Today’s Key Takeaways: Alaska #1 in energy consumption, #6 in production. Oil rises on tightening marketing. TOTE Alaska powers ships with LNG – cuts emissions. Reducing greenhouse gas emissions from aluminum production. CCS energy transition’s dark horse.
NEWS OF THE DAY:
Which USA States Consume and Produce the Most Energy?
Andreas Exarheas, Rigzone, August 2, 2023
According to the latest U.S. Energy Information Administration (EIA) total energy consumption per capita ranking among U.S. states, which shows data up to 2021, Alaska had the highest energy demand per capita in the region in 2021, with 932 million Btu.
Louisiana ranked a close second that year with 925 million Btu, while North Dakota was third with 905 million Btu, the ranking showed. Wyoming placed fourth, with 870 million Btu, Iowa was fifth, with 490 million Btu, Texas was sixth, with 486 million Btu, and West Virginia was seventh, with 478 million Btu, the EIA figures revealed.
Rounding out the top 10, South Dakota placed eighth, with 458 million Btu, Nebraska was ninth, with 457 million Btu, and Oklahoma was tenth, with 414 million Btu, the EIA ranking outlined.
According to the EIA’s latest total energy production ranking among U.S. states, which also showed data up to 2021 and excluded federal offshore production, Texas was the top state in terms of total energy output in 2021, with 23.844 quadrillion Btu. Pennsylvania ranked a distant second, with 10.151 quadrillion Btu, while Wyoming was third, with 6.032 quadrillion Btu, the EIA figures showed.
New Mexico placed fourth, with 5.505 quadrillion Btu, West Viriginia was fifth, with 5.497 quadrillion Btu, North Dakota was sixth, with 4.310 quadrillion Btu, Oklahoma was seventh, with 4.187 quadrillion Btu, Louisiana was eighth, with 4.105 quadrillion Btu, Colorado was ninth, with 3.630 quadrillion Btu, and Ohio was tenth, with 3.042 quadrillion Btu, according to the EIA ranking.
OIL:
Oil Rises After Industry Report Points to Massive Inventory Draw
Yong Chang Chin, Alex Longley, Yahoo!Finance, August 2, 2023
Oil resumed a rally after an industry estimate pointed to a huge drawdown in US inventories, adding to signals the market is tightening.
West Texas Intermediate climbed near $82 a barrel, though pared an earlier gain of as much as 1.3%. The American Petroleum Institute reported that nationwide crude stockpiles plunged 15.4 million barrels last week, according to people familiar with the figures. If confirmed by government data later Wednesday, that would be the biggest draw in volume terms in figures going back to 1982.
The API estimates also pointed to another drop in crude holdings at the key storage hub at Cushing, Oklahoma, as well as declines in inventories of gasoline and distillates.
Crude soared last month after the Organization of Petroleum Exporting Countries and allies including Russia cut supplies in a bid to lift prices. That’s spurred calls from players including BP Plc that the market is set to strengthen in the coming months.
“The visible tightness has convinced the market that announced cuts are not just empty rhetoric,” said Nitesh Shah, an analyst at WisdomTree. “Market optimism that we are nearing the end of a rate tightening cycle and that an economic soft-landing could easily be achieved has also helped oil prices gain.”
GAS:
TOTE Maritime Alaska is now powering its ships with natural gas, cutting carbon and other pollutants
Michael Fanelli, Alaska Public Media, August 2, 2023
Tote Maritime Alaska recently converted their two cargo ships to run on liquefied natural gas, or LNG, which they say makes them the first maritime company to convert its entire fleet.
The Anchorage-based company makes twice-weekly trips between Tacoma, Wash., and the Port of Alaska, carrying everything from groceries to armored vehicles. General Manager Art Dahlin said the company made the switch to comply with international standards, but also as an investment in Alaska.
“It’s clear that ice is melting,” Dahlin said. “If you look up at the Arctic, the sea routes are opening. So we’ve made a number of investments, including LNG, to make sure that we keep Alaska as beautiful as it is, and a place that our kids can enjoy.”
The ships originally ran on the industry standard heavy fuel oil, a tar-like residue of crude oil that was inexpensive but also one of the dirtiest fuels. Heavy fuel oil emits a number of toxic pollutants like sulfur oxide — which is harmful to humans and can create acid rain.
Because of that, the International Maritime Organization set a limit in 2020, capping the amount of sulfur ships could emit. Other options to comply with the new limit include installing “scrubbers” to filter out the pollutants or using more expensive, ultra-low-sulfur-diesel, which TOTE switched to in 2017.
Dahlin said because their ships were built relatively recently, they chose to extend their lifespan by converting to LNG. According to TOTE, the LNG fuel eliminates virtually all sulfur oxides and particulate matter, up to 95% of nitrogen oxides, and cuts carbon emissions by about 25%.
He said they would love to be able to get to zero emissions, but LNG is the cleanest option right now.
“There has to be a stopgap in between,” Dahlin said. “I think we all would love to get to, to be free of fossil fuels to power our vessels — that’s just not out there right now.”
Dahlin said if a zero emission fuel becomes available, the company will look to incorporate it in its next class of vessels.
He said while the conversion process was extremely expensive, they expect LNG to provide a more stable fuel cost moving forward.
MINING:
Mining heavyweights to build pilot plant
Rose Ragsdale, Metal Tech News, July 31, 2023
Rio Tinto and Sumitomo Corp. have teamed up to build a demonstration plant aimed at reducing greenhouse gas emissions from the production of aluminum.
The A$111.1 million (US$73.9 million) pilot project, the first of its kind deployment of hydrogen calcination in the world, will be built in Australia at the Yarwun Alumina Refinery in Gladstone, Queensland.
The project, co-sponsored by the Australian Renewable Energy Agency (ARENA), which contributed A$32.1 million (US$21.3 million) to the venture, is designed to reduce pollution from alumina refining, which accounts for roughly 3% of Australia’s greenhouse gas emissions.
Australia is the world’s largest exporter of alumina, the mineral feedstock for aluminum production, with the industry contributing about A$7.5 billion (US$5 billion) to the nation’s annual gross domestic product.
The demonstration project follows a successful feasibility study conducted by Rio Tinto, which ARENA supported with an A$580,000 (US$386,000) grant in 2021.
POLITICS:
Dark Horse
Carbon Economist, August 2, 2023
CCS is quietly gaining traction amid a growing realisation that reaching net zero will require more than renewables
CCS is the transition’s dark horse. Written off not long ago as too expensive and risky, it is now emerging as one of the pivotal technologies in the push for net zero. Its star is rising as policymakers and emitters concede there will be a need to capture and permanently store residual CO₂ that the deployment of renewables and other technologies cannot abate.
The list of CCS projects proposed or under development is growing rapidly: Global Energy Infrastructure’s CCS database is tracking more than 500. Information provider S&P Global Commodity Insights talks of a “trend shift” in the sector, with its forecasts showing a sixfold increase in capture capacity by 2030.
The energy industry is leading the charge. ExxonMobil aims to close a $4.9b deal later this year to acquire independent Denbury, which operates the largest CO₂ pipeline network in the US, and ten strategically located onshore sequestration sites.
For ExxonMobil and its global peers, CCS is a licence to operate existing fossil fuel operations —and new businesses such as blue hydrogen—in a carbon-constrained world, a strategy condemned by some.
But oil and gas companies also have an eye on carbon management as a future business. ExxonMobil recently signed a deal with Nucor, one of North America’s largest steelmakers, to capture, transport and store up to 800,000t/yr of CO₂ from a direct reduced iron plant in Louisiana. The deal takes ExxonMobil’s total CCS agreements with third parties to 5m t/yr.
In Europe, Germany’s Wintershall Dea is also betting on the carbon management business.
The company is evolving “from the leading European independent gas and oil company to a leading European independent gas and carbon management company”, COO Dawn Summers said during a recent strategy update. “CCS is safe and crucial for the fight against climate change,” she added.