Energy

Archive for Energy – Page 14

The future of flight in a net-zero-carbon world: 9 scenarios, lots of sustainable biofuel

By Candelaria Bergero, University of California, Irvine and Steve Davis, University of California, Irvine

Several major airlines have pledged to reach net-zero carbon emissions by midcentury to fight climate change. It’s an ambitious goal that will require an enormous ramp-up in sustainable aviation fuels, but that alone won’t be enough, our latest research shows.

The idea of jetliners running solely on fuel made from used cooking oil from restaurants or corn stalks might seem futuristic, but it’s not that far away.

Several airlines are already experimenting with sustainable aviation fuels. These include biofuels made from agriculture residues, trees, corn and used cooking oil. Other fuels are synthetic, made by combining captured carbon from the air and green hydrogen, made with renewable energy. Often, they can go straight into existing aircraft fuel tanks that normally hold fossil jet fuel.

United Airlines, which has been using a blend of used oil or waste fat and fossil fuels on some flights from Los Angeles and Amsterdam, announced in February 2023 that it had formed a partnership with biofuel companies to power 50,000 flights a year between its Chicago and Denver hubs using ethanol-based sustainable aviation fuels by 2028.

In a new study, we examined different options for aviation to reach net-zero emissions and assessed how air travel could continue without contributing to climate change.

The bottom line: Each pathway has important trade-offs and hurdles. Replacing fossil jet fuel with sustainable aviation fuels will be crucial, but the industry will still need to invest in direct-air carbon capture and storage to offset emissions that can’t be cut.

Scenarios for the future

Before the pandemic, in 2019, aviation accounted for about 3.1% of total global CO₂ emissions from fossil fuel combustion, and the number of passenger miles traveled each year was rising. If aviation emissions were a country, that would make it the sixth-largest emitter, closely following Japan.

In addition to releasing carbon emissions, burning jet fuel produces soot and water vapor, known as contrails, that contribute to warming, and these are not avoided by switching to sustainable aviation fuels.

Aviation is also one of the hardest-to-decarbonize sectors of the economy. Small electric and hydrogen-powered planes are being developed, but long-haul flights with lots of passengers are likely decades away.

We developed and analyzed nine scenarios spanning a range of projected passenger and freight demand, energy intensity and carbon intensity of aviation to explore how the industry might get to net-zero emissions by 2050.

Nine sets of bar charts — Nine scenarios illustrate how much carbon offsets would be required to reach net-zero emissions, depending on choices made about demand and energy and carbon intensity. Each starts with 2021’s emissions (1.2 gigatons of carbon dioxide equivalent). With rising demand and no improvement in carbon intensity, a large amount of carbon capture will be necessary. Less fossil fuel use and slower demand growth reduce offset needs.
Candelaria Bergero

We found that as much as 19.8 exajoules of sustainable aviation fuels could be needed for the entire sector to reach net-zero CO₂ emissions. With other efficiency improvements, that could be reduced to as little as 3 exajoules. To put that into context, 3 exajoules is almost equivalent to all biofuels produced in 2019 and far surpasses the 0.005 exajoules of bio-based jet fuel produced in 2019. An exajoule is a measure of energy.

Flying less and improving airplanes’ energy efficiency, such as using more efficient “glide” landings that allow airlines to approach the airport with engines at near idle, can help reduce the amount of fuel needed. But even in our rosiest scenarios – where demand grows at 1% per year, compared to the historical average of 4% per year, and energy efficiency improves by 4% per year rather than 1% – aviation would still need about 3 exajoules of sustainable aviation fuels.

Why offsets are still necessary

A rapid expansion in biofuel sustainable aviation fuels is easier said than done. It could require as much as 1.2 million square miles (300 million hectares) of dedicated land to grow crops to turn into fuel – roughly 19% of global cropland today.

Another challenge is cost. The global average price of fossil jet fuel is about about US$3 per gallon ($0.80 per liter), while the cost to produce bio-based jet fuels is often twice as much. The cheapest, HEFA, which uses fats, oils and greases, ranges in cost from $2.95 to $8.67 per gallon ($0.78 to $2.29 per liter), but it depends on the availability of waste oil.

Fischer-Tropsch biofuels, produced by a chemical reaction that converts carbon monoxide and hydrogen into liquid hydrocarbons, range from $3.79 to $8.71 per gallon ($1 to $2.30 per liter). And synthetic fuels are from $4.92 to $17.79 per gallon ($1.30 to $4.70 per liter).

Realistically, reaching net-zero emissions will likely also rely on carbon dioxide removal.

In a future with similar airline use as today, as much as 3.4 gigatons of carbon dioxide would have to be captured from the air and locked away – pumped underground, for example – for aviation to reach net-zero. That could cost trillions of dollars.

For these offsets to be effective, the carbon removal would also have to follow a robust eligibility criteria and be effectively permanent. This is not happening today in airline offsetting programs, where airlines are mostly buying cheap, nonpermanent offsets, such as those involving forest conservation and management projects.

Some caveats apply to our findings, which could increase the need for offsets even more.

Our assessment assumes sustainable aviation fuels to be net-zero carbon emissions. However, the feedstocks for these fuels currently have life-cycle emissions, including from fertilizer, farming and transportation. The American Society for Testing Materials also currently has a maximum blend limit: up to 50% sustainable fuels can be blended into conventional jet fuel for aviation in the U.S., though airlines have been testing 100% blends in Europe.

How to overcome the final hurdles

To meet the climate goals the world has set, emissions in all sectors must decrease – including aviation.

While reductions in demand would help reduce reliance on sustainable aviation fuels, it’s more likely that more and more people will fly in the future, as more people become wealthier. Efficiency improvements will help decrease the amount of energy needed to power aviation, but it won’t eliminate it.

Scaling up sustainable aviation fuel production could decrease its costs. Quotas, such as those introduced in the European Union’s “Fit for 55” plan, subsidies and tax credits, like those in the U.S. Inflation Reduction Act signed in 2022, and a carbon tax or other price on carbon, can all help achieve this.

Additionally, given the role that capturing carbon from the atmosphere will play in achieving net-zero emissions, a more robust accounting system is needed internationally to ensure that the offsets are compensating for aviation’s non-CO₂ impacts. If these hurdles are overcome, the aviation sector could achieve net-zero emissions by 2050.

About the Author:

Candelaria Bergero, Ph.D. Student in Earth System Science, University of California, Irvine and Steve Davis, Professor of Earth System Science, University of California, Irvine

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Energy Opinions

03 Feb

Murrey Math Lines 03.02.2023 (Brent, S&P 500)

By RoboForex.com

Brent

On H4, the quotes have broken through the 200-day Moving Average and are now below it, which indicates possible development of a downtrend. However, the RSI has reached the oversold area, which is a signal for a correction. So, a test of 4/8 (81.25) is expected, followed by a bounce off it and growth to the resistance level of 6/8 (84.38). The scenario can be cancelled by a downward breakaway of the support level of 4/8 (81.25). In this case, the quotes might drop to 2/8 (78.12).

On M15, the upper line of VoltyChannel is too far away from the current price, so growth of the quotes will be indicated by a bounce off 4/8 (81.25) on H4.

S&P 500

On H4, the quotes are above the 200-day Moving Average, which indicates prevalence of an uptrend. However, the RSI has reached the overbought area. In this case, a downward breakaway of 5/8 (4140.6) is expected, followed by falling to the support level of 4/8 (4062.5). The scenario can be cancelled by an upward breakaway of the resistance level of 6/8 (4218.8). In this case, the quotes should go on moving upwards and might reach 7/8 (4296.9).

On M15, an additional signal of a decline can be given by a breakaway of the lower border of VoltyChannel.

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Energy Financial News

26 Jan

How California’s ambitious new climate plan could help speed energy transformation around the world

By Daniel Sperling, University of California, Davis

California is embarking on an audacious new climate plan that aims to eliminate the state’s greenhouse gas footprint by 2045, and in the process, slash emissions far beyond its borders. The blueprint calls for massive transformations in industry, energy and transportation, as well as changes in institutions and human behaviors.

These transformations won’t be easy. Two years of developing the plan have exposed myriad challenges and tensions, including environmental justice, affordability and local rule.

For example, the San Francisco Fire Commission had prohibited batteries with more than 20 kilowatt-hours of power storage in homes, severely limiting the ability to store solar electricity from rooftop solar panels for all those times when the sun isn’t shining. More broadly, local opposition to new transmission lines, large-scale solar and wind facilities, substations for truck charging, and oil refinery conversions to produce renewable diesel will slow the transition.

I had a front row seat while the plan was prepared and vetted as a longtime board member of the California Air Resources Board, the state agency that oversees air pollution and climate control. And my chief contributor to this article, Rajinder Sahota, is deputy executive officer of the board, responsible for preparing the plan and navigating political land mines.

We believe California has a chance of succeeding, and in the process, showing the way for the rest of the world. In fact, most of the needed policies are already in place.

What happens in California has global reach

What California does matters far beyond state lines.

California is close to being the world’s fourth-largest economy and has a history of adopting environmental requirements that are imitated across the United States and the world. California has the most ambitious zero-emission requirements in the world for cars, trucks and buses; the most ambitious low-carbon fuel requirements; one of the largest carbon cap-and-trade programs; and the most aggressive requirements for renewable electricity.

In the U.S., through peculiarities in national air pollution law, other states have replicated many of California’s regulations and programs so they can race ahead of national policies. States can either follow federal vehicle emissions standards or California’s stricter rules. There is no third option. An increasing number of states now follow California.

So, even though California contributes less than 1% of global greenhouse gas emissions, if it sets a high bar, its many technical, institutional and behavioral innovations will likely spread and be transformative.

What’s in the California blueprint

The new Scoping Plan lays out in considerable detail how California intends to reduce greenhouse gas emissions 48% below 1990 levels by 2030 and then achieve carbon neutrality by 2045.

It calls for a 94% reduction in petroleum use between 2022 and 2045 and an 86% reduction in total fossil fuel use. Overall, it would cut greenhouse gas emissions by 85% by 2045 relative to 1990 levels. The remaining 15% reduction would come from capturing carbon from the air and fossil fuel plants, and sequestering it below ground or in forests, vegetation and soils.

To achieve these goals, the plan calls for a 37-fold increase in on-road zero-emission vehicles, a sixfold increase in electrical appliances in residences, a fourfold increase in installed wind and solar generation capacity, and doubling total electricity generation to run it all. It also calls for ramping up hydrogen power and altering agriculture and forest management to reduce wildfires, sequester carbon dioxide and reduce fertilizer demand.

This is a massive undertaking, and it implies a massive transformation of many industries and activities.

Transportation: California’s No. 1 emitter

Transportation accounts for about half of the state’s greenhouse gas emissions, including upstream oil refinery emissions. This is where the path forward is perhaps most settled.

The state has already adopted regulations requiring almost all new cars, trucks and buses to have zero emissions – new transit buses by 2029 and most truck sales and light-duty vehicle sales by 2035.

In addition, California’s Low Carbon Fuel Standard requires oil companies to steadily reduce the carbon intensity of transportation fuels. This regulation aims to ensure that the liquid fuels needed for legacy cars and trucks still on the road after 2045 will be low-carbon biofuels.

But regulations can be modified and even rescinded if opposition swells. If battery costs do not resume their downward slide, if electric utilities and others lag in providing charging infrastructure, and if local opposition blocks new charging sites and grid upgrades, the state could be forced to slow its zero-emission vehicle requirements.

The plan also relies on changes in human behavior. For example, it calls for a 25% reduction in vehicle miles traveled in 2030 compared with 2019, which has far dimmer prospects. The only strategies likely to significantly reduce vehicle use are steep charges for road use and parking, a move few politicians or voters in the U.S. would support, and a massive increase in shared-ride automated vehicles, which are not likely to scale up for at least another 10 years. Additional charges for driving and parking raise concerns about affordability for low-income commuters.

Electricity and electrifying buildings

The key to cutting emissions in almost every sector is electricity powered by renewable energy.

Electrifying most everything means not just replacing most of the state’s natural gas power plants, but also expanding total electricity production – in this case doubling total generation and quadrupling renewable generation, in just 22 years.

That amount of expansion and investment is mind-boggling – and it is the single most important change for reaching net zero, since electric vehicles and appliances depend on the availability of renewable electricity to count as zero emissions.

Electrification of buildings is in the early stages in California, with requirements in place for new homes to have rooftop solar, and incentives and regulations adopted to replace natural gas use with heat pumps and electric appliances.

The biggest and most important challenge is accelerating renewable electricity generation – mostly wind and utility-scale solar. The state has laws in place requiring electricity to be 100% zero emissions by 2045 – up from 52% in 2021.

The plan to get there includes offshore wind power, which will require new technology – floating wind turbines. The federal government in December 2022 leased the first Pacific sites for offshore wind farms, with plans to power over 1.5 million homes. However, years of technical and regulatory work are still ahead.

For solar power, the plan focuses on large solar farms, which can scale up faster and at less cost than rooftop solar. The same week the new scoping plan was announced, California’s Public Utility Commission voted to significantly scale back how much homeowners are reimbursed for solar power they send to the grid, a policy known as net metering. The Public Utility Commission argues that because of how electricity rates are set, generous rooftop solar reimbursements have primarily benefited wealthier households while imposing higher electricity bills on others. It believes this new policy will be more equitable and create a more sustainable model.

Industry and the carbon capture challenge

Industry plays a smaller role, and the policies and strategies here are less refined.

The state’s carbon cap-and-trade program, designed to ratchet down total emissions while allowing individual companies some flexibility, will tighten its emissions limits.

But while cap-and-trade has been effective to date, in part by generating billions of dollars for programs and incentives to reduce emissions, its role may change as energy efficiency improves and additional rules and regulations are put in place to replace fossil fuels.

One of the greatest controversies throughout the Scoping Plan process is its reliance on carbon capture and sequestration, or CCS. The controversy is rooted in concern that CCS allows fossil fuel facilities to continue releasing pollution while only capturing the carbon dioxide emissions. These facilities are often in or near disadvantaged communities.

California’s chances of success

Will California make it? The state has a track record of exceeding its goals, but getting to net zero by 2045 requires a sharper downward trajectory than even California has seen before, and there are still many hurdles.

Environmental justice concerns about carbon capture and new industrial facilities, coupled with NIMBYism, could block many needed investments. And the possibility of sluggish economic growth could led to spending cuts and might exacerbate concerns about economic disruption and affordability.

There are also questions about prices and geopolitics. Will the upturn in battery costs in 2022 – due to geopolitical flare-ups, a lag in expanding the supply of critical materials, and the war in Ukraine – turn out to be a hiccup or a trend? Will electric utilities move fast enough in building the infrastructure and grid capacity needed to accommodate the projected growth in zero-emission cars and trucks?

It is encouraging that the state has already created just about all the needed policy infrastructure. Additional tightening of emissions limits and targets will be needed, but the framework and policy mechanisms are largely in place.

Rajinder Sahota, deputy executive officer of the California Air Resources Board, contributed to this article.

About the Author:

Daniel Sperling, Distinguished Blue Planet Prize Professor of Civil and Environmental Engineering and Founding Director, Institute of Transportation Studies, University of California, Davis

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Energy Opinions

25 Jan

Natural Gas: Here’s What Happened After a “Double Top”

A key technical pattern warns of a reversal

By Elliott Wave International

It probably won’t be a surprise to you that Elliott Wave International is an advocate of technical analysis. After all, the Elliott wave method is a form of technical analysis.

You probably know that the term “technical analysis” refers to analyzing the behavior of financial markets themselves — generally by studying charts — as opposed to “fundamental” analysis, which is based on news and events outside of financial markets.

One of the many classic technical-analysis chart patterns is known as a double top. (Conversely, a double bottom is the same reversal formation after a significant prior down move.) Getting back to the double top, the first price high (or top) is followed by a moderate decline. The price then rises into the same territory as the prior high, which is the second top.

In August, the European Financial Forecast, a monthly Elliott Wave International publication which covers European financial markets and is also part of the monthly Global Market Perspective, said:

Natural gas has formed a bearish double top.

Keep in mind that this analysis was provided even though energy analysts were calling for natural gas prices to remain elevated due to “fundamentals,” for example, “supply strains.” Here’s a July 25 headline (The Financial Times):

Traders expect European gas prices to remain elevated for years to come

Instead of remaining elevated, the price of natural gas fell, which was right in line with our analysis of that double top in the August Global Market Perspective.

The January Global Market Perspective provides a review with this chart and commentary:

The chart illustrates the continuous natural gas futures contract that trades on the New York Mercantile Exchange.

In August, we illustrated this contract along with 15 other key commodities and stated that gas prices had formed a bearish double top. In a matter of weeks, futures collapsed 50% and penetrated a key technical support level at [a key Elliott wave]. The same support level failed again last month.

True, not all analysis based on a market’s “technicals” works out as expected, but often, it does — or at least gets very close.

See how Elliott Wave International’s global analysts apply Elliott wave and technical analysis to other financial markets — free — for a limited time.

Just follow this link to get the details.

This article was syndicated by Elliott Wave International and was originally published under the headline Natural Gas: Here’s What Happened After a “Double Top”. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Energy Financial News

19 Jan

Why Oil Prices Fell in the Face of “Supply Shock”

“Crude should be at the forefront of a…”

By Elliott Wave International

Looking back on 2022, one of the biggest fears about oil was that prices would skyrocket even more than they did due to a disruption in supply from Russia.

Of course, Russia has been a major world supplier of oil, but after Russia invaded Ukraine, many global financial institutions refused to back transactions involving Russian oil.

So, back in March of 2022, we had this headline from a major financial website (CNBC, March 4):

Oil market heads for ‘biggest supply crisis in decades’ with Russia’s exports set to fall, IEA says

Conventional wisdom says that a disruption in supply, let alone the biggest in decades, would lead to soaring oil prices.

However, at the time that March headline published, NYMEX crude oil was trading around $115 a barrel — and prices have been in a downtrend for most of the time since, for almost a year now.

In December, even the New York Times had a hard time explaining the disconnect (Dec. 9):

Oil Prices Drop, Despite Heightened Sanctions on Russian Crude

So, what’s going on?

Well, Elliott Wave International has studied the historic price patterns of oil and has concluded that investors cannot count on a relationship between prices and the oil market’s “fundamentals.”

Indeed, Robert Prechter’s Socionomic Theory of Finance provided historical analysis with this chart and commentary:

[The chart] shows the annual ratio between consumption and production worldwide. … Take a look at the three shaded trends on the graph. The huge surge in the ratio between 1980 and 1982 — the biggest rise on the chart — did not cause the price of oil to rise; rather, it fell, a lot. Nor did the large decline in the ratio between 2002 and 2005 cause the price of oil to fall; rather, it rose, a lot. And the rapid plunge in the ratio during 2009 did not cause the price of oil to fall; rather, it tripled. These extreme anomalies render the proposed causality spurious.

What Elliott Wave International has observed is that oil’s price does tend to follow Elliott wave patterns. As you probably know, Elliott waves reflect the repetitive patterns of investor psychology, the primary driver of financial markets.

Using the Elliott wave model, the December Global Market Perspective, a monthly Elliott Wave International publication which covers 50-plus financial markets, stated:

Crude should be at the forefront of a … decline.

Indeed, as of this intraday writing on Jan. 9, NYMEX crude oil is trading lower than it was when the December Global Market Perspective published.

Now, the new January Global Market Perspective offers more insight into what you can expect for oil’s future price path.

And, speaking of the Elliott wave model, if you’re new to the subject, or simply need a refresher, read Frost & Prechter’s Elliott Wave Principle: Key to Market Behavior. Here’s a quote:

In markets, progress ultimately takes the form of five waves of a specific structure. Three of these waves, which are labeled 1, 3 and 5, actually effect the directional movement. They are separated by two countertrend interruptions, which are labeled 2 and 4. The two interruptions are apparently a requisite for overall directional movement to occur.

[R.N.] Elliott noted three consistent aspects of the five-wave form. They are: Wave 2 never moves beyond the start of wave 1; wave 3 is never the shortest wave; wave 4 never enters the price territory of wave 1.

… Elliott did not specifically say that there is only one overriding form, the “five-wave” pattern, but that is undeniably the case. At any time, the market may be identified as being somewhere in the basic five-wave pattern at the largest degree of trend. Because the five-wave pattern is the overriding form of market progress, all other patterns are subsumed by it.

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Starting on January 16, and every two days, you’ll get a section of the latest issue of EWI’s Global Market Perspective.

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This article was syndicated by Elliott Wave International and was originally published under the headline Why Oil Prices Fell in the Face of “Supply Shock”. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Energy Financial News

30 Dec

Oil & Gas Co. To Expand Its Portfolio of Assets

Source: Bill Newman (12/29/22)

The transformational acquisition of interests in various oilfield-holding licenses is expected to generate “substantial free cash flow,” noted a Research Capital Corp. report.

Valeura Energy Inc. (VLE:TSX; PNWRF:OTCMKTS) will acquire offshore oil assets in the Gulf of Thailand, “a transformational action that provides a huge boost to cash flow,” reported Research Capital Corp. analyst Bill Newman in a Dec. 6 research note.

To reflect the deal, Research Capital increased its target price on the Canadian oil and gas company to CA$8.25 per share from CA$1.45, its current share price. From here, the target represents a possible 469% return for investors.

“We expect the assets will generate substantial free cash flow to fund development and appraisal projects to extend the life of the reserves, help to fund the company’s other Thailand assets, and provide capital for additional acquisitions,” wrote Newman.

Research Capital Corp. maintains its Speculative Buy rating on Valeura.

Valeura’s management team forecasts 2023 pretax annual cash flow of US$360 million (US$360M) from the new assets, Newman noted; Research Capital estimates funds flow forecast next year to be US$206M.

The three assets Valeura is to acquire, relayed Newman, are:

an operated 100% interest in the B5/27 license holding the Jasmine and Ban Yen oilfields
an operated 90% working interest in the G11/48 license holding the Nong Yao oilfield
a 70% interest in the G1/48 license holding the Manora oilfield

Newman noted these concessions have a current combined net oil production of about 21,200 barrels per day.

“The oilfields are midlife to mature assets but with additional development opportunities that can significantly extend the life,” he added.

For the acquisition, Valeura will pay US$10.4M in cash plus a possible maximum contingent payment of US$50M, due only if oil prices are high. Specifically, this payment is based on average oil prices in 2022, 2023, and 2024 and kicks in when the Dubai benchmark average exceeds US$100 per barrel. The Calgary, Alberta-based company will make the purchase through Valeura Energy Asia Pte. Ltd., a subsidiary and special purpose vehicle.

“In our conservative scenario, which includes the max contingent payment and our estimated discounted decommission costs of US$168.4M, the transaction metrics remain compelling at US$9.47 per barrel and $10,774 per flowing barrel,” Newman highlighted.

Research Capital Corp. maintains its Speculative Buy rating on Valeura.

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Energy Financial News

29 Dec

How Putin’s war and small islands are accelerating the global shift to clean energy, and what to watch for in 2023

By Rachel Kyte, Tufts University

The year 2022 was a tough one for the growing number of people living in food insecurity and energy poverty around the world, and the beginning of 2023 is looking bleak.

Russia’s war on Ukraine, one of the world’s largest grain and fertilizer feedstock suppliers, tightened global food and energy supplies, which in turn helped spur inflation.

Drought, exacerbated in some places by warring groups blocking food aid, pushed parts of the Horn of Africa toward famine. Extreme weather disasters have left trails of destruction with mounting costs on nearly every continent. More countries found themselves in debt distress.

But below the surface of almost weekly bad news, significant changes are underway that have the potential to create a more sustainable world – one in which humanity can tackle climate change, species extinction and food and energy insecurity.

I’ve been involved in international sustainable development for most of my career and now teach climate diplomacy. Here’s how two key systems that drive the world’s economy – energy and finance – are starting to shift toward sustainability and what to watch for in 2023.

Ramping up renewable energy growth

Russian President Vladimir Putin’s war on Ukraine has reverberated through Europe and spread to other countries that have long been dependent on the region for natural gas. But while oil-producing countries and gas lobbyists are arguing for more drilling, global energy investments reflect a quickening transition to cleaner energy.

Call it the Putin effect – Russia’s war is speeding up the global shift away from fossil fuels.

In December, the International Energy Agency published two important reports that point to the future of renewable energy.

First, the IEA revised its projection of renewable energy growth upward by 30%. It now expects the world to install as much solar and wind power in the next five years as it installed in the past 50 years.

The second report showed that energy use is becoming more efficient globally, with efficiency increasing by about 2% per year. As energy analyst Kingsmill Bond at the energy research group RMI noted, the two reports together suggest that fossil fuel demand may have peaked. While some low-income countries have been eager for deals to tap their fossil fuel resources, the IEA warns that new fossil fuel production risks becoming stranded, or uneconomic, in the next 20 years.

The main obstacles to the exponential growth in renewable energy, IEA points out, are antiquated energy policy frameworks, regulations and subsidies written at a time when energy systems, pricing and utilities were all geared toward fossil fuels.

Look in 2023 for reforms, including countries wrestling with how to permit smart grids and new transmission lines and finding ways to reward consumers for efficiency and clean energy generation.

The year 2023 will also see more focus on developing talent for the clean energy infrastructure build-out. In the U.S., the recently passed Inflation Reduction Act and the Bipartisan Infrastructure Law will pour hundreds of billions of dollars into clean energy and technology. Europe’s REPowerEU commitments will also boost investment. However, concerns about “buy American” rules within the new U.S. climate laws and an EU plan to launch a carbon border adjustment tax are raising fears that nationalism in trade policy could harm the speed of green growth.

Fixing international climate finance

The second system to watch for reform in 2023 is international finance. It’s also crucial to how low-income countries develop their energy systems, build resilience and recover from climate disasters.

Wealthy nations haven’t moved the energy transition forward quickly enough or provided enough support for emerging markets and developing countries to leapfrog inefficient fossil-fueled energy systems. Debt is ballooning in low-income countries, and climate change and disasters like the devastating flooding in Pakistan wipe out growth and add costs.

Barbados Prime Minister Mia Mottley has brought together international financial institutions with think tanks and philanthropists to push for changes.

Countries like Mottley’s have been frustrated that the current international financial system – primarily the International Monetary Fund and the multilateral development banks, including the World Bank – haven’t adapted to the growing climate challenges.

Mottley’s Bridgetown Initiative proposes a new approach. It calls for countries’ vulnerability to be measured by climate impact, and for funds to be made available on that basis, rather than income. It also urges more risk-taking by the development banks to leverage private investment in vulnerable countries, including climate debt swaps.

The Bridgetown Initiative also calls for countries to reflow their IMF Special Drawing Rights – a reserve available to IMF members – into a proposed fund that vulnerable countries could then use to build resilience to climate change. A working group established by the G-20 points out that the “easiest” trillion dollars to access for urgent climate response is that already in the system.

In early 2023, Mottley and French President Emmanuel Macron, with others, will drive a process to examine the possible measures to improve the current system before the annual meetings of the World Bank and the IMF in April, and then at a June summit called by France.

Watch in 2023 to see if this is the year the G-7 and the G-20 rekindle their global economic leadership roles. Their members are the largest owners of the international financial institutions, and also the largest emitters of carbon dioxide on the planet. India will lead the G-20 in 2023, followed by Brazil in 2024. Their leadership will be critical.

Watch small nations’ leadership in 2023

In 2023, expect to see small nations increasingly push for global transformation, led by the V-20 – the finance ministers of the countries most vulnerable to climate change.

In addition to the Bridgetown Initiative, Barbados has suggested a way to pool new funds working off the model of an oil spill damage fund at the International Maritime Organization. In the IMO fund, big oil importers pay in, and the fund pays out in the event of a spill. Barbados supports creating a similar fund to help countries when a climate event costs more than 5% of a country’s GDP.

This model is potentially a way to pool funds from a levy on the windfall profits of energy companies that saw their profits soar in 2022 while billions of people around the world suffered from energy price inflation.

Finally, the breakthrough agreement on biodiversity reached in December 2022 provides more promise for 2023. Countries agreed to conserve 30% of the world’s biodiversity and restore 30% of the world’s degraded lands. The funding – a $30 billion fund by 2030 – remains to be found, but the plan clarifies the task ahead and nature’s place in it. And we can hope 2023 is a year when signs of peace in our war against nature break out.

About the Author:

Rachel Kyte, Dean of the Fletcher School, Tufts University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Energy Opinions

28 Dec

Hydrogen Fueled Boiler Drives Company’s Pivot Toward Green Energy

Source: Streetwise Reports (12/22/22)

Jericho Energy Ventures Inc. reports gains with strong financial performance in gas, oil, and fuel of the future, hydrogen. Read more to learn the details of this report as well as see what experts are saying about the company.

Jericho Energy Ventures Inc. (JEV:TSX.V; JROOF:OTC PINK: JLM:FRA) has been awarded the Solar Impulse Foundations’ ‘Solar Impulse Efficient Solution’ Label, for its zero-emission Dynamic Combustion Chamber™ (DCC™) hydrogen fueled boiler. The Label seeks to identify solutions that hit high standards in profitability and sustainability and displays them to leading decision-makers hoping to expedite their development.

JEV is an energy company focused on the transition to low-carbon energy solutions, with investments in zero-emission hydrogen technologies. Founded in 2010, the company initially focused its efforts on oil and gas before beginning the transition to green energy in 2020 and continues to use profits from those sectors to fund its research into hydrogen.

Why Hydrogen?

Hydrogen continues to claim its spot on the list of sustainable fuels of the future. As reported by the National Inflation Association, on Dec. 9, the leaders of France, Portugal, and Spain, as well as European Commission President Ursula von der Leyen, met in the Spanish city of Alicante for a discussion on the construction and financing of a new pipeline to carry green hydrogen between Barcelona and Marseille.

The NIA also reported on an announcement from Airbus detailing the development of a hydrogen-powered jet engine for the A380 superjumbo, with test flights due to begin in 2026.

Technical analyst Clive Maund described JEV as an “energy company that is moving with the times,” and it continues to prove it with the development of its hydrogen-fueled product.

The Biden-Harris Administration, through the U.S. Department of Energy (DOE), has also announced US$750 million in funding in a bid to reduce the cost of clean hydrogen technology.

It is hoped the injection of funds will accelerate the expansion of hydrogen use and is an essential part of President Biden’s plan to have a 100% clean electrical grid by 2035 and net-zero carbon emissions by 2050.

Texas Governor Greg Abbott also announced on Dec. 8 that a US$4 billion hydrogen factory will be built in North Texas and will produce more than 73,000 metric tons of green hydrogen per year. This will make it the largest green hydrogen facility in the U.S.

The Chairman of the Solar Impulse Foundation, Bertrand Piccard, highlighted that, while heads of state and government officials may say that protecting the environment is too expensive, “solutions exist and represent the biggest market opportunity of our century,” calling it an “opportunity which cannot be missed.”

And Jericho Energy Ventures is not a company that likes to miss opportunities. Back in November, technical analyst Clive Maund described JEV as an “energy company that is moving with the times,” and it continues to prove it with the development of its hydrogen-fueled product.

Catalyst: Expert Says Jericho To Be 2023’s Largest Gainer

While the award was great for Jericho Energy Ventures, it is not the only good news to come from the company. It follows the news that JEV, whose registered office is in Vancouver, BC, reported record oil and gas joint venture results in Q3, a direct result of growing crude oil and natural gas prices in the first three quarters of 2022.

Having begun as an energy company focused on oil and gas, it acquired Hydrogen Technologies in January 2021 as part of its transition to researching and developing green energy solutions. It continues to invest in companies aligned with a low-carbon future, including H2U Technologies Inc., which is developing a new electrolyzer that will facilitate low-cost hydrogen production.

The National Inflation Association predicts that JEV will be one of the market’s largest percentage gainers in 2023.

Jericho Energy Ventures CEO Brian Williamson said that the company continues to “demonstrate that our strategy of providing molecules required for today and tomorrow can yield results for our shareholders. Our steady oil and gas production base provides strong cash flows that feed both strategic initiatives of hydrocarbons today and lower carbon forms of energy tomorrow.”

The National Inflation Association predicts that JEV will be one of the market’s largest percentage gainers in 2023. Investment from billionaire Chris Sacca’s Lowercarbon Capital in January 2022, along with investment from JEV into Supercritical Solutions, will go toward the development of the world’s first green hydrogen electrolyzer. The fact that Chris Sacca is one of the top three most successful technology investors of all time is sure to bring a level of prestige to the work going into development.

The NIA expects JEV’s market cap to “reach levels that are many times higher than today.”

The boiler was developed by JEV’s wholly-owned subsidiary, Hydrogen Technologies, which provides its award-winning clean energy solution for the Commercial and Industrial Boiler Market. The DCC™ produces zero CO2 or Greenhouse Gas emissions and seeks to replace boilers that burn coal, natural gas, fuel oil, or diesel, which will hopefully lead to a significant reduction in global greenhouse gasses emitted each year. It aims to decarbonize the global commercial and industrial heating industry, valued at almost US$30 billion.

Williamson stated, “we are, of course, honored to receive this prestigious recognition from the Solar Impulse Foundation. I applaud the fortitude and determination shown by the Hydrogen Technologies Team, which made this achievement possible, and we look forward to our DCC™ playing a major role in the reduction of greenhouse gas emissions from the commercial and industrial heat and steam market globally.”

Ownership and Share Structure

	Retail: 70%
	Management/Insiders: 30%
	Institutions: 0%

70%

30%

Share Structure as of 12/22/2022

According to Reuters, around 30% of Jericho’s shares are held by management and insiders. CEO Brian Williamson owns 1.26% of the shares, around 2.85 million. Founder Allen William Wilson is at 0.87%, with 1.97 million shares. and board member Nicholas Baxter owns 0.5%, with just over 1.1 million. Founder Allen William Wilson is at 0.87%, with 1.97 million shares.

Around 0.1% of shares are held by institutions. The largest of these is Michael L. Graves Inter Vivos Trust which is at 16.43%, with 37.13 million shares. McKenna & Associates LLC is next at 10.78%, with 24.36 million shares, and Andrew James Mckenna himself is at 0.15%, with 0.35 million shares.

70% of Jericho’s shares are in retail.

JEV’s market cap is CA$81.71 million, and it trades in a 52-week range of CA$0.31 and CA$0.84. It has 226.05 million shares outstanding.

Disclosures:
1) Lauren Rickard wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. They members of their household own securities of the following companies mentioned in the article: None. They or members of their household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Jericho Energy Ventures Inc. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with: None. Please click here for more information.

3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

Energy Financial News

13 Dec

Oil rises amid stoppage of key gas pipeline. A decline in US inflation could trigger a rally in stock indices

By JustMarkets

The Federal Reserve Bank of New York’s Microeconomic Data Center yesterday released its November 2022 Survey of Consumer Expectations, which shows that inflation expectations have declined in the short, medium, and long term. According to the report, expectations for rising home prices will continue to decline while the labor market will continue to strengthen. Household income growth expectations rose to a new high. Investors renewed their optimistic bets ahead of the release of economic data on inflation and the Federal Reserve’s interest rate decision, which is expected later this week. As the stock market closed Monday, the Dow Jones Index (US30) increased by 1.58%, and the S&P 500 Index (US500) added 1.43%. Technology Index NASDAQ (US100) gained 1.26% on Monday. All three indices closed the day in positive territory.

As a reminder, this is one of the busiest macroeconomic weeks of the year, with the four major central banks holding their final policy meetings of the year and data on US consumer inflation, which could play a major role in determining the outlook for the US interest rate and the dollar.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE30) decreased by 0.45%, France’s CAC 40 (FR40) lost 0.41%, Spain’s IBEX 35 (ES35) was down by 0.37%, Britain’s FTSE 100 (UK100) closed Monday at minus 0.41%.

UK GDP for October rose by 0.5%, up from minus 0.6% in September and ahead of the consensus forecast of 0.4%. The Bank of England and the UK Treasury have already acknowledged that the country is in recession, although technically, there have not been two consecutive quarters of negative growth so far. There has only been one-quarter of negative growth. Typically, negative economic growth during a recession leads to lower inflation, often to the point of deflation. This gives central banks plenty of room for easing and the government plenty of room to spend. But Britain’s spending is already well above its means, and its debt is too high. High inflation means that the Bank of England cannot begin easing. In fact, it may have to continue tightening, exacerbating the recession. Current market expectations call for the Bank of England to reach its peak rate of around 4% in 2023, and a rate cut is now planned for 2024.

Oil prices jumped by 3% yesterday. Oil was supported by the continued closure of the pipeline that connects Canadian oil to the US Gulf Coast. How long it will take Canada’s TC Energy Corp to clean up and restart its Keystone pipeline is still unknown. TC Energy closed the pipeline after a leak. More than 14,000 barrels of oil leaked from the pipeline last week, the largest US crude oil spill in nearly a decade. A decline in US inflation today could spark further gains in oil prices.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.21%, China’s FTSE China A50 (CHA50) was down by 0.08%, Hong Kong’s Hang Seng (HK50) fell by 2.20%, India’s NIFTY 50 (IND50) gained 0.01%, and Australia’s S&P/ASX 200 (AU200) ended Monday down by 0.45%.

According to data released Monday by the People’s Bank of China (PBOC), Chinese banks provided 1.21 trillion yuan ($173.48 billion) in new yuan loans, almost double October’s 615.2 billion yuan but below analysts’ expectations. Economists are confident that China’s central bank will focus on supporting the slowing economy. The PBOC has already cut the reserve requirement ratio for banks by 25 bps since December 5, freeing up about 500 billion yuan in long-term liquidity to support the fragile economy due to the Covid outbreak.

In Australia, the NAB business confidence index has become negative for the first time since December 2021. Orders declined from +14 in September to +5 in November, indicating a not-rosy outlook. In fact, the gap between current business conditions and business confidence is now at a record low, indicating heightened concerns about the sustainability of the economy next year. The main reasons for the decline in business confidence are high inflation and rising interest rates, which are putting pressure on consumers.

S&P 500 (F) (US500) 3,990.56 +56.18 (+1.43%)

Dow Jones (US30) 34,005.04 +528.58 (+1.58%)

DAX (DE40) 14,306.63 −64.09 (−0.45%)

FTSE 100 (UK100) 7,476.63 +4.46 (+0.06%)

USD Index 105.02 +0.21 (+0.20%)

Important events for today:

– Australia NAB Business Confidence (m/m) at 02:30 (GMT+2);
– UK Average Earnings Index (m/m) at 09:00 (GMT+2);
– UK Claimant Count Change (m/m) at 09:00 (GMT+2);
– UK Unemployment Rate (m/m) at 09:00 (GMT+2);
– German Consumer Price Index (m/m) at 09:00 (GMT+2);
– German ZEW Economic Sentiment (m/m) at 12:00 (GMT+2);
– Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+2);
– UK BoE Gov Bailey Speaks at 13:00 (GMT+2);
– US Consumer Price Index (m/m) at 15:30 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Energy Financial News

12 Dec

Brent Lost 11% Over Week

By RoboForex Analytical Department

The crude oil market keeps trying to stabilise but fails. Brent barrel started this week by an attempt to reach 76.55 USD.

On the whole, the probability of an equally fast decline looks limited. Nonetheless, investors may react negatively to the oil demand forecasts presented by OPEC and the IEA. However, market participants can use the fact that the Keystone Pipeline that delivers crude oil from Canada to the US is still laying idle.

According to Baker Hughes, the number of active drills in the US has dropped by 2 over a week, reaching 625 units.

On H4, Brent has reached the local goal of the wave of decline at 75.33. Today the market is forming a structure of a wave of growth to 89.40. A link of correction to 82.30 is expected, followed by growth to 101.00. Technically, this scenario is confirmed by the MACD: its signal line is headed strictly upwards to zero. A breakaway and further growth to new highs should follow.

On H1, Brent has formed the first impulse of growth to 77.00. A link of correction to 76.06 is not excluded. Then a new structure of growth is expected to develop to 78.78. Technically, this scenario is confirmed by the Stochastic oscillator. Its signal line is under 80, headed strictly down to 50. A bounce off it and growth back to 80 are expected.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Energy Financial News

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