Today’s Key Takeaways: Billions of dollars in oil production lost to war on American energy. OPEC to IEA – Stop setting global energy system up to fail spectacularly! A trio of LNG supply chain challenges. $1 trillion chasm in lithium battery supply chain. Congressional Carbon Tax supporters down to one?
NEWS OF THE DAY:
Price Tag for Biden’s War on Oil and Gas
Institute for Energy Research, September 14, 2023
- Oil prices are rising as U.S. production remains stunted from 2019 levels, despite prices 50 percent higher.
- Estimates are that the United States has foregone between 1.2 and 3.5 billion barrels of oil due to Biden’s policies.
- Biden has made it costlier to develop domestic oil, while reducing costs on heavily subsidized renewable energy and coddling petro-states where he has looked to for increased supplies.
Brent oil prices are holding around $90 a barrel and gasoline prices are headed back up to $4 a gallon due to President Biden’s anti-oil and gas policies. One study estimates that the United States would have produced between 1.2 and 3.5 billion more barrels of oil since Biden came into office if he not reversed President Trump’s pro-oil and gas drilling policies. The chart below shows high and low estimates for oil production if those policies had continued. The United States could have completely neutralized the OPEC and Russian voluntary oil output cuts of 1.3 million barrels a day now driving up oil prices. Instead, Biden policies are for net zero carbon or, in other words, net zero fossil fuels, which is an energy scheme that would impoverish America while pouring billions of dollars into the reserves of the Saudis and the Russians. Biden and the Democrats in Congress have provided at least 150 ways to hurt the productivity of the U.S. oil and gas industry with the most recent being the revoking of leases in the Arctic National Wildlife Refuge and proposing to place more prime oil and gas lands off-limits for drilling in the National Petroleum Reserve-Alaska. The value of the oil production lost due to this war on American energy and the reduced drilling ranges from $104 billion to $396 billion — so far.
OIL:
OPEC Slams The IEA Over Peak Fossil Fuel Demand Claims
Charles Kennedy, OilPrice.Com, September 14, 2023
Consistent data-based forecasts show that peak oil and other fossil fuel demand will not happen before 2030, as the International Energy Agency (IEA) claimed earlier this week, OPEC said on Thursday, dismissing the claims of the “beginning of the end of fossil fuels.”
Demand for oil, natural gas, and coal is nearing its peak, the head of the International Energy Agency said in an op-ed for the Financial Times on Tuesday, citing IEA research.
Noting that demand for oil and gas has been growing despite forecasts of peaks, Fatih Birol went on to say that “according to new projections from the International Energy Agency, this age of seemingly relentless growth is set to come to an end this decade, bringing with it significant implications for the global energy sector and the fight against climate change.”
The research, to be released in the IEA’s World Energy Outlook in October, suggests that even if governments do nothing more than they are already doing to curb the consumption of hydrocarbons, demand for all three of them will reach a peak within the next few years, Birol said.
In a rare rebuke to energy forecasters, OPEC issued a strong-worded statement on Thursday, saying that “It is an extremely risky and impractical narrative to dismiss fossil fuels, or to suggest that they are at the beginning of their end.”
“In past decades, there were often calls of peak supply, and in more recent ones, peak demand, but evidently neither has materialized. The difference today, and what makes such predictions so dangerous, is that they are often accompanied by calls to stop investing in new oil and gas projects,” the cartel said.
OPEC Secretary General Haitham Al Ghais also commented on the IEA’s projections and claims, noting that “Such narratives only set the global energy system up to fail spectacularly. It would lead to energy chaos on a potentially unprecedented scale, with dire consequences for economies and billions of people across the world.”
OPEC and its biggest members including Saudi Arabia have been warning for years that a rushed energy transition without security of conventional supply, and the underinvestment in the oil and gas industry, would lead to chaos and shortages of supply.
In response to the IEA’s claims today, OPEC also said, referring to how net zero policies would impact people’s lives,
“How much will they cost in their current form? What benefits will they bring? Will they work as hyped? Are there other options to help reduce emissions? And what will happen if these forecasts, policies, and targets do not materialize?”
GAS:
China’s LNG Buying Spree Threatens Global Gas Market Stability
Tsvetana Paraskova, OilPrice.Com, September 13, 2023
Fault at strike-hit Chevron Australia plant shuts 25% of output
Renju Jose, Lewis Jackson, Reuters, September 14, 2023
Freeport LNG Cancels 3-4 Cargoes Due to Outage, Now in 6th Day
Marcellus Drilling News, September 14, 2023
MINING:
Bridging the US battery supply chain chasm
Shane Lasley, North of 60 Mining News, September 13, 2023
There is nearly a $1 trillion chasm between where the United States’ lithium battery supply chain is today and where it needs to be by 2035 in order to build the envisioned green energy future where electric vehicles are charged with low-carbon energy. Roughly 40% of this investment will need to go toward ensuring there is a plentiful supply of cobalt, graphite, lithium, nickel, and other battery materials.
Simon Moores, CEO of Benchmark Mineral Intelligence and one of the world’s foremost authorities on lithium battery supply chains, has dubbed this wide abyss the “great raw materials disconnect.”
“A disconnect where the mine supply is going about half the pace of battery EV demand. And that gap is going to take a long time to bridge, it’s going to take more than this decade to bridge,” he said during the opening address of Benchmark’s Battery Gigafactories USA 2023 conference in Washington, DC.
Amongst the crowd listening to Moores’ impassioned battery supply chain speech were members of Li-Bridge, an alliance of America’s national laboratories and companies along the entire lithium battery supply chain that was assembled for the very purpose of bridging the rift that lies between today’s lithium supply chain realities and the clean energy future.
“Li-Bridge is optimistic that the U.S. industry can build sustainable competitive advantages, overcoming any comparative disadvantages the United States may have in the form of higher costs or a lack of critical mineral resources and enabling the U.S. industry to thrive without perpetual government support,” the public-private alliance penned in its Building a robust and resilient U.S. lithium battery supply chain report published in February.
POLITICS:
ROMNEY EXIT COULD MEAN GOP CARBON TAX SUPPORTERS DOWN TO ONE: Sen. Mitt Romney’s planned exit at the end of his term will be a major blow to GOP support for a carbon tax in Congress.
As far as we’re aware (please correct us if we’re wrong), the only other Republican in Congress to back a carbon tax is Rep. Brian Fitzpatrick of Pennsylvania, who has introduced a bill to impose a carbon tax that would fund infrastructure.
Romney has voiced support for a carbon tax at various points, saying at the end of last year that such a policy would “create a massive incentive for the private sector to innovate and to create innovations. Which will be low emitting, and low cost, and therefore will be adopted not just here, but adopted voluntarily in India and Brazil and China.”
Fitzpatrick, one of the most centrist members of the House GOP conference, represents a southeastern Pennsylvania district that Biden carried in 2022 and is a top target for Democrats next year.
From the Washington Examiner Daily on Energy