Chills, Zero-Thrills and the Blame Game...
Alexander Bencini Testaferrata
Middle East Internal Communications Manager at Boston Consulting Group
By Alexander Bencini
The Mid-Week Energy Blog - 17 February 2021
In this article: Oil prices are at a 13 month high this week, stimulated by the Texas freeze which closed wells in the United States' biggest oil producing state. The cold snap has caused mayhem across Texas, with nearly 4 million homes and businesses experiencing power shortages. It's worth noting that whilst Texas has saw a massive power shortage, the winter storm is also affecting the states of Louisiana, Kentucky, North Carolina and Missouri. To put that into perspective, the National Weather Service (NWS) announced that more than 150 million Americans are now under winter storm warnings. On Tuesday, the NWS reported that more than 73% of the US was covered by snow. Sub-zero thrills indeed.
As the cold snap continues, the blame game continues to peak, with waggling fingers pointing at each other across the energy mix. The Texas power grid, powered primarily by natural gas and wind turbines saw natural gas shortages and frozen turbines bringing power generation to a near halt (in the politest terms). Notwithstanding, iced-over coal and nuclear plants didn't have much success either — Cue the blame game. As electricity supply and demand factors knocked heads, spot electricity prices skyrocketed and one interesting/yet sad, take away is that at one point, charging your Tesla could have cost you $900!
In other news, hydrogen is moving up the investment ladder in Europe, Norway has granted new exploration licenses and the energy needed to power bitcoin appears to be more than that of two countries combined!
Price Check: WTI Crude is now $59.88 (08:43AM CST) having sat comfortably above $50 since January 5th 2021 and just dipping below $60 this morning. Brent sits at $63.58 (08:43 CST). Hanging on above $60 since February 8th 2021 and having seen a somewhat-steady rise since February 12th.
Here are this Week's Energy Headlines:
Oil production has been reported to be most impacted in the Permian Basin that spans Texas and New Mexico where temperatures fell to -2° F (-19° C) on Monday. Output was down elsewhere in Texas and Oklahoma as freezing weather caused issues at the wellhead and with other field activities. West Texas Intermediate (WTI) crude oil was up nearly 1% to $60.05 in Tuesday's trading session. Monday and Tuesday mark the first two days that WTI has breached the $60-mark in a year. The DOE report said the "freeze-offs" that have temporally halted gas output could keep many wells on ice for a few more days. US production averaged 11 million B/D last month and was on track to average about 98 Bcf/D for the first quarter, according to the US Energy Information Administration. Read Trent Jacobs' article on JPT
Most of the world’s planned hydrogen projects and the biggest chunk of related investments this decade are expected to be in Europe, an industry report said on Wednesday, as the continent races to scale up the low-carbon fuel to meet climate goals. The European Union has made hydrogen a key plank in its aim to eliminate its greenhouse gas emissions by 2050, with plans to install 40GW of electrolysers this decade - equipment to produce emissions-free hydrogen using water and renewable power. Read more on Reuters
Other Articles I'm Reading:
- Chevron and BP back renewable start-up focused on geothermal energy (CNBC)
- Why does Bitcoin need more energy than whole countries? (Deutsche Welle)
- Dubai airport sees passenger traffic drop 70% amid pandemic (Associated Press)
- Tesla's ready to build EVs in India, selects Karnataka for new plant (CNET)
- Norway grants 61 new offshore oil and gas exploration licenses (World Oil)
This Week on SPE Live:
Recent Broadcasts:
Tuesday, 9 February - SPE Live: What's Next for Computer Vision Systems and Data Analytics?
What are the latest advancements in #data analytics available for the oil and gas industry? What fourth industrial revolution advances are taking place both on and off the fields today? How can we continue to advance these systems into tomorrow? Watch the 50 minute conversation moderated by SPE's Nils Kaageson-Loe unfold below.
Sunday, 14 February - SPE Live: What's Next for Computer Vision Systems and Data Analytics?
Bringing together exclusive energy insights from the United States and the United Arab Emirates, our panelists explored the latest technology advancements in CCUS and what lies ahead for future global opportunities of #CCUS?
If you're not following the series already, take a look at our Live and On-Demand content.
For Entertainment Purposes:
Music on Right Now:
Santana - Soul Sacrifice (Woodstock 1969)
A pivotal in musical history; Woodstock. With a career spanning over 50 years, its worth remembering that Carlos Santana and his band really took the world by storm after appearing at Woodstock in 1969. With Glastonbury 2021 being officially cancelled, sit down and enjoy this performance from the comfort of your sofa on your big screen (socially distanced people watching is encouraged and Wellingtons are optional).
In My Video Queue:
The Little Things - Streaming on HBO Max & Cinemas
For months, I've been checking cinema schedules and watching in disbelief as the new James Bond keeps getting delayed and replays of 2019 films maintain their on-repeat position at the box office. However, Jared Leto, Rami Malek and Denzel Washington clearly heard my cries and produced this 'Seven'esque' thriller to kick off my 2021 with a trip to the cinema. Whilst the plot isn't the most innovative, the film has great acting all around and it is definitely worth a socially distanced trip to the cinema. There's also a new Tom & Jerry film out in the cinema.. just saying!
That's it for this week.
Wherever you are in the world, thank you for reading and keep safe.
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Alexander Bencini, a multimedia producer for the Society of Petroleum Engineers, based in Dubai and proudly European, enjoys following the ever changing dynamics of the global energy markets. When he's not putting together this blog or brainstorming with his colleagues, Alex enjoys supporting his two football teams - Bayern Munich and the Indianapolis Colts.