Coal: Road To Australia -- June 9, 2022

I try to consolidate stories to minimize excess blogs. I wanted to post this with other stories, but it's a huge story. Remember: the Australians just voted in a new ultra-liberal, green government, running on a platform to kill coal and natural gas and then reality struck home:

Link here.

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The Sports Page

In 1945, Nelson enjoyed a record-breaking year, winning 18 PGA tournaments out of the 30 he played, including 11 in a row that he played in. Both records are yet to be beaten.  

There is a reason why he has a tournament named for him.

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The Book Page

"Growing up gay on the oil-rich prairie of North Dakota."

Link over LieteraryHub. 

 

Author: Taylor Brorby. "The story of North Dakota is then the story of self-destruction."

The book: Boys and Oil: Growing Up Gay in a Fractured Land. 

No, I won't be reading it.

 

 

Road To Australia -- The Cost Of Electricity -- Peak Demand -- $15,000/MWH -- December 20, 2019

Link here. Energy-rich Australia -- exporting coal and natural gas to Asia -- Australia switching to solar energy.

Business-Friendly US Brings Australia's Largest Steelmaker To Ohio -- August 24, 2019

Remember this graph? From Rystad Energy, 2020 - 2029. Based on the graphic below, Ohio will be producing as much NEW oil and gas (mostly natural gas) as Russia over the next decade. See first comment.

Now this article Don saw over at joannenove.com, link here, from August 21, 2019.

The chief executive of Australia’s largest steelmaker, BlueScope, says much cheaper energy in the United States is a major driver of the company’s preparedness to invest in a $1 billion expansion of its star performer, the North Star steel mill in Ohio.

North America was providing far more growth opportunities than Australia, Mr Vassella said.

He said energy prices in the US were only a third of those in Australia and New Zealand, and that was a big plus, along with North Star’s proximity to customers and the strong market for steel products, which has benefited from trade sanctions that favour US steelmakers in supplying automotive companies and building products.

“It’s part of the package of a competitive business model,” he said. “We’re still paying too much for energy in Australia.”

...the $1 billion expansion of the North Star mill, to be fully up and running by 2023, was the largest capital investment the steelmaker would likely ever make…

But look at this:

While Mr Vassella renewed his criticism of Australia’s energy market, again joining the legion of key manufacturing bosses to condemn high domestic energy prices and call for a domestic gas reservation policy to drive down local power prices, he said energy prices did not play a role in BlueScope’s decision to expand its US presence.

“Let’s be clear: we weren’t ever going to put another steel mill in Australia — it wasn’t an Australia versus the US decision, it’s probably more of a statement about how business-friendly it is in the US,” he said.

I had a bit of difficulty following Mr Vassella comments regarding energy prices ... but the bottom line is that the CEO of Australia's largest steelmaker we weren’t ever going to put another steel mill in Australia. And their $1 billion expansion will be in Ohio.

I assume both Bernie Sanders and Pocahontas will do what they can to stop this -- in the name of global warming. For those who missed it, both Crazy Bernie and Pocahontas have said "when" they are elected president, they will revoke the permits for both the Keystone XL and the DAPL.

Australia -- Won't Be Left Behind -- August 13, 2019

A reader caught this interesting note in a reply to this story.

Meanwhile….good news for oil production and energy self sufficiency in Australia:

https://www.abc.net.au/news/2019-08-12/multi-billion-dollar-oil-project-using-fracking-west-kimberley/11389046

“A network of oil wells that involve fracking in the Great Sandy Desert, connected by pipelines to new and existing ports, may become Australia’s biggest oil producing project.

“Documents on the website of privately owned Theia Energy, some of which have since been removed, say they have found as much as 57 billion barrels of oil in the desert location 150 kilometres south-east of Broome.

“The oil find is described as “unconventional” meaning it is locked in dense rock that will need hydraulic fracturing, or fracking, to allow the oil to flow to the surface.

“Theia Energy, a small and privately owned Perth-based company, was created in 2018 when Finder Exploration split into Finder Energy for its offshore projects and Theia Energy for its onshore Great Sandy Desert Project. Theia Energy is in negotiations with the Karajarri traditional owners of the area to gain permission to confirm commercial flow rates of oil by fracking rock over a kilometre underground. [For the record, Bakken operators frack at a depth of almost two miles below ground.]

“Leading the negotiations on behalf of traditional owners is Karajarri Traditional Lands Association chairman Thomas King. 

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, career, or relationship decisions based on what you read here or what you think you may have read here.

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No Segue

I thought of this while posting links to the "C Rock."

The average university / college in the US:

• alpha males / all males enrolled: 25 / 100

The Ivy League universities / colleges in the US:

• alpha males / all males enrolled: 99 / 100

The same statistics apply to women in the same universities.

Australia Negotiating WIth US On Emergnecy Oil Supplies; A Note From A Reader On Australia - US LNG Exports -- August 2019

Updates

Later, 5:11 p.m. Central Time: wow, wow, wow, and wow. How interesting. The rest of the story.

Later, 1:05 p.m. Central Time: the tweet below simply says that Australia is negotiating with the US on emergency oil supplies. No timeline is provided. Is Australia looking out twenty years from now, or a year from now? Here's my take on the likelihood that Australia is negotiating with the US on emergency oil supplies based on data looking:

• 50 years out: 0% chance or 0% likely that the negotiations are based on data projected for 2075
• 25 years out: 5% chance or 5% likely that the negotiations are based on data projected for 2050
• 20 years out: 10% .... projected for 2040
• 10 years out: 15% ... projected for 2030
• 5 years out: 20% ... projected for 2025
• 1 year out: 50% chance

Yeah, the next video on this page might be appropriate. If nothing else, it's fun to listen to.

Original Post 

Memo to "First Squawk": enough with the caps.

Life During Wartime, Talking Heads
With regard to the twitter screen shot above. I happened upon that tweet about 9:00 a.m. this morning. It would have caught my attention regardless but a note from a reader last night "primed" me to see that tweet.

It should be noted this particular reader is particularly knowledgeable about this particular subject.

Here's the reader's note from last night.

That LNG daily export chart will show another 50% to 75% bump by year's end.

Six years out, it will easily double again ... gar own teed.

Current world's leading LNG exporter, Australia, will IMPORT LNG from USA (via Port Kembla's FSRU) in 16 months' time.

Contract with Cheniere has already been signed.

I find that absolutely incredible.

"Americans" have no idea how big this story -- the shale revolution story -- is and will be.

By the way, know what I found most rewarding about that short note? This one word: "Cheniere."

I noted the Cheniere / Chile connecting dot in the linked post above.

Monday, Martin Luther King Day, Much Closed -- January 21, 2019, T+19

Hot in Australia: $10,000/ MWh for air conditioning in Australia later today. Australia has taken the lead in renewable energy.

Link here for the graphs.

This link will take you to similar graphs last summer.

The folks over at Jo Nova love to talk about this.

This was a big, big issue last year for the Australians but it looks like nothing has happened. Australia has lots and lots of coal, natural gas, and sunshine.

In Victoria: $10,000/MWh to air condition one's house later today.

In South Australia, $10,500/MWh to air condition one's house later today.

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Softball

Day 31 of the partial government shutdown, which is beginning to look more and more like an airport issue. I haven't heard much about the national parks being closed since the early days of the shutdown. 

On another note, even Chris thinks Shelosi has thrown the Dreamers under the bus.

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A Note for the Granddaughters

Our middle granddaughter is playing in a national soccer tournament in Las Vegas, Nevada, over the three-day weekend.

Yesterday morning, Olivia scored the winning goal for her team. In fact, Olivia's goal was the only goal of the game. The teams were very evenly matched. With about four minutes left to play, Olivia took shot on goal. The ball was deflected, but Olivia followed it in and scored. Olivia is a mid-fielder, not a striker or a forward making her goal all that more impressive.

I got word overnight that her team won their evening game, 1 - 0, and will now advance to semi-finals this morning.

Pretty exciting.

Global Warming, What Global Warming? -- I Thought Hudson Bay Was Ice-Free -- July 28, 2018

Wind: Before we get to the Hudson Bay story, a global warming story closer to home. Texas regulator rejected a permit request from AEP for what would have been the largest wind farm in the country, a $4.5 billion project, the 2,000 MW Wind Catcher. This works out to an astounding $2.25 million / MW in a state in which there is a glut of natural gas -- and, oh, by the way, a state that easily handled the recent record demand for electricity.

The company was also facing huge headwinds in Oklahoma, February 5, 2018.
 
Data points:

• $4.5 billion / 2,000 MW = $2.25 millon / MW
• cost savings per AEP: $4 billion in utility costs over 25 years; $4 billion / 25 years = $160 million / year / 30 million (population of Texas) = $5/Texas resident over 25 years -- you have to be kidding
• "everyone" knows the costs would have been front-loaded -- which means that the savings, if any, would have come in the out years 
• folks can't even predict the price of natural gas next month, much less 25 years from now
• anyone telling me how much energy will over the next 25 years is full of hot air
• already there is a perception that wind/solar are raising the cost of energy (right, wrong, indifferent -- that's the perception)
• if one wants to see how wind energy can totally screw up a country's electric grid, click on "road-to-Australia," a tag at the bottom of the
• Texas, like Wyoming, has a thriving oil and gas industry; Wyoming is already dealing with it; it looks like Texas is also dealing with wind vs oil
• I thought the price of renewable energy construction was going down; back in 2016, the EIA said average cost for new wind power project: $2 million / MW -- note the Wind Catcher project, $2.25 million in one of the low-cost states, Texas
• From an August 25, 2014, post, this is 30-second sound bite for "cost of renewable megawatt":
  

  • Solar: $3 million / MW
  • Wind: $2.5 million / MW
  • Natural gas: $865,000 / MW

Fire: out in the far west. 

Ice: what would it mean if the Hudson Bay was ice-free year 'round?

Also, from iceagenow.com:

Hi Robert,

I’m in Puvirnituk, Nunavik, and the merchant ships had to call in the ice breaker to open the water ways to get out of the Hudson Bay.

I can see the ice breaker in the distance. It is sitting there waiting for the boats to finish unloading.

When asked about the ice everyone is saying it’s not normal this time of year.

Have a nice day.

Sidney B.

It's late July (2018) and they are still calling in ice breakers in Hudson Bay.

Even in Australia, "climate change" is a ratings killer -- everyone is so bored to death of the sermon. And, more: turn off all wind and solar at 6:00 p.m. (peak energy demand) -- it makes no difference -- except less migratory and protected birds would be killed.

And maybe that's why "global warming" is hardly a blip in the minds of Americans, in fact, "global warming/climate change" is not even on the list, from Gallup:

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Global Warming? What, Me Worry?

"Lower For Longer" -- Maybe Goldman Sachs Was Correct -- June 19, 2018; But For Australia, "Higher For Longer" -- Electricity Surged To $14,000/MWH Late Last Week

ExxonMobil Sees An Opportunity
Coals To Newcastle 

This is pretty coincidental. Three things:

• weather forecasters forecasting one of the colder winters ever for Australia this year; winter has just begun (that was about a week ago; I did not post)
• grid "crisis" in Australia; could not handle heating demand for cold snap; link here;
• today, oilprice.com reports that ExxonMobil plans to build LNG import terminal off Australia's east coast

Other notes:

• Australia sits on some of the world's largest coal reserves
• Australia is saying "no" to coal to save the world from global warming; trying to "make do" with renewable energy; obviously not working

Australia's cold snap yesterday (from the linked article above):

• energy prices surge 160x normal; up to $14,000 / MWH (US average: about $100/MWH)
• several major electricity power stations went down, unprepared for spike in demand caused by cold snap along Australia's east coast
• one of Australia's largest aluminium shelters forced to shut down
• on three separate occasions, Tomago, the state's largest single energy user, was forced to halt production as spot prices soared to a staggering $14,000 per megawatt hour
• Tesla's battery: the largest battery in the world would power the smelter plant for all of eight minutes

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Back to the Bakken

Active rigs:

$64.78↓↓	6/19/2018	06/19/2017	06/19/2016	06/19/2015	06/19/2014
Active Rigs	61	56	28	77	189

RBN Energy: Enterprises fractionators and other NGL-related assets at Mont Belvieu.

The fractionation and NGL storage complex in Mont Belvieu, TX, would surely qualify as one of the Seven Wonders of the Energy World, if there were such a list. With more than 250 million barrels of NGL storage carved — by water! — out of an enormous subterranean salt dome formation, and nearly two dozen fractionation plants with a combined capacity of more than 2 MMb/d, Mont Belvieu not only serves as the largest receipt point for mixed NGL streams on the planet, it is also the key hub of distribution for the ethane, propane, normal butane and other NGL purity products that are either consumed by Gulf Coast steam crackers and refineries or exported to foreign end-users. But unlike wonders of the ancient world like the Great Pyramids at Giza, Mont Belvieu is still very much a work in progress, with new storage caverns and new fractionators now under development to try to keep up with the breakneck pace of U.S. NGL production growth. Today, we begin a company-by-company review of fractionation capacity and other key infrastructure there.

Enterprise owns all or part of nine fractionation plants in Mont Belvieu (see photo below), the newest of which (Frac IX) is an 85-Mb/d facility that has been ramping to full operation this month (June 2018). The nine fractionators’ total capacity is 755 Mb/d, or 36% of the total existing fractionation capacity at the NGL hub. Enterprise — its holdings in Mont Belvieu  — has been a major fractionator there for many years. By 2010, it had 245 Mb/d of capacity up and running in Mont Belvieu, and this decade it’s added six 85-Mb/d plants: one each in 2010, 2011 and 2012; two in 2013 and — as we said above — another this month. The seventh and eighth fractionation units at Enterprise’s Mont Belvieu complex (the ones that came online in 2013) were joint projects with Western Gas Partners (WGP), a master limited partnership formed by Anadarko; Enterprise owns 75% of the two units and WGP owns 25%. Enterprise owns about 130 MMbbl of existing salt dome storage capacity at Mont Belvieu and is in the process of developing 38 MMbbl of additional storage capacity there. The company’s Mont Belvieu assets also including a propane dehydrogenation (PDH) plant, isobutene dehydrogenation (iBDH) capacity, propylene splitters, and an octane-enhancement unit that produces methyl tertiary butyl ether (MTBE) for the export market.

Back On The Road Again -- On The Road To Australia -- June 9, 2018

Screenshot of concern:

Some time ago we were following the "electric grid" in Australia pretty closely. I haven't thought about Australia in some time. I assume it's autumn and the "electric grid" should be doing quite well. But apparently I was wrong.

Before getting in that, I'm bringing myself up to date by clicking on the tag at the bottom of the blog, "Road to Australia."

To keep this in perspective, the average price of electricity in the US is about $100 / MWH.

In New South Wales, Australia, recently, the average price of electricity is about $300 / MWH and in the last few weeks has been spiking to $14,000 / MWH. NSW is the most populous state in Australia -- with two-thirds of the country's population; its capital is Sydney.

It is also the home of a number of coal-fired utility plants and aluminum smelters.

The link regarding the $14,000 / MWH spike comes from a site that has followed this closely. I was curious if perhaps the site was "crying wolf." A quick google search brought me to this article, from June 8, 2018, yesterday: Australia's largest aluminum (sic) smelter warns of "energy crisis" as power supply falters.

Tomago Aluminium, Australia's biggest smelter of the metal, warned on Friday that it faced curtailing operations for a third time this week because of power shortages across the national electricity market.

As of Friday afternoon, NSW plants reporting outages or reduced output included the gas-fired Tullawarra power station, Mt Piper coal-fired power plant - both owned by EnergyAustralia.

Also reporting coal-fired power units offline were Sunset Power's Vales Point and AGL's two Hunter Valley stations, Bayswater and Liddell.

The Australian Energy Market Operator (AEMO) issued an actual lack of reserve alert at 5.44 pm only to cancel it 23 minutes later after the market responded with extra supply - and demand eased back ahead of the long weekend.

There are at least three issues here:

• the role coal will (or won't) continue to play in a land where faux environmentalists are in control
• the mix of renewable energy vs fossil-fuel energy for generating electricity
• the lack of understanding, apparently, that renewable energy is not dispatchable; and, storage technology is yet a long way off (and/or very, very expensive in itself)

A fourth issue:

• the Australian grid issue sounds very much like the "oil issue" in Venezuela
• Venezuela sits on the world's largest reserve of oil (and the right kind of oil) and failed this past week to meet its contractual obligations due to central government policies
• Australia sits on some of the world's greatest coal reserves, and  cannot meet electricity demands due to central government policies

A fifth issue:

• if large utility plants fail (for whatever reason) and if aluminum smelters and steel plants fail (for whatever reason) they are unlikely to ever come back -- if they do come back, they won't come back for years -- others may disagree, but it's a huge gamble

Even worse news for the Australians, or at least two-thirds of Australians and their heavy industry  is the fact that politicians appear not ready to solve the problem, but rather are looking at whom to blame. The fact that politicians are looking to blame rather than solve, one suspects this problem will only get worse.

There would be nothing better that Canada would like to see than US aluminum and steel plants get shut down. Along with China, the two countries would have incredible pricing power, affecting everything from the US military to Boeing to American automobile manufacturers.

I don't know the statistics but my hunch is that it is not without good cause Presendent Trump has suggested that a robust steel and aluminum industry in the US is a national security issue.

Not mentioned is the quality and/or specifications of the required steel and aluminum.

In the short term, the viability of the US steel and aluminum industry is at risk if unfair trade practices continue. The big question, of course: if we want "free" trade, why are their any tariffs at all among the G7 countries, China, India, Australia, and so on?

In the long term, even if President Trump is able to save the US steel and aluminum industry by creating a level (or a more level) playing field, if the US takes the Road to Australia with renewable energy, it may not matter at all.

Joke of the day:

Some in Australia want to "fix" the "dispatchable" problem of renewable energy with more non-dispatchable renewable energy:

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A Reminder And Another Inconvenient Truth 

Today (20th century) it is completely impossible, even for a nuclear-powered icebreaker, to circumnavigate Greenland, for the seas surrounding the far north are frozen solid all year around.

However, there is direct evidence that conditions in the early fifteenth century were markedly different from those existing today, suggesting that Greenland could have been circumnavigated by the Vikings. -- 1421: The Year China Discovered America, Gavin Menzies, 2002, pp. 349 - 350.

The Road To Australia -- Free Wind Energy Where Electricity Costs $13,000 / MWH -- February 8, 2018

Updates

Later, 6:27 p.m. Central Time: shortly after reporting that electricity now costs $13,000 / MWh in South Australia, this note from a reader:

At 09:30, local time, the 5 eastern Australian states are consuming 25,000 megawatts of electricity. 

Wind and grid solar are producing 600 megawatts. 

Temperatures in Adelaide expected to exceed 100F, putting strain on grid supply.

The "NEM Dispatch Overview" tab on the Aussie AEMO site shows individual state production, consumption, and how much solar/wind is contributing ... along with the flow pattern amongst the states. 

Kinda fascinating seeing how 'close to the edge' the grid is, despite exceptionally high cost to provide their citizens, their industries, such a basic commodity like electricity. 

Original Post

 

Upset about your monthly utility bill? It could be worse. You could be living in South Australia -- the poster child for successful wind energy. Free wind energy is only costing them $13,000 / MWh (vs the "standard" / contract, $35 / MWH:

The Road To Australia -- $13,000/MWh -- February 6, 2018

Updates

February 7, 2018: from The Lead, August 6, 2015, this is where it all began.

Original Post

Late last week I posted the note about the Australian electric grid commission asking for help to "save" their country's electric grid. The commission was looking for constructive input not later than Monday, yesterday, or February 6, today (the exact day/date was a bit confusing).

In that post, I noted that Australians were paying as much as $14,000/MWh for "spot' electricity, to help do their part to save the world from global warming.

Well, here we go again, as Ronald Reagan would say. Here's the screenshots of electricity and demand in Victoria and South Australia taken just minutes ago:

Victoria, paying $12,000 / MWh:

South Australia, paying  $13,000 / MWh:

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North Korea -- Idle Rambling

I thought I had posted this on the blog, but if I did, I am unable to find it.

Within the last year or so, some pundit in the mainstream media suggested that Kim Jong-un will not risk nuclear war with the United States. The pundit stated that to do so would certainly mean the end of Kim Jong-un; the end of the dynasty began by his grandfather who it is said he reveres; and, even the end of the "geography" as know it, of that area we now call North Korea.

The pundit said that no dynastic leader would die by suicide; he said no dynasty would end by suicide.

I bought into that. It made sense.

Fast forward to A New Literary History of Modern History, c. 2017, page 35:

On April 25, 1644, the three-hundred-year-old Ming dynasty ended as its last ruler, the Chongzhen Emperor (ruled 1628 - 1644), committed suicide by hanging himself on Coal Hill, just north of the Imperial Palace in Beijing.

'Those who do not learn history are doomed to repeat it.' The quote is most likely due to writer and philosopher George Santayana, and in its original form it read, "Those who cannot remember the past are condemned to repeat it."

Why I Love To Blog -- Reason #56 -- February 2, 2018

Updates

February 4, 2018: and, yes as predicted. South Australia awards Tesla with the contract to save their grid. From Bloomberg:

South Australia plans to roll out solar panels and Tesla Inc. batteries to at least 50,000 homes to form what its government says will be the world’s largest virtual power plant. 

If you encounter a paywall, the story is also at The Guardian:

The South Australian premier said a trial was already under way to install solar panels and Tesla batteries on 1,100 Housing Trust homes. The cost would be financed by the sale of electricity. The power generated by the solar panels and the batteries would not be owned directly by the households.

The program would later be rolled out to another 24,000 public housing properties and also offered to other households with a view to having at least 50,000 Adelaide homes connected.

Not even gonna comment.

Original Post

 

I have long forgotten the origin of this story. It began at least a year or so ago. Maybe longer. I've long forgotten.

One reader from Australia alerted me to the pending implosion of the electric grid in south Australia. a year or so ago. Another reader, closer to home, alerted me to JoanneNova.com.

To make a long story short, to save the world from global warming, Australia decided some years ago -- and very recently in the big scheme of things -- to move electricity generation from coal to wind.

Coal in Australia is very, very cheap. Wind is free.

At least that's what we're told.

On January 18, 2018, spot price for electricity South Australia and environs went as high as ... hold on to your hat ... $14,000 / MWh (no typo).

When I started watching what I call "ISO Australia" (its actual name is AMEC: the Australian Energy Market Commission) I never knew where the story would go. I was simply fascinated by how the Australian grid seemed to be falling apart.

The commission set the bar low: as long as the grid held -- no brownouts or blackouts -- regardless how much it might cost the ratepayer -- the commission declared success: they were saving the world from global warming and Australians were adapting to $14,000/MWh electricity.

Well ... as noted, when I first started following "ISO Australia" I had no idea where it was going. Tonight I found out.

A reader sent me this: AEMC wants input on how to save Australia's electricity grid -- due Monday, February 6th.

As the reader noted, the commission is desperate; the commission needs help and they need it fast. Their phones must be ringing off their hooks (as we used to say).

A scary word in that sentence: "save."

The scariest words in that sentence: "by Monday February 6th."

Let's see -- it's Friday, here, February 2nd. That would make Monday, February 5th.

February 6th would be a Tuesday. Maybe AEMC, along with saving the world from global warming, uses a different calendar ... or maybe it has something to do with the International Date Line. I don't know.

But I digress. [Something tells me I'm on thin ice here; maybe Monday really is February 6th in Australia. Check Australian calendar.]

But the AEMA needs help; and they need help now. To save the grid.

They'll worry about saving the world later.

By the way, if you take time to read the story at the link, be sure to read the comments. The commission is already getting advice.

The big question is whether Elon Musk has time to save the Australian electricity grid. 

Australia, As Predicted, Experiencing Brownouts And Blackouts Because Consumers Are Using Too Much Electricity -- January 28, 2018

So, here it is, as predicted by a reader of the blog: brownouts and blackouts in Australia. From the article:

Mr Armstrong from Ausnet Services (another power company) blamed unreported air conditioners:

“There are a lot fuses blowing in the hot weather and a significant power pull with people having put in air-conditioners they didn’t tell us about,” Mr Armstrong said. 

Who knew you needed to tell your power company when you put in an air conditioner?

I assume Elon Musk is watching closely.

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The Australian Grid

"ISO Australia": Spot prices for Victoria, South Australia, and Tasmania -- note the spot price for electricity earlier in the day, in excess of $3,000/MWh --

There is no question in any sentient American that we would have been headed down the same path had Hillary been elected president.

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From A Reader 

(Electricity Consultant and Expert)

First:

If power prices hadn't spiked I would accept the "official" explanation that it was a local distribution system problem... transformers/conductors too small resulting in overheating and open fuses. Doesn't sound right does it? My hunch is low voltage from lack of on line capacity caused current to increase and open fuses. Sure, once these fuses opened they had sufficient power on the grid (load shedding).

Second:

Bull feathers...the junk power coming from all those wind turbines would make any system "blow fuses". It must be nearly impossible to maintain a stable electrical grid with a major component of wind power.

It's not just the varying wind speed that makes the output power nasty...see below: IEEE lists seven (7) power "disturbances". All seven of these are more of an issue with a variable, intermittent, on again off again wind generator than a conventional coal or gas generator. Example: Compare 500 wind turbines at two MW each vs. a coal-fired 1000 MW generation station...7x500 potential "disturbances" for the wind mills vs 7x1 for the coal-fired unit!!!

The reader quotes this from the news article:

The variable nature of wind energy sources (in terms of the real power, reactive power, output voltage, and frequency) is a major challenging issue.

The conversion of an input AC power at a given frequency and voltage to an output power at different frequency and voltage can be obtained with static circuits called power converters, containing controllable power electronic devices.

Note 1: These power converters use diodes and filters to convert the AC from the generator attached to the turbine to DC. This is necessary to smooth the constantly changing generated current. Then the DC current must be inverted to AC to be compatible with the electrical grid.

Note 2: See below item 5 (for example). Waveform distortion...some of this DC from the converter/inverter will certainly leak into the AC output as the diodes age and fail...believe me I've seen diode leakage/failure problems for 30 plus years maintaining AC to DC rectifiers on pipeline cathodic protection systems.

IEEE: ... power quality disturbances... have been organized into seven categories based on wave shape: 1. Transients 2. Interruptions 3. Sag / Undervoltage 4. Swell / Overvoltage 5. Waveform distortion 6. Voltage fluctuations 7. Frequency variations

Wind? The gift that keeps on giving. 

Whoo-Hoo! How Much Fun Is This? Tesla Will Debut Its Model 3 In The Southlake Showroom Tomorrow -- Across From The Apple Store -- January 25, 2018

Road to Australia: remind me to check "ISO-Australia" tomorrow. A reader writes:

Tomorrow and the day following could be 'interesting' for the SA and Victoria electricity markets.

Adelaide is calling for 107F both days with very light winds tomorrow (Saturday for them),  80% humidity and high cloud cover Sunday (meaning minimal input from widespread rooftop solar). 

Over in Vic, Melborne is calling for 102F Sunday.

Great reports from 'weatherzone.com' site.

I feel like an 18th century sailor constantly monitoring weather conditions to see if these guys can keep their lights on. 

Crazy.

Today, spot prices for electricity in Australia "only" hit $2,400/MWh compared with the "regular" $35MWh in the US. Don't take this out of context. I am inappropriately comparing apples to oranges. "Spot" price is way different than the "regular" price.

The Political Page, T+362 -- January 18, 2018 -- How's That Global Warming Working Out? Texas Shatters Winter Power Demand -- It's Cold Outside

We were told by Patrick Kennedy that our grandchildren would never see snow by 2010 or some such year. Don reminded me of that. Today, it is being reported that there is snow in all 50 states.

Texas: shatters record for winter power demand.

Texas has set a new record for winter power demand in the wake of a record-breaking cold snap that gripped the state on Tuesday night, according to the Electric Reliability Council of Texas, which oversees 90 percent of the state's grid.
Power demand peaked between 7 a.m. and 8 a.m. Wednesday at 65,731 megawatts -- shattering the record of 62,855 megawatts hit earlier this month when another cold snap hit the state. In a news release, ERCOT said the state had sufficient power resources available to meet demand.
The spike in demand also affected wholesale power prices, which hit around $200 per megawatt hour across the state, according to ERCOT. The average wholesale price of power, which changes by the minute every day, is typically $25 per megawatt-hour. By 9:30 a.m., prices had dropped down to around $100 per megawatt-hour, except in South Texas.

Don't cry for Texas at $200/MWh. Those in New England are paying $500/MWh, and those in South Australia are paying $10,000/MWh (no typo). [Update: this was how bad it was last week in South Australia -- in two days they burned more money on electricity costs than it would have cost to build a new natural-gas fired plant.]

Our electricity bill here in the DFW area in December, 2017, was about 4X our normal monthly payment. 4x.

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Teaching Spanish

Electricity Costs: How About $9,000/MWh; That's A Bargain, It's Going To Hit $10,000/MWh; Later, $14,000/MWh -- The Road To Australia -- January 18, 2018

This is truly unbelievable. A reader alerted me to this with this message last night.

104 F degrees in Adelaide now, expected to be 103 F as the sun goes down in a few hours which will neutralize extensive rooftop solar in the region.

Tomorrow looks to be equally hot. 

Grid operator AEMO, has taken steps to obfuscate easy data gathering from site. 

These folks are just crazy to go down this path (renewable energy -- solar).

For those folks who want to see where California is headed with its most recent order affecting PG&E, just look at these charts.

Remember, in North Dakota, electricity costs, I suppose, are about $30/MWh, although I have not checked in a long, long time. $30/MWh vs $14,000/MWh for spot electricity.

I said I would check out "ISO" Australia in the morning. Well, here the screenshots taken just a few minutes ago.

$9,014/MWh:

$10,029/MWh:

$14,166/MWh:

I assume Apple won't be putting any server farms in Australia any time soon.

Elon Musk can't get his batteries to Australia fast enough. But, of course, the batteries are only to mitigate black-outs that might last minutes. His batteries will do nothing for the price of spot electricity in south Australia. Wow, what a mess.

The good news: Australians don't have to pay this price for electricity. They can simply turn everything off.

Even during the worst days during the cold snap in New England, spot prices seldom went above $500/MWh. Earlier this morning, spot prices in New England spiked to $450/MWh.

Colluding With The Russians -- With Whom We Have Sanctions -- When Boston Is Not Burning Oil Brought In From Outside The US, It's Burning Natural Gas From Russia's Siberia -- January 8, 2018

Updates

January 10, 2018: see this link for tracking this vessel mentioned in the update following.

January 10, 2018: they must be reading the blog, LOL. Reuters is reporting that "US may get first LNG from Russia despite sanctions --

A vessel that may be carrying liquefied natural gas from Russia's new Yamal LNG export terminal could be heading to the United States despite sanctions against the company that operates the Russian facility.

The tanker Chris. De Margerie picked up a cargo from Novatek PAO's Yamal facility, Russia's second LNG export terminal, on Dec. 9 and dropped it off at National Grid Plc's Isle of Grain LNG facility near London on Dec. 28, according to Thomson Reuters data.
Since then, Engie SA's Gaselys LNG tanker picked up LNG from the UK facility on Dec. 30 and is expected to arrive in Boston on Jan. 22.

It is possible that some of the LNG on the Gaselys is from Yamal, according to a report by S&P Global Platts. Reuters has not independently verified that report, but the shipping data does show the routes the tankers are taking. The final destination could change.

Later, 2:30 p.m. CT: from a reader, follow the money, the jobs, the politics; this is nothing about saving the environment:

There has been a somewhat trivial 24 inch, 175 mile long pipeline called the Pilgrim Pipeline proposed to run from Albany to the refineries in Linden, NJ.

This pipeline was slated to colocate with existing Right of Ways (electrical transmission lines, roads, etc) for maybe 80/90% of its route. 

Products would be Bakken oil brought in by CBR and heating fuel, gasoline and other refined products brought back north. 

No more dramatic ice breaking to deliver life -ustaining fuel.

Pipeline never approved. 

Original Post

This story is so incredible on so many levels, it needs reposting. From Bloomberg:

Not many people had expected the U.S. to turn to Europe for natural gas this winter.
Yet the polar chill that gripped the U.S. East Coast this month, and sent spot prices to records, has led to a tanker loading a cargo of liquefied natural gas in the U.K. for Boston, some of which was likely produced by a project in Siberia targeted by U.S. financial curbs.

The Gaselys tanker is due to arrive in Boston on Jan. 22 after loading fuel from storage tanks at the U.K.’s Isle of Grain, according to ship-tracking data compiled by Bloomberg. The vessel docked at Grain shortly after the terminal near London received the first cargo from the $27 billion Yamal LNG plant in Russia’s icy north. 

“Gas from anywhere is profitable into that northeastern U.S. gas market as prices are the highest in the world,” said Trevor Sikorski, head of natural gas, coal and carbon at Energy Aspects Ltd. in London.

The arrival from the U.K. would make it the first LNG reload into the U.S. since a cargo from the tanks of the Huelva terminal in Spain was imported in June 2014, according to data through October from the U.S. Department of Energy. U.S. imports of the super-chilled fuel, mostly into Boston from Trinidad and Tobago, have dropped since exports started from the Gulf of Mexico coast in 2016.

Isle of Grain terminal operator National Grid Plc said it doesn’t comment on the intentions of gas shippers using its facilities. It’s not immediately clear who owns the cargo. [But pretty easy to guess.]

U.S. domestic demand climbed to a record last week as snow and winds bombarded Americans on the East Coast. Temperatures tonight in Boston may fall to as low as 15 degrees Fahrenheit (minus 9 degrees Celsius), with a cold outlook persisting through this month, according to AccuWeather Inc.

I wonder what ol' Ben Franklin would think of this craziness. I think he was close enough to ride a horse, or even walk, to the Marcellus fields west of Boston.

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The Road To Australia

And at the other end of the spectrum, now it's Australia paying upwards of $500/MWh for electricity in sweltering weather. Dynamic link here.

Renewable energy and Elon Musk's batteries apparently were not the answer ...

Morning In America? December 27, 2017

First things first, football: today is the day that college football playoffs and bowl games reach their stride with three to four bowl games / day. Today there are four games. Whoo-hoo. I may go over to Applebee's and simply hang out. LOL I  hate the names of the bowl games, but some of the match ups should be pretty good:

• Southern Miss vs Florida State, must watch, 12:30 p.m. CT
• Iowa vs Boston College, must watch 4:15 p.m. CT
• Purdue vs Arizona, no interest, but someone must want it, prime time, 7:30 p.m. CT
• Missouri vs Texas, no interest, but someone must want it, prime time, 8:30 p.m. CT

So, Applebee's this afternoon; couch potato this evening. What a great country!

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ISO New England 

After posting, a reader made these observations:

The NE power situation this moment ...
Couple of observations ...
The nuke, coal and GAS fuel percentage has been 'flatlined' all day, potentially indicating the fuel/facilities are maxxed out.
Oil is currently providing 19% of the juice - approaching gas' contribution
Forecast calls for next ten days remaining below freezing (32) all day and night.
Those folks are not only facing catastrophic costs just as winter begins, I'm wondering how secure/reliable their oil supplies are if they are burning through it a such a high rate.

There is a fairly large oil burning plant in Maine that was one of the most vociferous critics to gas pipeline build out.
Easy, in these circumstances, to see why. 

Looks like it's time to turn on the wind and solar farms. Link here.

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The Market

Tesla: And more trouble for Tesla, at least that’s what analysts at KeyBanc are predicting. After conversations with Tesla salespeople across the the country, analysts believe the electric car maker will report 70% fewer Model 3 deliveries for the current quarter than previously expected. Elon Musk said he would deliver 15,000 Model 3 vehicles in December, 2017. Early this morning, CNBC talking head said the number was more likely to be 5,000. Thirty percent of 15,000 is 4,500. Thirty percent of 5,000 is 1,500. If it's 5,000 vehicles, the believers will still believe. If it is less than 2,000 ... watch out....

Bull market: earlier this mornig a talking head on CNBC reminded us that the secular bull market that began in 1949 lasted until 1966. The "great recession" ended in 2012. 2029 is seventeen years from now.

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Where E-Media Shines

The Wall Street Journal has an excellent article on the defeat of ISIS. The dynamic maps are incredible and really bring the story to life. If caught behind a paywall try googling how islamic state's caliphate crumbled wsj. See also this post.

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Energy

Later today: the calendar suggests that API will release its weekly US crude oil inventories later today, but unlike previous weeks, no forecast is provided. Update: the forecast was for a drawdown of 3.8 million bbls; in fact, API shows actual drawdown of 6 million bbls. I use EIA data to follow re-balancing. EIA data should be released tomorrow, unless holiday Monday delays EIA data for one day.

Putting miners back to work: not only will the Trump EPA "repeal" the Clean Power Plan but it looks like Rick Perry, not the sharpest knife in the drawer, has found a way to subsidize coal. LOL.

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Shell Game

Shell confusion. I'm hearing conflicting stories on how the new tax bill will affect Royal Dutch Shell. For the past 36 hours -- including minutes ago (8:03 a.m. CT) on CNBC that RDS will incur a $3 billion charge in the fourth quarter. But now this "breaking story," at 5:33 a.m ET, from thefly.com:

Royal Dutch Shell expects U.S. tax reform to be favorable to Shell.

Royal Dutch Shell plc expects the potential economic impact of the recently enacted U.S. tax reform legislation to be favorable to Shell and to its U.S. operations, primarily due to the future reduction in the U.S. corporate income tax rate from 35% to 21%.

This change in U.S. tax legislation, effective January 1, 2018, will impact Shell's Q4 results but the analysis of the actual impact is not yet complete.

Shell intends to determine and announce the actual impact including any Q4 movements, and balance sheet adjustments, as part of its Q4 results.

However, on the basis of the Q3 financial statements, Shell would have incurred an estimated charge to earnings of $2B-$2.5B primarily driven by a re-measurement of its deferred tax position to reflect the lower corporate income tax rate. This charge represents a non-cash adjustment and will be reflected as an identified item.

How will the average investor know where the truth lies? Follow the share price of RDS-A or RDS-B. By the way, in 2019, the difference between RDS-A and RDS-B will no longer exist, which begs the question: do the "B" shares go away?

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For Those Who Love The Smell Of Diesel 

Diesel? Yup, diesel is the new green!

Welcome to a clean green Australia where they gave up coal to move to diesel. Fear of blackouts means diesel generator sales up 400%. Over at JoanneNova.

You can "believe" that story or you can go with Elon Musk: Tesla's enormous battery in Australia, just weeks old, is already responding to outages in "record" time, from The Washington Post. 

Less than a month after Tesla unveiled a new backup power system in South Australia, the world's largest lithium-ion battery is already being put to the test. And it appears to be far exceeding expectations: In the past three weeks alone, the Hornsdale Power Reserve has smoothed out at least two major energy outages, responding even more quickly than the coal-fired backups that were supposed to provide emergency power. Tesla's battery last week kicked in just 0.14 seconds after one of Australia's biggest plants, the Loy Yang facility in the neighboring state of Victoria, suffered a sudden, unexplained drop in output.

But this is the real story:

Fed by wind turbines at the nearby Hornsdale wind farm, the battery stores excess energy that is produced when the demand for electricity isn't peaking. It can power up to 30,000 homes, though only for short periods — meaning that the battery must still be supported by traditional power plants in the event of a long outage. 

Astute readers will know why Australia needed batteries in the first place and why their spot electricity prices are surging.

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Back to the Bakken

Active rigs:

$59.44→	12/27/2017	12/27/2016	12/27/2015	12/27/2014	12/27/2013
Active Rigs	53	41	62	173	187

RBN Energy: Alberta gas production tests takeaway capacity.

Western Canadian natural gas producers are increasingly facing oversupply conditions and price volatility. While competition and pushback from growing U.S. shale gas supply continues to be a factor, producers are now also contending with fresh problems closer to home — namely transportation constraints right where production is growing the most, in central Alberta.

This fall, the Alberta market experienced extreme bottlenecks that left production stranded and sent area gas prices reeling. The ramp-up of winter heating demand has since helped ease the constraints, but the problems are likely to return in the spring when demand is lower, leaving producers exposed to the risk of severe price weakness again in 2018 and limited in their ability to grow supply. Today, we continue our look at what’s behind the local constraints and the implications for production growth and prices in Western Canada.

Enbridge: growth portfolio is underappreciated -- Morningstar.

Enbridge is positioned to benefit from growing oil sands supply dynamics with its Mainline system and regional oil sands pipelines. The regulated Mainline system generates attractive tolls and represents approximately 70% of Canada’s pipeline takeaway capacity. The system offers refinery access to various markets, adding to the network’s attractiveness.

While crude pipelines are Enbridge’s bread and butter, the company operates a diverse energy portfolio. Gas distribution operations benefit from regulated returns and provide the company with reliable cash flows. Enbridge also operates natural gas pipelines and processing assets that supplement its crude pipeline network. Future natural gas pipeline projects benefit from long-term contracts that are tied into emerging projects.

Recently, Enbridge finalized its acquisition of Spectra Energy. The deal positions Enbridge to diversify its operations toward natural gas. The company intends to increase its annual dividend and has maintained an average distributable cash coverage ratio of approximately 3 times over the past three years.

Overall, Enbridge is in a strong position to benefit from the growing oil sands supply, which we expect to outstrip pipeline takeaway capacity in the near term. We expect the Line 3 Replacement to help; we project it to be in service by the end of 2019 and fuel tremendous growth for the company. We believe the stock is undervalued based on the company’s vast growth portfolio, highlighted by the lucrative natural gas projects associated with the Spectra acquisition and the Line 3 Replacement.

Enbridge Energy Partners: 10% dividend just got safer -- Motley Fool.

Not only that, but management expects the payout to grow at around 3% per year through 2020. Investors were rightly shocked by the news, sending shares up by as much as 10%. Enbridge Energy Partners and its parent, Enbridge, Inc. (NYSE: ENB), have made multiple moves in recent years that would leave anyone's head spinning. But the ship seems to have been righted, and the stock's sky-high yield appears safe for the foreseeable future in light of the outlook's key details. In fact, for venturesome investors, EEP is a great high-yield stock to consider heading into the new year. 

COP: did COP's earning growth outperform the industry? -- Simply Wall St.

Disclaimer: this is not an investment site. Do not make any investment, financial, travel, job, or relationship decisions based on anything you read here or think you may have read here.

ISO New England Spot Electricity Spikes To Over $220/MWh -- December 18, 2017

Link here.

Too much non-dispatchable wind and solar and not enough natural gas?

For comparison: PJM -- under $23/MWh. See comments below:

For comparative purposes, the wholesale spot pricing in 13 state PJM region - found at PJM site/Data Shortcuts/Operational Data - is under 23 bucks.

This is why businesses all over the world are looking at relocating there. 

The problem lies in the bars at the right side of the graph:

Meanwhile, South Australia and Victoria will see spot prices for electricity hit $315/MWh later today. Link here.

Australia's Growth Misses Estimates -- Bloomberg -- December 5, 2017

Electricity in Australia on very hot days at peak energy use times can cost upwards of $14,00/MWh. And then journalists have trouble explaining why Australia's households are spending less.

Australia’s economy grew slower than forecast as household spending rose at the weakest pace since the 2008 financial crisis, reinforcing the likelihood of the central bank keeping interest rates on hold for longer.