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DAILY ENERGY NEWS | 07/06/2023

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Biden's green jobs are real. In Guyana...

Oil & Gas Journal (7/5/23) reports: "ExxonMobil has been granted environmental authorization by the Environmental Protection Agency (EPA) of Guyana for a 35-well exploration and appraisal drilling campaign on Guyana’s offshore Stabroek block. The agency approved the multi-well project following review of the Environmental Impact Statement and Environmental Impact Assessment of the Cumulative Effects related to the project. The EPA “is satisfied that the project can be conducted in accordance with good environmental practices, and in a manner that avoids, prevents and minimizes any adverse effects which could result from the activity,” it noted in a statement July 2. Esso Exploration and Production Guyana Ltd. (EEPGL), an ExxonMobil affiliate and operator of the block, plans to further explore and appraise the block’s hydrocarbon reserves. The project scope includes 35 exploration and appraisal wells. Exact locations have not been finalized. Work is currently scheduled from third-quarter 2023 through 2028."

"Human well-being has skyrocketed in terms of wealth, health, and life expectancy since the Industrial Revolution, which was fueled by hydrocarbons."

– Jack Spencer,
The Heritage Foundation

There's a phantom menace threatening America's power grids.

Center of the American Experiment (7/5/23) blog: "It’s been very warm in Minnesota over the last two weeks, leading families to turn up the air conditioning. One thing that hasn’t been turned up over the last 14 days? The wind turbines operating on the regional electric grid to which Minnesota belongs, the Midcontinent Independent Systems Operator (MISO). Data from the U.S. Energy Information Administration (EIA) show that wind generation has been variable over the last two weeks, which isn’t surprising. Wind generation was fairly decent from June 24th through the 27th, but it has been anemic since June 28th...When electricity demand was highest, wind produced only 5.9 percent of its potential output, compared to its capacity value of 18.1 percent. This means MISO expected wind turbines to produce 5,171 MW of electricity during this time, but they only produced 1,686 MW. This overestimation of capacity value is a big problem because MISO is increasingly dependent on the wind to keep the lights on... Mitch Rolling and I often refer to wind capacity value ratings as 'phantom firm' resources because maybe they will be available to generate electricity, or maybe they will fall short like they did last week. All of this bodes poorly for the reliability of the electric grid in the future as more coal plants are forced to retire, and electric companies attempt to replace them with a combination of wind, solar, and battery storage. All of this begs the obvious question, why don’t companies like Xcel Energy turn their wind turbines up?"

How did China become the world's leader in EVs? Maybe because Xi Jinping isn't stopping nickel mines at home like Biden is in the USA.

Wall Street Journal (6/1/23) reports: "Across the Indonesian archipelago, new industrial plants are going up to process chunks of nickel ore for use in electric-car batteries. Five years ago, there were none. What changed? Chinese companies had a breakthrough. They tamed a refining process that was once unwieldy, unlocking Indonesia’s expansive deposits for the nickel-hungry EV industry. In doing so, they established Chinese dominance over what has grown into the world’s largest source of the commodity. That gives China a leg up in the global race to secure minerals that are critical to the energy transition and is a blow to U.S. efforts to lessen American companies’ dependency on China. The Biden administration is pushing hard to diversify energy supply chains. But with nickel, Chinese companies are tightening their grip. Beijing’s recent decision to impose export restrictions on gallium and germanium—two metals with key uses in semiconductors—underscores the potential risks of relying on China for crucial inputs."

Offshore wind—nobody lives there, but nat gas and coal are generally near load centers. Kind of important.

Bloomberg (7/5/23) reports: "The UK ordered one of the country’s biggest wind farms to cut output over the weekend even as the grid paid a coal plant to help maintain supply security. National Grid issued an order, in place until Tuesday morning, for a portion of the Seagreen offshore wind farm off the east coast of Scotland to curtail generation as the UK’s grid operator worked to manage electricity supply and demand. At the same time, it paid Uniper SE’s Ratcliffe-on-Soar coal-fired plant to be available to produce power. It’s a situation that underscores the importance not just of building more renewable capacity, but also having it in the right place or with sufficient infrastructure to move the electricity. Traditionally, coal-fired and nuclear stations were built near to population centers to make it easy to fulfill demand. But wind farms are placed where conditions are optimal, often far out to sea and in Scotland, a long way from population centers in England. The grid regularly takes actions, and sometimes complex combinations of actions, to ramp up or decrease power generation and demand in order to maintain secure supply."

Energy Markets

WTI Crude Oil: ↓ $70.40
Natural Gas: ↓ $2.61
Gasoline: ↓ $3.52

Diesel: ↓ $3.84
Heating Oil: ↓ $243.74
Brent Crude Oil: ↓ $75.21
US Rig Count: ↓ 704

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