Tuesday, July 05, 2022

European Commission Backs Norway's Offshore Oil and Gas Industry

In a remarkable shift in tone, the European Commission is expressing strong support for offshore oil and gas E&P off Norway, reflecting the rapid change in EU energy policy after the Russian invasion of Ukraine.

The EU is a major consumer of oil and gas, but it is not [known for encouraging more production as a matter of public policy. Historically, the European Commission has emphasized the bloc's intent to reach net-zero emissions in the long term rather than its plans to secure a supply of natural gas in the short term. Denmark, the EU member state with the largest offshore oil and gas sector, has even pledged to phase out E&P altogether by 2050.

But Europe's rapid disconnection from Russian energy is prompting a reorientation of priorities, particularly for pipeline natural gas, which is logistically difficult to replace. This is an urgent question ahead of the 2023-24 winter heating season: Russian state-owned energy company Gazprom has partially or fully cut gas supplies to customers in 12 EU countries, including a sharp 60 percent reduction in flow on the Nord Stream pipeline to Germany. The constriction of supply is driving up prices, and the benchmark Dutch TTF natural gas futures contract is up 300 percent year-on-year.

In this context, politically reliable Norwegian natural gas is most welcome in the EU. Norway has been producing gas at a high volume since the start of the year, and could supply about 100 TWh of extra gas (about six percent of annual EU imports from Russia) over the span of 2022.

The European Commission and the Norwegian government have announced plans to strengthen energy ties and promote offshore development for the long term. "The EU supports Norway's continued exploration and investments to bring oil and gas to the European market," said the EC and Norway in a joint statement. "Norway has significant remaining oil and gas resources and can, through continued exploration, new discoveries and field developments, continue to be a large supplier to Europe also in the longer term beyond 2030."

The statement noted that Norway's offshore sector has very low emissions from production activity, less than half of the global average. This makes Norwegian oil and gas more compatible with Europe's climate objectives than comparable supplies from elsewhere - notably the supplies from Russia, the world's leading emitter of methane.

The parties "agreed to step up cooperation in order to ensure additional short-term and long-term gas supplies from Norway," and to work together on renewables in the long term.


Biden 's green strategy is in complete collapse, at home and globally

The G-7 meeting in Germany has made at least one key point absolutely clear: President Biden 's so-called energy transition to renewable fuels is a complete failure. Not just in the U.S.: Globally. An utter failure.

In Europe, countries are talking renewables, but they are also reopening coal plants. That 's because they can 't get enough Russian oil and gas supplies or what they can get is too expensive, or both.

Austria, Germany, Italy, and the Netherlands ' all are reopening coal plants. Their so-called green strategies? Shoved aside.

They made a transition alright: Back to the worst carbon polluters. The president of Nigeria, which is a big oil and gas producer, is berating the Europeans for thinking renewables will pave the way to industrial prosperity.

European Brent oil is running around $115; West Texas crude is about the same. Gasoline just under $5 is causing widespread political backlash and threatens economic recession. Mr. Biden 's green strategy is in complete collapse.

Most regrettably, the guy with a smile on his face is Vladimir Putin. The sanctions strategy has backfired on the U.S. and NATO. Mr. Putin 's making money hand over fist.

His ruble currency is at a pre-war high; it 's the pound and the euro that have been sinking out of sight. Mr. Putin has found new customers: China and India.

India 's Russian imports have moved to a million barrels a day in June from 30,000 barrels a day in February. When the Indian finance minister was asked why he 's doing this, and whether he 's undermining the western defense of Ukraine, he responded simply: "Everyone else is buying Russian oil, why shouldn't we? "

Hate to say it, but he 's right. I hate to say this, but Mr. Putin has outsmarted the West.

If Mr. Biden had been willing to face reality and pull back on his war against fossil fuels by waving all his regulations and restrictions and sanctions on fracking, pipelining, refining, and so forth ' if he had shown some flexibility in the face of skyrocketing energy prices and a political revolt at home ' then it 's quite possible that energy supplies would be much greater today for all components and distillates. Prices also would be lower, or at the very least futures prices would be significantly lower.

All of which would 've added relief to the West 's energy crisis. Lower prices would 've hurt Vladimir Putin 's war machine financing. But Mr. Biden was stubborn, self-centered, and politically narcissistic. He has utterly failed to help the NATO coalition or to help ordinary working people.

All of this could have been mitigated, if not avoided, but for his stubbornness. Clinging to this idea of a 100 percent transition to renewables was craziness.

Now comes the craziest part of all. After gimmicks like a gas tax holiday, running down our strategic petroleum reserves (which are there for national security, not political price-fixing), and even debit card subsidies for gasoline, here 's the latest: Price controls. Yup, price controls. I 'm surprised it took the socialists so long to get there.

Secretary Yellen is leading the way. The distinguished former Fed chairwoman who is married to a Nobel Prize winner is touting price controls on Russian oil. Really?

Wait: It gets better.

President Macron wants to go really big. He wants price controls on all oil producers. Russia, the Saudis, OPEC, probably Venezuela, maybe Iran. Who knows? Probably, his world oil price controls would mean ' you guessed it ' price controls on American oil, too. Right?

That's only fair. Global oil price controls. Not on solar or wind, but on fossil fuels.

As I shut my eyes and lean back, I see Richard Nixon, Jerry Ford, Jimmy Carter. "Whip inflation now " ' on a grand scale. It 's a global race to socialism. Never mind the obvious shortages, energy wars, or just plain stupidity of repeating an age old socialist mistake.

Then again, when you look around that G-7 table ' Messrs. Biden, Trudeau, Scholz, Macron, Draghi, and Johnson ' I don 't see much of a commitment to free-market capitalism. I don 't see any Reagans. I don 't see any Thatchers. I don't see Milton Friedman. I don 't see Adam Smith. I don't see the signers of the American Declaration of Independence.

Oh, wait a minute, that 's tomorrow's special. This is just a tease. Tomorrow 's theme is, "Restoring Life, Liberty and the Pursuit of Happiness. "

Works for me. Because Americans don 't see much life, liberty, or happiness right now. But I know a way out. And, yes, the cavalry 's coming. Woke, big-government socialism is dead.


Beware existential angst of the climate alarmists

The term existential was popularised in the 20th century by French philosopher Jean-Paul Sartre, who believed that because there was no god, existence was absurd, life had no meaning and the individual therefore faced an existential crisis. In psychology, existential crises are inner conflicts characterised by the impression that life lacks meaning.

But in the climate wars a word that once had settled harmlessly in the realm of philosophy has become weaponised, wheeled out by climate catastrophists to herald imminent doom. Presumably it is a humanist alternative to a moral issue. In Australia the term increasingly is used "in terrorem ", as the lawyers say, to frighten the pants off the naive and the innocent. But what do the scaremongers mean by existential?

Are we talking now (clearly not), soon (whatever that means) or maybe someday, one day (when most of us will be long gone)? Does it mean the end of days, with the whole world wiped out, On the Beach style, or only in some more vulnerable areas?

The favourite scary example is rising tides among Pacific Islands, most of whose leaders seem to prefer immediate handouts for general budgetary purposes rather than practical assistance in mitigation. We are meant to assume the oceans will rise quickly and no one will respond "“ the old extrapolation trick.

Holland was once a major colonial power and The Netherlands is still a prosperous country. In the 14th century, the combined effects of soil subsidence and rising sea levels meant that without intervention it would soon be under water so it built a system of dykes that has survived to this day.

Technology is infinitely more sophisticated these days, so instead of wallowing in existential despair we should look for similar ways to solve the problem.

The alarmists, happy to label as climate deniers anyone who questions their theology, never explain the source of their dire apprehensions. The Intergovernmental Panel on Climate Change, the most authoritative body on the subject, nowhere mentions an apocalyptic scenario. Real experts do not blame climate change for increases in frequency or intensity of extreme weather events.

More than 20 years ago Prince Charles and Al Gore told us it was five minutes to midnight "“ that sounds like existential to me. Yet we are all still here. Tim Flannery finds plenty of time to publish books on the subject but never has time to argue the case publicly. He and his ilk can never find time to explain that whatever Australia does will make no difference to what they claim to be a global issue. Some alarmists can 't even use words to argue their case.

Blockade Australia seems to think criminal activity such as closing the Sydney Harbour Tunnel is persuasive. They want Australia to lead the way, to its economic detriment "“ the ultimate example of a self-inflicted wound from virtue signalling. Rhetorical overkill has proved remarkably successful in public debate. It is often said that in diplomacy words are bullets "“ the same could be said of politics, where extreme language can be influential. Words have power "“ they shape our beliefs, drive our behaviour and provoke emotional responses from others.

Most people don 't have time to research issues, let alone complex and confusing ones such as climate change. They therefore become vulnerable to doomsday proclamations. Ordinary citizens knew what was meant by global warming but when it seemed the planet had stopped warming for a period the topic became climate change, about which everyone could be concerned.

In September 2019 a survey of 30,000 people around the world found 48 per cent believed climate change would make humanity extinct. It seems people have an inherent need to worry about the future without necessarily relying on any serious factual information.

American Michael Shellenberger is a self-described environmental activist for 30 years and a compelling author. But he is fed up with "the exaggeration, alarmism and extremism which are the enemy of a positive, humanistic and rational environmentalism ".

He rebuts attempts in Australia to blame climate change for bushfires, which he largely attributes to human activities. In his view, "Climate alarmism, animus among environmental journalists and smoke that was unusually visible to densely populated areas appear to be the reasons for exaggerated media coverage ". He is concerned that the people who are the most apocalyptic about environmental problems tend to oppose the best and most obvious solution of dissolving them.

Remember that in 2009 the Greens opposed Kevin Rudd 's attempt to legislate a price on carbon, presumably because they wanted to continue to "enjoy the problem " and milk it for all it was worth. To date the Greens and teals have shown no concern for rising fuel and energy prices for consumers. If they are to become serious players they could start by urging Daniel Andrews to allow fracking, but this is unlikely because they need an energy crisis to rail against and remain relevant. They will much prefer to rely on inflammatory language so we should all be on our guard.


EVs may soon threaten the security of the power grid

If Australians start buying electric vehicles in big numbers, the power grid will come under enormous stress, with EVs potentially increasing demand by between 30 and 100 per cent, according to recent trials conducted by Origin Energy.

If thousands of EVs are being plugged in during peak evening periods, the effects could be disastrous, unless Australian households start using smart-charging devices, the research found.

The trials, conducted by Origin Energy and independent Federal Government Agency the Australian Renewable Energy Agency (ARENA), studied the charging patterns of 150 EV drivers with smart chargers installed in their homes to better understand how behaviours may impact the grid.

Smart chargers, which currently cost between $2,000 and $3,000, allow EV owners to automatically charge their vehicles when electricity prices are lower, or when solar power is being generated, reducing household costs and taking pressure off the grid during peak periods.

Chau Le, general manager of e-mobility at Origin, believes smart chargers will be an essential tool in reducing the risk of blackouts once EVs enter a phase of mass adoption.

“At the moment, our electricity grid is not coping at all. If we were to add another 30 per cent of peak load to the grid during those periods of high prices and constraints on the network, this would require significant investment to increase capacity,” Ms Le said.

The research found that 30 per cent of EV charging was done in the peak period between 3pm and 9pm.

In one trial, participants were given a 10-cent-per-kilowatt-hour credit on their electricity bill for charging off-peak, which reduced charging during the peak times by 10 per cent.

A second trial was run where charging was limited to mostly off-peak periods, which saw evening peak usage for charging those EVs reduced to just six per cent.

A third trial is now underway. It will see Origin work with several power distributors to investigate whether or not upgrades to the grid are required based on the findings of the first two trials.

Darren Miller, chief executive of ARENA, says the agency funded $840,000 of the $2.9 million trial, due to concerns about what may happen to Australia’s power grid once EVs become the dominant mode of transport.

“If we all end up having EVs and charging them at exactly the same time, say 6pm to 9pm on weeknights, then no doubt the distribution system won‘t be able to cope with that,” said Mr Miller.

“Extra investment will have to be made, and that will cost all of us on our electricity bill, too, ultimately.

“We can make sure we don‘t have to invest an extraordinary amount in the distribution system, the poles and wires outside our homes and businesses, to accommodate that extra load.”

While current EV sales are hovering around 2 per cent of the Australian car market overall, the Labor Government has previously stated that its climate and energy policy aims to have nine out of 10 new cars sales being EVs by 2030.

Recent research from the Reliable Affordable Clean Energy for 2030 Cooperative Research Centre (RACE 2030) claims that even if that number reaches eight in 10 by 2030, it will still double the current demand on the grid.

The Australian Energy Market Operator (AEMO) has also weighed into the debate via a new report that states that “all actionable projects should progress as urgently as possible”, including $12 billion of investment in new transmission lines, if the grid is to remain secure over the next decade and reach net zero emissions by 2050.


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)


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