U.S. Makes First Strategic Reserve Crude Sale to Foreign Nation

The U.S. Department of Energy sold crude oil from the Strategic Petroleum Reserve to a foreign government for the first time, according to the agency. The government of Australia and six companies were awarded supply in a DOE tender to sell 10.1 million barrels of SPR crude. The Pacific nation will be receiving 195,000 barrels of crude, the DOE said on its website. Last year, Australia was the first foreign country to lease storage space at caverns operated by the Department of Energy, which made it eligible to participate in the tender. Glencore Ldt., Marathon Petroleum Supply and Trading LLC, Motiva Enterprises LLC, Phillips 66 Company, Shell Trading (US) Company, Valero Marketing and Supply Company were among the other awardees in this tender, which offered oil deliveries during March and April. bloomberg

Beyond Oil: Lithium-Ion Battery Minerals and Energy Security

Oil has long dominated concerns about energy security because oil products have fueled nearly all of the world’s transportation for over a century. But that may be changing as vehicles powered by electric motors have become competitive with those powered by internal combustion engines. Should the mass adoption of electric vehicles occur, access to reliable and affordable sources of minerals like cobalt, graphite, lithium, manganese, and nickel, which are used in modern electric-vehicle batteries, will come to occupy a larger share of energy security concerns, especially since one country has already gained control over much of the world’s production and processing of those minerals. For the moment, however, oil products still provide over 90 percent of the energy that the world uses for mobility. Hence, the energy-security problem of ensuring the availability of reliable and affordable oil supplies remains a relevant ...

The First “Global Inflationary Depression” Is Very Possible

It is possible that we might soon be witness to the first global inflationary depression. This is not a mix of words we normally see placed together. Several factors make this scenario possible. First, we seldom have depressions but instead, tend to roll through mild recessions, however, what we face may be far more severe. Second, in the past, times of falling economic activity have generally been deflationary as defaults rise but this time, not so much. Third, but not least, in the past, many events tended to be regional rather than global, but over the years as economies have become more interconnected the resulting codependency presents an increased possibility of problems spreading across the world. Currently, the biggest source of demand comes from governments and not working people earning a living or businesses growing. If you remove all the money ...

We need a carbon price, can manage it regionally: Repsol deputy CEO

The world needs a carbon price in the transition to a lower-emissions economy and should not wait for global consensus on the issue, the deputy CEO of Spanish energy group Repsol told an oil and gas conference on Tuesday. “Definitely we will need a carbon price,” Luis Cabra told the online CERAWeek event. Governments can put a price on planet-warming emissions through taxes or by issuing the sort of limited, tradable permits that the European Union set up in 2005. “We should be ready to accept and to embrace something which is not a single global carbon price and maybe we need to think that for a while we need to live under regional regulations,” Cabra said. Repsol was an early mover among oil and gas firms in pledging to cut emissions from oil products it brings out of the ground to net-zero, meaning ...

Using the pandemic to re-set the world economy

On February 21, 60 major companies announced that they will be adopting a new economic framework, in partnership with the World Economic Forum. "Executives from Bank of America, Mastercard, KPMG, and about 60 other large companies announced [...] they'll be adopting a new reporting framework for environmental, social, and governance (ESG) standards in partnership with the World Economic Forum (WEF)," Business Insider reported. "Other companies that have signed on to this reporting framework include Salesforce, Unilever, Dell, and Sony." The new standard will be called "stakeholder capitalism metrics." Milton Friedman's 1980s economic dictum that profit is the purest motive is about to meet its strongest challenge ever -- stakeholder capitalism, represented by corporate and financial institutions' adoption of annual ESG audits, to measure and report how much risk a commercial entity faces on three fronts: environmental, social, and governance. Following Friedman's analysis, politicians ...

It’s Too Late for Big Oil’s Pivot to a Carbon Tax

The American Petroleum Institute is debating whether to support a price on carbon. It’s not every day that a top lobbying group contemplates taxing itself. That’s big news, and it’s tempting to call it a win for the climate. Not so fast. While API’s expected endorsement is indeed a sign of the times, it’s not a good one. For one, API is late to the party. BP Plc, ConocoPhillips, Exxon Mobil Corp., Royal Dutch Shell Plc, Total SE and many others have supported just such a price for a while. In January, Total SE quit its API membership because of a conflict over climate change policy. BP, Shell and others said that they would remain in the group to influence discussions from within. In a statement at the time, Shell said that API was moving closer to Shell’s own stated views ...

What the future holds for Exxon

“We are committed to playing a leading role in greenhouse gas reductions consistent with the goals of the Paris agreement...” Thus spoke Exxon (XOM) CEO Darren Woods at Exxon’s investor day this week. For most chief executives, supporting the Paris climate agreement at this point is a no-brainer. For the CEO of Exxon—a company that has spent untold millions over decades lobbying against climate change—to make that statement is nothing less than shocking. Woods’ capitulation is less surprising though if you think about where America’s largest oil and gas company finds itself, which is to say under siege. After a dismal 2020, the company is being called to account by analysts, activist hedge funds and even traditional investors. “Exxon is in a tough spot,” says Randy Nelson, president of Sanguine Gas Exploration, a Tulsa-based, independent oil and gas company. “What [Exxon does] really ...

Will we see oil at $100 a barrel again?

Brent crude has gained 23% to around $64 a barrel this year. Its gains have already surpassed the most bullish of forecasts, says Avi Salzman for Barron’s. Bank of America thinks crude will hit $100 a barrel “from time to time” over the next five years. Before 2014 crude regularly traded above $100. That era ended when US shale drillers began to pour millions of new barrels onto global markets. There are two key factors currently capping oil below $100 a barrel. First, energy cartel Opec and ally Russia are currently withholding about seven million barrels per day (mbpd) of production to prop up prices; economic recovery this year will cause them to turn on the taps and flood the market. Second, the green-energy transition means that some analysts think the world may already have passed peak oil demand. The energy ...

Enthusiasm For Electric Vehicles Still Appears Excessive

For decades, enthusiasm for electric vehicles has failed to translate into market success. Though continued skepticism may be warranted, it’s important, naturally, to keep an open mind when considering whether this time really could be different. I’m kind of like the grumpy old man in the microwave commercial a few years back who, listening to the marketer sing the oven’s praises keeps saying, “But does it brown the food?” I am constantly hearing: · The Chinese market is booming; · Norway’s automotive market is dominated by electric vehicles; · Manufacturers are planning to introduce scores of new electric vehicles; · Battery costs are falling rapidly; and · When batteries are less than $100/kwh, BEVs will be competitive with ICE vehicles. To all of which I respond, do the cars achieve mass market volumes without major government support? Or, to paraphrase a certain movie character, “Show me the sales!” Tesla TSLA -3.8% is ...

The Next U.S. Oil And Gas Boom Suddenly Looms On The Horizon

The history of the oil and gas business in the United States is that every time the “experts” all line up to declare it to be dead, it finds a way to come roaring back. This scenario has played itself out at least half a dozen times across my own 42-year career in the business or writing about it. Well, guess what: It appears to be happening again. I was about to say that it appears to be about to happen again, but the truth is that the domestic oil and gas industry has already staged a significant comeback from the depths of its COVID-19-induced depression last summer. Take the Enverus Daily Rig Count as an example: On September 1, 2020, that metric showed the number of active drilling rigs in the U.S. sat at just 276 rigs, depressingly near its ...

‘I’ll believe it when I see it’ – Saudi Arabia doubts oil recovery and keeps taps tight

This week’s surprise decision by Saudi Arabia and other top oil producers to broadly ...

Everything Is About To Get More Expensive. This Is Good

With America already experiencing the beginnings of an inflation wave that may spiral out ...

Why Collapse Occurs; Why It May Not Be Far Away

Collapse is a frightening subject. The question of why collapse occurs is something I ...

Don’t Believe the US Energy Independence Hype

The U.S. is energy independent, right? Well, that’s what some politicians would have you ...