Notes From All Over -- August 2, 2020

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Stocks in the news:

• MPC: "7-11" to buy Marathon's Speedway for $21 billion; link here; at the close on Friday, trading at $38.20/share
• MPC: won't re-start two idled oil refineries; one in California; one in New Mexico; link here;
• Martinez, CA: to comply with California's Low Carbon Fuel Standards objectives and greenhouse gas-reduction targets
• Gallup refinery, in New Mexico: 26,000 b/d
• May 5, 2020, earnings call: said these refineries were being looked at because they are the company's highest-cost facilities among its sixteen refineries
• note to folks in ND/Mandan refinery: too much global refining capacity and existing refineries will be pressured by new facilities coming online
• APA: world-class discovery in the Guyana-Suriname Basin; link here. Interestingly enough, if you can find it, good for you; I did not. I did not see a) the definition of "world-class discovery"; b) how much oil this "world-class discovery" might yield; and, c) most importantly, how it compares to the gold standard, the Bakken.

Pipelines: Occasional-Cortez deal could be another "fatal" blow to US pipelines, including the DAPL; link here;

• the writing is pretty much on the wall
• very little CAPEX going forward on big pipeline projects
• existing pipelines become more valuable

Samsung Electronics to halt production at its last computer factory in China; link here.

Wind power: expensive! This is from the NY Post so almost "no one" will pay attention, but those who do will think it's a fake story -- wind costing upwards of $500 / MWh.

Of course, in North Dakota where coal and natural gas is used, one can see electricity as low as $30 / MWh. One can track electricity rates in New England and in New York.

From the linked NY Post article:

Consider Rhode Island’s 30-megawatt, six-turbine offshore wind project located off Block Island and operated by Deepwater Wind. A decade ago, Rhode Island’s public utility commission rejected the project, concluding that the sky-high prices it would charge the local electric utility would adversely affect consumers. Yet the Rhode Island legislature ignored consumer interests and forced the commission to approve a 20-year contract.

At the start, in 2016, the local utility paid $245 per megawatt-hour for the project’s electricity, with a guaranteed increase of 3.5 percent each year. In 2035, the last year of the contract, the price will be an eye-popping $470 per MWh. By contrast, the average price of wholesale electricity in New England last year was about $31/MWh. In New York, average prices ranged between $22 per MWh upstate to $51 per MWh in Gotham.

Elsewhere, the dozen offshore projects now under development have lower-priced contracts, but they are still far higher than market prices. In New York, the first-year prices for the 816 MW Empire Wind and 880 MW Sunrise Wind projects will be $99/MWh and $110/MWh, respectively. And that’s cheap compared to electricity from some other wind projects in the Atlantic, which range from $77.76/MWh to $202/MWh.

Wind power: Germany! From Forbes:

With Germany as inspiration, the United Nations and World Bank poured billions into renewables like wind, solar, and hydro in developing nations like Kenya.

But then, last year, Germany was forced to acknowledge that it had to delay its phase-out of coal, and would not meet its 2020 greenhouse gas reduction commitments. It announced plans to bulldoze an ancient church and forest in order to get at the coal underneath it.

After renewables investors and advocates, including Al Gore and Greenpeace, criticized Germany, journalists came to the country’s defense.

“Germany has fallen short of its emission targets in part because its targets were so ambitious,” one of them argued last summer.

“If the rest of the world made just half Germany’s effort, the future for our planet would look less bleak,” she wrote. “So Germany, don’t give up. And also: Thank you.”

But Germany didn’t just fall short of its climate targets. Its emissions have flat-lined since 2009.

Now comes a major article in the country’s largest newsweekly magazine, Der Spiegel, titled, “A Botched Job in Germany” ("Murks in Germany"). The magazine’s cover shows broken wind turbines and incomplete electrical transmission towers against a dark silhouette of Berlin.

“The Energiewende — the biggest political project since reunification — threatens to fail,” write Der Spiegel’s Frank Dohmen, Alexander Jung, Stefan Schultz, Gerald Traufetter in their a 5,700-word investigative story.

Over the past five years alone, the Energiewende has cost Germany €32 billion ($36 billion) annually, and opposition to renewables is growing in the German countryside.

“The politicians fear citizen resistance” Der Spiegel reports. “There is hardly a wind energy project that is not fought.”

In response, politicians sometimes order “electrical lines be buried underground but that is many times more expensive and takes years longer.”

Much, much more at the link.

Remind me: I need to re-subscribe to Forbes.