Big Oil and COP28 Climate Cultists
A letter was recently leaked that had been distributed among the Organization of the Petroleum Exporting Countries (OPEC) and 10 other member countries of the OPEC+ coalition — all of which are attending the annual meeting of climate change alarmists otherwise known as COP28.
The letter calls on OPEC members to resist signing on to any deal at COP28 that calls for the eventual phaseout of fossil fuels.
Predictably, the letter triggered outrage among the conference’s climate zealots, who see using fossil fuels as the “sin” that is threatening to destroy the planet. “OPEC’s letter is outrageous,” complained Massachusetts Democrat Senator Ed Markey, who is attending the conference being held in oil-rich Dubai. “OPEC wants to talk about emissions, but not the source of the emissions.”
“It would be like the tobacco industry saying you can talk about lung cancer, but you can’t talk about cigarettes,” he huffed. “It’s outrageous. It’s preposterous.”
The nerve of oil-rich countries. Can you believe that when national economic stability relies on selling oil, those countries don’t want to go belly up by adhering to the pipe dream demands of a bunch of hypocritical climate cultists preaching dubious scientific claims as unassailable dogma?
The truth is that the only way for the phaseout of fossil fuels to be achieved both fairly and equitably is via the free market. The climate cultists have little genuine concern for the state of the planet, much less the state of humanity. Their vacuous claims don’t justify ending the use of fossil fuels because doing so would result in devastating consequences not only for first-world economies but especially for the developing world.
To put it simply, there is no climate “emergency” that justifies the type of “stop oil now” nonsense being pushed by global leftist elites at COP28.
If renewables were a legitimate new step up for energy production on a global scale that could supplant the oil industry in both energy output as well as being more economical, then there would be no need for COP28 countries to continuously trot out climate change agreements. There would be no need to virtue signal about “saving the planet.”
The reason whales still swim in the world’s oceans is not because of Greenpeace but because of the discovery of crude oil — black gold. The whaling industry died because crude oil was an abundant and cost-effective resource that allowed for the burgeoning of a new and cheaper energy-based economy.
When it comes to renewables, however, what they offer is much less than what the fossil fuel industry is already providing. Thus, in order to get the world off of fossil fuels, the climate cultists have to push alarmism and fearmongering about carbon emissions killing planet earth if we don’t transition now.
And when it comes to costs, the Left does yeoman’s work in trying to spin the claim that renewables are “actually” more cost-efficient than fossil fuels. A recent example of this comes from the International Energy Agency, which predicts that the expansion of solar and wind power will lead to falling energy prices when compared to maintaining existing coal-fired power plants.
Well, if their economic predictions are as accurate as their climate change modeling predictions, then we’ll stick with the cost of fossil fuel-powered energy, thank you. Furthermore, much of this predicted cost reduction is dependent on government tax credits. In other words, electricity bills will still go up, but perhaps less so because taxpayers are on the hook for the difference.
Finally, back to the first observation. In a free market economy, the energy technology that wins is what offers customers the most bang for their buck. The effort to demonize fossil fuels is all about creating the perception that fossil fuel-based reliable energy production should be jettisoned for a new “clean” energy that just doesn’t have the capacity to measure up. Yet it’s being sold as the “solution” to a climate change “problem” that has always existed and will continue to exist irrespective of any actions taken.
https://patriotpost.us/articles/102803-big-oil-and-cop28-climate-cultists-2023-12-12
***************************************************What climate crisis? America’s new fossil fuel boom as crude exports soar to record high
As diplomats convene at the United Nations’ COP28 climate change summit, fossil fuel production and consumption are hitting new highs, and tanker owners are in prime position to profit from rising trade flows.
The Biden administration is a leading proponent of decarbonization, yet the U.S. is pumping out record volumes of hydrocarbons. America is on track to be the world’s largest producer and exporter of natural gas this year, as well as the leading exporter of refined products and liquefied petroleum gas.
There are also big wins — for energy producers and shipowners, not decarbonization advocates — on the crude oil front.
The U.S. produced 13.2 million barrels per day (b/d) of crude oil in September, according to data released Thursday by the Energy Information Administration. That is the country’s highest monthly production level ever.
And not only is America producing more crude, it is exporting a larger share of the crude it produces, further boosting volumes aboard tankers bound for Europe and Asia.
Seaborne crude exports up 19% vs. 2022
Exports of U.S. crude were banned between 1975 and 2015. For 40 years, U.S. production could only be sold overseas if it was refined first, then exported as petroleum products.
The end of the ban dramatically increased market opportunities for U.S. production, thereby stimulating higher output — creating more business for oil companies and tanker owners.
That upward momentum continues. Seaborne crude exports are tracked by commodity intelligence provider Kpler. In January-November, its data shows that U.S. seaborne crude exports averaged 4 million b/d, an all-time high and up 19% year on year.
Exports in November averaged 4.45 million b/d, the second-highest monthly average on record, just slightly below the peak of 4.46 million bpd in March.
Volumes rise sharply to both Europe and Asia
The Panama Canal is wreaking havoc on many cargo supply chains, but it has virtually no effect on U.S. crude exports.
U.S. crude exports to Asia are loaded on very large crude carriers (VLCCs; tankers that carry 2 million barrels) via ship-to-ship transfers in the U.S. Gulf. VLCCs are too large to transit either the Panama or Suez canals; they use the Cape of Good Hope.
U.S. exports to Europe are shipped aboard Aframaxes (750,000-barrel capacity), Suezmaxes (1 million-barrel capacity) and VLCCs.
Since the invasion of Ukraine, Europe has hiked its purchases of U.S. crude to help offset banned Russian supply. According to Kpler data, an average of 1.83 million b/d of U.S. crude flowed to Europe in January-November, up 26% from the 2022 full-year average.
Europe’s share of total U.S. crude exports has risen to 46% this year compared to 37% in 2021, the year prior to the invasion, while Asia’s share is 41%, down from 47% in 2021.
“In volumetric terms, the story has been all about Europe this year,” Reid I’Anson, senior commodity analyst at Kpler, told FreightWaves. “Europe continues to grow increasingly reliant on U.S. energy — not just LNG [liquefied natural gas] but across the board.”
Despite the pull of Europe, U.S. crude exports to Asia have also continued to escalate. According to Kpler data, exports to Asia are averaging a record-high 1.65 million b/d year to date, up 15% from last year and up 26% from 2021.
Rising volumes to Asia translate into profitable business for VLCC owners. Brokerage True North Chartering counted 40 spot VLCC cargoes loading in the U.S. Gulf in both October and November, matching the prior monthly high in April.
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Norway's COP28 message: 'Leave no stone unturned' in gas exploration, Norway tells industry
Norway still has vast proven natural gas resources without development plans, the Norwegian Petroleum Directorate (NPD) said on Wednesday, urging exploration companies to find ways of producing it despite technological challenges.
As this year's COP28 U.N. climate talks focuses on the first global agreement to phase out fossil fuel use, Norway argues it will keep producing oil and gas, which it says has fewer emissions during production compared with others, as long as there is demand and output will naturally ebb from early 2030.
Natural gas resources equating to some 860 billion standard cubic metres (bcm) are trapped in so-called tight reservoirs with low permeability in Norwegian offshore territory, according to NPD estimates.
However, production from tight reservoirs is frequently only profitable if the development is based on tie-backs to existing infrastructure with a long production horizon, the NPD said in a statement.
But time is of the essence in producing these resources before the end of the lifetime of the infrastructure they are tied to, said Arne Jacobsen an assistant NPD director.
"We need to ensure that these values are not lost, and that the companies are doing enough to produce the difficult volumes as well," Jacobsen added.
Companies should work together and "leave no stone unturned" to determine if it is possible to produce remaining resources profitably with existing technology, he said.
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Residential solar industry is in danger of imploding
This $30 billion industry is built on a shaky foundation of cheap money, questionable accounting and aggressive claims for federal tax credits. With money no longer cheap, subsidies a matter of politics and swirling allegations of fraud, a collapse could be coming soon.
Sitting at a mostly empty 20-person conference table in his Houston headquarters, William “John” Berger, CEO of Sunnova Energy International, looks relaxed and confident. The top of his crisp white shirt is unbuttoned, and no strands of gray yet spoil his shock of black hair. At 50, this Texas-born Aggie engineer with a Harvard MBA has built Sunnova into the nation’s second-largest residential solar power developer, with 2,000 megawatts of generation on the rooftops of 390,000 homes. And yet, he quips, if you like cliffhangers, “you’ve come to the right place.”
Sunnova has lost $330 million on $722 million in revenue in the last 12 months. Its shares are trading around $10, off 80% from their 2021 high. Wall Street is nervous about its bonds: Its $400 million 2021 senior unsecured debt issue, maturing in 2026, initially paid 5.75%, but now yields 14%—high even for junk. But the big test, Berger says, will come if there’s a recession or difficulty raising money (which he fears more than high rates). In the worst case, he says, he could slash costs by 50%, stop seeking new business and fire himself.
The glory days for residential solar power in the United States weren’t that long ago. In 2022, a record six gigawatts of peak generating capacity were installed on 700,000 rooftops, bringing total residential solar power to 40 GWs—nearly enough to power Los Angeles and Philadelphia combined. The boom was partly fueled by falling prices for solar panels and inverters as more countries, including the U.S., jumped in to compete against China. Topping it off, in August 2022, President Biden signed the Inflation Reduction Act, an orgy of renewable energy subsidies which boosted the solar tax credit from 26% to 30% and extended it through 2032—meaning Uncle Sam is on the hook for maybe $8 billion a year for at least a decade.
Despite all this, the residential solar industry is in serious trouble. Sharply rising interest rates have sapped both growth in demand for new residential systems, which are typically financed, and the value of $21 billion in debt issued to install existing systems. High interest rates are what Sunlight Financial, a residential solar financier, blamed when it filed for bankruptcy in October. (It went public in 2021 via a SPAC.) Two days after Sunlight sought Chapter 11 protection, San Francisco–based Sunrun, the largest player in residential solar with annual revenue of $2.3 billion, said it was writing off $1.2 billion in goodwill, primarily from the $3.2 billion acquisition of Vivint Solar in 2020.
The interest rate spike is drawing attention to other problems in an industry built not only on cheap money but also on suspect accounting and a tax credit regime (born in 2005) that has invited aggressive—and in some cases fraudulent—claims. Sunrun, whose stock is off 90% from its 2021 high, faces continuing pressure from short sellers who allege it has claimed inflated tax credits. As Warren Buffett famously observed, “you don’t find out who’s been swimming naked until the tide goes out.” In emailed responses to Forbes, Sunrun defended all its practices as proper.
The shorts have some company. One industry whistleblower has told the IRS that inflated tax credit claims are endemic across the residential solar industry. The IRS isn’t talking, but the whistleblower’s attorney believes the agency is still investigating the man’s claims, which could eventually earn him a fat reward of 15% to 30% of any funds recovered.
Gordon Johnson, whose New York boutique equity research firm serves mostly short sellers, goes so far as to compare the residential solar industry’s current peril to the subprime mortgage debacle of 15 years ago: “It’s a debt Ponzi. They perpetually issue more debt to fund these projects that don’t generate the cash they say.”
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My other blogs. Main ones below
http://dissectleft.blogspot.com (DISSECTING LEFTISM )
http://edwatch.blogspot.com (EDUCATION WATCH)
http://pcwatch.blogspot.com (POLITICAL CORRECTNESS WATCH)
http://australian-politics.blogspot.com (AUSTRALIAN POLITICS)
http://snorphty.blogspot.com/ (TONGUE-TIED)
http://jonjayray.com/blogall.html More blogs
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Jim Hansen and his twin
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