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Raw material costs and looming shortages: these have been the dangers on the path of the world’s energy system transition from fossil fuels to low-carbon alternatives. Until inflation and recession reared their twin heads. Since the start of the year, economies in Europe and North America, previously stalwarts of economic growth, even with hiccups such as the 2008 financial crisis, have been slowing down, and fears of runaway inflation have been rising. While most of the media attention in this respect has been focused on consumer prices…
We've already written this month about how the "tax break" incentive to buy an EV is starting to vaporize into thin air in places like Japan and the U.K. Now, the irony continues, as rising costs of energy in Europe, helped along by "green" energy policies, are making industrial projects like battery cell factories "unfeasible".  Volkswagen brand CEO Thomas Schaefer said this week that investments in German and EU projects will no longer make financial sense if "policy makers fail to control ballooning energy prices in the long-term", according…
The biggest buyers in Asia imported a record volume of oil in November as the world’s major importers rushed to stock up on cheaper crude ahead of the EU embargo and the price cap on Russian oil in effect from December 5. Lower benchmark prices and the push to secure oil supplies before the sanctions against Russia create additional uncertainties in terms of marine transportation services and, possibly, a shortage of tankers. To get under the wire of these tough market conditions, China, India, Japan, and South Korea imported high crude volumes…
Long have there been questions and scrutiny over oil majors’ tax practices, with the situation being exacerbated this year due to the global economic and energy crises in the wake of Russia’s invasion of Ukraine. While the U.K. and other countries have introduced a windfall tax on oil and gas majors, not everyone has responded in the same way. Now, the charity Oxfam is calling for greater transparency and accountability for the tax practices of major fossil fuel firms.  Oil and gas firms have always been scrutinized for paying…
China says it hopes that Kazakhstan is prepared to increase the amount of natural gas it supplies over the winter, even though the government in Astana has pledged to limit exports to meet domestic demand. “We hope that Kazakhstan will in keeping with its contract ensure stable deliveries of gas to China and maximally increase them during the winter months,” Chinese Prime Li Keqiang told his Kazakh counterpart, Alikhan Smailov, in a video conference call on November 29. Li’s comments were carried on Chinese state television and…
The apparent failure by Beijing to determine new ways to handle the COVID-19 pandemic, given what many consider the largest mass protests since the student movement of 1989, has exposed the limited abilities of the new Chinese Communist Party (CCP) leadership to handle unexpected events despite its extensive security and surveillance apparatus. CCP General Secretary Xi Jinping, who gained near-total control of the party apparatus at the 20th Party Congress late last month, is nowhere to be seen after tens of thousands of students on at least 50…
Russia began installing managers and technical staff at Ukraine’s Zaporizhzhia Nuclear Power Plant (ZNPP) soon after seizing the plant by military force on March 4 and well before officially annexing Ukraine’s Zaporizhzhia region to Russia (see Part One). Moscow completed the formal annexation procedures on October 5, and that same day, President Vladimir Putin issued a decree to place the ZNPP under Russian government ownership (Ukrainska Pravda, October 5). Based on Putin’s decree, the Rosenergoatom State Concern (operator of…
This week saw two documents published by two government departments: the European Commission in Brussels and the Department of Treasury in Washington. The Commission’s document was a proposal for “a new instrument” aimed at limiting excessive gas prices in Europe. The Treasury’s document was guidance on the implementation of a price cap policy towards crude oil originating in the Russian Federation. Both were slammed by critics within hours of their publication. The two documents represent the long-awaited price caps that…
Nigeria has posted strong oil profits, with high hopes to continue expanding its fossil fuel industry as oil majors look to Africa to boost their low-carbon operations. But oil theft continues to be a significant challenge to the country’s oil output with the government taking major steps to tackle the crime.  Between 1999 and 2020 the Nigerian government earned $741.48 billion from oil and gas, according to a recent Nigeria Extractive Industries Transparency Initiative (NEITI) report. NEITI Executive Secretary, Ogbonnaya Orji, stated…
High prices seem to have started to weigh on diesel demand in the United States, where distillate inventories – comprising diesel and heating oil – have been slowly rising over the past few weeks.    American distillate inventories are still below the five-year average, but the gap in stocks compared to previous years has slowly started to narrow, suggesting that high prices are hitting demand, while encouraging more refinery output thanks to solid refining margins.   In this week’s inventory report, the…
Iberia is well positioned to compete with – or even replace – Northern Europe’s existing energy industrial hub as sectors in Spain and Portugal can call on abundant sunshine, strong winds and mature gas infrastructure as well as a wealth of industry and managerial expertise. With reliable gas supply from North Africa, lower power prices compared to the rest of Europe, and a renewable energy pipeline that stands out on the continent, Spain and Portugal have the potential to evolve into a new European energy powerhouse, according…
The effects of climate change are being increasingly felt across the United States. The National Oceanic and Atmospheric Administration (NOAA) recently predicted a seventh consecutive ‘above average’ hurricane season for 2022. This comes after suggestions by scientists that anthropogenic (human-caused) climatic factors had exacerbated previous above-average seasons. In line with this evidence, US political actors frequently depict climate-exacerbated hurricanes as a threat to national security. However, this rhetoric is not culminating…
The missile that landed in Eastern Polish farmland on November 15, killing two people and injuring three, caused a sharp international crisis, which Warsaw treated with due care and the utmost responsibility. Had the stray projectile been a Russian sea-launched Kalibr or an air-launched Kh-555, it would have constituted the first hostile strike on North Atlantic Treaty Organization (NATO) territory. Thus, every possible source of data was incorporated into the swift investigation, which established that it was in fact a misguided S-300 surface-to-air…
Via AG Metal Miner   The recent rise in aluminum, copper, and nickel price have created some short-term uncertainty as companies finalize their long-term contracts for 2023. Earlier this month, all three metals rose on the back of rumors that China might begin easing zero-COVID restrictions. In addition, the USD index has dropped from its September peak of 114. As of press time, the index sits at just 106. In this post, we’ll discuss some of the primary drivers of the recent surge. We’ll also attempt to determine whether or not…
Runaway energy price inflation has wreaked havoc on European industrial activity, with the heaviest consumers taking the brunt. Aluminum and steel smelters are shutting down because of energy costs. Chemical producers are moving to the United States. BASF is planning a permanent downsizing. There is, however, a bigger problem than all these would constitute for their respective industries. Fertilizer makers are also shutting down their plants. And fertilizer imports are down because the biggest suppliers of fertilizers for Europe were Russia and…
The world is facing an energy trilemma. Leaders in the public and private sectors are faced with the challenging puzzle of how to ensure a secure and reliable supply of energy while also keeping energy prices affordable and minimizing negative environmental externalities. This isn’t easy anywhere on Earth, but nowhere is it more of a challenge than in Africa, the continent that epitomizes the trilemma as well as the consequences of falling short.  600 million people across the continent still lack access to energy, and that number will…
The world’s largest floating wind farm, from Norwegian oil and gas giant Equinor, just produced its first power. Two further floating wind projects have been announced for the U.K. and France, expected to boost Europe’s wind energy output by 2030 significantly. These early floating wind projects provide hope to renewable energy companies looking to expand their operations, as well as fossil fuel companies aiming to decarbonise through the incorporation of clean energy technology in their oil and gas operations.  With governments…
As an increasing number of countries ban single-use plastics, waste remains a significant environmental issue – although a variety of initiatives promise to make emerging markets the focus of the global struggle against plastic waste. The Covid-19 pandemic saw a decline in plastic usage; however, it led to an increase in littering from personal protective equipment (PPE) and single-use plastics. Additionally, much of this waste is disposed of unsustainably, ending up either incinerated or stored in landfill, the third-largest source of methane…
Oil firms have been dishing out bumper sums to shareholders as a crisis in the energy sector drives profits to record levels, according to research released today. Dividends from oil firms rose by 75.1 per cent to a record $46.4bn in the the three months through September and pushed up the total figure paid out globally, according to the Global Dividend Index from Janus Henderson.  The total dished out to investors rose by seven per cent on a headline basis to $415.9bn. More than 85 per cent of UK firms hiked their payout in the third quarter…
India would be one of the countries most exposed if Russia refuses to sell crude oil at the capped price under proposed sanctions to be imposed by the United States and the European Union.  In 2021, India was the world’s third-largest crude importer (214 million tonnes) after China (526 million tonnes) and the United States (305 million tonnes) (“Statistical review of world energy”, BP, 2022). India and China rely on imports by tanker from the Middle East, Russia and other regions, in contrast to the United States, which…
The latest Bloomberg Trade Tracker reveals an ominous outlook for world trade due to soaring interest rates, the war in Ukraine, a slowdown in the US economy, and zero Covid in China. A shortage of containers has entirely reversed into a glut as crashing shipping rates and canceled sails gain momentum during what is supposed to be the busiest shipping period of the year.  "The world's two biggest economies are feeling glum about the export outlook, with both the US and China gauges in contraction in October and the American one in "below-normal"…
Europe’s financial authorities are strengthening the oversight of the energy derivative trades used by energy firms to hedge power and gas prices as policymakers look to avoid a spillover effect of the energy crisis into financial markets.      In the energy derivative market, worth trillions of euros, energy firms faced more than a trillion euros in margin calls in September, a development that could have triggered a collapse of “Lehman Brothers” proportions in the energy industry.    As…
As demand for electric vehicles (EVs) soars, spurred by government incentives and a push to decarbonize the transportation sector, the global battery industry is set to attract significant attention and investment. Rystad Energy forecasts total EV sales this year will reach nearly 10 million units, a 43% jump from 2021 sales. On the back of this, demand for battery cathodes and anodes – core components in the manufacturing process – is also set to rocket. On the current trajectory of EV sales and other li-ion battery demand, total battery…
Ukraine is erecting a reinforced concrete wall on its border with Belarus to mitigate the risk of Russia further using its ally to stage more ground invasions.  Ukraine has already built three kilometers of reinforced concrete walls topped with barbed wire on the border with Belarus in the region of Volyn, Reuters reported, with additional fortifications going up elsewhere in two other regions.  Ukrainian officials did not disclose further details of the fortifications, but protecting the 1,000-kilometer-long border will be challenging. …

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