Today’s Key Takeaways: Romania makes large crude oil discovery. Rate cut leads to rising oil prices. Surge in natural gas and renewables this summer. Killing another domestic mining project. Climate policies make left sweat 2024.
NEWS OF THE DAY:
OMV Petrom makes largest crude oil discovery in decades
Reuters, June 13, 2023
Romanian oil and gas group OMV Petrom (ROSNP.BX), majority-controlled by Austria’s OMV (OMVV.VI), said on Tuesday it discovered new crude oil and natural gas deposits equal to about three quarters of its overall 2022 production.
The deposits are the largest crude oil discovery OMV Petrom has made in decades, it said, and were found in southern Romania holding over 30 million barrels of oil equivalent (boe) of recoverable resources.
“The new discoveries will contribute to reducing the decline of our production and to the continuity of the supply of essential products for the economy,” said Cristian Hubati, a company board member responsible for exploration and production.
The discoveries were in three areas, with the largest in the Verguleasa area that is near existing production, part of a strategy of exploring near infrastructure already present.
The find comes as the company gears up for a final investment decision on a large Black Sea offshore gas project together with state owned gas producer Romgaz .
Oil prices rise 3% after China rate cut
Stephanie Power, Reuters, June 13, 2023
- China cuts short-term borrowing costs to support recovery
- Market rebounds from steep losses on Monday
- POLL-US crude stockpiles seen down last week
NEW YORK, June 13 (Reuters) – Oil prices climbed 3% on Tuesday, recovering from steep losses the previous session, after China’s central bank lowered a short-term lending rate for the first time in 10 months.
The rate cut, aimed at adding momentum to a hesitant post-pandemic recovery in the world’s second-largest economy and biggest crude importer, is likely increase oil demand.
Brent crude futures climbed $2.18, or 3%, to $74.02 a barrel by 11:34 a.m. EDT (1534 GMT). U.S. West Texas Intermediate (WTI) crude was up $2.04, or 3%, at $69.16 a barrel.
Natural gas, renewables set to surge this summer, feds say
Abby Shepherd, ENERGYWIRE, June 12, 2023
Solar and wind are expected to dominate new capacity as fuel costs give a boost to natural gas.
Renewable energy and natural gas use are expected to increase significantly this summer, reducing dependence on coal-fired power plants, the U.S. Energy Information Administration said last week.
EIA estimated that 15 percent less coal-fired generation will be online this June, July and August compared to the same period last year. Meanwhile, natural gas will remain the main fuel source in the power sector this summer, with generation increasing by 3 percent.
“Additional natural gas-fired generating capacity and favorable fuel costs are the primary drivers” of growth in the fuel’s use, EIA said.
The summer projections come as an E&E News review shows that wind and solar generated more electricity than coal through May, a first for a five-month period. Last week, the Solar Energy Industries Association also reported that solar had its best first quarter in history, despite ongoing supply chain challenges.
This summer, solar and wind are expected to continue dominating the country’s new generating capacity, according to EIA. The agency projected that wind generation will be 7 percent higher than the previous summer. Solar power is projected to be 24 percent higher. In February, EIA estimated that solar capacity this year will increase by 7.7 gigawatts in Texas and by 4.2 gigawatts in California.
With a new reactor opening at the Vogtle nuclear power plant, EIA also estimates nuclear generation will increase by 4.5 terawatt-hours this summer.
According to federal data, about 11 GW of U.S. coal capacity retired between June 2022 and May 2023.
Biden Revokes Permit for the NewRange Copper Nickel Mine
Institute for Energy Research, June 12, 2023
The Biden administration killed another domestic mining project in the largest copper and nickel find in the world, by revoking a Clean Water Act permit, previously granted by the U.S. Army Corps of Engineers in the mineral-rich Duluth Complex of northeastern Minnesota. The government claims that the permit did not comply with the water quality standards set by a sovereign downstream tribe, the Fond du Lac Band of Lake Superior Chippewa. The minerals are needed for the production of electric vehicles and their batteries, which is a part of Biden’s climate agenda. The political decision will make the United States more reliant on China, which lacks environmental and labor standards and uses minerals sourced by child labor. China dominates the battery chain for electric vehicles providing 80 percent of the processed minerals. The Biden administration’s decision highlights the need for permitting reform to limit lawsuits and modernize the permitting process.
- The Biden Administration’s latest action against mineral mines in the United States is the revocation of a permit for a large copper/nickel deposit in Northeastern Minnesota.
- Adverse decisions regarding U.S. mining projects by the Biden administration comes at the same time that it is seeking to transition the U.S. energy system to “green” technologies highly dependent on them.
- China is the world’s predominant supplier of critical minerals and Biden’s actions will increase that dominance.
- The United States is 4 times more dependent upon China’s minerals and their processing than it was on the Middle East at the peak of its oil dependency.
Biden’s climate policy makes the left sweat 2024
Jael Holzman, Andrew Freedman, Axios, June 13, 2023
Joe Biden’s critics in the climate movement fret he could face enthusiasm problems with climate voters and young people for backing fossil fuel projects.
- The Biden camp and its defenders attest the president’s achievements, including the biggest climate law in U.S. history, make up a sterling record compared to a GOP that is routinely targeting low-carbon investments.
Driving the news: Biden shepherded new laws benefiting low-carbon energy over the last year, including the Inflation Reduction Act, which is already driving public and private sector money into the renewables sector.
- He recently fought back a GOP attempt to rescind that law’s climate programs through a debt ceiling deal, banned drilling in some places and proposed a new power emissions rule.
- But Biden also has backed more LNG exports, citing the war in Ukraine, and approved federal oil and gas permits after pledging to ban new permitting as a candidate.
- And he’s pushed forward the Willow oil project in Alaska and the Mountain Valley pipeline in the Appalachian region, in response to bipartisan pressure from lawmakers.
- This energy policy approach has won some praise but also invited protests at recent events with administration officials, and criticism from some of the climate movement’s biggest figures.
The intrigue: Leah Stokes, a political science professor at the University of California at Santa Barbara who helped Democrats craft their signature climate law, acknowledged to Axios that “multiple things can be true” — Biden’s the “best climate president” but it’s “still not enough.”
- However, Stokes said, the “fact is that President Biden will by far be the better candidate on climate change in the 2024 election.”
Between the lines: Some climate advocates make the case that Biden should be more aggressive against the continued use of fossil fuels, or he’ll dampen voter enthusiasm on the left.