SUPPORT US

Energy Security Forum Newsletter

ESF_Montage.JPG

PAST NEWSLETTERS

Main Takeaways for the week of April 20, 2022

Issues with raw material supplies are causing EV and wind turbine manufacturers to throw cold water over transition targets. Guyana mulls creating an NOC. U.S. natural gas pipelines supplied by the Permian may be at capacity by late 2023. Italy continues work in securing more natural gas supplies, from Egypt, Angola, and the Republic of the Congo. U.S. embraces more nuclear, with DoD support for microreactors and Infrastructure Bill support for existing nuclear plants. Japanese companies propose new ways to convert old LNG carriers into LNG production facilities.


Featured Article

 “I was honored to visit Alberta, Canada with Premier Jason Kenney to discuss the importance of strengthening North America’s collective energy security. Canada, like the United States, is blessed with abundant natural resources that can be used to eliminate our dependence on Russian and Chinese energy and critical mineral supply chains. A strong North American Energy Alliance can fuel worldwide economic development and allow us to meet our shared climate goals while significantly reducing Russia and China’s unwarranted influence on the global community,”

Quote from United States Senator Joe Manchin


Weekly Energy Chart

From The United States ended the winter with the least natural gas in storage in three years, by the EIA

april_20_2022.jpg


Headlines

Global Petroleum Liquids 

Global LNG 

Global Coal 

  • No significant developments

North American Energy Infrastructure 

China

Russia

  • No significant developments

Europe

India

U.S. - Canada Energy Relations 

  • No significant developments

Middle East Energy Geopolitics 

  • No significant developments

Central Asia Energy Geopolitics 

Canadian Oil and Gas 

Electricity 

Nuclear 

Renewables

Energy Transition Metals

Hydrogen 

  • No significant developments

Biofuels


Quotes

It is unclear if truly indigenous Chinese innovation can take the baton and drive future growth. Firms that have innovated have frequently been the target of reasserted state control, for fear of independent actors. Other firms are building out a massive technology base, but only with support and subsidies from the state, which calls into question how efficient they are at research and development and how much longer the state can afford to support them. No doubt, given the effort the CCP has put into industrial policy, there will be successes. But as a system, Chinese innovation funding is underperforming.

From The Age of Slow Growth in China, by Danial H. Rosen for Foreign Affairs

 

“I was honored to visit Alberta, Canada with Premier Jason Kenney to discuss the importance of strengthening North America’s collective energy security. Canada, like the United States, is blessed with abundant natural resources that can be used to eliminate our dependence on Russian and Chinese energy and critical mineral supply chains. A strong North American Energy Alliance can fuel worldwide economic development and allow us to meet our shared climate goals while significantly reducing Russia and China’s unwarranted influence on the global community,”

Quote from United States Senator Joe Manchin

 

Derivative hedges for firms that are long the underlying commodities are typically known as offsetting “short” positions—that is, the derivative position protects against a commodity price decline. These hedges, however, have liquidity implications for firms using them. Specifically, while the two positions net out in an economic sense, the cash flows aren’t offsetting. For example, a commodity trading firm may buy a physical commodity and then also expend cash on a derivative hedge against falling prices. However, if commodity prices rise, the derivative position taken to guard against a price decline loses money. Margin calls from the derivative counterparty may follow, requiring that the trader/producer provide additional funding of the hedge and further draining cash.

From Commodity Financing Markets Shaken by Russia Invasion; Monitoring for U.S. Financial Stress, by Jill Cetina, Matthew McCormick and Pon Sagnanert for the Federal Reserve Bank of Dallas

 

There are a number of reasons this supply gap has emerged. One important explanation—and one that continues to play a role in 2022—is the inability of some OPEC+ members to increase production to take advantage of their growing quotas. These countries are bumping into capacity constraints for several reasons, including infrastructure issues and the difficulty of attracting sufficient investment to offset production declines at existing wells. Angola is an example. Its quota in February 2022 was 1.42 mb/d. However, Angola’s maximum capacity is 1.19 mb/d, according to IEA estimates. This supply gap will only worsen in coming months, as Angola’s quota will eventually reach 1.53 mb/d, the country’s October 2018 output according to OPEC.

From Capacity Constraints Drive the OPEC+ Supply Gap, by Lutz Kilian, Michael D. Plante and Kunal Patel for the Federal Reserve Bank of Dallas

 

Another set of assumptions that have not fared well during the war are the concepts of “energy independence” and the ability of the United States to counter Russia’s weapon with its own weapon. The United States is energy independent—at least in the way people measure independence, which is to say that the United States is a net energy exporter. Being a net exporter does nothing to insulate the United States from the shocks of the global oil market. This is not a surprise. But for people who think producing more oil is a way to avoid oil shocks, this crisis could be a correction of sorts. Or it should be.

From The Energy Weapon—Revisited, by Nikos Tsafos for the Center for Strategic and International Studies

 

In that sense, carbon has emerged as an intriguing new commodity, but with some curious aspects. Emissions from a flue stack can be highly concentrated, but those from an oil field can be hugely dispersed. As a relatively new commodity type, and only recently with a financial incentive, emissions have not to date attracted the kinds of investments in measurement methodology, measurement tools, and analytics, leading to an inadequate understanding of the scale of the problem (or the opportunity). Even standards for reporting are still a work in progress.

From Carbon is Now a Commodity Too Valuable to Overlook – Here’s Why, by Geoffrey Cann for EnergyNow.com


Showing 1 reaction

Please check your e-mail for a link to activate your account.
SUBSCRIBE TO OUR NEWSLETTERS
 
UPCOMING EVENTS

CONFERENCE
Annual Defence Procurement Conference

Ottawa, Ontario

October 25, 2022

SEARCH
EXPERTS IN THE MEDIA

Oil to Remain Above $80 Even With a Recession

by Business Desk (feat. Amrita Sen), Global Herald, July 5, 2022

Sweden, Finland entry to NATO ‘not done deal,’

by Heather Hiscox (feat. Andrew Rasiulis), CBC News, July 5, 2022

Exclusive-China plans $75 billion infrastructure fund to revive economy

by Xiangming Hou and Kevin Yao (feat. Amrita Sen), Reuters, July 4, 2022

À long terme, l’avantage est toujours à la Russie

by Violette Cantin (feat. Ferry de Kerckhove), Le Devoire, July 4, 2022

Pan-Canadian Policy Table

by Alain Gravel (feat. Jean-Christophe Boucher), Ici Radio Canada, July 2, 2022

La place du Canada sur la scène internationale

by Hugo Lavoie (feat. Jocelyn Coulon), Tout un Matin, July 1, 2022


LATEST TWEETS

HEAD OFFICE
Canadian Global Affairs Institute
Suite 1800, 150–9th Avenue SW
Calgary, Alberta, Canada T2P 3H9

 

OTTAWA OFFICE
Canadian Global Affairs Institute
8 York Street, 2nd Floor
Ottawa, Ontario, Canada K1N 5S6

 

Phone: (613) 288-2529
Email: [email protected]
Web: cgai.ca

 

Making sense of our complex world.
Déchiffrer la complexité de notre monde.

 

© 2002-2022 Canadian Global Affairs Institute
Charitable Registration No. 87982 7913 RR0001

 


Sign in with Facebook | Sign in with Twitter | Sign in with Email