Quote of the Week

“Climate change is a global problem with grave implications: environmental, social, economic, political and for the distribution of goods.”

Pope Francis, who will meet with Big Oil execs the week of June 11, from a 2015 statement

Graphic of the Week

Contents

1.  Oil and the Global Economy
2.  The Middle East & North Africa
3.  China
4.  Russia
5.  Nigeria
6.  Venezuela
7.  The Briefs

1.  Oil and the Global Economy

Oil futures traded in a narrow range last week, at circa $65 a barrel in New York, and $76 in London. The standoff between higher and lower oil prices continues apace. Those saying that prices will soon be higher are looking at the rapid decline of Venezuela’s oil production; the damage to Iran’s oil exports that could come from the new US sanctions; and the mounting obstacles to further rapid increases in US shale oil production.  Those seeing lower prices ahead are citing the likelihood that OPEC+ will increase production later this month and the dangers to global demand stemming from the possible trade wars.

Of all the potential developments affecting oil prices, the Venezuelan situation seems the most serious. Reports from Caracas suggest that crude exports could fall well below 1 million b/d this month offsetting any increase in OPEC production that could be expected in the near future. While Russia and the Gulf Arab states are in a position to increase oil production,  most of the other adherents to OPEC’s production freeze agreement are not. Indeed, much of the “OPEC” production cut has come from the faltering Venezuelan oil industry helped along by production problems in Nigeria and Angola.

The OPEC Production Cut:

The meeting in Vienna on June 22nd between OPEC and non-OPEC oil producers is shaping up to be one of the most controversial OPEC meetings ever as competing interests debate whether to lift all or part of the production freeze before the end of the year. While the coalition leaders, Russia and Saudi Arabia, seem willing and able to increase production immediately, other oil exporters, without the ability to raise production significantly, would like to see oil prices rise much further.

Other cross currents will be at play. Iran, which is facing new sanctions designed to limit its oil exports in the fall, is demanding that the meeting discuss the sanctions and take steps to protect Tehran. The conflict between Iran and the Arab oil producers over Tehran’s intervention in regional conflicts is part of the equation as are the interests of the US, Russia, and China. The fight between Qatar and the Saudis is back on the table with Riyadh threatening their neighbor if it purchases Russia’s S-400 anti-aircraft missile system.

Some countries are satisfied with world oil prices back in the mid-$70s realizing that if oil goes much higher, there will be demand destruction and more incentives for the US shale oil industry to step up production. Others feel that higher prices will not hurt demand and that increased revenues are the best hope for a prosperous future. Few oil exporters have expressed much concern about the prospects for global warming.

In the background is the realization that the new alliance between Russia and the Saudis, which between them produce around 20 million barrels of crude a day, has come to control the oil markets. In comparison to the two giant producers, the interests of other members no longer count. While the two countries found common ground when it came to eliminating the global oil glut, they are divided by many other issues, so the future of this alliance is not solid.

US Shale Oil Production: Problems keep arising for oil producers in the Permian Basin. In addition to a shortage of pipeline capacity to move the production from newly drilled oil and gas wells to market, we now have a severe labor shortage in West Texas. To attract new workers, drillers are now offering 100 percent pay hikes to people living in the region. The need for truck drivers (it takes 1000 truckloads of supplies to drill and frack a well) has denuded surrounding counties of everyone with a commercial driver’s license. New workers are given crash courses at local community colleges and sent into the field to drill and frack new wells.

According to Rigzone, shipping constraints from the Permian Basin are costing drillers more than $1 billion a day. Eight of the Permian’s “pure-play” drillers lost $15.6 billion in combined market value in the 15 days through last Tuesday, as shipping constraints eat up the profits they make due to lower local prices and delays in moving oil to market.  Last Wednesday, oil in Midland, Texas, was trading for about $19 a barrel below Brent crude, the global benchmark price.

Currently, the pipelines taking natural gas from the Permian are 98 percent full, so there is a serious problem about what to do with the gas coming from new wells. The Railroad Commission of Texas is considering whether to keep the strict gas flaring limits or to loosen them. The Commission issues flare permits for 45 days at a time, for a maximum limit of 180 days. if the Commission keeps the current flaring limits intact, some producers may be forced to shut wells because the limit for individual oil well flaring is a maximum of 45 days—after which drillers must either pipe the gas or shut the well.

If the limits are loosened, it would hurt air quality, increase environmental protests, and possibly invite lawsuits. According to the Environmental Defense Fund, a Clean Air Task Force report has ranked seven counties in Permian Basin in the top 10 worst U.S. counties for asthma attacks.  The Permian natural gas glut also is depressing prices in West Texas, where spot prices have fallen 49 percent so far this year, to $2.03 per million BTUs.

Industry representatives still maintain that the best years for the Permian Basin are still ahead and that new pipelines will eliminate the bottlenecks in a year or two. The greater Permian Basin currently produces around 3.64 million b/d of crude oil, which is projected to jump to 4.49 million b/d by the end of the year and 5.42 million b/d by the end of 2019. Major oil companies — Chevron, ExxonMobil, and Shell — are just starting to get into the Permian, These three companies alone are expected to achieve a combined production growth in the basin of over 600,000 b/d of oil equivalent in the next year and a half.

2.  The Middle East & North Africa

Most of the news this week has been about the impending US sanctions on Iran and preparations for the OPEC meeting later this month.

Iran: Tehran is becoming increasingly concerned about what will happen to its economy when the US sanctions fully set in and spent last week issuing a stream of threats, accusations, and bluster. Supreme leader Khamenei said he had ordered preparations to increase uranium enrichment capacity if a nuclear deal falls apart and he vowed never to accept limits on Tehran’s ballistic missile program. According to Iran’s OPEC governor Ardebili oil prices could jump to $140 a barrel due to the US sanctions against Iran and Venezuela.

Although the European Union has vowed to maintain the Iran nuclear deal despite the US decision, EU efforts to broker a settlement are making little progress. Last week the CEO of Total which has a massive natural gas development project in Iran, said that the chances of a US waiver to continue the project are very slim. The Saudis are helping Total’s withdrawal from Iran along by signing a $44 billion joint venture between Aramco and Total for a development project in India.

The US Treasury has advised businesses to begin unwinding their business in Iran immediately, and European refiners are starting to slow purchases from Iran after tanker providers, insurers, and banks began avoiding becoming involved in deals with Iran for fear of exposing themselves to secondary US sanctions. Unless it gains an exemption SWIFT, the Society for Worldwide Interbank Financial Telecommunication will be required by the US to cut off targeted Iranian banks from its network by early November or face possible countermeasures against both its board members and the financial institutions that employ them. This could have a devasting impact on Iran later this year as much of its international economic activity passes through SWIFT.

Iraq: Crude exports rose nearly 5 percent last month, from 3.62 million b/d in April to 3.8 million in May, as tanker loading rates increased from Iraq’s southern terminals and Turkey’s Ceyhan terminal. Revenue from the crude sales averaged $69.93 per barrel, a nearly 8 percent increase from April, earning a total of $7.56 billion in May.

Iraq’s parliament retroactively amended Iraq’s election law last week to require a full manual recount of the May 12 voting results.  The legislation also calls for removing the leaders of the Independent High Electoral Commission, which is responsible for administering the election, and replacing them with a judicial panel. This development adds a new uncertainty to the volatile political landscape and will postpone indefinitely essential decisions about the further development of the country’s oil resources.  Some newly elected Iraqi lawmakers, linked with Shiite cleric Moqtada al-Sadr, are not sure that Baghdad’s participation in the OPEC production cut is good for Iraq. This only adds to calls to close down the agreement before the end of the year.

The Oil Ministry is denying that it has activated an agreement to export crude oil from Kirkuk to Iran, even though several Iraqi officials and an Iranian state news outlet say tanker trucks have crossed the border. “We have a deal with Iran, but so far we are still making preparations.”

Saudi Arabia: Riyadh has started increasing oil production again after two years of curtailed production. Last month, production increased by 100,000 b/d which is small in comparison with total production, but the move sends a message that the kingdom is ready to make changes to the OPEC+ production freeze later this month. Tanker trackers say that Saudi exports were up by 300,000 b/d last month as Riyadh came under pressure from Washington to increase production to keep rising US gasoline prices under control before the US mid-term elections.  Rapidly falling Venezuelan production has resulted in OPEC producing about 700,000 b/d less oil than envisioned under the agreement.

A day before President Trump withdrew from the Iran nuclear deal a US senior official phoned the Saudis to ask that it help to keep prices stable if Washington’s move disrupted supply. Until the phone call, Saudi officials had been saying it was too early to raise output. In the past, the Saudis have been reluctant to raise output in response to US requests. Now with the Iran confrontation going full steam, Riyadh may be more willing to cooperate with Washington’s needs.

Saudi Aramco is restructuring its non-oil businesses with the aim of streamlining the business to make its shares more attractive to investors and achieve a higher valuation for its shares. In the past Aramco has been involved in many government social projects which have diverted personnel and assets from its core business.

There was disturbing news out of the kingdom concerning dissension in the royal family. Dozens of important Saudis are in jail and many more are barred from leaving the country. While Crown Prince bin Salman has gone further than any of his predecessors to relax the kingdom’s strict social rules,  he is also overseeing a ruthless crackdown on perceived dissenters. Last week there was a report, which has not been confirmed by any mainstream media outlet, about a recent shootout in a royal palace between rival family members and their bodyguards that resulted in the death of senior officials. If true, not only have Saudis done a remarkable job of covering up the incident, but it shows there are deep divisions among the 15,000 members and the 2,000 elite members of the Saudi royal family that runs the country. A civil war between factions of the royal family would obviously have serious consequences for oil exports and the global economy.

3.  China

The US and China remain on course to open a $100 billion trade war later this month after the third round of negotiations ended in failure. President Trump said he would implement previously threatened tariffs on $50 billion worth of Chinese industrial exports “shortly” after June 15th and Beijing promised to reciprocate. Widening price discounts have boosted the attractiveness of US oil exports to China, but Beijing may hold off on US oil imports in retaliation for the new US tariffs despite their increasing need for fuel imports.

In the meantime, Beijing continues to import oil and other fuels at a healthy pace. China’s May crude oil imports of 9.2 million b/d were slightly less than the record high of 9.6 million hit the month before.  The year-to-date oil imports, however, represent an increase of 7.8 percent over a year earlier.

China’s coal imports in May were almost unchanged at 22 million tons from last year as tight government policies kept a lid on foreign coal buying.  The Trump administration is hoping that China may soon be buying a lot more coal from the US as part of a larger plan to narrow the merchandise trade deficit with Washington of $375 billion. The administration would like to see the coal come from West Virginia, but at last report, there is not much coal left there to mine in the quantities needed to make a dent in the trade deficit.

Concerns are rising about the size of China’s corporate and consumer debt. Fitch Ratings Service recently pointed out that Beijing’s ratio of corporate debt to GDP was very high last year at 168 percent. Since the 2008 economic crisis, Beijing has followed a loose monetary policy and made trillions of dollars’ worth of loans to keep economic growth going. Now that government efforts are underway to rein in these excessive debt levels, Fitch believes that a debt crackdown could be a major risk to the country’s economic growth and have significant effect for the global economy, including oil imports.

4. Russia

President Putin said last week that higher oil prices were putting Russia’s economy on more solid ground. Although growth is still slow, it’s sustainable, and inflation is low,. Investments in the Russian economy, meanwhile, are up 4.4 percent from last year. Putin has pushed a theme of recovery this year. Growth in Russia’s GDP is forecast at 1.8 percent this year, compared with 1.5 percent in 2017. By contrast, the US economy is expected to grow by 2.7 percent this year, according to OPEC economists.

Moscow’s energy and finance ministries agreed with oil companies to start cutting the export duty on crude to bring it from the current 30 percent to zero over the next six years. The duty will be cut by 5 percent annually over the period, as part of a wider tax reform that seeks to replace the export duties and mineral resources extraction taxes with a tax based on the profits that oil companies in Russia make.

Gazprom said it received the necessary permit to advance construction of the Nord Stream 2 gas pipeline through Swedish waters and that “this is an important milestone for our project.” The major impediment to the project still is Denmark’s reluctance to give the Russians a permit as Europe would become even more dependent on Russian energy that would be delivered through a new Moscow-controlled pipeline.

Last week Ukraine’s Naftogaz said that a Dutch court had approved its petition to freeze Gazprom assets in the Netherlands.  Ukraine is seeking to enforce the payment of the $2.6 billion award it was handed by an arbitration court earlier this year over the payment dispute with Gazprom. Actions like this will certainly inspire Moscow to push hard on getting Nordstream 2 into operation.

In the long run, Gazprom will likely get its permit as Europe has few choices for sources of natural gas. While there is a lot of LNG around these days, that pace at which China is buying it up to clean up its air will likely preclude the EU ever being in a position to replace the bulk of its need for natural gas with LNG.

5. Nigeria

With the introduction of amnesty and training for youths in the Niger Delta, expectations were high that the development would result in an end to vandalism, oil theft, and illegal refining. But this has not been the case. Nigeria has managed to restore its oil production to around 1.8 million b/d, following a series of militant attacks on oil infrastructure in 2016. However, sabotage in parts of the Niger Delta continues to plague its oil production and the oil majors operating there.

Facilities operated by indigenous and international oil companies continue to be vandalized by attacks and other illegal activities such as crude-oil theft.  Crude oil theft resulted in losses of around 9,000 b/d in 2017, more than the 6,000 b/d lost in 2016, but less than the rate of 25,000-b/d loss in 2015, Shell said two months ago.

In the middle of May, Shell declared force majeure on Bonny Light exports because of the shutdown of the Nembe Creek pipeline, which led to the accumulation of unsold crude.  Following disruptions of the oil flows on the pipeline feeding the Forcados oil terminal, the facility faces more than two weeks of delays for oil cargo loadings and no official June or July loading schedules have been released.

Last week, a coalition of militant groups in Niger Delta, the “Joint Revolutionary Council,” threatened to resume hostilities, if the Federal Government fails to address the problems in the region. A spokesperson for the group said  “There is nothing good to show in the region, in spite of the increase in the price of oil, and the relative peace that we have guaranteed in the Niger Delta. Poverty has been on the rise in the Niger Delta. Environmental degradation has become the order of the day, even as young people have resorted to illegal ways of fractionating crude oil to cater for their families.”

In past periods of rampant insurgency, the militants succeeded in reducing Nigeria’s oil production by nearly 1 million b/d. Recently, however, more production has been coming from offshore fields which are more difficult to sabotage. Some foreign oil companies have been slowly turning over onshore production to local companies and concentrating on offshore.

6. Venezuela

Venezuela’s state oil company, PDVSA, told eight foreign customers it would be unable to supply the contracted volumes of crude oil in the immediate future.  Among the affected refiners are Nynas, Tipco, Chevron, CNPC, Reliance, Conoco, Valero, and Lukoil, which will receive only part of the oil shipments specified in their contracts.  PDVSA’s crude commitments for June total 1.49 million b/d, but the company only has 694,000 b/d available to export.  This situation suggests that Caracas will have to declare force majeure on its oil exports as production falls, and its ports are unable to ship crude.

Tankers are sitting off the country’s main oil port waiting to load more than 24 million barrels of crude, almost as much as PDVSA shipped in April.  The clogged ports are largely the result of the seizure of terminals on several Caribbean islands by ConocoPhillips last month to enforce court judgments. The lack of other options has forced PDVSA to ship oil from its coastal terminals which cannot handle very large tankers.

The company has begun testing ship-to-ship oil transfers, to be carried out in the sea 6 miles from Venezuela’s Cardon refinery. This method of delivery entails specialized equipment, additional training for tanker captains, and higher costs for ship owners and customers. However, PDVSA is pushing ahead over customer doubts given the congestion at its ports and a desperate need to complete sales.  This situation is unlikely to end well.

7.  The Briefs (date of the article in Peak Oil News is in parentheses)

Pope meeting Big Oil: At a time when investors are piling pressure on Big Oil to take climate change seriously, top executives from some of the major global oil companies discussed climate change last week at the Vatican with Pope Francis, who called on Catholics in 2015 to join the fight against climate change.  Attendees included, among others—BP’s chief executive Bob Dudley; Eldar Sætre, CEO at Equinor (formerly Statoil); Larry Fink, chief executive at the world’s largest asset manager, BlackRock; Ernest Moniz, former US Energy Secretary under President Obama; and a representative of ExxonMobil. (6/4)

Offshore Ireland: More interest in the oil and gas basin off the western coast is expected after reserve estimates nearly doubled.  Europa Oil & Gas, which currently holds a 100 percent stake in the FEL 3/13 prospect in the Irish waters of the Atlantic Ocean, said data show the reserve estimate at 2.9 billion barrels of oil equivalent, 93 percent more than initially expected. (6/6)

The Norwegian Petroleum Directorate, the nation’s energy regulator, confirmed a discovery was made by Equinor in a wildcat well, one drilled in an area not previously known to contain oil or natural gas. (6/9)

Royal Dutch Shell took the top spot among oil and gas companies on the Forbes Global 2000’s list of the biggest and most powerful public companies, surpassing last year’s leader Exxon Mobil Corp. Shell climbed from 20th to 11th while Exxon slipped to 13th. (6/8)

Qatar Petroleum bought an equity stake in the Vaca Muerta shale natural gas basin in Argentina.  That marks a debut in unconventional resources. The state-owned petroleum company in Qatar said it reached an agreement with US supermajor Exxon Mobil to take a 30 percent stake in its operations in Argentina. (6/5)

In China, a report by consultant group Wood Mackenzie found the Chinese market is looking at trucking to make up for the lack of pipeline coverage inland. They expect China’s gas demand to reach 9.3 trillion cubic feet this year. Similar to 2017, 12 percent of that demand will be supported by LNG trucking. (6/5)

Namibia, just south of Angola, could be a focal point for potential reserves. Atlantic-focused Chariot Oil & Gas was upbeat about prospects in Namibia. The company said it was fully funded for fourth quarter drilling at the prospect in Namibia that has 459 million barrels of prospective reserves. (6/7)

Offshore Brazil, Equinor, formerly known as Statoil, completed a transaction with Exxon that puts the latter in an equity partnership at the BM-S-8 block with a 36.5 percent stake. The block is within the Carcara oil field, which has an estimated 2 billion barrels of reserves. (6/7)

Canadian oil production from a facility in Alberta has the same greenhouse gas intensity as US oil, the head of producer Suncor said. Suncor said it has completed its $13 billion overhaul of its Fort Hills facility north of Fort McMurray. As of Thursday, the company said its production figures were strong, with second quarter rates averaging 636,000 b/d, up from early-year startup figures of around 194,000 b/d. (6/9)

Anti-corruption pushback: A refusal by US oil companies including ExxonMobil and Chevron to disclose their US tax payments is undermining the international effort to fight corruption in natural resources industries worldwide, according to transparency campaign groups. (6/6)

The US oil rig count increased by one last week to 862 while the gas rig count also increased by one to 198, according to Baker Hughes. Canada, for its part, gained 13 oil rigs for the week—after last week’s gain of 18 oil and gas rigs. Despite two weeks of significant gains, Canada’s oil and gas rig count is still down year over year. (6/9)

ANWR: The Trump administration has allocated $4 million for construction work ahead of the start of oil and gas drilling in the Arctic National Wildlife Refuge. ANWR is the largest in the US wildlife refuge system, and also the wildest: there are no roads or buildings at all in the 19-million-acre expanse. However, President Trump is pushing for a lease sale in the ANWR to be scheduled for as early as next year, despite fierce opposition from environmental groups. (6/9)

Bizarre lifejacket: The Trump administration is pulling out all the stops to give a leg up to the coal and nuclear industries. Trump is moving to take unprecedented action to intervene in the US electricity markets to essentially bail out failing plants as they face an existential threat from natural gas and renewable energy. FERC rejected a lifeline proposal earlier this year. But Trump isn’t giving up yet. Last week, the President ordered Secretary Perry to come up with some way to keep unprofitable plants open. (6/6)

Oil and gas drillers in Colorado will tweak their drilling and completion schedules for the summer as a way of supporting the state’s efforts to reduce ozone emissions, which seasonally grow during the summer. The efforts of the Colorado Oil & Gas Commission were aimed at reducing the likelihood of the state’s Front Range area receiving a “serious” ozone nonattainment area status. (6/6)

US retail gasoline prices are pulling back in line with declines in crude oil prices, but continue to put a crimp on people’s wallets. Motor club AAA lists the national average price for regular unleaded gasoline at $2.94 per gallon on Tuesday, only a couple of cents less than last week. (6/6)

Jet fuel prices are at six-year highs, and part of the reason is linked to record US shale crude production, and the unique properties refiners contend with when they refine that oil. The US produced about 4.7 million b/d of crude from shale formations in 2017. Refiners have found that when using shale oil to making diesel, their second-most common product after gasoline, they need to take measures to offset waxiness to make the fuel usable for truck and car engines. One option is to add kerosene and other components commonly found in jet fuel. However, that reduces the available pool of jet fuel at a time when economic growth has boosted air travel. (6/8)

Jet-fuel prices have surged more than 50% over the past year, pushing carriers to raise fares and Delta Air Lines to cut its profit expectations. (6/7)

Shale oil, which the Energy Information Administration projects will represent a rising proportion of American oil supplies in the coming decades, has a surprising Achilles heel: its low octane levels, which make it a poor fit for the high-efficiency car engines of the future. For financially troubled shale drillers, that’s bad news, since it suggests demand for their oil could fall even if the price of a higher-octane oil barrel rises. (6/7)

Distillate fuel continued to be the most exported US petroleum product in 2017, averaging 1.4 million b/d of gross exports. In 2017, the United States exported 27 percent of total domestic distillate production. (6/7)

Exxon Mobil Corp. is trying to give itself a green facelift. Chief Executive Darren Woods has called for Exxon to become “part of the solution” on climate change, a point he is expected to make when he and other oil and gas executives meet with Pope Francis at the Vatican to discuss the issue. The company is touting its research into fuels made from algae. It pledged last month to cut its methane emissions 15 percent by 2020. Exxon is now calling for global action to address climate change, and it has begun publicly promoting a US carbon tax. (6/8)

Biofuels win? The Trump administration was on the verge of releasing a major change in US biofuels policy, but a last-minute political assault from corn states might have shelved the proposal indefinitely. The proposal was an effort to water down biofuels requirements while trying to prevent a full-blown outcry from corn country. (6/8, 6/6)

E school buses: The California Energy Commission School Bus Replacement Program is making up to $78.7 million in grant funding available for the replacement of California’s oldest school buses, and it is favoring electric buses. Additionally, the Energy Commission’s Alternative and Renewable Fuel and Vehicle Technology Program has up to $13 million in grant funds for e-bus infrastructure and $2.4 million in grant funds for compressed natural gas fueling infrastructure for the replacement school buses. (6/8)

Volvo Cars said that by the middle of the next decade, it expects to generate half of all sales annually from fully electric cars and one-third of all cars sold to be autonomous driving cars. (6/8)

GM’s EV’s in China: On World Environment Day, General Motors mapped out its electrification path in China. GM is on track to deliver ten new energy vehicle models in China between 2016 and 2020. From 2021 through 2023, GM will maintain momentum by doubling the number of new energy vehicles available. (6/5)

Battery buddies: General Motors and Honda are partnering on new advanced chemistry battery components, including the cell and module, to accelerate both companies’ plans for all-electric vehicles. The next-generation battery will deliver higher energy density, smaller packaging and faster-charging capabilities for both companies’ future products, mainly for the North American market. The collaboration will support each company’s respective and distinct vehicles. (6/8)

E-rail: Italy’s Enel and Russian Railways will team up to develop a battery energy storage solution for electric railways in the hopes that it could help stabilize the Russian railway electricity grid, improve train operations, and avoid expensive grid upgrades that might otherwise be required. The power company plans to couple the energy storage system with regenerative braking technology. The energy will be stored in the batteries for later use, which could help the railway network to reduce its overall energy consumption. (6/4)

Solar tariff hit: President Donald Trump’s tariff on imported solar panels has led US renewable energy companies to cancel or freeze investments of more than $2.5 billion in large installation projects, along with thousands of jobs.  That’s more than double the about $1 billion in new spending plans announced by firms building or expanding US solar panel factories to take advantage of the tax on imports. (6/7)

Colorado’s largest electricity provider said it wants to retire two coal-fired units a decade early and nearly double the share of power it gets from renewable sources.  Xcel Energy said the changes would reduce its carbon pollution in the state by 60 percent and increase its share of renewable energy to almost 55 percent, up from about 28 percent now.  Xcel said the plan would save consumers $215 million by 2054, citing the “historically low” cost of renewables. (6/9)

In Arizona, the main buyer of electricity from a coal plant on the verge of closure said it would instead source its electricity largely from a solar power project, ignoring an appeal by the US Interior Department to buy more power from the plant to keep it open. (6/9)

UK becalmed: Britain’s gone nine days with almost no wind generation, and forecasts show the calm conditions persisting for another two weeks. The wind drought has pushed up day-ahead power prices to the highest level for the time of year for at least a decade. (6/8)

Slower hurricanes: Hurricane Harvey stalled over Texas in August 2017 and dropped nearly 50 inches of rain in some places. With wind speeds that can top 180 miles per hour, hurricanes are not usually thought of as slow. Yet between 1949 and 2016, tropical cyclone movement speeds declined 10 percent worldwide. The storms, in effect, are sticking around places for a longer period. (6/7)

New CO2 removal: Carbon Engineering founder David Keith and his colleagues say that they have demonstrated for the first time a scalable and cost-effective solution for removing CO2 from the atmosphere. They are commercializing a process which uses water electrolysis and fuels synthesis to produce clean liquid hydrocarbon fuels that are drop-in compatible with existing transportation infrastructure. The company, with funding from Bill Gates, has published a peer-reviewed study showing that they can capture carbon for under $100 a ton. This would be a major advance on the current price of around $600 per ton. (6/8 and 6/9)

Different nukes: TerraPower, which has partnered with the China National Nuclear Corporation, plans to start building a test reactor using the traveling wave concept in China in 2019. If all goes well, it would start operation in the mid-2020s. So far, everything is being done in the lab. The test reactor will reveal whether the traveling wave reactor design as developed by Bill Gates’ TerraPower has a future as a reliable, economically viable alternative to coal, gas, and existing nuclear power technology. But as one prominent critic points out, traveling wave reactors using sodium as coolant carry a very high risk of explosion as the sodium is extremely flammable upon contact with oxygen. (6/5)

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