Welcome to Grid Brief! Here’s what we’re looking at today: Shell wants to explore more offshore drilling in Malaysia, Sweden needs to triple its nuclear fleet to meet increasing electricity demand, American coal production tips slightly upward from this time last year, and more.

Shell Eyes Malaysia for Offshore Drilling

Shell is looking to expand offshore drilling operations in Malaysia.

“Shell is scheduled to next week start a geophysical site survey over acreage including its MLNG, SK 439 and SK 440 production sharing contracts offshore Sarawak, where it has identified wildcat opportunities and potential development candidates — Berembun, Pechu, Teja, Pepulut, Habanero, Mengkedu, Nonsoom, Misai Kuching and Roselle,” reports Upstream Online. “The site survey work, which is expected to last until the end of September, will be performed by the Malaysia-flagged vessel Cassandra VI.”

Shell has been expanding its involvement in Malaysia since 2022 when it inked production-sharing contracts with the country’s state energy firm Petronas.

“Our long and successful partnership with PETRONAS in Malaysia continues, as together we seek to provide the energy of today while funding the energy of tomorrow. I look forward to further successful collaboration on growing a sustainable energy industry in Malaysia,” Shell said in May of last year.

Shell’s current plants for Malaysia offshore drilling conform to plants it laid out earlier this year to expand its upstream presence while expanding gas production, according to Oilprice.com.

Sweden Needs to 3x Its Nuclear

Sweden has announced that it needs to triple its nuclear capacity to meet rising electricity demand.

“At least 10 new conventional reactors need to be built by 2045, Romina Pourmokhtari, the nation’s climate and energy minister, said in a statement on Wednesday,” reports Bloomberg. “The biggest Nordic nation has six reactors in operation today.”

Sweden’s climate commitments, which involves electrifying more sectors of its economy and powering them with clean energy, looks to spike the country’s electricity demand.

Swedish utility Vattengell and Findland’s Fortum Oyj are looking into small modular reactors to satisfy Sweden’s hunger for fission. But Sweden faced a setback in its nuclear ambitions, as German utility Uniper, which operates Sweden’s largest reactor, said last month that it has no intention of investing in more nuclear.

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American Coal Production Ticks Up

Coal production in the US has lifted slightly when compared to this time last year.

“U.S. year-to-date coal production totaled 352.5 MMst, 0.2% higher than the comparable year-to-date coal production in 2022,” reports the Energy Information Administration

But this week’s estimate coal production total (11.2 MMst) is a 5.2% drop from last week, and 5.5% lower than the comparable week in 2022. Estimated U.S. coal production totaled about 11.2 million short tons (MMst).

The West of the Mississippi River (6.4 MMst) out-produced the East (4.7 MMst).

What does this mean for coal power in America?

Despite the slight uptick in production, the EIA anticipates American coal-fired capacity will continue to decline. As reported in their Annual Energy Outlook earlier this year, the EIA considered several different scenarios when modeling coal’s future: one where zero-carbon technology is expensive, one where it’s cheap, and one where its cost remains the same. Across the scenarios, coal-fire capacity is expected to plummet between 52% to 97 GW to 88% to 23 GW by mid century. The new EPA emissions rules may fast-track coal plant retirements regardless of the financial efficacy of clean energy.

Conversation Starters

• A burgeoning Australian labor dispute could disrupt the LNG market. “Potential strikes at three major liquefied natural gas facilities in Australia could disrupt about 10% of global exports of the fuel and deliver a new energy price shock across Asia and Europe,” reports Bloomberg. “Workers at Chevron Corp. and Woodside Energy Group Ltd. facilities in Australia have voted to approve industrial action at the North West Shelf, Wheatstone and Gorgon operations, and some walkouts could begin as soon as next week under labor rules.”

• Solar manufacturing is coming to Louisiana. “First Solar said on Thursday it has selected Louisiana to build its fifth U.S. factory amid a surge in demand for American-made solar panels. The company plans to invest $1.1 billion to set up the facility at Acadiana Regional Airport in Iberia Parish in the southeastern state,” reports Reuters. “President Joe Biden's Inflation Reduction Act, a law passed last year that incentivizes homegrown production of clean energy equipment, is underpinning a boom in solar factory investments. The project is expected to be completed by the first half of 2026 and would add 3.5 gigawatts of manufacturing capacity for the company, First Solar said.”

• America has been importing more oil from Iraq. “Iraq's oil exports to the United States have seen a substantial surge, reaching over 55 million barrels during the initial five months of 2023, according to data released by the US Energy Information Administration on Thursday. The EIA's data, obtained by Shafaq News agency, unveiled the statistics detailing Iraq's crude oil and derivative exports to the United States from January to May,” reports Shafaq. “During this period, the exports totaled 55.407 million barrels, reflecting a growth of 30.5% compared to the corresponding period in 2022, which saw exports amounting to 38.424 million barrels. The surge is even more pronounced when compared to 2021, where the oil exports to the US amounted to 21.645 million barrels, showcasing an increase of 61%.”

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