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(Bloomberg) – Oil executives are flocking to Venezuela to take advantage of lighter U.S. sanctions, even though there’s a risk that access to the world’s largest oil reserves might snap shut as quickly as it opened.

Companies including Shell Plc., Repsol SA, Hungary’s Mol Nyrt, Sweden’s Maha Energy AB, the National Gas Company of Trinidad and Tobago and Bolivia’s state gas company YPFB have sent delegations to Caracas since the U.S. lifted curbs on Venezuela’s oil sector last month, according to four people with knowledge of the situation.

The companies are generally trying either to secure access to oil and gas fields, rewrite contracts or recover old debts, the people said. They are effectively betting that the government of U.S. President Joe Biden won’t follow through on its threat to reimpose sanctions against companies that operate in Venezuela, which would stop the party just as it’s getting started.

Washington gave the government of President Nicolás Maduro until the end of November to make significant advances toward holding fair elections, including defining a process for disqualified candidates to participate in next year’s vote. Maduro has yet to do this, bringing a risk of “snapback sanctions” that would reimpose tight curbs on Venezuela’s oil sector, making it nearly impossible for foreign drillers to operate there.

“If they don’t take the agreed steps, we will remove the licenses we’ve awarded,” U.S. Assistant Secretary of State for Western Hemisphere Affairs Brian Nichols said this month.

However, the U.S. may be reluctant to reimpose controls. A revival of Venezuela’s oil sector helps offset the impact on oil markets of sanctions imposed on Russia last year, while a stronger Venezuelan economy also helps curb the flow of migrants to the U.S.

Sudden decision. In recent weeks, foreign oil executives have met officials from the oil ministry, state-controlled oil company Petróleos de Venezuela SA, or PDVSA, and the International Investment Center, a government-led investment promotion entity, the people said.

The scope of the Biden administration’s decision to ease controls for six months, allowing oil companies to operate relatively freely in Venezuela, took many in the industry by surprise, setting off a rush to Caracas by would-be deal makers.

Venezuela has more than 40 oil partnerships with foreign and local companies, some of which suspended activity due to the difficult business climate. The government now seeks to replace these with companies willing to make new investments and produce.

The government is targeting production of 1 MMbpd, from about 750,000-800,000 bpd currently. The nation has about 300 Bbbl of reserves, a greater number than Saudi Arabia.

The country could reach that target by end of next year if the U.S. extends its license for another six months after it expires in March, according to Asdrúbal Oliveros, head of Caracas-based consultancy Ecoanalitica.

“The question is if this opening will last,” Oliveros said in a webcast this month.

Shell declined to comment. Repsol, Mol Nyrt, Maha Energy, the National Gas Company of Trinidad and Tobago and Bolivia’s state gas company YPFB didn’t reply to written requests for comment.

Venezuela’s information ministry, oil ministry and PDVSA didn’t reply emails seeking comment.

The Maduro government and a coalition of opposition parties signed an agreement in Barbados in October that contains guarantees for a fairer presidential election in 2024, including foreign observers and the release of political prisoners.

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The Biden administration on Tuesday will auction off 35,000 acres (14,164 hectares) of land in Wyoming to oil and gas drillers, the first in a series of such sales that will coincide with a United Nations’ conference aimed at combating fossil fuel-driven climate change in Dubai.

The Interior Department’s U.S. Bureau of Land Management (BLM) will offer 63 drilling parcels on nearly 44,000 acres (17,806 hectares) in six Western states over the next two weeks. The Wyoming sale is by far the largest, with 37 parcels.

The remaining acreage, in New Mexico, Oklahoma, Nevada, North Dakota and Utah, will be sold on Nov. 30, Dec. 5 and Dec. 12. All the sales will be held on the online auction platform EnergyNet.

The UN’s “Conference of the Parties” on climate, known as COP 28, will begin on Thursday and will take place over the same two weeks. Dozens of nations plan to push for the world’s first deal to phase out carbon dioxide-emitting coal, oil and gas at the meeting. U.S. President Joe Biden is not expected to attend.

An Interior spokesperson did not comment on the timing of the sales.

Environmental groups were critical of the sales.

“Instead of doing the necessary work to fight climate change, Biden continues to support the expansion of fossil fuels here in the U.S.,” Nicole Ghio, senior fossil fuels program manager for Friends of the Earth, said in a statement.

U.S. oil extraction policies have been a headache for President Biden, who promised on the campaign trail to end new leasing on federal lands and waters, but was blocked by courts from doing so.

Biden’s Inflation Reduction Act (IRA), a climate change law passed last year, made oil and gas auctions a prerequisite for renewable energy development. It also, however, requires higher royalty rates and minimum bids meant to boost taxpayer returns.

Biden’s Interior Department has issued far fewer new leases than previous administrations. The agency issued 527 leases in fiscal years 2021 and 2022 combined, compared with 2,740 in the previous two years, during the Trump administration, according to BLM data.

(Reporting by Nichola Groom; Editing by Aurora Ellis)

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A New Type of Geothermal Power Plant Just Made the Internet a Little Greener

The post Daily Energy Standup Episode #259 – Geothermal Breakthrough, Alberta’s Power Struggles, and China’s Energy Surge appeared first on Energy News Beat.

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Chinese authorities have been keen to avoid a repeat of last year’s power shortages.
Generally, China is certain that its winter power supply is guaranteed, but shortages could occur in the Yunnan province and Inner Mongolia.
China will continue to provide high levels of coal volumes to ensure stability in power supply this winter.

China is ramping up coal and natural gas production, imports, and consumption as its electricity demand jumped in the year’s second half and looks to hit a record-high winter peak demand.

Chinese authorities have been keen to avoid a repeat of last year’s shortages and spiking prices and have instructed utilities and producers to maximize imports and output before the winter.

Ahead of the 2023/2024 heating season, China looks better prepared to meet peak power demand than in the previous winter.

China sees its peak power demand potentially rising by 12.1%, or by 140 gigawatts (GW), this winter, a spokesperson for the National Energy Administration (NEA) said at the end of October.

Generally, China is certain that its winter power supply is guaranteed, but shortages could occur in the Yunnan province and Inner Mongolia, according to NEA spokesperson Zhang Xing, quoted by Reuters.

Previously, figures by the NEA have shown that the peak power demand in China was at 1,159 GW last winter.

This winter, peak demand is expected to be higher due to increased consumption in the second half of the year, including a hotter-than-normal summer.

China will continue to provide high levels of coal volumes to ensure stability in power supply this winter, according to the official.

Energy major CNOOC said in September that China’s natural gas demand is set for an 8% increase this year compared to 2022, with imports of both LNG and pipeline gas expected to rise by around 11%.

Much lower LNG prices this year than last have helped drive Chinese LNG imports higher, potentially sapping the global market at the expense of Europe, which relies on LNG to offset the loss of Russian pipeline gas supply.

Demand in Europe and Asia is rising in November compared to the warmer October, but LNG spot prices in Asia have either dropped or remained steady in the past few weeks amid high inventories in both Asia and Europe and weak demand.

Last week, the LNG price for January delivery into Northeast Asia averaged $16.40 per million British thermal units (MMBtu), slightly down from $16.70 per MMBtu, per industry sources estimates cited by Reuters.

Last month, China told its largest natural gas suppliers to fill up their storage sites ahead of the peak winter season. The National Energy Administration noted China’s gas market was “generally in balance,” but full storage could better manage supply in case of disruptions in the international market.

Beijing has also asked Chinese coal miners to ramp up production ahead of peak demand season this winter.

A spokesperson for the National Reform and Development Commission—Beijing’s planning agency—said that the central government would encourage local authorities and companies to work on boosting coal supply, Reuters reported earlier this month.

China relies on coal to avoid blackouts as the economy reopened after the Covid lockdowns. During the first half of this year, coal production, coal imports, and coal-fired electricity generation surged and offset a significant decline in power output at China’s massive hydropower capacity due to insufficient rainfall and drought.

Chinese coal production rose by 3% year-on-year between January and September. October output fell by 1.1% from a six-month high in September due to more safety checks at mines, but was still up by 3.8% compared to October 2022, per official Chinese data quoted by Reuters.

China continues to rely on coal and coal-fired power generation to meet its growing power demand, and despite being the world’s top investor in solar and wind capacity, it also plans a lot of new coal-fired electricity capacity.

During the first half of 2023 alone, China approved more than 50 GW of new coal power, Greenpeace said in a report this year. That’s more than it did in all of 2021, the environmental campaign group said.

Source: Oilprice.com

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Earlier this month, one corner of the internet got a little bit greener, thanks to a first-of-its-kind geothermal operation in the northern Nevada desert. Project Red, developed by a geothermal startup called Fervo, began pushing electrons onto a local grid that includes data centers operated by Google. The search company invested in the project two years ago as part of its efforts to make all of its data centers run on green energy 24/7.

Project Red is small—producing between 2 and 3 megawatts of power, or enough to power a few thousand homes—but it is a crucial demonstration of a new approach to geothermal power that could make it possible to harness the Earth’s natural heat anywhere in the world.

Hot rock is everywhere, with temperatures rising hundreds of degrees Fahrenheit within the first few miles of the surface, but geothermal plants provide just a small fraction of the global electricity supply. That’s largely because they are mostly built where naturally heated water can be easily tapped, like hot springs and geysers. Hot water is pumped to the surface, where it produces steam that powers turbines.

The Nevada site, an “enhanced” geothermal system, or EGS, works differently. Instead of drilling into a natural hydrothermal system, Fervo dug into rock that is completely dry and effectively created an artificial hot spring by pumping down water that returns to the surface much hotter.

That strategy piggybacks on hydraulic fracturing techniques developed by the oil and gas industry. Fervo drilled two wells that each extended more than 7,000 feet down before turning fully horizontal. It then connected them by fracking, producing cracks in the rock that connected the two boreholes. Water enters one borehole cold and exits the other at a temperature high enough to drive turbines and generate power.

Fervo announced that its experiment had been a success this summer after a monthlong testing period that saw temperatures at the bottom of the boreholes reach 375 degrees Fahrenheit (191 C) and enough water torrenting through the system to produce an estimated 3.5 megawatts of electricity. Those operational figures have held relatively steady since then, according to Fervo CEO Tim Latimer, suggesting the project was ready to be plugged into the grid for the long haul. The Nevada wells were drilled close enough to a traditional geothermal power plant that the project can use existing turbines and power lines to deliver electricity to the grid.

While output is short of the company’s initial 5-megawatt estimate when it announced with Google, Latimer says further tweaks should eke out more electricity in the future. As it stands, the project is the first to achieve such a high level of performance, he notes. While two plants in northeastern France currently produce electricity from dry rocks, they operate at substantially cooler temperatures and rely on exploiting natural fault systems in the rock. Latimer says that Fervo’s results point to a strategy that can be scaled up.

Geothermal energy could help Google with a challenge faced by all tech companies trying to reduce the impact of power-hungry data centers. Wind and solar now power vast swathes of the cloud computing behind internet services and apps, but because wind and sun aren’t always available, the flow of energy derived from them isn’t either.

Google has in recent years purchased enough renewable power to cover its data operations’ annual energy use—but at any given hour of the day, on any particular grid, the electricity that flows into a data center may have to come from a dirtier source. The company is now working on a more ambitious 2030 goal to secure 24/7 clean energy on the local grids where its data centers are located. Geothermal is a leading candidate for making it possible. “There’s a very small group of options there for technologies that we could scale,” says Michael Terrell, senior director for climate and energy at Google.

The company has explored other options, like new types of small-scale nuclear reactors or hydrogen fuel produced with renewable electricity, but they will likely take more time to develop. “Out of the next set of technologies after wind, solar, and lithium-ion storage, this is the first one that’s actually out there now delivering electrons,” Terrell says of the new Nevada geothermal plant. With an output of just a few megawatts of power, it’s a long way from providing the hundreds of megawatts a typical data center might need, but he considers the concept proven out.

The post A New Type of Geothermal Power Plant Just Made the Internet a Little Greener appeared first on Energy News Beat.

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(Bloomberg) – Saudi Arabia is asking others in the OPEC coalition to reduce their oil production quotas in a bid to shore up global markets, but some members are resisting, delegates said.

The OPEC leader has been making a largely unilateral production cutback of 1 MMbpd since July, and is now seeking further support from across OPEC and its partners, said the delegates, asking not to be identified because the information is private.

Brent crude pared earlier losses and was little changed at $80.48 a barrel as of 3:56 p.m. in London.

The Saudi proposal comes amid difficult talks for the producers’ group, which was forced to delay its policy meeting by four days to Nov. 30 as Angola and Nigeria resist reductions to their own production quota limits for 2024, which were set out at the group’s last conference in June.

The producers were progressing toward a compromise on this matter before the weekend, but have yet to clinch an agreement, delegates said.

The 23-nation OPEC alliance faces pressure to intervene in crude markets, following a 17% drop in prices over the past two months amid plentiful supplies and a darkening economic backdrop. Markets could weaken further in early 2024, when forecasters including the International Energy Agency anticipate the emergence of a new supply surplus.

Saudi Arabia’s voluntary production cut of 1 MMbpd, implemented in tandem with a 300,000 bpd export reduction from Russia, is currently set to continue until the end of the year. Most analysts expect Riyadh and Moscow to extend those curbs into 2024.

Market watchers such as JPMorgan Chase & Co. have flagged the possibility that OPEC may cut deeper, and some — such as Commerzbank AG and hedge fund manager Pierre Andurand —  have warned that prices may buckle further if they don’t. Brent futures traded near $80 a barrel on Monday.

Supply reductions across the alliance would probably win back oil bulls, but they could be hard to orchestrate. Iraq, Russia and Kazakhstan have recently been pumping over their quotas, while others like the African members have lost so much production capacity, they’re in no position to cut further.

It’s also unclear whether the United Arab Emirates, a key member, will be under pressure not to proceed with a quota increase of 200,000 bpd permitted from January. Abu Dhabi secured the dispensation at the last OPEC gathering in June, in order to finally make use of recent investments in new capacity.

Source: Worldoil.com

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We forecast the U.S. energy sector to emit about 4,790 million metric tons of carbon dioxide (CO2) in 2023, a 3% decrease from 2022. Much of this decline results from lower electricity generation from coal-fired power plants due to higher generation from renewable sources such as solar power. We expect this trend to continue into 2024, with CO2 emissions declining 1% relative to 2023.

Almost half of U.S. CO2 emissions result from petroleum consumption, primarily by the transportation sector. In 2023, we estimate that petroleum emissions will remain relatively unchanged, with rising jet fuel consumption offsetting falling gasoline consumption.

Another large source of CO2 emissions in the United States is fossil fuel-fired power generation. Natural gas has become the largest source of electricity in the United States because it is a relatively low-cost fuel. Natural gas emissions also result from its consumption in the residential and commercial sectors for space heating and in the industrial sector for manufacturing processes. We estimate that U.S. CO2 emissions from natural gas will grow by 1% in 2023 and remain relatively flat in 2024.

The forecast reduction in CO2 emissions is largely due to lower power generation from coal-fired power plants, which we expect to contribute to an 18% decline in coal-related CO2 emissions in 2023 and a 5% decline in 2024. The electric power sector has been retiring significant coal-fired generating capacity in response to economic competition from natural gas and new renewable generating capacity.

The electric power sector has shifted in recent years toward renewable energy sources. Much of the recent increase in renewable generation is the result of an expected 60 gigawatts of new solar generating capacity entering service during 2023 and 2024. We expect that the solar capacity increase, in addition to our forecast of increased hydropower generation and modest gains in new wind capacity, will reduce both coal-fired and natural gas-fired power generation next year.

Source: Eia.gov

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Premier Danielle Smith is conjuring up a new A-bomb to drop on the meddling of the Trudeau Liberals with Alberta’s power grid.

This newly devised weapon is the key feature in Smith’s first use of the Sovereignty Within a United Canada Act, which she introduced on Monday in her bid to thwart Trudeau’s clean electricity regulations, devised to force Alberta’s electrical grid to be net zero by 2035.

The A-bomb is a proposed Alberta Crown corporation for electricity generation. It represents Alberta arming up to reverse the broken federal-provincial power dynamic. It’s also the only mechanism that will allow Alberta to meet the generational challenge of having an affordable and reliable net-zero electrical grid by 2050.

At her news conference, Smith suggested it’s not a sure thing Alberta will get the new Crown corporation. For now, she said, she’ll work with industry players to see if one is needed.

But if Trudeau’s new clean electricity regulations are enforced, ordering Alberta’s grid to be net zero by 2035, 15 years earlier than previously agreed upon, such a Crown corporation will be necessary, Smith said.

Alberta needs reliable electricity to get through cold winter days and it needs affordable electricity for people here to prosper. With five or six million more Albertans here by 2050, Alberta will also need to double its baseload electrical generation.

Private industry could do this with natural gas but the new federal regulations stipulate that all plants must capture 95 per cent of their emissions, something Smith said is not feasible, suggesting 60 per cent is possible for new plants, even as it will greatly increase costs.

Smith said she will not ask any private operators to disregard federal law, but said a Crown corporation could build new gas plants and disregard the new federal regulations if need be, adding provincial officials involved could be indemnified against federal prosecution.

As Smith described it, the new Crown corporation will be similar to Epcor, owned by the City of Edmonton, or Enmax, owned by the City of Calgary.

“We want the private sector to step in with new natural gas generation, with new nuclear generation, but if they don’t, we’ll need to step in. We’re sending a message to the market that this is a reluctant entry. It would be a generator of last resort.”

A moment later, she added, “I can’t sit back and allow for the grid to fail, for there to be insufficient investment in baseload power and for us to see the instability in the grid that we have get worse and worse, or for the affordability to get worse and worse. We have to act now.”

If existing power plants don’t meet federal regulations, Alberta’s power corporation could also purchase them and continue operating them. “These measures are not something we want to do,” Smith said. “They are planned to counteract the absurd ideological, unscientific and unconstitutional interference in Alberta’s government by a federal government that simply doesn’t care what happens to our province so long as they have a good, virtue-signalling story to tell their leftist friends and special interests.”

What to make of all this?

First, while Smith talks about this new Crown corporation in theoretical terms, there’s no way for Alberta to meet its 2050 target without such a Crown corporation. The Alberta oilsands will need the heat and clean power of nuclear. Alberta consumers will need the same for the grid, and nuclear is the only proven way to provide safe, affordable, abundant, net-zero power, as demonstrated by Ontario.

Second, the existence of an Alberta power generation company will turn on its head national power dynamics, which saw Ottawa bring in out-of-touch and overly aggressive legislation on the oil and gas industry, then impose it on Alberta, with Alberta then spending years in court trying to convince federal judges that Ottawa had gone too far.

With its Crown corporation, Alberta will possess the mechanism to defy Ottawa, to force it to take the Alberta government to court, not the other way around.

What isn’t clear is how our top courts will view Alberta reversing the established process by defying Ottawa in this manner. It’s possible it will be seen by federal judges as an insulting violation of Canada’s constitutional order.

Bottom lines? Trudeau’s government is exceptionally unpopular and likely doomed in the next election, which will make this current problem go away. That said, the push for net zero will not go away, and Smith’s move to create a Crown corporation to safeguard us and help build nuclear in Alberta is sound.

Source: Edmontonjournal.com

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Construction of the Power of Siberia 2 natural gas pipeline is likely to be slower than expected despite the ‘no limit’ strategic partnership between Beijing and Moscow
Russian President Vladimir Putin has promised to export at least 98 billion cubic metres per year of gas from Russia to China

Construction of one of Russia’s key natural gas projects to ensure a financial lifeline overseas is likely to be slower than expected as China seeks to leverage its “bargaining stance”, according to a Russian source and Chinese analysts.

The discussions with Beijing over the construction of the Power of Siberia 2 natural gas pipeline, a long touted signal of bilateral cooperation, have progressed slowly.

The pipeline, if completed, would divert 50 billion cubic metres (1.8 trillion cubic feet) of natural gas per year that previously supplied Europe to north China, offering a significant boost to Beijing’s energy security.

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