PAST NEWSLETTERS

Main Takeaways for the week of December 8, 2021

The EU energy crisis enters a new phase, as the threat of new U.S. sanctions on Russia cause natural gas prices to spike in Europe at the same time as electricity prices rise to new records and European demand for natural gas for home heating remains unexpectedly resilient. OPEC+ demonstrates confidence in oil market as worries about Omicron variant ease (perhaps too soon). Supply concerns for oil and gas and copper beyond 2022 are flagged by research organizations. Trans Mountain pipeline supplying British Columbia and Washington State reopens after flooding damage. Chinese firms plan to produce hydrogen electrolyzers at half competitor costs very soon.

CGAI Energy Security Forum News

We are pleased to inform our newsletter subscribers that the CGAI Energy Security Forum has formed a close partnership with Ontario Tech University’s Brilliant Energy Institute. You can read today’s press release about our partnership here.

With this partnership, the Energy Security Forum will deepen its involvement in and understanding of energy transition technologies and their energy security implications, including small modular reactors, hydrogen, and integrated energy systems. This partnership will also improve the CGAI’s footprint in the Greater Toronto Area, and expand its network to enable consistent connections between energy, foreign affairs, and policy experts. We aim to be not only the premier institution for energy security in Canada, but also a major voice internationally. This partnership with Ontario Tech University is a big step toward achieving this goal.

Featured Energy Article

Pursuing Canada’s COP commitments requires changing how energy decisions are made, by CGAI Fellows Monica Gattinger and Michael Cleland for Policy Options

Headlines

Global Petroleum Liquids

• Saudi Aramco raises official selling prices on heavy, medium, and light crude grades after OPEC+ declines to reduce output increases, indicating confidence in oil demand into 2022
• World Petroleum Congress starts in Houston, with US Deputy Energy Secretary warning that oil and gas companies must embrace energy transition or face financial failure
• Omicron is probably less severe than Delta, raising oil prices. However Omicron spreads fast, still hits unvaccinated, and 45% of global pop is unvaccinated, caution required
• The Ont. science table says early data from South Africa suggests vaccination protects against omicron-related hospitalization.
• International Energy Forum warns that price volatility, government regulations, diverging narratives about demand, and ESG confusion have depressed needed O&G investment

Global LNG

• Japan’s JERA retires four 600MW LNG-fired power plants, will replace with three new 650MW LNG-fired power plats
• Massive Shell Prelude FLNG evacuated after fire and electricity outage, cancelling several LNG cargoes and putting upward pressure on prices
• Several scheduled LNG shipments were canceled at the Prelude export plant in Australia due to a power issue
• United States set to have the world’s largest LNG export capacity in 2022 with total export capacity of almost 14 bcf/d

Global Coal

• Increased demand for coal from high natural gas prices leads to lowest U.S. coal stockpiles since 1978. EIA not worried due to healthy coal sufficiency measures

North American Energy Infrastructure

• Trans Mountain Pipeline restarts on December 5th, but fuel shortages in lower mainland persist. B.C. government will not yet lift fuel rationing

U.S. - China Energy Relations

• Commercial relationship between LNG supplier U.S. and LNG consumer China is strengthening ties between the two superpowers after tariff detente, according to Nikos Tsafos

EU – Russia Energy Relations

• Prospect of new U.S. sanctions on Russia over possible invasion of Ukraine causes European natural gas prices to jump
• Rosneft may begin exporting pipeline natural gas to Europe next year to meet EU Gas Directive competition requirements for Nord Stream 2. Like Gasprom, Rosneft is controlled by the Russian government
• Natural gas crunch is showing that while EU industrial demand for natural gas is elastic, demand for heating is highly inelastic, according to Ira Joseph

U.S. - Canada Energy Relations

• No significant developments

Middle East Energy Geopolitics

• Yemeni Houthis claim drone attack on Aramco facilities in Jeddah, underlining continued risks to Saudi Arabian oil infrastructure resulting from quagmire proxy war with Iran

Canadian Oil and Gas

• Exxon Mobil plans to achieve net zero GHG emissions from Permian production operations by 2030

Electricity

• Coal-burning Poland power demand exceeds supply on December 6, asks for help in supplying power from neighbors, prompting Sweden to fire up Karlshamn oil-fired plant
• In the absence of new transmission, energy storage requirements of 8-10 TWh may be required in the U.S. to achieve electricity decarbonization, according to Venkat Srinivasan
• European energy crunch spreads to long-term electricity markets, with both French and German year-ahead prices rising to records

Energy Minerals

• International Copper Study Group expects a 328,000 mt copper surplus in 2022 due to new mines and increased copper recycling, before turning to structural deficit

Hydrogen

• Chinese firms rapidly building hydrogen electrolyzer manufacturing capacity, formulating plans to produce electrolyzers at half the cost of other suppliers
• Kogas plans three hydrogen production plants in South Korea to achieve 1.04 million mt/year of hydrogen production per year. More than half grey, plus blue and green hydrogen

Nuclear

• Japan’s Ikata 3 nuclear reactor comes back online after 2 years of being shut down. Of Japan’s 33 operable reactors, Ikata 3 is one of only 8 currently in operation
• The Ikata No. 3 nuclear reactor in Japan is back online after being shut for nearly 2 years
• Ontario Power Generation announces that GE Hitachi’s BWRX-300 reactor design will be the first SMR in Canada, with planned completion in 2028

Other Recommended Content

Will the U.S. Control Its Own Battery Fate? Live Chat featuring Venkat Srinivasan, Director of the Argonne Collaborative Center for Energy Storage Science for The Information

Electrification is not the silver bullet for building decarbonization in North America, by Benjamin Levitt, Research and Analysis Associate Director at IHS Markit

Why the Climate Panic About Africa Is Wrong, by Todd Moss, executive director at the Energy for Growth Hub, and Vijaya Ramachandran, Director for Energy and Development at The Breakthrough Institute

Investment Crisis Threatens Energy Security, report by the International Energy Forum and IHS Markit

Luck is not an energy policy – the cost of energy, the price cap, and what to do about it, blog post by Dieter Helm