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  • Kashagan Lives--Later // Powerless Puerto Rico // CO2 Crunch Comes for UK Food Producer

Kashagan Lives--Later // Powerless Puerto Rico // CO2 Crunch Comes for UK Food Producer

Kashagan Lives--Later

Kashagan, the massive oilfield in Kazakhstan, will not come online until mid-October.

"In early August, the offshore oilfield Kashagan, which pumps more than 300,000 barrels per day (bpd), was shut down after a gas leak was detected on the site," reports Oilprice.com. "A few days later, the field operator said that it would partially restart production, and upon completion of repairs and integrity verification, full production would be restored at the facility."

Last Friday, Kazakhstan's Energy Minister Bulat Akchulakov said, "We expect, we would be probably able to switch it on in October at best. We are studying now, at which capacity and how." He also added that it would take a few more weeks for oil loading terminals in the Black Sea to be fully operational.

Kashagan's estimated output before it shut off was around 100,000 barrels per day. Kashagan's oil exports have lagged of late because of Kashagan and maintenance issues at two of the Caspian Pipeline's Constoriums Black Sea terminals.

"Crude oil production in Kazakhstan, which is part of the OPEC+ output deal, plunged by 13% in August from July. Excluding condensate, oil production in Kazakhstan dropped to 1.196 million bpd last month, down from 1.378 million bpd," reports Oilprice.com.

Powerless Puerto Rico

Puerto Rico declared a state of emergency over the weeks as Hurricane Fiona swung towards it. In the aftermath of the storm, over 1 million residents were left without power.

"More than 1.4 million Puerto Rico power customers – such as homes and businesses – have lost electricity," reports CNN. "And it could be days before power is restored, the main power utility in Puerto Rico said Sunday, as daily high temperatures after Monday are forecast to reach the mid-80s to 90s."

Yesterday, the whole island went dark.

Before the storm even hit, Luma Energy, Puerto Rico's private grid operator, reported that 6.5% of households were already without power. In truth, the island's grid never truly recovered from 2017's Hurricane Maria. Just a few months ago, Puerto Ricans experienced another island-wide blackout when a power plant failed.

In a rare spot of good news, the hospitals in San Juan, the island's capital, have regained power. “The power system at all the hospitals in the Medical Center Complex has been restored,” Puerto Rico Health Secretary Dr. Carlos Mellado López tweeted Sunday night. “Our patients are safe and receiving the medical care they need.”

Still, the damage to Puerto Rican infrastructure has been extensive--whole bridges have been ripped from their moorings and swept out to sea. Three hundred FEMA workers are already on the ground in Puerto Rico responding to the crisis.

CO2 Crunch Comes for UK Food Producer

One of Britain's largest CO2 produces halted operations at once of its plants, putting further strain on downstream products like fertilizer and fizz for soft drinks.

"CF Industries Holdings Inc. stopped ammonia production at its Billingham factory in northeast England earlier this week," reports Bloomberg. "It warned in August of the temporary outage, which it blamed on soaring natural gas prices. The fertilizer plant produces CO2 as a byproduct, and had supplied 42% of the UK market."

The UK has been preparing for turbulence in the CO2 supply chain since last year when plants first began closing--a good reminder that the West's current troubles are not "Putin's fault" nor are they strictly the result of sanctions. Now, the UK's food and drink manufacturers largely rely on imports.

Kate Halliwell, chief scientific officer for the Food and Drink Federation, told Bloomberg that CF's closure "only adds to the enormous pressures food companies are facing this autumn, from soaring energy prices, volatile exchange rates, rising ingredient costs and stubborn labour shortages."

Europe's fertilizer production capacity has dropped by 70% as natural gas prices have risen over the course of the year. The silver lining is that CF's Billingham plant will continue to produce ammonium nitrate, which can work as a nitrogen fertilizer, and nitric acid.

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Conversation Starters

  1. Oil exports have returned to normal levels at an Iraqi terminal. "Oil loading and exporting operations from Iraq's Basrah oil terminal are back to their normal rates after being halted on Friday due to a spillage, which has now been contained, Basrah Oil Company said on Saturday," reports Reuters. "The port has four loading platforms and can export up to 1.8 million barrels per day."

  2. China bypassed Russia and made a railroad deal with Uzbekistan and Kyrgyzstan. The countries "have signed a long-anticipated agreement to push ahead with the construction of a railroad linking their countries that will, if completed, establish a shorter route to Europe, bypassing sanctions-hit Russia," reports Oilprice.com "The three governments signed the agreement on September 14 on the sidelines of a summit of the Shanghai Cooperation Organization (SCO) in Uzbekistan."

  3. Nuclear energy supplied 10% of California's energy last year. "In 2021, three nuclear power plants supplied about 10% of California’s electricity. Diablo Canyon, located in San Luis Obispo County, is California’s last operating nuclear power plant, and it supplied over 8% of California’s electricity in 2021. The remaining nuclear electricity supply was imported from the Palo Verde Generating Station in Arizona and the Columbia Generating Station in Washington," reports the Energy Information Administration.

Crom's Blessing