Today’s Key Takeaways: Climate advocates pushing net zero not making much progress – global demand for fossil fuels remains strong. Who hires in low oil & gas price environments? NASA: mining the moon within 10 years. Opinion: Republicans must embrace CCUS.
NEWS OF THE DAY:
Fossil Fuels Remain Strong in 2022 Globally, Despite Increases in Renewable Energy
Institute for Energy Research, June 28, 2023
In 2022, fossil fuels accounted for 82 percent of global energy consumption, up 1 percent from 2021, as record renewable energy growth did not shift the dominance of fossil fuels, according to the UK-based Energy Institute, who, with consultancies KPMG and Kearney, put together what was BP’s statistical review of world energy since the 1950s. Renewable capacity increased by a record 266 gigawatts led by solar, greenhouse gas emissions increased by 0.8 percent reaching a new high of 39.3 billion metric tons of carbon dioxide equivalent, coal made up 35.4 percent of power generation, and renewables, including hydroelectric, accounted for about 7.5 percent of global energy consumption and 12 percent of global power generation, taking away from nuclear, which fell 4.4 percent, despite not emitting greenhouse gases.
Oil Production and Demand
Global oil consumption increased in 2022, rising by 2.9 million barrels per day to 97.3 million barrels per day, a smaller increase than was seen between 2020 and 2021, but remained 0.7 percent below 2019 pre-COVID levels. Most of the growth in oil consumption came from jet fuel and kerosene, which grew by 0.9 million barrels per day, and diesel, which grew by 0.7 million barrels per day. Diesel and gasoline made up over half of total global oil demand. Demand for gasoline in 2022 was similar to pre-pandemic levels, while demand for naphtha, diesel, fuel oil and other oil products were above their pre-pandemic levels. Although aviation-related oil demand exhibited the strongest pre-pandemic recovery relative to 2021, it remained more than 1.7 million barrels per day below 2019 levels. Regionally, OECD and non-OECD consumption increased by roughly same amount–1.4 million barrels per day for OECD consumption and 1.5 million barrels per day for non-OECD consumption, as China was in its zero COVID status, dampening its demand.
Global oil production increased by 3.8 million barrels per day in 2022, with OPEC+ accounting for more than 60 percent of the increase. Among all countries, Saudi Arabia (1,182,000 barrels per day) and the United States (1,091,000 barrels per day), saw the largest oil production increases. Nigeria reported the largest decline in production (184,000 barrels per day) with production in Libya declining by 181,000 barrels per day.
Refining capacity increased slightly by around 534,000 barrels per day in 2022 driven by an increase in capacity in non-OECD countries.
Oil prices rose by about 40 percent, with Brent oil ending the year averaging around $101 per barrel in 2022, its highest level since 2013.
OIL & GAS:
Which Companies Actively Hire During Low Oil, Gas Price Environments?
Andreas Exarheas, Rigzone, June 28, 2023
Chad Spencer, the CEO of Houston headquartered Hazeltine Executive Search Partners (HESP), a member of the Sanford Rose Associates Network, has outlined which companies “tend to thrive and actively hire during low oil and gas price environments” in a statement sent to Rigzone.
Integrated oil businesses are one example, Spencer highlighted, dubbing them “a beacon of resilience”.
“Integrated oil companies, with their diversified operations spanning exploration, production, refining, and marketing, have consistently displayed resilience during challenging times,” Spencer told Rigzone.
“While cost-cutting measures may be implemented, these companies often prioritize strategic hiring in areas such as research and development, refining, and technological advancements,” he added.
“By investing in innovation and leveraging their long-term vision, integrated oil companies fortify their competitive advantage and position themselves for sustained growth even in low-price environments,” he continued.
National Oil Companies (NOC) were another example highlighted by Spencer, who noted that NOCs play a vital role in the oil and gas industry, “acting as stewards of their nation’s resources”.
“Despite the downturns, NOCs maintain a strategic focus on developing domestic reserves. Their hiring priorities typically revolve around critical roles related to field development, reservoir management, and infrastructure projects,” Spencer said.
“By nurturing and investing in local talent, NOCs ensure energy security and bolster economic stability, making them key players in times of industry volatility,” he added.
Spencer also flagged service companies as businesses that tend to thrive and actively hire during low price environments, describing them as “enablers of operational efficiency”.
“During low-price periods, exploration and production companies often seek cost-effective solutions to streamline their operations,” Spencer noted.
MINING:
Mining the Moon to lift off within ten years — NASA
Cecelia Jamasmie, Mining.Com, June 28, 2023
The US space agency (NASA) is looking to operate a pilot processing plant for lunar resources by 2032, as part of its planned Artemis missions, which will also take the first woman and first person of colour to the Earth’s natural satellite for the first time.
According to Gerald Sanders, a NASA scientist, the government body will initially look to quantify potential resources, including energy, water, and lunar soil, as a goal to attract commercial investment.
Exploring for minerals and metals, including iron ore and rare earths, as well as planning a trip to Mars will come later, Sanders told a mining conference in Australia.
NASA plans to build a permanent moon-orbiting base called Gateway, similar to the International Space Station (ISS). From there, the agency hopes to build a base on the lunar surface, where it can mine the resources required to fly the first astronauts to other planets.
The first customers are expected to be commercial rocket companies that could use the moon’s resources for refueling.
NASA will send a test drill to the Moon’s surface by the end of next week, with large-scale excavation activities scheduled for 2032.
No longer science fiction
After being considered mostly a science-fiction tale, governments have started implementing programs and legislation to join the race for space mining.
In 2015, former US President Barack Obama signed a law that grants US citizens rights to own resources mined in space. The ground-breaking rule was touted as a major boost to asteroid mining because it encourages the commercial exploration and utilization of resources from asteroids obtained by US firms.
Moon richer in metals than previously thought — NASA
Successor Donald Trump signed an order in 2020 encouraging citizens to mine the Moon and other celestial bodies with commercial purposes.
Russia’s space agency Roscosmos quickly condemned Trump’s move, likening it to colonialism.
Private initiatives to mine celestial bodies, including the Moon, have come, and gone in the last decade. Planetary Resources and Deep Space Industries were perhaps the most touted, but neither company arrived on any asteroids and were eventually acquired and rerouted to other endeavours.
Most recently, California-based AstroForge unveiled plans to test its own technique for refining platinum from a sample of asteroid-like material.
POLITICS:
Republicans Must Embrace CCUS Projects in Louisiana
Dan Eberhart, Real Clear Energy, June 27, 2023
Louisiana is known for its vibrant energy sector and vast industrial infrastructure and is uniquely positioned to lead the charge in carbon capture utilization and storage (CCUS) technology implementation. As CEO of Canary LLC, a drilling and production company in the energy sector, I know this firsthand, and I am incredibly proud of the jobs, services, and people at our locations in Lafayette and Shreveport. By supporting CCUS projects, Republicans can continue to support the oil and gas industry, economic growth, and energy independence.
Investing in CCUS technology fosters energy security. Louisiana has an abundance of natural resources, particularly natural gas, which powers our state and nation. By developing carbon capture infrastructure, the state can reduce dependence on foreign energy sources, strengthening America’s energy independence in the process.
That’s why the upcoming Environmental Protection Agency (EPA) hearing in Baton Rouge is so important. The EPA is considering granting our state permanent primacy over new Class 6 CCUS projects. Having primacy would mean Louisiana can join other states, like Wyoming and North Dakota, that regulate and maintain new CCUS projects and use the technology to grow their economies and support jobs. It would also allow Louisiana to continue its over 40-year history of primacy of underground storage projects instead of leaving it to a government agency in Washington.
As Republicans, we need to support CCUS projects in Louisiana and ensure that the EPA grants us permanent primacy. Not only will we support the oil and gas industry – including our national security – but Louisiana has proven that the state can oversee these projects.
We must embrace CCUS projects because they will strengthen energy security, drive technological innovation, and create well-paying jobs. This is an opportunity for Republicans to take the lead on economic growth, cleaner energy, and sovereignty for our state.
Dan K. Eberhart is CEO of Canary oilfield services and Managing Director and founder of Eberhart Capital.