Energy Security Forum Newsletter



Main Takeaways for the week of March 23, 2022

Governments, companies, and people around the world are being squeezed by shortages of oil, refined products, natural gas, coal, and metals. The IEA estimates a 3 mb/d shortfall of Russian oil output. The United States is working to improve relations with Saudi Arabia, Iran, and Venezuela. China’s fourteenth five-year energy plan calls for more domestic production of oil and gas. India is combatting rising energy prices with discounted Russian imports. Germany announces cooperation with Qatar on LNG supplies. Japan imposes blackouts to deal with an increasingly vulnerable grid. Belgium proposes delaying phase-out of 2 GW nuclear for ten years. Canada will begin selling “green bonds” this week for "clean projects".

Featured Article

Storage requirements in a 100% renewable electricity system: Extreme events and inter-annual variability, by Oliver Ruhnau and Staffan Qvist for ZBW - Leibniz Information Centre for Economics


Global Petroleum Liquids

Global LNG

Global Coal

North American Energy Infrastructure

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U.S. - Canada Energy Relations

Middle East Energy Geopolitics

Central Asia Energy Geopolitics

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Canadian Oil and Gas





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Most Russian oil production is in the permafrost, and for most of the summer the permafrost is inaccessible because its top layer melts into a messy, horizon-spanning swamp. What the Russians do is wait for the land to freeze, and then build dike-roads and drill for crude in the long dark of the Siberian winter. Should something happen to consumption of Russian crude oil or any of the millions of feet of pipe that take that crude from wellhead to port or consumer, flows would back up through the literally thousands of miles of pipes right up to the drill site. There is no place to store the stuff. Russia would just need to shut everything down. Turning it back on would require manually checking everything, all the way from well to border.

From The End of Russian Oil, by Peter Zeihan for Zeihan on Geopolitics


China’s closed capital account means that just switching in and out of renminbi requires permission from the government. Add to that the sweeping asset forfeiture rules incorporated into Beijing’s anti-sanctions law introduced last year, and you’d be naive to think that China was any more secure a place for Riyadh to store its wealth in the long term. In times of peace, it’s easy to forget that whenever you invest or sell a product overseas, you’re dependent on the goodwill of a foreign government to ensure you get paid.

From Saudi Arabia’s oil-for-yuan bid won’t threaten the dollar, by David Fickling for Bloomberg Opinion


Permian Basin shale oil can be brought online quickly to substitute for the absence of Russian oil on global markets. Alongside the obvious security and economic benefits to the West, the oil-and-gas industry has the opportunity to ensure the Permian is the cleanest hydrocarbon source in the world. To do this, producers should set aggressive emission-reduction targets and drive methane emissions as close to zero as possible with measuring and monitoring verified by third parties.

From U.S. Shale Oil and Gas Are the Key to a Renewable Future, by Christopher James for Wall Street Journal Opinion

Prices of materials like crude, gas, wheat and metals have become alarmingly erratic as a gulf emerges between buyers and sellers who are facing big financing strains. Markets have been roiled on fears about Russia’s invasion of Ukraine constraining commodities flows, though in many cases rallies were quickly followed by a drop in prices.

From The world’s biggest commodities markets are starting to seize up, by Mark Burton and Alex Longley for Bloomberg


Japan introduced a feed-in tariff program in 2012 that boosted installations of solar panels. While wildly successful, it also crowded the nation’s grid with intermittent power output, making it difficult -- and sometimes not very cost effective -- to replace retiring thermal power plants. So when last week’s earthquake hit and knocked offline 12 power plants, Japan had little spare capacity to call upon. The sudden cold blast boosted demand but reduced solar output, forcing the nation’s top utility to ask businesses and households to lower consumption.

From Japan’s Power Crisis Was a Decade in the Making and Won’t Go Away, by Stephen Stapczynski and Shoko Oda, for Bloomberg


When optimizing system costs based on single years rather than a multi-year time series, we find substantial inter-annual variation in storage requirements with the most extreme year needing more than twice as much storage as the average year. We conclude that focusing on short-duration extreme events or single years can lead to an underestimation of storage requirements and costs of a 100 % renewable system.

From Storage requirements in a 100% renewable electricity system: Extreme events and inter-annual variability, by Oliver Ruhnau and Staffan Qvist for ZBW - Leibniz Information Centre for Economics


"We are going to need a lot of fossil fuels to mine more metals. Higher oil prices mean higher costs to mining, thus higher metals prices. Thus higher prices to the consumer [are] circular, and that's what people are missing," she said. "If you want to increase demand or production for EVs, that only increases demand for fossil fuels. There’s no way you can produce these vehicles without increasing demand for fossil fuels."

Quote by Tracy Shuchart from Biden's clean energy revolution depends on diesel trucks, by Alex Lockie for Commercial Carrier Journal


Recent data from Energy Intelligence, however, indicate that the fall in Russian petroleum exports to date has been somewhat smaller than the initial estimate of 3 mb/d and coincided with oil price weakening after March 8. What changed is that much of the Russian oil that continues to be exported from Baltic and Black Sea ports at steep discounts is not delivered to refiners, as is customary. Instead, trading houses are purchasing the oil and keeping it in commercial storage in Europe, from where it may be potentially resold, bypassing financial sanctions. Buying oil for storage is not prohibited under current sanctions.

From The Russian Oil Supply Shock of 2022, by Lutz Kilian and Michael D. Plante for the Federal Reserve Bank of Dallas

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