Energy News Beat

The 1.4-gigawatt Mystic gas generation plant in Massachusetts is scheduled to close in May.

Constellation Energy owns the plant and the Everett Marine Terminal LNG import facility that feeds gas to Mystic.

Without Mystic, economics may not warrant keeping the LNG terminal open, which would affect as many as 2 million people who receive natural gas via the local utility, National Grid.

The United States has few LNG import facilities because the shale gas revolution has shifted the United States towards exports as it has become the world’s largest natural gas producer and LNG exporter.

Massachusetts and the entire New England region have opposed new natural gas pipelines so LNG imports are their only option to fill in the gaps.

Without Mystic and Everett, significant demand for natural gas during severe winter weather could be disastrous.

Constellation Energy plans to retire a Massachusetts gas power plant at the end of May, which will eliminate the biggest user of the liquefied natural gas (LNG) that is imported through the company’s Everett Marine Terminal. Constellation is trying to line up new gas buyers to keep the terminal running. If it cannot, it will likely close the import facility. New England utilities rely on imported LNG supplies for heating during the winter when demand peaks. National Grid, which has more than two million gas customers in Massachusetts and New York, obtains gas from the Everett terminal that it pipes around Boston and trucks to storage tanks across the region ahead of each winter. Without it, severe cold could leave their customers without gas to heat their homes. Despite the United States being awash with natural gas, Massachusetts relies on imported LNG because the state has opposed pipelines to get natural gas from nearby Pennsylvania production wells—gas that would be significantly cheaper than imported LNG. New England residents paid about 31 percent more for natural gas in the fourth quarter of 2023 than the U.S. average, according to the Energy Information Administration.

Constellation is planning to close the 1.4 gigawatt Mystic Generating Station at the May 31 expiration of a deal with regulators–a two-year agreement intended to bolster the region’s energy supplies. A big issue for keeping the nearby LNG terminal open is how to cover the terminal’s overhead, most of which is currently recouped through New England electricity bills tied to the nearby power plant. It could cost about $60 million a year to cover the terminal’s fixed operating costs, plus the price of the LNG, which could amount to hundreds of millions of dollars annually.

According to regulators, a December 2022 winter storm serves as an example of why utilities need quick access to reserves of natural gas. The winter storm caused demand to surge and gas wells in Appalachia to freeze with pressure dropping dangerously low on the Consolidated Edison’s pipeline system around New York City. The utility was able to tap its own LNG reserves to stave off damage that could have knocked out service and taken months to repair. Everett LNG was and is the insurance against the lights and heat going out during extremely cold stretches.

New England’s Need for Everett

The Everett LNG Terminal is needed because of the difficulty of building energy infrastructure in the Northeast. Pipeline projects have been blocked that would deliver gas from shale-gas fields in Pennsylvania, Ohio and West Virginia. For example, in 2016, Massachusetts and New Hampshire blocked financing for the $3 billion Access Northeast Pipeline, which would have lowered prices and eliminated the reliance on LNG. Since 1971, the Everett Marine Terminal has been providing gas to New England and is one of the few remaining import terminals in the United States. When the shale gas renaissance made the United States the largest producer of natural gas in the world, most of the U.S. import LNG facilities were retooled to become export terminals. Last year the United States became the world’s largest exporter of LNG.

The tankers filled with U.S. LNG, however, are not allowed to deliver the fuel to Everett or anywhere else in the United States due to the Jones Act–a 1920 law that restricts domestic shipping routes to U.S.-built and American-crewed vessels. Despite New England being served by a pair of interstate pipelines and Canadian gas, it has had to obtain additional supplies from more expensive imports from overseas, usually from Trinidad and Tobago, but also from Russia before sanctions stopped those imports due to Russia’s invasion of Ukraine.

New England Faces Challenges to Its Grid Due to Plant Closures

Both the power plant and the LNG facility’s shutdown underscores the challenges facing the American grid as the transition to green energy and Biden’s climate agenda accelerates. While Mystic may ultimately be replaced by intermittent wind farms and solar projects, it is not clear whether those facilities and the expensive battery storage needed to back up their unreliable power will be built quickly enough to prevent power shortfalls.

Renewable-power projects have met resistance in the Northeast. For example, in 2021, Maine voters scotched a transmission line that would carry hydropower from the Canadian border toward Boston. A transmission line being laid along the bottom of the Hudson River to carry hydropower from Quebec’s remote forests to New York City took 15 years to clear permitting and other hurdles before work began last year. Some New York offshore wind projects have been canceled or are in limbo after regulators rejected developers’ requests to charge higher power rates to account for their rising costs. In New Jersey, a European wind-power company canceled plans for two wind farms despite state financial incentives.

“Ensuring reliability and affordability could become challenging in the face of a significant winter event,” FERC Chairman Willie Phillips and NERC Chief Executive Officer James Robb said in a joint statement in November. According to the New England grid operator, it would be prudent to keep Everett operating for now. The number of LNG import facilities in the region is limited, new infrastructure could face delays and there’s uncertainty about how much winter power demand will grow as homes and businesses convert to electricity from gas.

Conclusion

The Mystic Power Plant and the Everett LNG terminal may close at the end of May if regulators do not keep it open and/or if the LNG import terminal cannot find enough customers to cover its costs. This puts the region in jeopardy during cold New England winters with possibly insufficient fuel to keep furnaces going and the lights on. Many see the Everett LNG import terminal as insurance against demand spikes and freezing weather that could make existing infrastructure inoperative. Biden’s rush to push green energy in the form of intermittent and unreliable wind and solar power on Americans is putting the electric grid in jeopardy and New England may be the first to experience the damage. The Biden Administration seems to be ignoring this growing problem, preferring to focus on its “climate change” agenda which includes ending all fossil fuels, including natural gas.

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Energy News Beat

Although the immediate effects of the Houthi attacks have not made a significant impact on the price of oil, the longer trade is disrupted and conflict is allowed to persist, the higher the chance will be that oil and energy prices increase.

EIA predicts a continued steady growth in oil production with a possible decrease in demand moving through 2024 and 2025.

With the recent seizure of the St. Nikolas by the Iranian navy, tensions in the Middle East show dangerous signs of further escalation and expanded regional instability.

Since October 7th 2023, the Iranian-backed Houthi rebels of Yemen have launched dozens of attacks on merchant and American naval vessels in what they claim to be support for Hamas in the Israel-Hamas war. The continued attacks, and further escalation, have raised concerns about the long term impacts on the oil market, as well as the threat of the continuation of expanded regional conflict. On January 11th, the Iranian navy seized the oil tanker St. Nikolas in the Gulf of Oman while en route to Turkey in retaliation for last year’s seizure of the ship by the United States. Additionally, on January 15th, Houthi rebels struck the American owned container vessel, the Gibraltar Eagle, which sustained significant damage – no lives were lost. Finally, on January 16th, the Iranian Revolutionary Guard Corps launched ballistic missiles at targets in northern Iraq and Syria.

Given that the Middle East accounts for approximately 31.3 percent of global oil production, continued escalation threatens to not only further destabilize the region and increase the likelihood of wider regional conflict, but also stands to have a negative long term impact on oil prices. Although the immediate effects of the Houthi attacks have not made a significant impact on the price of oil, the longer trade is disrupted and conflict is allowed to persist, the higher the chance will be that oil and energy prices increase.

The Dangers of an Emboldened Iran

The St. Nikolas is owned and operated by the Greek ship owner Empire Navigation Inc., which is registered in the Marshall Islands, and was recently renamed from Suez Rajan. The ship was renamed due to last year’s seizure of the ship by the United States after it was caught violating the International Emergency Economic Powers Act (IEEPA) and global sanctions against Iran in an attempt to sell and transport 980,000 barrels of Iranian crude oil on behalf of the Islamic Revolutionary Guard Corps (IRGC).

In United States v. Empire Navigation Inc. and Suez Rajan Limited, Suez Rajan Limited plead guilty to the charges and were sentenced to 3 years corporate probation and a fine of $2.5 million which Empire Navigation Inc. agreed to joint liability for. The St. Nikolas, which has a cargo of approximately 1 million barrels of Iraqi crude oil, has now been located east of Iran’s Qeshm Island where Iran plans to hold the ship, and its crew, until they are repaid $75 million for the confiscation of their oil last year – they declared that they would retaliate after the Suez Rajan had its cargo taken last year.

Source: AP News

Four days after the Iranian seizure of the St. Nikolas, the Iranian backed Houthis in Yemen launched a ballistic missile at the Gibraltar Eagle, an American owned bulk carrier that was in transit in the southern Red Sea. Although the ship reportedly did not sustain significant damage, and no lives were lost, the attack demonstrates the deep resolve of the Houthis, who are funded and supplied by Iran, to continue their efforts to disrupt trade in the region in opposition to the Israel-Hamas war.

Taking further advantage of the regional chaos, on January 16th, Iran launched missile attacks in northern Iraq and Syria at what they claimed to be an Israeli intelligence base in northern Iraq and at purported “anti-Iranian” groups in Syria, and the Iranian Revolutionary Guard Corps took credit – this demonstrates an escalation as the dozens of attacks carried out in the region since October, had been led and claimed by Iranian backed militias but not the Iranian’s directly.

Iran and the Houthis’ Impact on the Energy Market

As a result of the continued turmoil in the Red Sea, oil prices have risen over the first two weeks of January with Brent crude reaching a high of $80.53 on January 12th and currently sitting at $78.49 as of January 19th. With the risk of shipping through the Red Sea increasing, Shell, a major British oil company, announced on January 16th, that they will be suspending their shipments through the Red Sea indefinitely. Shell joins BP, Equinor, and QatarEnergy, who recently announced that they would cease all shipments of LNG through the Red Sea, all of whom cite the continued actions of the Houthis as their reasoning to find alternative routes to market. Importantly, QatarEnergy production of LNG will not stop, they will simply be using the route around the Cape of Good Hope to deliver to the European markets – this will add 9 additional days to the already 18 day long voyage from Qatar. However, one thing that has surprised many market observers has been the fact that the rise in the price of oil has not been as immediate or volatile as it has been in the past during conflicts in the Middle East.

Source: EIA

The above chart indicates the 14 largest oil price shocks between 1970 and 2020, the majority of which were caused by global events in the Middle East. What sets the lack of immediate price shock apart from the historical record has been the extraordinary increase in American domestic production of oil. In 2023, the United States produced more oil than any other country in the world rising to a record 13.1 million barrels per day (bpd) in August of 2023 alone. With such impressive production, EIA predicts a continued steady growth in oil production with a possible decrease in demand moving through 2024 and 2025, as shown in the image below.

Source: EIA

Experts indicate that innovation in drilling and the shale revolution have directly contributed to the record production of oil, as well as stand as a strong reason as to why oil prices have not been as heavily impacted by the militant actions of the Houthis and the Iranians. Advancement in technology in hydraulic fracturing and horizontal drilling, are what have enabled the shale revolution, which allows for the extraction of oil from previously impermeable oil formations and now accounts for 36 percent of all crude oil produced in the United States. The incredible expansion of domestic production of oil in the United States will continue to play a vital role in keeping the global price of oil steady with heightened tensions in the Middle East.

Conclusion

Since their first attacks in November, 2023, the Houthis have not shown any sign of relenting, even with the recent retaliation by American and British forces. With the recent seizure of the St. Nikolas by the Iranian navy, tensions in the Middle East show dangerous signs of further escalation and expanded regional instability. As a significant amount of global oil production takes place throughout the Middle East, as demonstrated by the recent increase in the price of a barrel of oil, until regional stability returns, global energy prices remain at risk of increasing further, which continues to underscore the importance of the rise of U.S. oil production in recent years.

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Energy News Beat

The Biden administration will “temporary pause” pending decisions for liquefied natural gas (LNG) export terminals.

“My administration is announcing today a temporary pause on pending decisions of liquefied natural gas exports – with the exception of unanticipated and immediate national security emergencies,” the White House said in a statement.

The US will pause pending decisions on exports of LNG to non-FTA countries until the Department of Energy can update the underlying analyses for authorizations.

“During this period, we will take a hard look at the impacts of LNG exports on energy costs, America’s energy security, and our environment. This pause on new LNG approvals sees the climate crisis for what it is: the existential threat of our time,” the statement said.

This move, which comes as President Joe Biden enters an election year, has been reported in several media reports this week and it could potentially delay final investment decisions on several projects.

The projects include Venture Global’s CP2 LNG terminal, which is awaiting the final approval from the Federal Energy Regulatory Commission (FERC) and also the non-FTA export authorization from the Department of Energy.

Responding to media reports earlier this week, a spokeswoman for Venture Global said that “such an action would shock the global energy market, having the impact of an economic sanction, and send a devastating signal to our allies that they can no longer rely on the United States.”

“The true irony is this policy would hurt the climate and lead to increased emissions as it would force the world to pivot to coal,” she said.

Texas-based Energy Transfer is also planning to take a final decision this year to build its Lake Charles LNG export facility in Louisiana, depending on the export approval by the DOE.

Moreover, Commonwealth LNG also aims to take FID this year on its 9.3 mtpa LNG facility under development in Cameron, Louisiana.

The US is already the number one exporter of LNG worldwide – with US LNG exports expected to double by the end of this decade, the White House said.

“Today’s announcement will not impact our ability to continue supplying LNG to our allies in the near-term,” the statement said.

Last year, roughly half of US LNG exports went to Europe, and the US has worked with the EU to economize consumption and manage its storage to “ensure that unprovoked acts of aggression cannot threaten its supply,” it said.

The statement said that current economic and environmental analyses DOE uses to underpin its LNG export authorizations are roughly five years old and “no longer adequately account for considerations like potential energy cost increases for American consumers and manufacturers beyond current authorizations or the latest assessment of the impact of greenhouse gas emissions.”

The pause, which is subject to exception for unanticipated and immediate national security emergencies, will provide the time to integrate these “critical considerations”, the statement said.

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Biden’s Energy Department is issuing new and proposed regulations at breakneck speed in order to implement the president’s climate and “net zero” carbon aspirations.

In 2023, the Biden administration proposed 30 regulations affecting everything from refrigerators and freezers to gas stoves and furnaces, and first-ever standards for fans and blowers.

The regulatory onslaught and forced electrification are happening against a weakened grid as Biden’s Green New Deal demands more power from intermittent energy sources such as wind and solar.

Electricity prices are increasing at a time when the government is demanding consumers “electrify everything.”

The Biden administration recently unveiled regulations targeting multiple home and commercial appliances, which will impact the pocketbooks and comfort of millions of Americans. Biden’s Department of Energy (DOE) finalized new energy efficiency standards for residential refrigerators and freezers and proposed standards for commercial fans and blowers. DOE’s standards for refrigerators and freezers will be implemented between 2029 and 2030, and take less efficient and less expensive models off the market, limiting consumer choice. The standards for fans and blowers are the first federal regulations targeting those appliances. According to DOE, the proposed standards “follows the lead” of efficiency standards established by California—a state whose regulations and standards the Biden administration likes to imitate.

The Biden administration tends to inflate the benefits of its analyses by using assumptions that provide the answers it wants. For example, in EPA’s power plant rule, the administration assumed that technologies such as hydrogen and carbon capture and sequestration were currently available to reach the conclusions they wanted. Refrigerator standards are much like dishwashers and clothes washer standards where there have been so many revised standards over the decades that they come at diminishing returns or negative returns. In the past, some standards have increased the upfront cost of the appliance more than the projected savings from lower energy costs.

Regardless, the Biden administration finds positive returns to support the finalization of its standards due to hidden assumptions in its models, which result in higher cost products for Americans that may not work as well. For example, new standards for dishwashers have led to cycles taking as much as twice as long to finish. The new DOE standards take choice away from American consumers, who can decide for themselves what is best for their needs. The standards substitute consumer choice for authoritarian dictates, not only for consumers, but also for manufacturers.

Biden’s Copious List of New Standards

According to DOE, the administration proposed or finalized a total of 30 regulations in 2023 as part of President Biden’s climate agenda and has pledged to continue moving forward with more regulations in 2024. According to experts, the Biden administration’s energy efficiency actions will ultimately harm consumers and drive prices higher since manufacturers will be forced to adopt newer technologies to achieve the standards that do not necessarily benefit consumers. For example, DOE’s efficiency standards for stovetops proposed in February compromises some of the features that gas stove users want, while saving an insignificant amount of energy. According to the agency’s analysis, those standards would effectively ban half of all available gas stoves.

After DOE released its proposed stovetop regulations, it proposed regulations for clothes washers and refrigerators in February; finalized standards for air conditioners in March; proposed regulations on dishwashers in May; issued a proposal targeting water heaters in July; and proposed standards for furnaces in September. The Biden administration is not just tweaking regulations, it is effectively banning whole categories of appliance that are sold on the market to advance the President Biden’s climate agenda. Green energy groups want to electrify homes and businesses, reducing reliance on natural gas while simultaneously demanding replacement of current fossil fuel-fired power with intermittent and unreliable wind and solar power because the commercial and residential sectors account for over 30 percent of total end-use carbon dioxide emissions in the United States–the largest share of any sector including industry, transportation and agriculture. Fossil fuels, however, allow people to work at jobs and provide Americans with a livable environment in their homes and places of business.

Industry is challenging DOE’s Furnace Standard

The natural gas industry is challenging the Biden administration over its regulations targeting traditional gas-powered residential furnaces. The American Gas Association (AGA), whose members provide natural gas to more than 74 million customers nationwide, several trade associations and one manufacturer recently filed the legal challenge against the Department of Energy (DOE) over the regulations.The DOE’s finalized regulations, which are slated to go into effect in 2028, require furnaces to achieve an annual fuel utilization efficiency (AFUE) of 95 percent, meaning manufacturers would only be allowed to sell furnaces that convert at least 95 percent of fuel into heat within six years. The current market standard AFUE for a residential furnace is 80 percent.

Because the regulation effectively bans the sale of a large number of gas furnaces that consumers want, AGA said that DOE needs a solutions-oriented approach to energy conservation that protects consumers and ensures continued availability of low-cost, low-emission natural gas furnaces. According to AGA President and CEO Karen Harbert its 114 pages of comments have been summarily ignored by DOE. The regulations impact 55 percent of American households and would lead to higher costs for 30 percent of senior households, 27 percent of small businesses and 26 percent of low-income households.

Conclusion

The finalized and proposed standards will increase the demand for electricity and with it the cost of electricity to consumers. Residential electricity prices have increased 21 percent since Biden took office as his climate agenda is attempting to replace coal and natural gas generators with mostly intermittent and unreliable wind and solar power. While the displacement has retired a large number of coal plants and some gas plants, the share of coal and gas power to the total has only declined by a single percentage point since Biden took office as the capacity factors of wind and solar power are much lower than fossil fuel plants. But it has affected the reliability of the power grid, with little new firm capacity that can reliably meet new demand, as Senator Joe Manchin points out below.

Senator Joe Manchin, a Democrat from West Viriginia and Chairman of the Senate Energy and Natural Resources Committee has pushed back against the Biden administration’s regulations targeting home appliances. Manchin criticized DOE’s aggressive energy efficiency rulemakings, arguing the agency should allow the free market to improve product technology rather than force such changes through regulation. According to Manchin, “It absolutely shows you how disconnected the [DOE] is with the facts and reality of what’s happening to the grid system.” “We’ve had so many warnings from [the Federal Energy Regulatory Commission] and [North American Electric Reliability Corporation] and everybody else that the grid is strained to say the least.” “And we’re taking more dispatchable power off the grid. That means 24/7, mostly fossil — because of the movement of this administration. It is putting us in the danger zone, the grid,” he continued. “With all the movement and demand for more electric appliances that would take the place of gas whether it be a stove or furnace. It absolutely makes no sense and is not in check with reality. Absolutely not.”

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In what many are dubbing the next Keystone XL Pipeline, climate activists have turned their attention to blocking liquefied natural gas (LNG) export projects. The attention was compounded last week when the Biden administration announced that it was reevaluating the climate criteria of LNG exports. Much like the battle over Keystone XL, the ire is misguided, and it would be a mistake for the Biden administration to make the permitting reviews more burdensome. Rather than slow walk or block LNG exports, it’s in America’s national interest – for economic, security, and environmental reasons – to let the market determine the appropriate level of natural gas trade.

How did the U.S. go from building LNG import terminals to becoming the world’s largest exporter? The shale revolution unlocked an abundance of natural gas beneath U.S. soil, and the economic and environmental benefits have been significant. Apart from 2022, natural gas prices have been consistently low for the last 15 years, which has resulted in dramatic savings in electricity bills and home heating for American families. Households that use natural gas for heat, cooking and clothes drying save more than $1,000 a year on average than those relying on electricity. Natural gas is also a critical input for many energy-intensive manufacturing processes, including many clean energy technologies. It’s also a critical feedstock for fertilizers and agricultural production and has helped farmers to produce more food on less land.

The increase in natural gas production is also the primary reason why the U.S. is a global leader in carbon dioxide emissions reductions. Importantly, the U.S. natural gas industry continues to shrink its environmental and climate footprint. For instance, from 2011 to 2018, methane emissions intensity from natural gas extraction in the Permian Basin fell by nearly 85% even as production jumped by over 416%.

With the abundance of domestic natural gas and demand for energy in emerging economies rising, companies began exporting LNG in 2016. By 2022, the U.S. became the world’s largest LNG exporter, surpassing Russia and setting record highs last year. Russia’s invasion of Ukraine provided a wake-up call that Europe was far too dependent on Russian gas, and as the continent has diversified its natural gas imports, American exporters have stepped up in a big way. While some of that diversification strategy was underway before the war, U.S. exporters ramped up production to support America’s allies across the pond. Europe was the primary destination for LNG exports the last two years and American gas will likely be essential for Europeans wanting to survive the winter for the foreseeable future.

In addition to the climate concerns, opponents have also raised concerns that exports would raise prices on families and businesses at home. LNG exports have in fact raised prices, but those higher prices have been marginal. Further, higher prices incentivize more exploration and production, offsetting some of the price increases.

Just as increased natural gas consumption lowered domestic emissions, LNG can be instrumental in lowering emissions in emerging economies. As Paul Bledsoe of the Progressive Policy Institute wrote, “Studies consistently show that coal-to-liquefied natural gas (LNG) switching provides net greenhouse gas emissions reductions, usually between 40-50%, meaning the extent of global emissions reductions from coal displacement will be in part determined by how much U.S. liquefied natural gas reaches overseas coal-using nations.”

U.S. LNG exports have been a tremendous boon to the economy, strengthened relationships with America’s allies and can be imperative to meeting the world’s energy needs and climate goals. It would be regrettable if future terminals suffered the same fate as the Keystone XL pipeline, which was held up by politics and litigation for more than 12 years before the developer abandoned the project.

This anti-energy development trend has gotten much worse and affects all forms of energy. Most recently, environmental activists are trying to block a transmission line that would bring wind power from Arizona to California. These are projects deemed environmentally safe by federal and state regulators. The politicization and blocking of necessary energy infrastructure obstructs job creation, decreases energy supplies (and increases prices), and shifts or outsources emissions that ultimately result in higher global greenhouse gas levels. If the Biden administration caves to the keep-it-in-the-ground climate activists, America, her allies, and the planet will be worse off.

Source: C3newsmag.com

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3 Podcasters Walk in a Bar EP 44 – The guys talks about ESG investing can also include natural gas

#podcast @thecrudetruth9585

@davidblackmon6807 #energytransition #oilandgas #geopolitics

David Blackmon – https://davidblackmon.substack.com/

Rey Trevino – https://thecrudetruth.com/

Stu Turley, – https://energynewsbeat.co/

Highlights of the Podcast:

01:32 – The poster child for years on renewable energy

02:38 – Germany’s economy will not do well this year

06:55 – ESG investing can also include natural gas

08:48 – Tax in tax incentives are from profits from companies.

11:18 – The regulatory issues in the US

16:12 – The Nape Presents the Crude Truth with David Blackmon and Stuart Turley podcast pavilion.

With 3 unique personalities, backgrounds, and one horrible team sense of humor, it makes for fun talks around the energy markets.

David Blackmon is a Forbes author and currently writes Energy Absurdities of the Day. He has several active podcasts with ….. His industry leadership is evident, but a dry, calm way of expressing himself adds a different twist.

R.T. Trevillon is the podcast host of The Crude Truth filmed in Fort Worth Texas and runs an oil and gas E&P company. Pecos Country Operating has been in business for ….years and has a constant commitment to all of their stakeholders and is actively working in this oil and gas market.

Stu Turley is the co-podcast host of the Energy News Beat Podcast. While Stu is a legend in his own mind, [email protected]

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If you have any questions, please reach out to us. We want to answer all questions, and if you have what it takes to be a podcast host and you want your show reach out.

Also, sponsor slots are available. There is excellent reach with the four podcasts.

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

3 Podcasters Walk in a Bar EP 44 – The guys talks about ESG investing can also include natural gas

Stuart Turley [00:00:13] If you ever have that uncle, that crazy old uncle at Christmas when he was sit there and he kind of walk up and he’d tell you, look at the family with a straight face and say, all of a sudden these three guys walk into a bar. Well, I happen to know the other two. One of them is out on his yacht in the middle of the Caribbean. So David’s on assignment. We’re going to hold him. Do it next week. So we got RT. We got the Rey Treviño the third. He is a big dog over there at Pecos operating company. And I mean, he’s got a wonderful podcast, The Crude Truth. Great numbers. Welcome. Thank you very much.

Rey Treviño [00:00:52] Well, thank you. Stu, as always for having me on this two podcasters edition. You know, David again, is that on assignment in the Caribbean? I hope he comes back.

Stuart Turley [00:01:00] Oh, yeah.

Rey Treviño [00:01:01] Nothing else. Hopefully finds a good ten and and maybe, maybe a little bit of a smile. Who knows?

Stuart Turley [00:01:07] I got some stuff on that. But, David, we love you. We miss you. And, but we’re going to talk about you because your energy absurdity, is absolutely one of the best Substack to subscribe to, and today is no exception. I mean, we’re talking, Germany is going nuts. And, RT, it was weird that Germany, has been the poster child for years on renewable energy. They shut down their their nuclear reactors.

Rey Treviño [00:01:39] Yes.

Stuart Turley [00:01:40] Then they have to fire back up all of their, coal plants.

Rey Treviño [00:01:45] Yep.

Stuart Turley [00:01:46] And they’re having to tear down wind farms because they got coal plants there, and they’ve run all their business out. BASF has had to move to China for their fertilizer. And so David’s article on his Substack. It’ll be in the show notes was very simple when it was like, is this intentional, RT? You can’t be this evil and stupid at the same time.

Rey Treviño [00:02:12] It blows me away, you know? The way that Germany has been, I guess what? They’ve been the poster child on what not to do.

Stuart Turley [00:02:19] Exactly.

Rey Treviño [00:02:20] Okay. And I didn’t quite know. I was like, well, what about.

Stuart Turley [00:02:23] California? Newsom has been saying we’re going to follow Germany.

Rey Treviño [00:02:29] That’s that’s it. Let’s let’s table that discussion for a second and get back to Germany, because I even had a great Substack article last week about how just Germany’s economy will not do well this year due to their decisions that they’ve made on renewables over consistent energy, efficient, reliable, abundant, inexpensive, right. Fuel sources. And I think in that, and David, and David Blackmon’s article, excuse me, David, he even mentioned that I think it was a graph that they’re now using less. Thank you so much, Megan. And of course, that was just a shout-out to our, waitress today. Again, we’re coming to you from the flying saucer in downtown Fort Worth. Thank you, as always to them. And, if you guys ever get a chance to get over and have a cold pint, have a good pint at the flying saucer.

Stuart Turley [00:03:21] Absolutely.

Rey Treviño [00:03:21] Okay. Back. Yes, back to David Blackman. There’s a graph in there, and, you know, hey, you know, from the generation of look at the graphs, you know. Yeah, it’s clear Germany is now using less electricity than they were in the 1970s.

Stuart Turley [00:03:35] Yes, 1978. And, I can actually remember 1978 since Noah and I were wonderful friends. But in 1978, you can see that they have, demolished their wonderful all of their stuff. VW has even closed some of their plants, and they’re not building any new plants. So the gross domestic product, for, GDP for Germany is down. And and then the next thing is so goes Germany, goes to the, EU. So, I mean, it is the largest one there. So if Governor Newsom, who was just seen having, lunch with the Clintons in Mexico, it was pretty funny. But if you sit back and sit and take a look. California is having the same high energy costs. And the reason that he points out in this article is the fact that the energy is so expensive, businesses have left and people can’t afford to run anything at home. So they’re trying to use as least amount of energy and they’re still spending more.

Rey Treviño [00:04:50] Jesus, that’s an oxymoron, if I ever said so myself.

Stuart Turley [00:04:54] I resemble that remark. So.

Rey Treviño [00:05:00] You know, on part. I tell you what, this, just the whole upside down world and and we talk about ESG right here. Germany has gone the way that we should go. Just think about the year that we’re having this year in 2024. ESG investments have Tanked. .

Stuart Turley [00:05:17] And they have. And it’s it’s just unbelievable. Blackrock lost $5 trillion last year in their ESG funds. And so what was so fun was Cop 28 when heads were exploding on Cop 28 when they had to include natural gas. That remember the president of Cop 28 was, from the UAE? That’s right. And he’s an oil company guy. And so they said, we’ll transition away when reasonable. Yeah. Oh, I mean, I thought I was going to see John Kerry just absolutely go. Well, here’s the point. Blackrock. Larry Fink has said we are investing in oil and gas. Here’s the biggest. And olive oil guy on the planet. Now trying to say that the investors need their money back.

Rey Treviño [00:06:15] Yeah.

Stuart Turley [00:06:16] Vanguard’s doing the same thing. And all of the others. And the discussions I’m having. RT are phenomenal. Yeah, people are wanting to say, hey, I’m getting like, killed in California. And we’ve talked about you, and I have laughed about the fact that, U-Haul, the highest rates in U-Haul history, are coming from California to Texas. Nobody wants to go back. But it’s the tax deduction and investing in ESG for folks that actually know what they’re doing. I’ve got a bunch of other stuff coming around.

Rey Treviño [00:06:51] Investing in ESG that actually know what to do. What do you mean?

Stuart Turley [00:06:55] Because ESG investing can also include natural gas. You can’t go to the grid without having natural gas. Now, here’s where ESG investing comes in. You can have Bitcoin mining. You can also just invest directly into the EMP operators. And the way that happens is if they are doing carbon capture, if they’re watching their emissions, if they are actually following the regulations, you can have the right EMP company doing and following best practices and you get the tax deduction.

Rey Treviño [00:07:34] Now there is a difference between a tax deduction and a subsidy right.

Stuart Turley [00:07:38] Oh absolutely. You know that bad dog. Which one is is subsidy is Tammy Nemeth brought this out on the show on on Monday. And David was still out on his yacht in the middle of the Caribbean, and and Tammy was way cool. She said, you know, a subsidy is like, the high price of energy is so high that they have to give a subsidy to the end users in Germany or the EU or the UK. The UK has had to have subsidies go in order. Subsidies come in to the disproportionately impacted communities in the US, giving them a heat pump. But here’s the here’s the bad part about subsidies. They don’t work as intended. Okay, so all the subsidies do is help eliminate the higher cost, which is hurting the middle class, which is taking away from them. So with high costs of energy, you’re wiping out the middle class and you’re creating more poor people, higher cost of energy. I kid you not.

Rey Treviño [00:08:47] And

Stuart Turley [00:08:48] Tax in tax incentives are from profits from companies. So if you look for tax incentives going in, all of a sudden the tax incentives actually make a huge difference because somebody’s had to make some profit in order to do that. On on EVs.

Rey Treviño [00:09:07] Yeah.

Stuart Turley [00:09:08] We can’t go to EVs because you’re going to get a 7 to $14,000, tax rebate. How much money do you have to make in order to get that to that? You’re going to save money and not pay that in taxes?

Rey Treviño [00:09:24] Oh, wow.

Stuart Turley [00:09:25] Think about that. The average median income, I believe in the US is around $86,000. If you’re at $86,000 in the mid, middle class, you know you’re not going to get be able to take advantage of an EV. So I had a family member look at me the other day at Christmas and I just had to leave. He said, everybody can afford an EV. I’m like, no. And then you can’t even plug them in to charge them.

Rey Treviño [00:09:53] I know, because what if everybody was at your house? Would you have enough chargers to plug everybody up? No. Never thought about that.

Stuart Turley [00:10:00] No, but it’s even bringing in the grid. You can’t bring in the grid because of the, circuits? No. There are people in California trying to buy EVs, but the grid is not capable of supporting more than 100 back to a house.

Rey Treviño [00:10:15] Wow.

Stuart Turley [00:10:16] Oops.

Rey Treviño [00:10:16] Oops. There’s just so much going on. I mean, you know, I’m glad you got, because a lot of people are like. Well, it’s just about a subsidy, right? Like, no, you know, tax deductions are not subsidies.

Stuart Turley [00:10:29] Yeah.

Rey Treviño [00:10:29] Just glad you’re able to make a difference.

Stuart Turley [00:10:31] There’s a difference. Are you using me up?

Rey Treviño [00:10:35] Well, Tim, you know, it’s.

Stuart Turley [00:10:37] Easy because you do that to me all the time. That was intentional. It’s like, guys, when I walk down the hall and RT, you go, hey, stupid. And I answer it.

Rey Treviño [00:10:50] So I don’t know.

Stuart Turley [00:10:51] I don’t know.

Rey Treviño [00:10:52] Yeah, I got nothing on that one.

Stuart Turley [00:10:54] No, the truth hurts. Okay, so RT when you sit back and we take a look at what’s coming around the corner for energy, nuclear. Your talk with Grace Stanke is phenomenal. I thought you did fabulous on that. And so, she has some great things. We’re seeing some great nuclear things coming around the corner. The, problem is the regulatory issues in the US. If you know your senator, if you know your, Congress representative, reach out to them and call them, because it’s not only the wind, it’s not only the solar, it’s nuclear, it’s oil and gas. It is everything.

Rey Treviño [00:11:36] Everything.

Stuart Turley [00:11:36] Everything is getting shut down. There are 24,000 energy projects that they can’t connect to the grid right now.

Rey Treviño [00:11:45] You know, I mean, if when I I’ll tell you this and I’ll look at the camera, but I can’t figure out how to make a dollar from nuclear Pecos country is going to the nuclear. That’s. I’m not lying. So if anybody out there that’s listening that has an idea of, please let me know. Well, just from everything that you’re doing. Because guess what? How far can a nuclear sub travel?

Stuart Turley [00:12:11] Long Way.

Rey Treviño [00:12:12] Forever So why would I not want to produce an energy source that I could charge people for, right? For? I mean, I’m not having to worry about, you know, and I love my oil and gas, but I’m going to worry about pump maintenance, finding new sources. I mean, heaven forbid. So, I mean, nuclear’s doing great in other parts of the world, even in Japan, where they have probably seen the worst of nuclear. You know, I kind of now looking at nuclear the way Thomas Edison used to go against Tesla with, direct current.

Stuart Turley [00:12:49] Right.

Rey Treviño [00:12:50] And that Thomas Edison was showing all the negatives that Tesla’s, which we all use today as his warm electricity because Thomas Edison created, is known creating the electric chair.

Stuart Turley [00:13:03] Right.

Rey Treviño [00:13:04] It’s something else because he was trying to dismiss and scare everybody, With Tesla’s one way electricity. And yet, I would say Japan probably has the 100% most reasons not to ever have nuclear. And yet they supply most of their energy from nuclear down. And the rest of the world is also doing more and more nuclear.

Stuart Turley [00:13:27] Yes,.

Rey Treviño [00:13:27] But not in America.

Stuart Turley [00:13:28] No, it’s because regulatory issues, legislation through regulatory issues equals higher energy price.

Rey Treviño [00:13:36] But you know what? I don’t see too many politicians that are really going nuclear, baby.

Stuart Turley [00:13:42] No. But I want to give a, shout out to Doug Sandridge, who I’m going to introduce you to. I signed a, petition. Yes. And I’m going to sign a petition. And it is for oil executives that are for nuclear. And I’m going to introduce you to him. And we’ve had Chris Wright sign it. And a lots of other David have signed it. And you didn’t get the memo?

Rey Treviño [00:14:05] No, I did not, I did not. That’s okay. I promise you no. Well, I think on the top of my list, I tell you, you know, we’ve, we had a great 2023.

Rey Treviño [00:14:16] Oh, yeah.

Stuart Turley [00:14:16] We’ve been having a better, more busy 2024. I mean, you and I were talking beforehand. I was like, how much time do I have to really work on?

Stuart Turley [00:14:24] Yeah, I’m I’m going to be a testament here. He has no time. So, but, you know, you’re one of the hardest working cats I know.

Rey Treviño [00:14:34] No, I tell you what, you know, I always enjoy putting these out there. And I enjoy coming here to the. I’d like doing them at the bar more. It’s just more fun, you know, something is. And, it’s a fun little break from the monotony of the day.

Stuart Turley [00:14:47] Oh, absolutely.

Rey Treviño [00:14:48] The fact that you and I and David Blackmon get to sit here, laugh a little bit, but talk about energy.

Stuart Turley [00:14:54] Yep.

Rey Treviño [00:14:54] And we even had on a guest doctor in Ireland came. Hopefully we’ll have more people on this year. I think that was very fun.

Stuart Turley [00:15:01] Oh, I.

Rey Treviño [00:15:02] I think we should.

Stuart Turley [00:15:04] If you want to be on the 3 podcasters, walk into the bar. We want to have a party with you. So come on, just let us know. Reach out to either David Blackmon, RT Rey Treviño the third, or me Stuart Turley on LinkedIn. And, RT, how can they find you?

Rey Treviño [00:15:22] Oh, definitely on LinkedIn at Rey Treviño the third or the Crude Truth.com. Right. Also, we got, we’ll we’re updating, but right now we got our website up. Well. My God, what is it? Pecos operating. Pecos operating dot Com.

Stuart Turley [00:15:39] Right.

Rey Treviño [00:15:40] And, you know, we’re just we’re gearing up for 2024.

Stuart Turley [00:15:43] You and I, we’re looking in that, like, headline in the, deer in headlights.

Rey Treviño [00:15:47] You know, as we’re getting closer and we roll this out, man, we’re getting ready for Nape.

Stuart Turley [00:15:50] Isn’t that fun?

Rey Treviño [00:15:51] And I’ve really been working on it. You know, I wrote I work for an oil and gas company, right? And so we’re getting ready. We’ve got some great projects that we’re doing in 2024 that we’re going to actually have at Nape, have great digital, showing of it, you know, of, of some great news.

Stuart Turley [00:16:09] The podcast pavilion.

Rey Treviño [00:16:10] Yes. It’s going to be the Nape, the Nape Presents the Crude Truth with David Blackmon and Stuart Turley podcast pavilion.

Stuart Turley [00:16:17] Right.

Rey Treviño [00:16:18] Something like that. And, but we want to say thank you to Nape Expo for allowing us to be out there.

Stuart Turley [00:16:23] Right.

Rey Treviño [00:16:24] We’re going to have a great podcast pavilion. And, so we’re going to have on some great guests, and we’re even gonna have some wonderful people coming in. Right.

Stuart Turley [00:16:32] And I want to give a shout out to, John Farrell and Aaron Summers over at, well, database. They’ve already kicked out to a huge email blast.

Rey Treviño [00:16:42] Yeah,.

Stuart Turley [00:16:42] You’ve got some folks lining up. I got some folks lining up, and, they’re a, sponsor on Nape, and we’re going to be doing live deal evaluations. So we got a whole team. We got a live podcast.

Rey Treviño [00:16:56] Yeah,.

Stuart Turley [00:16:56] We got a live deal, evaluations, and not every deal. Should you invest in. You want it validated? Hey, I know people.

Rey Treviño [00:17:08] And we may even be able to do a little a little light in happy hour while we’re there. We’ll see. We’ll see.

Stuart Turley [00:17:12] Thanks.

Rey Treviño [00:17:13] Oh, well, no, not confirmed yet, but we don’t know. And, but I’m just excited. We got a great first quarter in 2024. Still, David, you know, hurry up and get back from assignment.

Stuart Turley [00:17:23] Right.

Rey Treviño [00:17:24] And, you know, I just thank you all so much.

Stuart Turley [00:17:26] And, he doesn’t want to he doesn’t like being alone with me because I’m too funny. So with that, thank you. Very much. Appreciate all of you.

Rey Treviño [00:17:35] Adios.

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Energy News Beat

President Biden vetoed a bipartisan resolution Wednesday that would have reversed his administration’s decision to waive “Buy America” requirements for taxpayer-funded electric vehicle (EV) charging stations.

The resolution, which was authored by Sen. Marco Rubio, R-Fla., and introduced in July, would have specifically overturned the Department of Transportation’s (DOT) Waiver of Buy America Requirements for Electric Vehicle Chargers. Rubio, the vice chairman of the Senate Select Committee on Intelligence, and other Republican lawmakers argued DOT’s waiver benefits Chinese manufacturers who dominate the EV charger supply chain.

“If enacted, this resolution would harm my Administration’s efforts to encourage investment in critical industries and bring high-quality jobs back to the United States,” Biden said in a statement Wednesday. “It would not only thwart the collective goal of the Congress and the Administration to establish a domestic EV charger manufacturing industry, but it would also delay the significant progress being made by my Administration and the States in establishing the EV charging network.”

“Establishing resilient supply chains is critical to our national economic and energy security, and my Administration will not support policies that would undermine efforts to bring this critical manufacturing back to the United States,” the president continued.

A driver charges his electric vehicle at a charging station in Monterey Park, California, on August 31, 2022.

Biden further argued that his administration’s actions in effect promote domestic manufacturing while the Senate resolution would do the opposite. But he acknowledged the DOT waiver allows newly announced manufacturing capacity for EV charger components “the necessary time to ramp up production.”

17 RETIRED MILITARY OFFICIALS RAISE ALARM ON BIDEN’S ELECTRIC VEHICLE PUSH

DOT unveiled the final Made in America EV charger waiver rule in February 2023 which axed more stringent requirements and pushed certain deadlines back months what was considered a victory for green energy industry groups. The waiver governs manufacturing and assembly requirements for EV charging companies to be eligible for millions of dollars in federal subsidies.

The waiver rules revised a stricter proposal put forth by DOT in August 2022. The four-phase proposed waiver would have immediately scrapped all requirements; then required EV charger companies to assemble all products in the U.S. beginning Jan. 1, 2023; manufacture chargers with no less than 25% American-made components by cost beginning July 1, 2023; and manufacture chargers with no less than 55% American-made components by cost beginning Jan. 1, 2024.

President Biden previously set a goal of ensuring 50% of car purchases are electric by 2030.

The finalized waiver finalized in 2023 knocked it down to a two-phase process and pushed key deadlines back. It requires EV charger companies to ensure final assembly of chargers is in the U.S. and that the cost of American-made components in chargers represents 55% of total product costs beginning on July 1, 2024. The waiver notably scrapped the 25% domestic component requirement.

The post Biden vetoes bipartisan bill protecting US EV industry from China appeared first on Energy News Beat.

Energy News Beat

In October the Daily Sceptic reported on a paper written for the Royal Society led by Sir Chris Llewellyn Smith of Oxford University that concluded batteries were not the answer to the huge storage requirements of intermittent ‘green’ electricity power. Despite the prestigious academic fire power on parade, the paper died a death in the popular prints, presumably because of its unwelcome message about the much-touted battery solution. But recent revelations suggest the report could act as a loose thread that helps unravel the collectivist Net Zero agenda in the U.K. The Royal Society analysed decades of local wind speeds and found the electricity system needed the equivalent of at least a third of green energy to be stored as backup. Such a cost would be astronomical. Now it appears that the Government’s Climate Change Committee (CCC) fudged the issue by using just one year of high wind data in persuading Members of Parliament in 2019 to donkey-nod through Theresa May’s insane legislative rush to Net Zero by 2050.

Sir Chris’s report showed that wind could fall away for days at a time during periods of intense cold dominated by high atmospheric pressure. It also found wind speeds varied between years, all of which is in fact known and has been studied widely by other scientists. The Telegraph has reported on remarks made by Sir Chris after the paper was published in which he noted that the CCC has “conceded privately” that reliance on one year’s data was a “mistake”. It appears that the information given to MPs committing to 2050 Net Zero assumed there would be just seven days when wind turbines would produce less than 10% of their potential electricity output. According to Net Zero Watch that compares with 30 such days in 2020, 33 in 2019 and 56 in 2018.

In reporting that the CCC has conceded the “mistake”, the Telegraph noted that Sir Chris said the committee was still saying it doesn’t differ much from Sir Chris’s calculations. “Well that’s not quite true,” observed the Oxford Emeritus Professor. Asked by the newspaper if it disputed the account of Sir Chris, a CCC spokesman said it had “nothing further to add”.

Of course the ‘Noble Lie’ that Net Zero must be foisted on an unwilling population whatever the economic and societal cost will need to be preserved. Nothing to see here, move along please, is likely to guide most mainstream media in covering these latest revelations. The investigative science and Net Zero writer Paul Homewood is less inclined to ignore the serious matter. “It is now clear that Parliament authorised Net Zero without any proper assessment, whether financial or energy, and the whole Net Zero legislation must now be suspended until a full independent assessment is carried out.” He goes further and states that current and past members of the CCC must be held to account, and “excluded from any further influence over the country’s energy policy, or indeed on any issue of public policy”.

In general, nobody wants to talk about the lack of wind and solar backup, so there is a widespread pretence that the problem will somehow be solved in the future. But having dismissed any role for batteries, the Royal Society suggested hydrogen as a solution, an idea, alas, only slightly less dumb than batteries. Highly explosive, low kinetic energy compared with hydrocarbons, expensive to produce, difficult to store and move around – the disadvantages are all too obvious. Francis Menton of the Manhattan Contrarian saw the report as an “enormous improvement” on every other effort on the subject of large scale energy storage systems. But in the end, the authors still have a “quasi-religious commitment” to a fossil-free future, and this means that the report, despite containing much valuable information, “is actually useless for any public policy purpose”.

What is becoming clear is the level of statistical deception that is practised across climate science and the promotion of Net Zero. Surface temperature measurements are frequently adjusted upwards on a retrospective basis despite ignoring growing urban heat corruptions, activists use computer models to run up garbage-in, garbage-out scares on an almost daily basis, and bad weather is deliberately confused with long-term climate to suggest the latter is changing due to human caused carbon dioxide. All lapped up without a critical word between them by members of the mainstream media increasingly funded by elite billionaires.

The donkey-nodding politicians and the poodle media often hide behind the notion that they are just following the ‘science’. There is no such thing as the ‘science’, settled or otherwise, just the ongoing scientific process. The distinguished scientist and Nobel laureate Richard Feynman captured the integrity of the process when he wrote: “If you’re doing an experiment, you should report everything that you think might make it invalid – not only what you think is right about it. … Details that could throw doubt on your interpretation must be given, if you know them.”

Renewable energy is not a low-cost substitute for fossil fuels, notes a forward in Rupert Darwall’s recently published report on Net Zero and Britain’s “disastrous” energy policies. High and rising energy costs have locked Britain into economic decline, a suggestion given weight by last week’s savage destruction of the steel economy of Port Talbot. Renewables are not cheap, nor can they provide the reliability that modern societies expect and on which they depend. His report is said to convincingly demonstrate “how Britain was conned into Net Zero by deceptive and illusory promises of cheap wind power”.

The CCC is a dedicated green activist group that sits at the heart of U.K. Government. It is a pernicious, untrustworthy force in British politics giving cover to policies that will lead to de-industrialisation and massive changes in future lifestyle including restriction on diet, transport and personal freedoms.

Here’s hoping the wind scandal blows the damn thing away.

Chris Morrison is the Daily Sceptic’s Environment Editor.

Stop Press: Watch award-winning journalist, Alex Newman, explain why the “human-induced climate change” narrative is finally crumbling.

Source: Dailysceptic.org

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The post Revelation That U.K. Climate Target is Based on One Windy Year’s Data Threatens to Unravel Net Zero Credibility appeared first on Energy News Beat.

Energy News Beat
High GDP growth, industrialization, urbanization, and a rising number of middle class in India are set to drive demand growth in the Asian country.
Total Indian refining capacity is expected to increase by 22% in five years from the current 254 million metric tons per year.
All major forecasters expect India to replace China as the biggest driver of global oil demand growth in the long term, which should happen before 2030.

Before the end of this decade, the world’s third-largest crude oil importer, India, is set to become the single biggest driver of global oil demand, replacing China, analysts and forecasters say.

India’s economy has grown at a robust pace over the past year. Meanwhile, growth in other major economies—including China—has sputtered. High GDP growth, industrialization, urbanization, and a rising number of middle class in India are all expected to shift the key oil demand growth driver from China onto India.

Some analysts, such as Rystad Energy, expect India’s crude oil demand growth to shrink to 150,000 barrels per day (bpd) in 2024 from 290,000 bpd in 2023.

Despite these predictions of slower demand growth, India is boosting its refining capacity. The country should add 1.12 million bpd to its current total each year until 2028, a junior oil minister told India’s parliament last month.

Total Indian refining capacity is expected to increase by 22% in five years from the current 254 million metric tons per year, which are equal to around 5.8 million bpd, Rameswar Teli said. The government expects the boost to refining capacity to be “adequate” to meet the country’s fuel demand in the long term.

India’s economy is growing faster than all other major economies, and so is its demand for energy.

All major forecasters expect India to replace China as the biggest driver of global oil demand growth in the long term, which should happen before 2030.

In 2023, oil consumption in India hit a record high of 231 million tons, up from 219 million tons in 2022, according to data from the Indian Ministry of Petroleum and Natural Gas cited by Reuters market analyst John Kemp.

Besides being a major oil importer, India isn’t shying away from buying crude from whoever offers the lowest price. Over the past year, India has become a top buyer of Russian crude oil, alongside China, taking advantage of the discounts at which Russian grades are being offered compared to international benchmarks.

India buys from abroad more than 80% of the crude oil it consumes. Over the past year and a half, the country has significantly raised its imports of cheaper Russian crude oil, which is banned in the West.

India sees its oil supplier base as diversified as it is buying crude from 39 sources at present, compared to 27 sources previously, Indian Minister of Petroleum and Natural Gas, Hardeep Singh Puri, said in August last year.

“If there’s a 30% discount, the Russians are putting a ribbon around it and sending it to us free. That’s what it means,” the minister told CNBC.

India is thus looking to make opportunistic spot purchases on top of its term sale agreements to meet its growing oil demand, which is only expected to rise in the coming decades.

Economic growth is much higher than in any of the other major economies and is expected to remain robust in the near and medium term, Indian authorities and international investment banks say.

Earlier this month, India’s National Statistical Office (NSO) said that real GDP growth during 2023-24 is estimated at 7.3%, up from 7.2% growth in 2022-23.

“With strong domestic demand conditions, India remains the fastest growing major economy and is now the fifth largest economy in the world,” Shaktikanta Das, Governor of Reserve Bank of India, said in Davos last week.

“Strong domestic demand remains the main driver of growth, although there has been a significant increase in Indian economy’s global integration through trade and financial channels. Higher reliance on domestic demand cushioned India from multiple external headwinds,” the central bank governor added.

The strong economy would raise demand for oil, as will continued urbanization and industrialization, analysts say.

Source: Oilprice.com

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The post India to Become Single Most Important Driver of Oil Demand Growth appeared first on Energy News Beat.

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The futility of 22 naval ships trying to patrol 2,200 km of Yemeni coastline were once again exposed yesterday with two US-flagged Maersk boxships fired upon by the Houthis as shipping comes to terms with the fact that the Red Sea exodus is here to stay for a considerable time.

Reacting to Israel’s war in Gaza, the Houthis of Yemen – backed by Iranian intelligence and hardware – have targeted around 40 merchant ships in the last three months with drone and missiles, as well as taking one carrier and its crew, the Galaxy Leader, hostage.

The Maersk Detroit and the Maersk Chesapeake became the latest vessels to be targeted yesterday, with both ships forced to turn around.

According to the US military three anti-ship ballistic missiles were fired at Maersk Detroit. Two were shot down and one exploded just 100 m from the vessel’s starboard.

Container shipping was the quickest sector to reroute away from the Red Sea and the Suez, with some 90% of all boxships heading via southern Africa on voyages between Asia and Europe. According to liner analyst John McCown, who runs US firm Blue Alpha Capital, the Asia-Europe tradelane accounts for 25% of worldwide container miles and with typically one-third longer voyages the change has the effect of drawing in the equivalent of 8% worldwide capacity of boxships and equipment to maintain the same service.

For the tanker trades, Middle East-origin crude flows to Europe have all now started rerouting to Europe via the Cape of Good Hope, though loadings do appear to be continuing normally. Only two transits have been observed via the Bab el-Mandeb since US-led strikes began on January 12, the last of which occurred a week ago, according to new analysis from Vortexa.

The vessel class most impacted by these diversions is suezmax, as this is the class that carries most of these cargoes through the Red Sea on this route. Diverting via the cape adds about 4,900 nautical miles to the voyage and over two weeks in voyage length. This increases tonne-miles for a single voyage by around 70%, according to Vortexa.

Using 2023 data, Vortexa has projected the impact to this vessel class if this rerouting continues. On a monthly basis, tonne-miles for suezmaxes carrying crude from the Middle East to Europe would increase about 130% if transits occur via the cape instead of the Bab el-Mandeb. With the incremental increase from the extra tonne-miles for these specific cargoes, monthly global suezmax tonne-miles would increase by around 10%.

Turning to product tankers, a very hot sector rates-wise at present, Pareto Securities suggests no product tankers look set to use the Suez Canal during the first half of February — and this will imply near-zero middle-distillate arrivals from the Middle East Gulf and India to Europe during that time, something that will require significant stock draws or the need for replacement cargoes.

New analysis has just been published on how the shut-in of the Red Sea is affecting the LNG trades too. Qatar is now shipping all its gas cargoes to Europe via the cape and last week Splash reported on how the Red Sea had no gas carriers in it at all for the first time this century.

For the LNG market, an extended shut-in of the Red Sea route from the Middle East poses a supply risk to Europe, although the price impact will be delayed until Europe’s gas storage has been drawn down sufficiently.

In 2023, around 15.5m tonnes of LNG was sent through the Red Sea from the Middle East to Europe accounting for 12.9% of the continent’s LNG supply last year.

Re-routing vessels through the Cape of Good Hope adds around 12.5 days to the voyage each way at 16 knots – which could require an additional 15-20 vessels to deliver the same volume over the year, Rystad analysis shows.

Source: Splash247.com

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The post Red Sea naval forces struggle to contain Houthi attacks appeared first on Energy News Beat.

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