by a Prince William County lawsuit,  the spoils don’t always go to the seller  if a legal challenge over the rezoning holds up their profits as the property value and tax increase remains.

The report on Project Oasis proposal in Southwest Virginia said development of a 250,000 square foot “hyperscale” data center with 36 MW of demand could generate an estimated $464 million in capital investment and 40 indirect jobs.

Another report by the Virginia Economic Development Partnership found that 35 data centers, which are cited as the largest industry in the state, invested $23 billion into the economy while getting almost $1 billion in tax relief in exchange for its economic inputs. The report found a 14% average annual return on incentive for the years 2022 through 2027.

“JLARC estimated [in 2019] that 90 percent of the data center investment made by the companies that benefit from the DCRSUT exemption would not have occurred in Virginia without the exemption,” the report stated.

Although localities may be raking in local revenue benefits, those tax incentives for data centers cancel out cash that could be padding state coffers, which similarly could go toward education and other services.

“There’s different layers to look at,” said Jackson Miller, director of state power sector policy, also at the NRDC. “We just think that if you’re going to give away that revenue, which is taxpayer public money, then it needs to be conditioned with requirements to maximize energy efficiency, with requirements to maximize and ensure that that facility is bearing its costs and paying for it on the grid so ratepayers don’t get a double- whammy.”

Along with a bill to study if data centers or ratepayers foot the bill for transmission upgrades, a separate bill sent to JLARC this session came from Del. Rip Sullivan, D-Fairfax, and Sen. Suhas Subramanyam, D-Loudoun, that would’ve required data centers to achieve a certain computing efficiency score, known as a PUE, in order to receive state tax breaks.

The data center companies have climate improving commitments, but local permitting pushback to renewable energy sources, including solar, present challenges.

The centers should “ be required to be 100% renewable before they turn the lights on if they’re serious about their publicly stated comments,” said Hart, with the National Park Conservation Service.

The data center industry’s benefits to Virginia’s economy include the creation of 12,140 direct jobs, including engineers, building control specialists, security, server technicians, logistics professionals, construction management, health and safety specialists, and food services. The future benefits — and challenges — of data center development in the state remain to be seen.

Source: Yahoo.com

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The acquisition of Marathon Oil will extend ConocoPhillips’ reach across shale fields in Texas, New Mexico and North Dakota, adding 2 billion barrels of resources to its portfolio.
ConocoPhillips expects share buybacks worth $7 billion in the first year after the deal is completed and $20 billion after the first three years.
ConocoPhillips is the last major U.S. oil company to pull the trigger on a big acquisition as the industry undergoes a wave of consolidation.

ConocoPhillips agreed on Wednesday to buy Marathon Oil in an all-stock transaction worth $17 billion that would bolster the company’s shale assets as the broader oil and gas industry undergoes a major wave of consolidation.

The deal will add 2 billion barrels of resources to ConocoPhillips’ inventory in the U.S., extending the company’s reach across shale fields in Texas, New Mexico and North Dakota.

Lance said the transaction would grow ConocoPhillips’ earnings, cash flow and shareholder returns after the deal closes in the fourth quarter. ConocoPhillips expects share buybacks worth $7 billion in the first year after the deal is completed and $20 billion in the first three years.

The merger is expected to generate $500 million in savings in the first year through reduced administrative and operating costs because the companies’ assets are adjacent to each other.

ConocoPhillips’ stock was down 3.3% in early trading following the announcement as Marathon Oil shares surged 7.3%. ConocoPhillips is the third-largest U.S. oil company with a market capitalization of $137 billion, while Marathon Oil has a market cap of $14.4 billion.

ConocoPhillips is the last of the top three U.S. oil companies to pull the trigger on a big acquisition as the industry undergoes a transformational wave of consolidation.

Exxon Mobil’s acquisition of Pioneer Natural Resources for $60 billion recently received the greenlight from the Federal Trade Commission. Hess Corporation shareholders voted on Tuesday to advance the company’s $53 billion merger with Chevron

Source: CNBC

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