Archive for Energy – Page 9

Uranium Co. Acquires Rio Tinto’s Wyoming Assets

Source: Joe Reagor (9/27/24)

Roth MKM raised its target price on Uranium Energy Corp. (UEC:NYSE AMERICAN) after its agreement to acquire Rio Tinto Plc.’s (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK) Wyoming uranium assets for US$175 million in cash.

Roth MKM analyst Joe Reagor, in a research report published on September 25, 2024, reiterated a Buy rating on Uranium Energy Corp. (UEC:NYSE AMERICAN) while raising the price target from US$9.00 to US$9.50. The report follows UEC’s announcement of its agreement to acquire Rio Tinto Plc.’s (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK) Wyoming uranium assets for US$175 million in cash.

Reagor highlighted the significance of the acquisition, stating, “We view this acquisition as an ideal bolt-on for UEC and as such, we are increasing our price target from US$9.00 to US$9.50.” The analyst noted that the acquired assets include the Red Desert project, the Green Mountain project, and the Sweetwater uranium plant, with historical resources of 175 million pounds of uranium.

The analyst emphasized the potential value creation from these assets, explaining, “Given the current resource base is historical, there is potential for UEC to generate shareholder value by converting these resources to a SK-1300 compliant resource, in our view.” Reagor also pointed out the potential for new discoveries and the significance of the Sweetwater plant, stating, “Ultimately, we believe the licensed capacity could be converted to ISR resin stripping and thereby provide UEC with significant production growth potential.”

Regarding UEC’s strategic plans, Reagor noted that the company intends to fund the transaction from its existing liquidity. He added, “We believe UEC’s purchase price for Rio’s Wyoming uranium assets reflects the historical nature of the resources and a lack of recent work on the projects. However, if UEC is able to update the resources to be SK-1300 compliant, they would be worth significantly more, in our opinion.”

Roth MKM’s valuation methodology for UEC is based on a sum-of-the-parts analysis. Reagor explained, “We assign a value of US$974.5 million to UEC’s ISR projects (US$8.5 per pound of resource including the historical resources from Uranium One), US$156 million for the potential to add 52 million additional pounds of ISR resources in Wyoming (US$3.00 per pound), US$246.4 million for its hard rock assets (US$6.00 per pound of resource), and US$69.3 million for the company’s exploration project Oviedo (US$3.00 per pound of the low end of the exploration target).”

The analyst added values for various facilities, assets, and investments, including “US$250 million to the company’s Hobson Facility, US$250 million for the Irigaray facility, US$1.2 billion for the former UEX assets, US$255 million for Roughrider, US$325 million for the Rio Wyoming assets (less US$175 million acquisition cost), and US$38.3 million for its titanium asset.”

In conclusion, Reagor’s sum-of-the-parts analysis led to a total valuation of US$3.9 billion, or US$9.45 per fully diluted share, rounded up to a price target of US$9.50. This represents a potential return of approximately 47% from the current price of US$6.45.

The report also outlined several risk factors, including political risk, commodity price risk, operational and technical risk, pre-revenue risk, and market risk, which could impact UEC’s ability to reach the price target.

 

Important Disclosures:

  1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Uranium Energy Corp.
  2.  This article does not constitute investment advice and is not a solicitation for any 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. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

For additional disclosures, please click here.

Disclosures for Roth MKM, Uranium Energy Corp., September 25, 2024

Regulation Analyst Certification (“Reg AC”): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Disclosures: Within the last twelve months, ROTH Capital Partners, or an affiliate to ROTH Capital Partners, has received compensation for investment banking services from Uranium Energy Corp.. ROTH makes a market in shares of Uranium Energy Corp. and as such, buys and sells from customers on a principal basis. Shares of Uranium Energy Corp. may be subject to the Securities and Exchange Commission’s Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.

ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months. The material, information and facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the express written permission of ROTH. Copyright 2024. Member: FINRA/SIPC.

Rising electricity demand could bring Three Mile Island and other prematurely shuttered nuclear plants back to life

By Todd Allen, University of Michigan 

Constellation, an energy company that provides electricity and natural gas to customers in 16 states and Washington, announced on Sept. 20, 2024, that it plans to restore and restart Unit 1 at Three Mile Island, a nuclear plant near Middletown, Pennsylvania, that was shut down in 2019. Microsoft has signed a 20-year agreement to purchase electricity generated by the plant to offset power demand from its data centers in the mid-Atlantic region.

Three Mile Island was the site in 1979 of a partial meltdown at the plant’s Unit 2 reactor. The Nuclear Regulatory Commission calls this event “the most serious accident in U.S. commercial nuclear power plant operating history,” although only small amounts of radiation were released, and no health effects on plant workers or the public were detected. Unit 1 was not affected by the accident. University of Michigan nuclear engineering professor Todd Allen explains what restarting Unit 1 will involve, and why some other shuttered nuclear plants may also get new leases on life.

What is the history of TMI-1?

Three Mile Island Unit 1 is a large nuclear power station with the capacity to generate 837 megawatts of electricity – enough to power about 800,000 homes. It started commercial operations in 1974 and ran until September 2019.

After the accident at Unit 2 in 1979, Unit 1 was shut down for six years, until the operator at the time, Metropolitan Edison, demonstrated to the Nuclear Regulatory Commission that it could operate the reactor safely.

Constellation closed Unit 1 down in 2019, even though the plant’s operating license had been extended through 2034 and it had no operational or safety problems. TMI-1 could not compete economically at that point with natural gas-fueled power plants because gas had become extremely cheap.

Pennsylvania also had a policy preference for increasing electricity generation from solar and wind power. The state legislature chose not to reclassify the plant as a carbon-free electricity source, which would have qualified it for state support.

The 1979 accident at Three Mile Island had broad, lasting effects on nuclear power regulation.

What is the reactor’s current condition?

Since the shutdown in 2019, the plant has sat idle. The NRC calls this status safe storage, or SAFSTOR. The plant is shut down, uranium fuel is removed from the reactor, and the facility is maintained in a safe, stable condition. Irradiated fuel is stored in large steel and concrete casks on a physically secured portion of the site, known as an Independent Spent Fuel Storage Installation.

In addition to the fuel, other materials in the plant are radioactive, such as structural channels that direct the cooling water during operation and the large vessel in which the reactor is housed. Radioactive decay occurs during the SAFSTOR period, reducing the plant’s radioactivity and making it easier to dismantle the plant later.

A half-dozen large cylindrical casks on a concrete pad.
The United States does not have a licensed long-term disposal site for spent nuclear fuel, so it is stored in large dry casks on-site at operating and closed reactors.
U.S. Nuclear Regulatory Commission, CC BY

What will Constellation need to do to prepare the reactor to restart?

Constellation will need to ensure that it has enough fuel and sufficiently trained personnel. It also will have to ensure that the reactor’s components are still in a condition that allows for safe operation.

This will require detailed inspections and mandatory maintenance actions to ensure that all components are running correctly. In some cases, the company may need to install new equipment.

The exact work will depend on the results of inspections but could include upgrading or replacing the reactor’s major components, such as the turbine and associated electricity generator; large transformers that move the electricity from the reactor out to the grid; equipment used to cool the reactor during operation; and systems for controlling the plant during startup, shutdown and power generation.

As an analogy, imagine that you move to a city and stop driving your car for five years. When you decide to resume driving, you’d need to ensure you have gas, that your driver’s license is still valid and that all of the car’s components still operate correctly. It would probably need new oil, air in the tires, new filters and other replacement parts to run well.

A nuclear plant is much more complicated than a car, so the number of checks and verifications will take longer and cost more. Constellation expects to bring the restored plant online in 2028 at a projected cost of US$1.6 billion.

What will the NRC consider as it decides whether to relicense the reactor?

The agency needs to independently confirm Constellation has enough fuel and trained personnel, and that the plant can run safely. These checks must be approved by the commission before the plant can operate.

In my view, Constellation will need to show that the plant is in a condition to operate at the same levels of safety that existed there in September 2019 when the company terminated operations.

Do you expect other utilities to try this type of restoration at closed reactors?

Constellation is not the only utility considering restarting a nuclear plant. Holtec International, an energy technology company, bought the closed Palisades nuclear plant in southwest Michigan in 2022 with the intent to decommission it, but then the company decided to restore and reopen the plant.

That work is underway now. Recently, in its first major inspection at the plant, the NRC found a number of components that it said required more testing and repair work.

Wolverine Power Cooperative, a not-for-profit energy provider to rural communities across Michigan, plans to purchase electricity from the restored Palisades plant, with support from the U.S. Department of Agriculture’s Empowering Rural America program. Holtec is receiving support for restoring Palisades from the U.S. Department of Energy and the state of Michigan.

A third company, NextEra Energy, is considering restarting its Duane Arnold nuclear plant in Palo, Iowa. And others could follow. In the past decade, a dozen nuclear plants closed before the end of their licensed operating lives because they were having trouble competing economically. But with electricity demand rising, especially to power data centers and electric vehicles, some of those plants could also become candidates for reopening.The Conversation

About the Author:

Todd Allen, Professor of Nuclear Engineering & Radiological Sciences, University of Michigan

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

 

Brent Crude Oil Rebounds Amid Monetary Easing and Market Dynamics

By RoboForex Analytical Department

Brent crude oil has regained its upward momentum, climbing towards 73.63 USD, following a recent decline triggered by comments from US Federal Reserve Chairman Jerome Powell. In his statement, Powell indicated that the Fed would be cautious about further easing monetary conditions, emphasizing that the rate cut schedule should not be seen as a definitive plan for all future actions by the Monetary Policy Committee (MPC).

Despite these cautious remarks, the Fed’s recent decision to lower rates by 50 basis points is fundamentally seen as positive for the commodity market. Lower borrowing costs might stimulate economic demand and enhance interest in energy resources.

Concurrently, the latest data from the US Department of Energy showing a decrease in crude oil inventories by 1.63 million barrels—exceeding expectations of a 0.50 million barrel reduction—also supports bullish sentiments in the oil market. This stock reduction is especially significant as it indicates a robust demand backdrop.

Additionally, the market is closely monitoring potential increases in oil production by OPEC+ countries and the economic data coming from China, the world’s largest oil consumer. Recent weaker-than-expected economic indicators from China have cast some doubts on the sustained strength of oil demand.

The geopolitical situation in the Middle East remains a critical factor, with any escalation potentially impacting energy supply routes and market stability.

Technical analysis of Brent Crude Oil

The market has established a consolidation range around 72.00 USD for the further Brent forecast, with current fluctuations extending to a high of 73.73 USD and a low of 71.78 USD. Having found support at 71.78 USD, there is potential for the market to breach the upper boundary of 73.73 USD today. A successful break above this level could indicate a continuation of the growth trend towards 75.15 USD, possibly reaching up to 75.77 USD. The MACD indicator supports this bullish outlook, with the signal line below zero but pointing upwards, suggesting an imminent upward movement.

Today, Brent surpassed the 73.00 USD mark, continuing its ascent towards the target of 75.15 USD. Upon reaching this target, a retest of the 73.00 USD level from above may occur, potentially setting the stage for another upward wave towards 75.77 USD. The Stochastic oscillator, currently above 80, is poised for a temporary decline, indicating that a corrective phase could follow before further gains.

 

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.

Oil and gas communities are a blind spot in America’s climate and economic policies

By Noah Kaufman, Columbia University 

On a recent visit to Rangely, a small town in northwest Colorado, my colleagues and I met with the administrators of a highly regarded community college to discuss the town’s economy. Leaving the scenic campus, we saw families driving into the mountains in off-road vehicles, a favorite activity for this outdoors-loving community. With a median household income above US$70,000 and a low cost of living, Rangely does not have the signs of a town in economic distress.

But an existential risk looms over Rangely. The town is here because of an oil boom during World War II. Today, the oil and gas industry contributes over half of the county’s economic output.

Rangely is not unique in the United States, which is the world’s largest producer of oil and natural gas. There are towns across the country that depend on the oil and gas industry for well-paying jobs and public revenues that fund their schools and other critical services.

A heavy dependence on any single industry is risky, and the oil industry is prone to booms and busts. But the economies of oil- and gas-dependent towns face a unique threat from global efforts to address the risks of climate change, which is fueled by the burning of oil and natural gas. Any serious strategy to halt global warming involves policies that will, over time, sharply reduce demand for all fossil fuels.

Early signs of this transformation can be seen in last year’s international agreement to “transition away from fossil fuels” and in the spread of electric vehicles that are starting to displace gasoline- and diesel-powered cars, trucks and buses.

As an economist who worked at the White House during the Obama administration and early Biden administration, I contributed to detailed strategies to reduce greenhouse gas emissions and to support communities in economic distress. But we did not have a plan to prepare oil and gas towns like Rangely for future economic challenges.

Why oil and gas towns are overlooked

Congress has prioritized support for small towns in recent legislation. However, oil- and gas-dependent towns were largely absent from these strategies for three primary reasons.

First is a perceived lack of urgency. The attention to a “just transition” as the nation moves away from fossil fuels has been disproportionately directed to coal-dependent communities. U.S. coal production has declined for 15 years, and a continued transition away from coal appears imminent and inevitable.

In contrast, U.S. production of oil and natural gas continues to grow. To be sure, some oil and gas communities are already struggling. But the widespread economic risks of a shift away from oil and gas may feel more like a problem for future decades.

Second, politicians downplay risks to oil and gas communities.

Most Republicans are not planning for a future decline in oil and gas production at all, and that includes many local politicians in oil and gas-dependent communities. For their part, most Democratic politicians prefer to focus on how climate action can be an engine of future economic growth. President Joe Biden likes to say, “When I think about climate change, I think jobs.”

He is not wrong to highlight the economic opportunities of climate solutions. But clean energy jobs rarely offer one-for-one replacements for the high-paying jobs in the oil and gas industries and the public revenues those industries bring local communities.

Third, economists’ policy toolbox is poorly suited to the challenges facing oil and gas communities.

Proposals to support local economic development commonly suggest targeting persistently distressed local economies with measures such as wage subsidies that have the potential to rapidly put more people to work.

A different prescription is needed for oil and gas communities, which are not generally struggling today. Over the 15-year period prior to the pandemic, the U.S. counties with oil and gas production experienced average annual GDP growth of 2.4% per year, compared with 1.9% nationwide.

Most oil and gas communities do not need economic stimulus policies that provide immediate relief. What they need are holistic economic development strategies that can cultivate new industries – building on their existing strengths – that will enable them to prosper into the future.

Solutions to help oil and gas towns prepare

Harvard economist Ricardo Hausmann compares the challenge of developing new economic capabilities to the game of Scrabble, where each additional letter enables the creation of more words. He cites the Finish economy as an example: It evolved from harvesting lumber to making tools that cut wood to producing automated cutting machines. From there, it evolved to sophisticated automated machines, including those used by global corporations such as telecommunications giant Nokia.

Such economic evolutions must be tailored to the characteristics of individual places. But the initial step is to recognize the problem and invest in solutions.

The Southern Ute Indian Tribe is doing this in southwest Colorado. It devotes oil and gas revenues to a Permanent Fund, which promotes fiscal sustainability by ensuring the tribe’s assets are aligned with its long-term financial goals, and a Growth Fund that diversifies the tribe’s revenue sources by investing in a range of businesses.

At the national level, a recent National Academies panel proposed the creation of a federally chartered corporation to help communities facing acute economic threats, including a future decline in oil and gas. This corporation could provide funding for displaced workers, critical public infrastructure and programs that ensure access to economic opportunities.

Colorado’s state Office of Just Transition has started to serve this role. Currently, it focuses only on the transition away from coal, with the goals of helping communities develop new economic opportunities and helping workers transition to new jobs. But its mission could be expanded in the future. In fact, Rangely is already receiving some support due to coal closures nearby.

No one-size-fits-all solution

Small, rural towns like Rangely illustrate how oil- and gas-reliant regions will need unique strategies tailored to the strengths and limitations of individual places. No off-the-shelf playbook exists.

Our group of researchers who visited Rangely are part of the Resilient Energy Economies initiative, which was created by universities, research institutes and philanthropic organizations to ensure that policymakers have the information they need to help fossil fuel-dependent communities successfully navigate the energy transition.

The best time to build a more resilient economy is before a crisis arrives. Anyone familiar with the Bible – or Broadway – knows the story of Joseph, whose dreams foresaw seven years of abundance for Egypt followed by seven years of famine. The pharaoh acted on Joseph’s vision, using the boom to prepare for the bust.

The United States is experiencing abundant oil and gas production today. Policymakers know risks are coming. But so far, the country is failing to prepare communities for harder days to come.The Conversation

About the Author:

Noah Kaufman, Senior Research Scholar in Climate Economics, Columbia University

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

Brent remains under pressure: China and rapid growth in OPEC+ production to blame

By RoboForex Analytical Department

The oil market remains under pressure. A barrel of Brent oil declined to 71.80 USD by Tuesday. The commodity erased all early-week gains as fears of slowing demand in China outweighed the risk of energy shortages due to the storm in the Persian Gulf.

In recent weeks, market participants have been paying close attention and analysing the whole range of news related to China. The sluggish economic growth rate combined with the global strategy of transition to low-carbon raw materials is reducing China’s need for oil. This negatively impacts Chinese oil imports and naturally affects market prices as China is considered the world’s largest raw material consumer.

Investors are also confident that oil consumption in Europe and the US will reduce following the active driving season. Additionally, some oil refineries are going into maintenance mode, meaning they will not need as many raw materials as before. OPEC+ had previously postponed the planned increase in oil output for a couple of months. Yes, the market now has a respite but the likelihood of an imminent commodity oversupply is still looming over prices

Storm Francine is expected to intensify near Texas, US and could become a Category 2 storm, which means a hurricane threat. Some production facilities in Texas may be shut down until weather conditions improve.

Brent technical analysis

The BRENT H4 chart shows that the market has broken below the 74.96 level and completed a downward wave, reaching 70.50. A consolidation range could form at the current lows today. An upward breakout will open the potential for growth to 75.00 (testing from below). With a downward breakout, the range could expand to the local target of 69.69. This scenario is technically supported by the MACD indicator, with its signal line below the zero level at the lows and poised for growth.

The BRENT H1 chart shows that the market has reached the downward wave’s local target of 70.50. Today, the market is forming a consolidation range above this level. The range expanded up to 71.90 and down to 70.46. A breakout above the 71.90 level will open the potential for a corrective wave towards 75.00. With a breakout below 70.46, the range could expand downwards, with the wave continuing to 69.69. This scenario is technically supported by the Stochastic oscillator, whose signal line is below 20 and poised for growth.

 

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.

Oil and gas communities are a blind spot in America’s climate and economic policies

By Noah Kaufman, Columbia University 

On a recent visit to Rangely, a small town in northwest Colorado, my colleagues and I met with the administrators of a highly regarded community college to discuss the town’s economy. Leaving the scenic campus, we saw families driving into the mountains in off-road vehicles, a favorite activity for this outdoors-loving community. With a median household income above US$70,000 and a low cost of living, Rangely does not have the signs of a town in economic distress.

But an existential risk looms over Rangely. The town is here because of an oil boom during World War II. Today, the oil and gas industry contributes over half of the county’s economic output.

Rangely is not unique in the United States, which is the world’s largest producer of oil and natural gas. There are towns across the country that depend on the oil and gas industry for well-paying jobs and public revenues that fund their schools and other critical services.

A heavy dependence on any single industry is risky, and the oil industry is prone to booms and busts. But the economies of oil- and gas-dependent towns face a unique threat from global efforts to address the risks of climate change, which is fueled by the burning of oil and natural gas. Any serious strategy to halt global warming involves policies that will, over time, sharply reduce demand for all fossil fuels.

Early signs of this transformation can be seen in last year’s international agreement to “transition away from fossil fuels” and in the spread of electric vehicles that are starting to displace gasoline- and diesel-powered cars, trucks and buses.

As an economist who worked at the White House during the Obama administration and early Biden administration, I contributed to detailed strategies to reduce greenhouse gas emissions and to support communities in economic distress. But we did not have a plan to prepare oil and gas towns like Rangely for future economic challenges.

Why oil and gas towns are overlooked

Congress has prioritized support for small towns in recent legislation. However, oil- and gas-dependent towns were largely absent from these strategies for three primary reasons.

First is a perceived lack of urgency. The attention to a “just transition” as the nation moves away from fossil fuels has been disproportionately directed to coal-dependent communities. U.S. coal production has declined for 15 years, and a continued transition away from coal appears imminent and inevitable.

In contrast, U.S. production of oil and natural gas continues to grow. To be sure, some oil and gas communities are already struggling. But the widespread economic risks of a shift away from oil and gas may feel more like a problem for future decades.

Second, politicians downplay risks to oil and gas communities.

Most Republicans are not planning for a future decline in oil and gas production at all, and that includes many local politicians in oil and gas-dependent communities. For their part, most Democratic politicians prefer to focus on how climate action can be an engine of future economic growth. President Joe Biden likes to say, “When I think about climate change, I think jobs.”

He is not wrong to highlight the economic opportunities of climate solutions. But clean energy jobs rarely offer one-for-one replacements for the high-paying jobs in the oil and gas industries and the public revenues those industries bring local communities.

Third, economists’ policy toolbox is poorly suited to the challenges facing oil and gas communities.

Proposals to support local economic development commonly suggest targeting persistently distressed local economies with measures such as wage subsidies that have the potential to rapidly put more people to work.

A different prescription is needed for oil and gas communities, which are not generally struggling today. Over the 15-year period prior to the pandemic, the U.S. counties with oil and gas production experienced average annual GDP growth of 2.4% per year, compared with 1.9% nationwide.

Most oil and gas communities do not need economic stimulus policies that provide immediate relief. What they need are holistic economic development strategies that can cultivate new industries – building on their existing strengths – that will enable them to prosper into the future.

Solutions to help oil and gas towns prepare

Harvard economist Ricardo Hausmann compares the challenge of developing new economic capabilities to the game of Scrabble, where each additional letter enables the creation of more words. He cites the Finish economy as an example: It evolved from harvesting lumber to making tools that cut wood to producing automated cutting machines. From there, it evolved to sophisticated automated machines, including those used by global corporations such as telecommunications giant Nokia.

Such economic evolutions must be tailored to the characteristics of individual places. But the initial step is to recognize the problem and invest in solutions.

The Southern Ute Indian Tribe is doing this in southwest Colorado. It devotes oil and gas revenues to a Permanent Fund, which promotes fiscal sustainability by ensuring the tribe’s assets are aligned with its long-term financial goals, and a Growth Fund that diversifies the tribe’s revenue sources by investing in a range of businesses.

At the national level, a recent National Academies panel proposed the creation of a federally chartered corporation to help communities facing acute economic threats, including a future decline in oil and gas. This corporation could provide funding for displaced workers, critical public infrastructure and programs that ensure access to economic opportunities.

Colorado’s state Office of Just Transition has started to serve this role. Currently, it focuses only on the transition away from coal, with the goals of helping communities develop new economic opportunities and helping workers transition to new jobs. But its mission could be expanded in the future. In fact, Rangely is already receiving some support due to coal closures nearby.

No one-size-fits-all solution

Small, rural towns like Rangely illustrate how oil- and gas-reliant regions will need unique strategies tailored to the strengths and limitations of individual places. No off-the-shelf playbook exists.

Our group of researchers who visited Rangely are part of the Resilient Energy Economies initiative, which was created by universities, research institutes and philanthropic organizations to ensure that policymakers have the information they need to help fossil fuel-dependent communities successfully navigate the energy transition.

The best time to build a more resilient economy is before a crisis arrives. Anyone familiar with the Bible – or Broadway – knows the story of Joseph, whose dreams foresaw seven years of abundance for Egypt followed by seven years of famine. The pharaoh acted on Joseph’s vision, using the boom to prepare for the bust.

The United States is experiencing abundant oil and gas production today. Policymakers know risks are coming. But so far, the country is failing to prepare communities for harder days to come.The Conversation

About the Author:

Noah Kaufman, Senior Research Scholar in Climate Economics, Columbia University

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

Brent Crude Under Pressure Amid Supply Expansion Concerns

By RoboForex Analytical Department

Brent crude oil prices have experienced significant selling pressure recently, dipping to 77.21 USD per barrel on Tuesday. Although there has been a slight recovery from earlier lows, the overall market sentiment remains bearish.

Investors are reacting to recent data from OPEC, which indicates that 8 OPEC+ members plan to increase their production by 180,000 barrels per day. This anticipated rise in supply casts a shadow over the oil market, particularly as it coincides with weakening demand indicators from major economies.

A report from the Department of Energy in the US highlighted a drop in oil consumption in June to levels not seen since the summer of 2020, considering seasonal adjustments. This downturn in demand is mirrored by troubling economic data from China, where factory activity has reportedly reached a six-month low. Moreover, the decline in selling prices and a reduction in new orders from Chinese manufacturing sectors add to the pessimism surrounding future demand.

However, some support for oil prices stems from production issues in Libya, where the largest local oilfield has halted production due to state-imposed force majeure. This disruption could pose supply challenges for major oil consumers and as highlighted in commodities analysis, temporarily cushion the impact of broader negative trends.

Brent technical analysis

The H4 chart shows a previous growth impulse peaking at 81.85, followed by a correction down to 75.20, forming a broad consolidation range at this lower level. There is an expectation for a growth move towards 79.00 today. If this level is breached upward, it may signal the continuation of the growth wave to 82.87. This bullish scenario is tentatively supported by the MACD indicator, whose signal line is below zero but shows signs of an upward trajectory.

On the H1 chart, Brent has formed a corrective structure down to 76.02 and is currently developing a growth structure towards 77.55. A successful breach of this level could open the way for further growth to 79.00, potentially continuing to 82.87. The Stochastic oscillator supports this outlook, with its signal line positioned around 50 and pointing upwards, indicating potential for further price increases.

 

Overall, while the short-term technical indicators suggest a possible recovery in Brent prices, the broader market context remains challenging due to increased supply forecasts and weak demand signals from vital global markets.

 

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.

Recycling more than pop cans: A circular economy for our energy landscapes

By Martin J. Pasqualetti, Arizona State University; Chad Walker, Dalhousie University, and Michelle Adams, Dalhousie University 

From cereal boxes to our distinct milk bags, Canadians have been told that one of the best things we can do for the planet is to embrace the circular economy — reusing, repurposing or reallocating assets to ensure they’re kept within useful circulation as long as possible, and ideally forever.

Originally conceptualized as recycling, we are all familiar with the good feeling that comes from tossing paper, plastic and other materials into the blue bin rather than throwing them in a landfill. It’s time to consider applying an expanded version of this approach to what we call energy landscapes.

Considering the thousands of square kilometres that we have carved, scraped and bulldozed to produce the energy we crave, it is past time we started figuring out how we can recycle energy landscapes and make them useful for new purposes.

In our over-crowded world, we can no longer justify exploiting our landscapes for the energy we need and then simply walking away. We need to embrace a circular economy for our energy landscapes of the past and prepare to recycle the landscapes of the future.

Recycling landscapes

Recycling of energy landscapes comes to two forms; that is, the land itself and the infrastructure we place upon it.

Although rare in Canada, the idea is quickly catching on elsewhere. Lignite pits in Germany have been converted to recreational lakes. A derelict, coal-burning power plant in London has been transformed into an exhibition, condominiums and retail space.

In Nova Scotia, a 14 MW wind farm was developed at the site of the province’s coal-fired Lingan power station, and newly proposed green hydrogen production facilities are to be built on the land of stalled liquefied natural gas projects.

The idea of recycling or reusing applies not just to fossil fuels, but to renewable energy policies as well.

Last summer, the Conservative government of Alberta made decisions on the future land use of renewable energy projects like wind and solar farms. As outlined by academic Ian Urquhart earlier this year, the government’s seven-month moratorium banned all new projects under the rationale they threatened the province’s best agricultural lands and “Alberta’s pristine landscapes.”

However, the restrictions brought in, including a 35-kilometre buffer zone, do not apply to new oil and gas projects. Alberta Premier Danielle Smith’s government therefore created a unique set of recycling concerns around renewables that didn’t apply to fossil fuels.

Reusing space in an energy transition

At a time when more local smart grid projects — bringing together local renewables, battery storage, smart controls, heat pumps and electric vehicles — are being developed, there’s a need to consider how to go beyond recycling to reuse existing space and infrastructure.

Rooftop solar is an obvious choice to better utilize space, though the footprint of household and on-street EV charging infrastructure is similarly unsubstantial compared to your neighbourhood gas station.

Recycling in a clean energy transition will not only have great value in energy landscapes, but also in new clean energy technologies themselves. While we are already slowing the rise of climate change-fuelling emissions, we can go further if we advance the practice of recycling EV batteries and solar panels.

But we can’t stop there. We must also prepare to recycle the landscapes these technologies create.

Abandonment is not an option

Abandoning exhausted energy sites is wasteful, unnecessary and costly. The customary energy life cycle includes exploration, development, extraction, processing, transmission and sometimes reclamation. We advocate for an additional stage: recycling, thus preparing the land to be reimagined for another cycle of useful purpose.

We must take greater care of the precious Canadian landscape, especially those that have paid dearly to provide the energy we need. Once the land gives all it can, we should consider it not the end of the life cycle but as a new beginning.

Recycling energy landscapes as a strategy challenges the status quo. We must chart a path toward ensuring that such landscapes are repurposed to benefit both ecosystems and society, and embrace a circular economy for the land.The Conversation

About the Authors:

Martin J. Pasqualetti, Professor of Geography and Senior Global Futures Scientist, Arizona State University; Chad Walker, Assistant professor, Low-carbon Transitions, School of Planning, Dalhousie University, and Michelle Adams, Associate professor, School for Resource and Environmental Studies, Dalhousie University

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

Brent Oil Falters Amid Surprising Inventory Growth and Geopolitical Developments

By RoboForex Analytical Department

Brent crude oil has seen a decline to 77.07 USD a barrel on Wednesday, influenced by unexpected shifts in U.S. energy inventories and ongoing geopolitical developments. The analysis of Brent prices highlights key factors contributing to this downturn.

The market has had to adjust its risk assessment following a recent increase in U.S. crude oil stocks, contrary to the anticipated decrease. According to the American Petroleum Institute (API), inventories rose by 0.347 million barrels, whereas analysts had forecast a reduction of 2.800 million barrels. This update has fueled bearish sentiments among traders, marking the second inventory increase in the last eight weeks, impacting the broader commodities analysis as well.

Geopolitically, the situation in the Middle East remains a critical focus. Although Israel has agreed to a proposal to resolve tensions with the Gaza Strip, the absence of a full ceasefire keeps the regional stability fragile and continues to impact global oil supply fears. This geopolitical uncertainty has also influenced Brent signals, adding to the complexity of forecasting future price movements.

Additionally, economic signals from China are exerting fundamental pressure on oil prices. The persistent economic struggles in China, a major global oil consumer, are dampening demand expectations and consequently affecting oil prices. As a result, Brent forecasts remain cautious, with analysts watching closely for any shifts in economic indicators that could influence demand.

Technical analysis of Brent

The market has established a consolidation range at approximately 78.20 USD, from which a downtrend towards 74.74 USD is currently developing. Looking ahead, there is potential for a reversal with growth targets at 81.81 USD and possibly extending to 88.80 USD should the upper resistance break. This bullish scenario is technically supported by the MACD indicator, whose Brent signal line is positioned below zero but poised for an upward shift, suggesting a possible change in momentum.

On the hourly chart, Brent analysis indicates the commodity is progressing through a bearish phase towards 75.75 USD. Once this target is reached, a retracement to 78.20 USD could occur before further declines towards 74.74 USD. This outlook is corroborated by the Stochastic oscillator, with its Brent signal line currently hovering around the 50 mark and directed downward, reinforcing the short-term bearish trend.

In summary, Brent forecast suggests that the market is facing a period of volatility, with the potential for both short-term declines and longer-term bullish reversals depending on how global events and economic indicators unfold.

 

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.

Offshore wind farms connected by an underwater power grid for transmission could revolutionize how the East Coast gets its electricity

By Tyler Hansen, Dartmouth College; Abraham Silverman, Johns Hopkins University; Elizabeth J. Wilson, Dartmouth College, and Erin Baker, UMass Amherst 

Offshore winds have the potential to supply coastlines with massive, consistent flows of clean electricity. One study estimates wind farms just offshore could meet 11 times the projected global electricity demand in 2040.

In the U.S., the East Coast is an ideal location to capture this power, but there’s a problem: getting electricity from ocean wind farms to the cities and towns that need it.

While everyone wants reliable electricity in their homes and businesses, few support the construction of the transmission lines necessary to get it there. This has always been a problem, both in the U.S. and internationally, but it is becoming an even bigger challenge as countries speed toward net-zero carbon energy systems that will use more electricity.

The U.S. Department of Energy and 10 states in the Northeast States Collaborative on Interregional Transmission are working on a potentially transformative solution: plans for an offshore electric power grid.

Two illustrations show a line of wind farms, the first with each one individually connected to land and the second with all connected to a transmission backbone with only two connections to land.
How an offshore transmission backbone could reduce the number of transmission lines and land crossings.
Illustrations by Billy Roberts, NREL

At the core of this grid would be backbone transmission lines off the East Coast, from North Carolina to Maine, where dozens of offshore wind projects are already in the pipeline.

The plans envision it supporting at least 85 gigawatts of offshore wind power by 2050 – close to the U.S. goal of 110 GW of installed wind power by mid-century, enough to power 40 million homes and up from 0.2 GW today. The Northeast States Collaborative formalized their goals in July 2024 through a multistate memorandum of understanding.

Emerging research from the Department of Energy, the research company Brattle and other groups suggests that an offshore electric power grid could mitigate key challenges to building new transmission lines on land and reduce the costs of offshore wind power.

Cutting costs would be welcome news – offshore wind project costs rose as much as 50% from 2021 to 2023. While some of the underlying causes have subsided, such as inflation and global supply chain disruptions, interest rates remain high, and the industry is still trying to find its footing in the U.S.

What is an offshore electric power grid?

Today’s offshore wind projects use a point-to-point, or radial design, where each offshore wind farm is individually connected to the onshore grid.

This method works if a region has only a few projects, but it quickly becomes more expensive due to the cabling and other infrastructure. Its lines are also disruptive to communities and marine life. And it requires more costly onshore grid upgrades.

Coordinated offshore transmission can avoid many of those costs with what the Department of Energy calls “meshed” or “backbone” designs.

Rather than individual connections to land, many offshore wind farms would be connected to a shared transmission line, which would connect to the onshore grid through strategically placed “points of interconnection.” This way, electricity produced by an offshore wind farm would be transmitted to where it is most needed, up and down the East Coast.

A map shows lease areas, from South Carolina to Massachusetts.
Several areas along the Atlantic continental shelf have been leased for wind power development.
U.S. Department of the Interior, 2024

Even better, electricity generated onshore could also be transmitted through these shared lines to move energy to where it is needed. This could improve the resilience of power grids and reduce the need for new transmission lines over land, which have been notoriously difficult to gain approval for, especially on the East Coast.

Coordinated offshore transmission was part of early U.S. discussions on offshore wind planning and development. In the late 2000s when Google and partners first proposed the Atlantic Wind Connection, an offshore transmission project, the benefits in both offshore renewables and the entire energy system were intriguing. At the time, the U.S. had just one utility-scale offshore wind project in the pipeline, and it ultimately failed.

Today, the U.S. has 53 GW of offshore wind projects being planned or developed. As energy researchers, we believe coordinated offshore transmission is important for the industry to succeed at scale.

Offshore grid could save money, reduce impacts

By enabling power from offshore wind farms and onshore electricity generators to travel to more places, coordinated transmission can enhance grid reliability and enable electricity to get to where it is most needed. This reduces the need for more expensive and often more polluting power plants.

A 2024 report from the National Renewable Energy Lab found the benefits of a coordinated design are nearly three times higher than the costs when compared with a standard point-to-point design.

Studies from Europe, the U.K. and Brattle have pointed to additional benefits, including reducing planet-warming carbon emissions, cutting the number of beach crossings by a third and reducing the miles of transmission cables needed by 35% to 60%.

Three maps show how a backbone design connects systems all along the coast and requires fewer wind farm-to-land connections.
Three transmission designs show the difference between intraregional systems with several land connections and interregional and backbone designs. These three were investigated by the National Renewable Energy Lab in the Atlantic Offshore Wind Transmission Study.
Illustrations by Billy Roberts, NREL

In the U.S., offshore transmission lines would be almost entirely in federal waters, potentially avoiding many of the conflicts associated with onshore projects, though it would still face challenges.

Challenges and next steps

Building an offshore grid will require some important changes.

First is changing government incentives. The federal investment tax credit for offshore wind, which covers at least 30% of the upfront capital cost of a project, does not currently help pay for coordinated transmission designs.

Second, planning needs to take everyone’s concerns into account from the beginning. While the overall benefits of coordinated transmission designs outweigh overall costs, who receives the benefits and who bears the costs matters. For example, more expensive power generators could earn less, and some communities feel threatened by offshore development.

Third, greater coordination will be needed among everyone involved to dispatch power to and from the regional grids. The Federal Energy Regulatory Commission’s recent Order 1920, requiring power providers to plan for future needs, may serve as a blueprint, but it does not apply to interregional projects, such as an offshore transmission backbone connecting over a dozen states across three regions.

A pier with cranes and huge wind turbine blades, seen from the water
Several New England states are seeing economic growth from the offshore wind industry. Here, blades are prepared for shipping at a pier in New London, Conn.
Elizabeth J. Wilson, CC BY-ND

The U.S. reached an important milestone in March 2024 with the completion of South Fork Wind, the country’s first utility-scale wind farm, bringing U.S. offshore wind power capacity to nearly 200 megawatts. Eight more projects are under construction or approved for construction. Once built, they would bring installed capacity to over 13 gigawatts, roughly the same as three dozen coal-fired power plants.

An offshore transmission backbone could support offshore wind development and the East Coast’s energy needs for generations to come.

This article was updated July 31, 2024, to clarify that the states formalized the memorandum of understanding.The Conversation

About the Authors:

Tyler Hansen, Research Associate in Environmental Studies, Dartmouth College; Abraham Silverman, Research Scholar, Ralph O’Connor Sustainable Energy Institute, Johns Hopkins University; Elizabeth J. Wilson, Professor of Environmental Studies, Dartmouth College, and Erin Baker, Professor of Industrial Engineering Applied to Energy Policy, UMass Amherst

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