David Fuller and Eoin Treacy's Comment of the Day
Category - Energy

    Oil Tanks Are Running Dry at the Biggest US Crude Storage Hub

    This article from Bloomberg may be of interest. Here is a section:

    Operationally, pulling oil out of tanks when levels fall below the so-called “suction line” is difficult and expensive, and the quality of crude can be compromised by the presence of water and sediment. 

    For now, traders are expecting stockpiles to halt their decline by October and possibly start building up again, depending on how exports shape up. Indeed, this week’s drawdown was less than 1 million barrels — the first time that’s happened since early August.

    Cushing’s role in global oil markets has also diminished in recent years since the US lifted an export ban. Most barrels now flow straight from the prolific oilfields in Texas’ Permian Basin to the coast, where they are shipped to overseas buyers.

    Read entire article

    Honeywell and ESS Tech, Inc. Collaborate to Accelerate Commercial Deployment of Iron Flow Battery Energy Storage Systems

    This press release may be of interest to subscribers. Here is a section:

    Honeywell (Nasdaq: HON) today announced a strategic collaboration with ESS Tech, Inc. (ESS) (NYSE: GWH) to advance technology development and market adoption of iron flow battery (IFB) energy storage systems. Honeywell has made an investment in ESS as part of this collaboration.

    The relationship builds upon each company’s development of energy storage systems, and brings together ESS’ market-leading, patented IFB design with Honeywell’s advanced materials and energy systems expertise.

    “The demand for long-duration energy storage represents a compelling market opportunity within the energy transition and the combination of Honeywell and ESS technology can accelerate decarbonization for the commercial, industrial and utility sectors,” said Bryan Glover, chief growth officer, Honeywell Performance Materials and Technology (PMT) group. “Our strategic collaboration with ESS will accelerate Honeywell’s ability to bring comprehensive solutions to our customers while working to advance long-duration energy storage across all industries requiring expansive energy storage.”

    “Today, we are creating superior technology in the critical long-duration energy storage industry,” said Eric Dresselhuys, CEO of ESS. “Combining ESS’ innovative technology and deployment experience with Honeywell’s storage and control system expertise will enable us to drive the clean energy transition and deliver value to our customers, shareholders and communities.”

    Read entire article

    Russia Halts Diesel Loadings at Ports Following Export Ban

    This article from Bloomberg may be of interest. Here is a section:

    Russia’s decision to ban exports of all types of diesel is adding to pressure in an already tight global market. The lifting of the ban, which came into force on Sept. 21, will depend on how quickly supplies are replenished in the domestic market, according to First Deputy Prime Minister Pavel Sorokin.

    Read entire article

    Saudis Didn't Secure Tesla, Will They Keep Funding Rival Lucid?

    This note from Bloomberg may be of interest. Here it is in full:

    Lucid's liquidity clock was wound until late 2024 with its $3 billion stock sale in June, yet further large injections, perhaps as soon as late 2024, could help stem the cash burn while the company scales operations. Stiff competition in the luxury-end of the auto industry from peers like Mercedes, Tesla, Audi and BMW, and the potential for an economic downturn, add substantial risk to Lucid's journey toward profitability. A takeover by the Kingdom of Saudi Arabia (60% stake in Lucid via the Public Investment Fund) is possible, yet the timing is questionable relative to the company's convertible bonds' 2026 maturity. The potential of such an action makes our view of event risk favorable -- and a consideration given the country's Vision 2030 plan - but it does make the bonds more of a lottery ticket than well-defined credit.

    Read entire article

    Sunak Delays UK's Petrol Car Ban as Part of Green U-Turn

    This article from Bloomberg may be of interest. Here is a section:  

    Sunak said in a speech on Wednesday in London that he would push back by five years to 2035 a plan to bar the sale of new petrol and diesel cars, casting the decision as an effort to protect families struggling with bills. The vast majority of vehicles sold in the UK would likely be electric by 2030 without government intervention, he said.

    “At least for now it should be you, the consumer, who makes that choice, not the government forcing you to do it,” Sunak said in Downing Street. 

    While Sunak insisted he was still committed to reaching net zero by 2050 and not watering down any targets, he said the UK must act in a “more proportionate way.” He affirmed his belief that climate change was “real and happening,” but said that the debate over the issue had been “charged with far too much emotion and not enough clarity.” 

    Read entire article

    Advances Bipartisan Nuclear Energy Bill from Capito, Carper, Whitehouse

    This press release is the primary reason uranium prices are jumping this week. Here is a section:

    The ADVANCE Act would:

    Facilitate American Nuclear Leadership by:
    Empowering the Nuclear Regulatory Commission (NRC) to lead in international forums to develop regulations for advanced nuclear reactors.
    Establishing a joint Commerce Department and Energy Department initiative to facilitate outreach to nations that are seeking to develop advanced nuclear energy programs.

     Develop and Deploy New Nuclear Technologies by:

    Reducing regulatory costs for companies seeking to license advanced nuclear reactor technologies.
    Creating a prize to incentivize the successful deployment of next-generation nuclear reactor technologies.
    Requiring the NRC to develop a pathway to enable the timely licensing of nuclear facilities at brownfield sites.

     Preserve Existing Nuclear Energy by:

    Modernizing outdated rules that restrict international investment.
    Extending a long-established, indemnification policy necessary to enable the continued operation of today’s reactors and give certainty for capital investments in building new reactors.

     Strengthen America’s Nuclear Fuel Cycle and Supply Chain Infrastructure by:

    Directing the NRC to establish an initiative to enhance preparedness to qualify and license advanced nuclear fuels.
    The bill identifies modern manufacturing techniques to build nuclear reactors better, faster, cheaper, and smarter. 

    Read entire article

    Drilling Three Miles Sideways Brings Risks for Shale Operators

    This article from Bloomberg may be of interest. Here is a section:

    “It’s a risk-reward decision, because if something bad happens at 18,000 feet, that’s an expensive mistake,” Kaes Van’t Hof, president of Diamondback, said on a call with analysts. The company has even gone sideways deep under the home of company chief Travis Stice. So far, he said, the results of the longer laterals have been positive. “The drilling guys can do it, there’s no doubt about that.”

    Pioneer, the largest independent producer in the Permian, has an inventory of more than 1,000 future wells that run at least 15,000 feet horizontally — or about 2.8 miles — and some even exceed 18,000 feet. That’s about 3.4 miles, or the length of 50 football fields. The longer horizontal wells generate more oil, cost less per lateral foot and require fewer vertical holes and fracking workers, Pioneer’s president and incoming chief executive officer, Rich Dealy, said on an August conference call.

    Servicers, the hired hands of the oil patch, are for the most part eager to take on these kinds of risky, big-ticket jobs. An average 2-mile lateral well costs $6.5 million, all in, compared to around $9 million for a 3-mile lateral well, according to data from Bernstein. Pioneer and Diamondback didn’t say whether they’ve had any problems when they extend the laterals or how much they’ve spent, though Dealy said on the call that the roughly 3-mile laterals result in capital savings of about 15% per foot. Longer horizontals are particularly popular in the Marcellus Shale of the US Northeast as well as the Midland Basin of the Permian in Texas.

    Read entire article

    Nuclear power could see its biggest expansion in decades, leading to increased demand for uranium

    This article from MarketWatch may be of interest. Here is a section:

    "Growing interest in nuclear energy is being seen around the world," said Freebairn, noting this his company has been highlighting events in Eastern Europe and North America.

    For now, nuclear power provides around 10% of the world's electricity, according to the International Energy Agency.

    It comes from roughly 440 reactors in 31 countries with about 390 gigawatt electrical (GWe) capacity, according to UxC's Hinze. If total power demand grows by 2% to 3% as agencies like the IEA predicts over the next 10 to 20 years, and nuclear power keeps it share of the total in the 8% to 10% range, then Hinze expects nuclear power should reach at least 500 GWe by 2040 and as high as 550 GWe.

    That would represent a roughly 40% growth over the current market size, he said.

    There are potential downside risks to nuclear power growth, including competition from fossil fuels and renewables, but since nuclear power is "already not a huge share of the market, it would make sense that its growth can continue regardless of how the other energy fuels fare," Hinze said.

    Read entire article

    Oil Extends Rally as OPEC+ Cuts Set Up Tightest Market in Decade

    This article from Bloomberg may be of interest. Here is a section:

    Oil rallied to a 10-month high as production cuts by leaders of the OPEC+ cartel strain global supplies, a setup that’s projected to create the tightest crude market in a decade in the months ahead.

    Global benchmark Brent climbed above $91 a barrel, and West Texas Intermediate topped $89, both fresh highs for the year. The gains are already showing signs of filtering into fuel markets, with US gasoline prices at the highest seasonal levels in a decade and diesel — the global economy’s workhorse fuel — pushing past $1,000 a ton in Europe.

    Oil markets may experience a shortfall of 3.3 million barrels a day in the fourth quarter, the most constrained market in more than a decade, according to a report Tuesday from the Organization of Petroleum Exporting Countries. The US Energy Information Administration will publish its monthly market report later Tuesday, with the International Energy Agency’s outlook due Wednesday.

    Read entire article

    Lithium Americas Surges on Reports It Has Lithium-Rich Deposit

    This note may be of interest. Here is a section: 

    Lithium Americas shares rise more than 6%, one of the leading gains on the S&P/TSX Composite index, after research and media reports suggest that the company’s Thacker Pass project is located on a US lithium deposit that could be among the largest in the world.

    Lithium reserves in the McDermitt Caldera, located along the Nevada-Oregon border, could contain between 20 and 40 million metric tons of the metal, according to findings from Lithium Americas volcanologists and geologists in an Aug. 31 research report.

    Read entire article