“Assumptions, Guesses and Ambiguities”. 2050 All Renewables-Not Gonna Happen.

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Today’s Key Takeaways: Oil and gas drilling technology works for geothermal. Can carbon offsets boost Alaska’s economy? Global natural gas demand is stable. Safety nets for gallium and germanium. Report skeptical of EV climate benefits.


Fervo Reaches Milestone Using Oil Drilling Tech for Geothermal
Rocky Teodoro, Rigzone, July 19, 2023

Houston-based geothermal startup Fervo Energy has successfully completed a well test to confirm the commercial viability of using oil and gas drilling technology for geothermal energy, the company said in a news release Tuesday.

The 30-day well test, a standard for geothermal, achieved a flow rate of 63 liters per second at high temperature that enables 3.5 megawatts (MW) of electric production, setting new records for both flow and power output from an enhanced geothermal system, according to the release. The test was done at Fervo Energy’s full-scale commercial pilot, dubbed Project Red, in northern Nevada.

“By applying drilling technology from the oil and gas industry, we have proven that we can produce 24/7 carbon-free energy resources in new geographies across the world”, Fervo CEO Tim Latimer said. “The incredible results we share today are the product of many years of dedicated work and commitment from Fervo employees and industry partners, especially Google.”

According to the news release, Fervo and Google signed the world’s first corporate agreement to develop next-generation geothermal power in 2021, aiming to power Google’s Cloud region in Las Vegas with an “always-on”, carbon-free resource that will reduce the company’s hourly reliance on fossil fuels.



Can Carbon Offsets Boost Alaska’s Waning Oil Economy?
Felicity Bradstock, OilPrice.Com, July 18, 2023

  • The Alaskan economy, heavily reliant on oil production revenues, has been faltering due to the decline of the oil industry, prompting exploration of alternative energy projects.
  • Governor Mike Dunleavy has signed legislation to launch the state’s carbon offset market, allowing Alaska to sell carbon credits to carbon-emitting companies.
  • Alaska’s move mirrors other governments’ carbon offset schemes, aiming to encourage decarbonisation and fund green energy operations.

While Alaska is not yet ready to give up on oil and gas, it has faced years of difficulties in getting new projects off the ground, which is making the state government more open to alternative energy projects. Despite being slow to support the green transition, Alaska is slowing beginning to understand the need to diversify and is expected to do so through a carbon offput scheme, which could bring in new revenue. 

Alaska’s economy has been faltering due to failures in its previously strong oil and gas industry. The state government and several oil companies have been fighting to get the go ahead on several exploration projects for years, having repeatedly faced hurdles.

Finally, in May this year, the ConocoPhillips Willow project was granted federal approval, meaning that drilling on Alaska’s North Slope can go ahead. The area is thought to hold around 600 million barrels of oil, but it could take years for this oil to reach the market following project development. Despite optimism around recent project progress, several years of oil production slowing down have left Alaska in a slump. 

Around 85 percent of Alaska’s state revenues come from oil production, making it more dependent on fossil fuel than any other state. However, its oil industry has been steadily declining over the last decade, falling from the top U.S. spot for production to below Texas, New Mexico and North Dakota. Alaska’s oil production in 2020 stood at around 448,000 bpd, the lowest level since 1976, and by 2022, Alaska’s oil output was similar to that of Oklahoma. This has had a significant effect on its economy, which performed worse than any other state in 2022, contracting by 2.4 percent. This has also had a negative impact on other sectors in the state, including infrastructure and education, with Alaska also ranking near the bottom for its Cost of Doing Business.


IEA: Global natural gas demand stable — for now
Mike Soraghan, Energywire, July 18, 2023

In the wake of Russia’s invasion of Ukraine, countries should cooperate “even more closely” to ensure security of natural gas, the International Energy Agency said.

Global demand for natural gas will likely stay flat for the rest of the year, amid the easing of market tensions created by Russia’s invasion of Ukraine, according to a new report from the International Energy Agency.

In its 2023 Global Gas Security Review, IEA predicts demand will resume moderate growth next year as economic activity expands and winter weather patterns return to normal. If natural gas storage sites keep filling at current rates in Europe, they could be nearly 100 percent full by mid-September, reducing the likelihood of volatility, according to the report.

But a particularly cold winter could still roil markets and drive-up prices, particularly if Russia fully halts all shipments to Europe, IEA said. Russia began cutting off natural gas supply to much of Europe last year, shortly after it invaded Ukraine, leading to massive supply shortages and an uptick in U.S. liquefied natural gas projects.

LNG has since become a baseload source of energy for Europe as it phases out the use of gas piped in from Russia, according to the IEA report. LNG’s share in total E.U. demand was nearly 35 percent in 2022, compared to an average of 12 percent from 2010 to 2019.

But last week, Rystad Energy reported that LNG from the United States is increasingly headed to Asia, as European prices continue to fall. And the IEA report warns that a colder-than-usual winter in Asia could spur fierce competition for gas, also driving up prices.

As the natural gas market transforms in the wake of the Russian invasion, countries need to coordinate more deeply on supply, possibly exploring new types of transactions, the IEA said. The agency’s report was released ahead of the 12th LNG Producer-Consumer Conference, which starts Tuesday in Tokyo and is organized by IEA and Japan’s Ministry of Economy, Trade, and Industry.

“Responsible producers and consumers must reconsider their approaches to supply security and flexibility, cooperating even more closely,” said Keisuke Sadamori, IEA’s director of energy markets and security. “Meaningful efforts are also needed to reduce the carbon footprint of gas supply chains, including through greater use of low-emissions gases. I look forward to discussing these topics with market players in Tokyo this week.”


Gallium, germanium supply safety nets – Metal Tech News
Shane Lasley, Metal Tech News, July 18, 2023

Technology metal brokers in the US and Germany say they have stores of both metals to meet tech needs following curbs on Chinese exports.

Technology metal brokers in the United States and Europe are providing safety nets for companies seeking reliable supplies of gallium and germanium as global supply disruptions loom.

Earlier this month, China announced that starting on Aug. 1 it will be placing government-controlled restrictions on the exports of this pair of semiconductor metals that are key ingredients in next-generation smartphones, telecommunication networks, solar panels, quantum computers, and an array of other high-tech products.

While both metals are critical to the global technology sector, manufacturers are most concerned about shortages of gallium, due to China’s dominant position when it comes to global supply.

According to the U.S. Geological Survey, China supplied 98% of the world’s gallium in 2022 – Russia came in second at around 1%. The germanium supply chains are opaque, but USGS calculates that 54% of U.S. germanium imports last year came from China, with most of the rest coming from Germany, Belgium, and Russia.

China’s apparent near monopoly over gallium supplies has global technology manufacturing companies and governments scrambling for alternative supplies.

Reuters recently reported that the U.S. does not currently have any government stockpiles of gallium to fall back on, which makes the situation more troubling for high-tech manufacturers.

“Many companies are wondering whether their supply chains for raw materials will remain resilient once Chinese exporters have to go through a licensing process as of this August,” said Matthias Rueth, managing director of TRADIUM, a specialty metals trader based in Germany. “Industrial users without sufficient physical stockpiles of necessary materials may therefore face supply shortages.”



MANHATTAN INSTITUTE REPORT SKEPTICAL OF ELECTRIC VEHICLES: A new report from the Manhattan Institute disputes the climate and cost benefits of the U.S. push for electric vehicles adoption, saying that the push comes with many unknown variables—including a potential jump in consumer costs and additional strain on grids.

The study’s author, Mark Mills,asserted that greenhouse gas reductions from higher EV penetration rates are based largely on “assumptions, guesses, and ambiguities,” and that bans on ICE-powered vehicles could risk “draconian impediments to affordable and convenient driving and a massive misallocation of capital in the world’s $4 trillion automotive industry.” Read more on the study here.

From the Washington Examiner, Daily on Energy