Oil output lags despite drilling uptick // Who wants these things? // Reality comes to Belgium, partly

Oil output lags despite drilling uptick

Press Secretary Jen Psaki and other administration officials have been fond of pointing to the seemingly unused 9,000 drilling permits as an example of industry corruption. Why won't they just drill? Are they price-gouging the American people?

Those are the questions the talking point hopes to provoke. But a closer look clarifies the situation. Here's this from WSJ:

"Though the number of active U.S. oil-directed rigs has grown by roughly one-fifth in the past six months, much of the new activity is to make up for a depleted inventory of wells drilled before the pandemic, executives said. Frackers brought the best of those online last year instead of drilling new ones and will have to drill more than usual this year to offset those lost wells."

Not only that, companies used up many of their DUCs (drilled but uncompleted wells) to get through the pandemic when barrel prices cratered. Now there's less low-hanging fruit and they're facing inflation, difficulty finding workers, and supply chain issues. 

Hence the industry's frustration with how they feel the administration has treated them, especially that 9,000 permits talking point. A letter to Biden from industry groups had this to say: 

"[S]ince the time you first began campaigning for, and since becoming, President, you have expressed deep hostility toward the oil and natural gas business – and by extension, the thousands of very hard-working men and women – union and non – in very good-paying jobs, who bring energy to the nation."

However sympathetic you find that there's no doubt that the Biden administration hopes for a future of less, not more fossil fuel. Last year, Amos Hochstein, the administration's senior energy adviser at the State Department said, the energy crisis "shows us we need to accelerate the move off fossil fuels." That move will mean replacing fossil fuel with renewables almost exclusively.

Quitting fossil fuels without nuclear is like skydiving without a parachute, but even if it wasn't, the appetite for massive renewables buildouts sits smaller than boosters like to admit. 

Who wants these things?

Recently, a large offshore wind installation in California has come under fire from a Chumash tribe and major conservation groups. The Chumash case against the four 330-foot-tall wind turbines that could supply 60 megawatts of energy by 2026 is clear. The project proposal sits on their first-ever marine sanctuary granted to a tribe.

Tribal Council Chairwoman Violet Sage Walker explained her resistance like this: “I have been working to create this tribal sanctuary day and night for 10 years. There’s no way that windmills there will ever swing their blades out there.”

More surprising is that the Sierra Club and Natural Resources Defense Council are throwing in with the Chumash tribe. Both organizations support the closure of Diablo Canyon nuclear power plant and argue that renewable energy can replace its clean energy. But now they're fighting what could help achieve their goals.

This poses problems for both Gavin Newsom and Joe Biden. Both want this offshore to go through. The LA Times reports:  

"Data generated by the project, its developers say, could also be used in the development and construction of far larger wind farms proposed in federal waters, about 20 miles off the state’s central and northern coasts, under permits issued by the Bureau of Ocean Energy Management. The federal proposals, which are supported by Gov. Gavin Newsom and the Biden administration, include floating 380 wind turbines across a nearly 400-square-mile patch of sea northwest of Morro Bay. If all goes according to plan, it would operational by 2032."

If there's this much pressure against offshore turbines, imagine how much pressure for the $3 billion CAISO has just approved to build more transmission to accommodate still more renewables. If tribes don't want them and "flyover country" doesn't want them and environmental groups don't want them...then who does?

Reality comes to Belgium, partly

Last December, the Belgian government committed itself to shutting down four nuclear reactors--two by 2022 and 2023, and two by 2025. Those latter two, Doel 4 and Tihange 3, are the newer of the set. 

The war in Ukraine has changed things. Now, Belgium wants to keep the younger reactors going for ten more years. They'll still sacrifice the older reactors, despite that likely putting them deeper into either energy rationing or Russian dependence. Belgium gets nearly half of its electricity from nuclear. 

This is a bittersweet story to be sure. On the one hand, it's heartening that they came around at all. On the other, their stubbornness is reckless. Germany, however, continues on its course to shutter all of its nuclear plants. Let's hope Belgium's near commonsense becomes contagious. 

Headlines

• Five years on, Snowy 2.0 emerges as a $10 billion white elephant. (SMH)

• Massive quake shuts plants and sends Japan's power to 1-year high. (BBG)

• Nickel market turmoil spurring EV price hike, switch in battery chemistry. (SPG)

• SEC proposes emissions disclosure from firms. (OP)

• US and European allies to escalate sanctions on Russia. (FT)

Word of the day

back stripping

1. n. [Geophysics]

A modeling technique to assess the geologic history of rock layers through the use of geologic cross sections or seismic sections. Removal of the youngest layers of rock at the top of the section allows restoration of the underlying layers to their initial, undisturbed configurations. Successively older layers can be sequentially removed to further assess the effects of compaction, development of geologic structures, and other processes on an area. (Source)

Crom's Blessing

Construction is progress on an addition to the Applied Physics building at Argonne. c.1970