Putin puts coal on track for a comeback in UK

China plans a massive increase in coal mining, a move that will dramatically reduce its reliance on imports and deal a blow to its near-term climate actions.

The National Development and Reform Commission, the nation’s top economic planner, told officials from major mining regions at a meeting late last week that it wants to boost domestic production capacity by about 300 million tons, according to people familiar with the matter. It also plans to build a 620 million-ton stockpile of the fuel split between government, miners and users.

Such an increase in output would cut the country’s already scant dependence on foreign imports after global prices hit record levels in the wake of Russia’s invasion of Ukraine. The measures also highlight concerns that China’s reliance on fossil fuels remains as entrenched as ever, as it seeks to enhance energy security to limit disruptions to economic growth, regardless of the impact on its climate goals.

It’s hard to overstate the importance to China of coal, the most-polluting fossil fuel. The nation produces and consumes more than half of global supply, and it’s the biggest contributor to its world-leading greenhouse gas emissions. China has said that coal consumption should begin to fall off in the second half of this decade as it strives to peak emissions across the economy by 2030.

The production increase would be split, with 150 million tons of capacity coming from new, upgraded operations and another 150 million from open-pit mines and some mines that had previously been shut. Daily output should average 12.6 million tons, according to the NDRC, which is even higher than the record-breaking levels reached in the fall after shortages caused widespread industrial brownouts.

The NDRC didn’t give a timeline for the ramp-up, but if last year’s all-out push on production is anything to go by, it could happen relatively quickly. The added 300 million tons of capacity is equivalent to China’s typical annual imports. The nation produced over 4 billion tons of its own coal last year.

The new edicts on supply follow other measures intended to guarantee a smoothly running power system, which still relies on coal for about 60% of its needs. The government has ordered mines and power plants to sign medium and long-term contracts for 100% of their generation, and will enforce a price range of between 570 and 770 yuan a ton for those supplies.

4) America fires starting gun on new gold rush in shale
The Times, 14 March 2022

Any thoughts that the sun may be setting on the American shale oil and gas sector have been abandoned amid Russia’s invasion of Ukraine and subsequent efforts to halt imports of Russian hydrocarbons

As Covid-19 swept the world, America’s shale industry was brought to its knees. An unprecedented slump in demand drove the country’s oil price below zero for the first time on record. Dozens of operators filed for bankruptcy protection.

What followed was a steep, protracted road to recovery — and then Russia invaded Ukraine. Now, with the conflict having driven the price of crude to its highest levels since 2008, producers that only two years ago had been pushed to the brink are back on the march.

According to John Kilduff, partner at Again Capital, an investment firm, the “boom times” are about to return for those producers. Oil’s rapid ascent is “just too much of an allure not to capitalise on. I don’t think that it’s unfair to say, if these prices last even much longer, that there will be a gold rush.”

A ban on Russian oil in the United States and Britain’s commitment to phase out all imports this year have intensified supply fears that were already fuelling an extraordinary rally. Last week West Texas Intermediate, the American benchmark oil price that stooped as low as minus $40 in April 2020, hit $129.

President Biden, who faces a crucial set of midterm congressional elections in eight months’ time, is trying to persuade Americans that “Putin’s price hike” is the reason they are digging deeper than ever before to fill up their cars. He knows that blame is rarely apportioned far from the Oval Office when voters are feeling the pinch at the pump.

Jennifer Granholm, the US energy secretary, made a stark appeal to oil executives gathered in Houston, Texas, last Wednesday. “We are on a war footing,” she declared at the CERAWeek conference. “That means releases from the strategic reserves across the world, as we have done. That means you producing more right now, where and if you can.”

The last shale boom carried America’s oil output to a peak of 12.9 million barrels per day before the pandemic. Covid suppressed production to less than 11 million barrels, but this has since recovered to 11.7 million. The Baker Hughes rig count, a key barometer of activity across America’s oil sector, reported that 663 rigs were in operation as of Friday, up 261 on the same point in 2021.

Until recently, few industry experts believed that US oil production would ever return to its pre-coronavirus levels. “Even last year, the majority of large producers were saying that we would never see pre-Covid [output] records in future,” Artem Abramov, head of shale research at Rystad Energy, a consultancy, said. As it stands, though, records that a matter of months ago seemed untouchable could be toppled this year. Rystad, which already had forecast growth of 900,000 barrels per day in American output in 2022, is now predicting a further increase of up to 600,000.

Oil production is not the only thing on the rise. Shares in America’s top shale operators, which tumbled two years ago, rose sharply as Putin’s forces prepared to invade Ukraine. ConocoPhillips’ stock has climbed by more than a third since the start of this year, while shares in Chesapeake Energy and Continental Resources are up by a fifth.

Some producers, given their struggles of the recent past, are understandably wary of stepping up production beyond their previous plans. Persisting labour shortages and supply constraints abound. Demand remains variable. Above all, drilling and fracking — or hydraulic fracturing, the process by which a mix of water, sand and chemicals is injected into the ground under high pressure, breaking up shale rock and releasing the gas held within — are expensive. Long before the pandemic, Wall Street was demanding spending cuts and greater returns.

Grappling with record petrol prices across the US, the White House is impatient. Yet so far Biden, on a mission to decarbonise the world’s largest economy by 2050, has shown little interest in building bridges with its oil industry. The president bluntly dismissed suggestions that his policies were holding back domestic production as “simply not true” during a live television address last Tuesday.

Calls from the sector for greater support have fallen on deaf ears. Operators already have about 9,100 unused permits to drill on federal land, Biden noted, arguing that they “could be drilling right now, yesterday, last week, last year” but had decided not to. Granholm went further, accusing lobbyists of peddling “the same old DC BS” during an emergency. She asked: “Aren’t we ready to finally work together to confront this moment of crisis?”

Some executives have expressed apprehension that Washington’s appetite for oil could be short-lived. “The rhetoric from the administration is we need more oil now, but we don’t need it later,” Mike Sommers, chief executive of the American Petroleum Institute, told Axios. How could companies make long-term investments, he mused, when they did not know what policies to expect in future?

Biden, meanwhile, is standing by his climate agenda and a goal of transitioning away from fossil fuels. His officials insist that there is no tension between the desire for more domestic oil and gas output today and alternative sources tomorrow. They are trying, as Granholm put it, to “walk and chew gum at the same time”.

With US inflation at a four-decade high, Biden has vowed to throw all he can at mitigating the cost of surging oil prices for consumers. “This is not a ‘drill, baby, drill,’ administration, that’s for sure,” Kilduff said. It is, nevertheless, one that faces the ballot box in November. Officials would “bite the bullet”, he predicted, and do everything possible “in the short term” to boost oil production and get prices down.

5) German finance minister open to new oil, gas drilling in North Sea
Reuters, 13 March 2022

BERLIN, March 13 (Reuters) – Germany should rethink its ban on allowing new drilling for oil and gas in the North Sea as it tries to reduce its dependence on Russian energy due to the invasion of Ukraine, Finance Minister Christian Lindner said on Sunday.

Under the coalition deal between Chancellor Olaf Scholz’s Social Democrats, the Greens and Lindner’s Free Democrats (FDP), Germany will not grant any new permits for oil and gas drilling in the North Sea beyond the existing framework.

“We have to question the decision in the coalition agreement,” Lindner told the Tagesspiegel newspaper. “Due to global market prices developments, this looks more economical.”

Germany, which depends on Russia for two thirds of its natural gas imports, is urgently trying to boost alternative energy sources, including building its first liquefied natural gas (LNG) terminal. Lindner, however, said at least for a transitional period, Europe’s biggest economy will still need oil and gas.

“Against the changed geopolitical background, I think it is advisable to examine the entire energy strategy of our country without any prohibitions on thinking,” he said.

Despite the sharp rise in fuel prices at petrol stations, Lindner rejected a temporary cut in sales tax from 19% to 7% for petrol and diesel, as suggested by some politicians.

“If the conservatives call for a fuel price brake, they must say what they want to cut in the budget. Or admit they are prepared to take on new debt for this,” he said, adding he was also against introducing a speed limit on German motorways.

Not content with letting the radical Greens do this work for him, Mr Putin decided to give them a helping hand. 

WHEN Lorraine Allanson spoke up in favour of drilling for shale gas in her part of North Yorkshire, activists cut off her internet, called her a “whore” and linked her to a fake crime number.

“Shouting, abuse, public defecation, intimidation, hijacking lorries to stop deliveries, blocking the village street, this was the locals’ daily experience,” she wrote in her book My Story.

The wave of noisy protests against shale gas in Lancashire and Yorkshire in recent years looked like a grassroots movement. It was anything but.

It was peopled by a middle class rent-a-crowd, ramped up by misleading scare stories from Friends of the Earth, amplified by the BBC and The Guardian, funded by wealthy hedge-fund billionaires and welcomed by incumbent energy firms worried by the prospect of new competition for renewables, nuclear or offshore gas.

All this suited Vladimir Putin’s regime, because banning shale kept the gas underground and left us more dependent on Russia for our energy supplies.

Unlike Germany, the UK gets most of its gas from Norway and Qatar, but an increasing amount comes directly from Russia. And the refusal of Europe to frack helped drive up the gas price everywhere.

Not content with letting the radical Greens do this work for him, Mr Putin decided to give them a helping hand.

Alarmed by the fall in the gas price that America’s shale revolution promised, he told a global economic conference in 2013 that “black stuff comes out of the tap” when you frack near people’s homes, an absurd claim that not even Friends of the Earth would dare make.

Russian support for anti-fracking campaigns over the past decade took the form of public comments from the Kremlin’s cronies, a blizzard of scare stories on the Russia Today TV channel, some overt political lobbying by the country’s Gazprom and Russian money almost certainly finding its way into the coffers of environmental pressure groups.

In 2011 Gazprom, a firm with a mixed environmental record, claimed wrongly: “The production of shale gas is associated with significant environmental risks, in particular the hazard of surface and underground water contamination with chemicals.”

Alexander Medvedev, the general director of Gazprom Export, said fracking would never work in Europe. But just in case it did, he added in a speech in Brussels that the Russian state was “ready to wage its war on shale”.

In just six months Russia Today ran scores of anti-shale stories, with headlines like:

“Wrecking the Earth: Fracking has grave radiation risks few talk about”, “Fracking fluid linked to fish die-off”, “US fracking wells annually produce 280bn gallons of toxic waste water destroying environment”, “We say no to shale gas”, “Fracking nightmare”, “Fracking chemicals disrupt human hormone functions, study claims”, “Living near fracking sites increases infant birth defects”, “Hundreds gather for anti-fracking march in Manchester”.

One ludicrous story went even further, claiming frackers were “the moral equivalent of paedophiles”.

Russian social media amplified every alarm, fanning the flames of concern.

Behind the scenes Russian interests lobbied hard for bans on shale gas. Bulgaria rushed through a ban in 2012 under pressure from the socialist party and Bulgaria’s gas company, Overgas, which gets almost all its gas from Gazprom.

The ban followed some small protests featuring several leading members of the Soviet-era secret police.

In Germany, Gazprom Germania lobbied the Bundestag and the key ministries for a ban on shale gas, as did German energy companies with large Russian investors.

Here, Lord Truscott, married to a Russian colonel’s daughter, made several interventions in the House of Lords to criticise shale gas as vice chair of the short-lived All-Party Parliamentary Group on Shale Gas Regulation and Planning — an anti-shale lobby front.

In America, a congressional inquiry concluded that two environmental foundations in San Francisco, the Sea Change Foundation and Energy Foundation, were “pass-through” conduits to anti-fracking campaigns channelling huge donations made in jurisdictions that allowed anonymity such as Bermuda.

Covert payments

There they appeared to share connections with Russian investors.

The Center for Strategic and International Studies, a think tank based in Washington DC, published a report that concluded: “Russian-supported consultancies in Europe may be helping some of the environ-mental groups opposed to hydraulic fracturing”.

In 2014, Anders Fogh Rasmussen, secretary-general of Nato and former Prime Minister of Denmark, told the Chatham House think tank: “I have met allies who can report that Russia, as part of their sophisticated information and disinformation operations, engaged actively with so-called non-governmental organisations — environmental organisations working against shale gas — to maintain European dependence on imported Russian gas.”

National Review, a US magazine, concluded in 2015: “Russia has ramped up covert payments to environmental groups in the West.

“By supporting well-intentioned environmentalists with hard cash (often without their knowledge), Russian intelligence gains Western mouthpieces to petition Western audiences in its favour.”

The Wilfried Martens Centre for European Studies in Belgium published a report in 2016 which concluded that “the Russian government has therefore invested €82million in NGOs whose job is to persuade EU governments to stop shale gas exploration”.

Much of the support for the anti-fracking movement was still homegrown. But it did Putin’s dirty work for him.

10) Tilak Doshi: Oil and the eclipse of Pax Americana in the Middle East
Forbes, 10 March 2022

Under the Biden administration, the U.S. is in danger of losing both, its own status as a world’s leading oil and gas producer and its hitherto unchallenged role as security guarantor in the Middle East.

When relatively small countries allied to the Western bloc do not accept phone calls from the President of the United States, it is a matter of no little significance. It was reported on Tuesday that the White House was “unable to arrange calls between President Biden and the de facto leaders of Saudi Arabia and the United Arab Emirates” as US officials worked overtime to garner international support for Ukraine and tame a surge in oil prices.

US pump prices, that critical barometer of presidential popularity, averaged a record $4.17 per gallon on Tuesday (the previous high was set 13 years ago when the national average price hit $4.10 per gallon).

Just how did the US, the guarantor of regional security in the Middle East and ally to key oil-producing monarchies in the Persian Gulf, come to this rather ignominious state of affairs, when the leaders of the Saudi Arabia and the UAE snub President Biden’s phone calls?

The Slide In US Prestige in the Middle East

Since the discovery of oil in the Middle East, the region have been an indelible fixture in global geopolitics. The American security blanket became an established feature of the regional political order since Saudi King Ibn Saud met with US President Roosevelt on-board a US navy cruiser in the Great Bitter Lake of the Suez Canal in 1945.

The slide in U.S. prestige in the Middle East may be traced to President Obama’s two-term reign. The cornerstone of his foreign policy sought to distance the US from its traditional Arab Gulf allies as well as Israel to “normalize” Iran in the region. Obama forced through the Joint Comprehensive Plan of Action (JCPOA) nuclear deal with Iran that gave it access to over $100 billion, of which $1.8 billion in untraceable cash was flown into Tehran. This, it was thought, would allow the US to extricate itself from its Middle East security commitments and seal President Obama’s foreign policy legacy.

The appeasement of Iran by President Obama’s administration, seen by the moderate Gulf Arab states as little short of betrayal, is pursued by the Biden administration (“Obama 2.0”) with even greater zeal. Among President Biden’s earliest Executive Orders was one which rescinded the “terrorist organization” designation imposed by the Trump administration on the Iran-backed Houthi rebels in Yemen to push rapprochement with Iran. This led within weeks to a spate of missile and drone attacks by the Houthis in Saudi Arabia. In January, the Houthis carried out an attack with missiles and drones on Abu Dhabi, the capital of the UAE.

The recent attacks on Abu Dhabi are the most serious escalation of tensions in the Arabian peninsula since the drone and missile attack carried out on critical Saudi Aramco oil facilities in September 2019 which was also claimed by the Houthis.

The Biden administration’s enthusiasm to resume the 2015 nuclear agreement with Iran which President Trump pulled out of in 2018 has shown new heights (or depths).

A recent report cited Russian ambassador Mikhail Ulyanov, head of the Russian delegation to the Vienna talks on the nuclear deal, who said that “Iran got much more than it expected” in the talks. The Biden administration is now on the brink of signing what commentators have called a “surrender pact” — negotiated for the US by the very same Russia which just launched the first European full-scale land war since Armistice Day 1945. The new deal will take Iran off the list of Foreign Terrorist Organizations and allow Iran to sell oil in world markets (including the US itself) as well as permit Iran to have nuclear weapons and ballistic missiles to deliver them within a few short years.

As if this level of appeasement isn’t enough, the Washington Examiner reported on Monday that the Biden administration officials are declining to indict two Iranian nationals who allegedly planned to assassinate former US National Security Advisor John R. Bolton to avenge the Trump administration’s killing of General Qasem Soleimani, commander of the Quds Force, in a 2020 drone strike.

Oil Markets in Disarray

Perhaps most convoluted in the Biden administration’s Middle East diplomacy relate to its contradictory approach to oil markets. After having cancelled the completed Keystone XL pipeline which would have delivered over 800,000 barrels per day of Canadian crude oil to US refiners on the first day of office, President Biden unleashed a full-scale regulatory assault on US oil and gas production, halting oil and gas leases on federal land, suspending oil leasing in Alaska and, most recently, inflicting even further environmental constraints for approving natural gas pipelines and export terminals.

Oil and gas development in the US during Biden’s year in office has been hamstrung by nuisance lawsuits, the empowerment of radical environmental groups, and the weaponization of key agencies such as the EPA, BLM, FERC, and even the US Fed, all geared towards an anti-fossil fuel crusade to “fight climate change”.

Yet, just a few months after blocking the Keystone pipeline, Biden lifted sanctions on the Nord Stream 2 pipeline imposed by the previous administration, opening the path to greater European dependence on Russian gas and potentially exposing Ukraine to a loss in transit fees in existing gas pipelines. Despite 14 months of having waged war on domestic oil and gas production and transport, as promised in his presidential election campaign (“we are going to get rid of fossil fuels”), President Biden bizarrely asserted on Tuesday that it is “simply not true that my administration or policies are holding back domestic energy production”.

When oil prices surged late last year as the global economy rebounded from the pandemic lockdowns, the Biden administration beseeched the OPEC+ group that includes OPEC members and Russia and its allies to increase production. The group including kingpin Saudi Arabia have repeatedly rebuffed these requests from the US, most recently last month. The Biden administration has now started negotiations with the Russian-allied Maduro regime in Venezuela to lift oil sanctions as a means of getting more oil to world markets and tame oil prices.

Republican leaders have called out the incoherence of the Biden administration’s oil policy. Arkansas Senator Tom Cotton harshly criticized Biden’s decision not to increase domestic oil production in favour of looking to import from places like Iran and Venezuela, and called Biden’s policy on oil and gas as “almost a farce”.

House Minority Leader Kevin McCarthy said on Wednesday that the U.S. needs to boost its own oil production to replace banned Russian crude instead of looking to Iran or Venezuela. “Why would you take the billions of dollars you provide to [Russian President Vladimir Putin] and just give it to another dictator that funds terrorism around the world with Iran and Venezuela?”

Oil Policy and Geopolitical Realism

The Biden administration seems to lack an appreciation for the direct link between energy and economic power and between realism in oil policy and geopolitical outcomes. Unlike President Trump’s focus on “energy dominance” and “America First” strategies, President Biden seems content to stymie US oil and gas production to satisfy the climate-obsessed left wing of the Democratic party while looking to hostile regimes like Iran and Venezuela to supply global oil markets and replace banned Russian exports.

The U.S. appeasement of Iranian’s regional ambitions has led to a realignment of Middle East relations that threaten to upend decades of close alliance between the U.S. and the Sunni Arab monarchies. Thus the UAE abstained from a vote at the United Nations Security Council to condemn Russia’s invasion of Ukraine despite significant pressure from the U.S. Saudi Crown Prince Mohammed bin Salman and the U.A.E.’s Sheikh Mohammed bin Zayed al Nahyan, having declined U.S. government requests to speak to Mr. Biden, saw no problem in talking to President Vladimir Putin.

That is how much the prestige of Pax Americana has sunk in the Middle East. The Saudis and Emiratis have drawn closer to Russia in a strategic realignment brought on by the fecklessness of the Biden administration’s diplomacy in the region. And, under the Biden administration, the U.S. is in danger of losing both, its own status as an world’s leading oil and gas producer and its hitherto unchallenged role as security guarantor in the Middle East.

The Law of Supply and Demand is as consistent as gravity. Americans who understand the benefits of ample supply — seventy percent — favor producing more domestic oil and gas.

Nonetheless, President(ish) Joe Biden, his administration and congressional Democrats think voters will 1) buy their fraudulent excuses for the soaring costs of fossil fuels, and 2) overlook the shortcomings of the alt-energy schemes they imagine will provide “energy independence.”

Today, energy prices are wrecking America’s economy.

Ukraine’s capital under fire; 3 EU nation leaders to visit
Characteristically, Joe “The Buck (Never) Stops Here” Biden blames others, including Russia/Ukraine: “Putin’s war is already hurting American families at the gas pump … I’m going to do everything I can to minimize Putin’s price hike here at home.”

Biden also claimed, falsely, “It’s simply not true that my administration or policies are holding back domestic energy production,” before blaming energy companies:

“To the oil and gas companies … we understand Putin’s war against the people of Ukraine is causing prices to rise. … But it’s no excuse to exercise excessive price increases or padding profits … to exploit this situation or American consumers.”

Biden’s finger-pointing is shamelessly dishonest.

Energy prices took off more than a year before Russia invaded Ukraine.

During the 2020 primary, candidate Biden promised, “No more drilling… No ability for the oil industry to continue to drill, period. It ends.”

Biden voters approved.

Then, on his first day in office, Biden signed executive orders limiting fossil fuel exploration, canceling leases on federal land, killing the Keystone XL pipeline, and began pressuring lenders to restrict financing for exploration and production of fossil fuels.

Energy prices climbed immediately, and, today, are more than two times higher.

Abnormally-high energy prices are intentional, a result of artificial scarcity and market manipulation that are parts of a broader left-liberal war on conventional energy being waged to fundamentally transform Western society.

Russia’s invasion of Ukraine did increase prices somewhat, but Joe Biden’s executive orders and his fealty to fellow Democrats’ “Green New Deal” had already made it far costlier to feed families, heat/cool homes, drive vehicles, run businesses, and live normal lives.

The president appears unconcerned about the impact his policies have on households, and his assumption that ordinary Americans are stupid enough to take his deceitful excuses at face value and give him a pass only adds insult to injury.

Speaking of insults, part-time Secretary of Transportation Pete Budegieg condescendingly instructed Americans upset by record gasoline prices to buy electric vehicles (EVs).

Problem solved, right?

Currently, average EV pricing — after generous government subsidies — is $56,437.00. The average 2022 income for full-time workers is estimated at $53,490.00.

Additionally, the estimated cost breakeven point for EVs over gasoline-powered vehicles is fifteen years.

Worse, Biden’s/fellow Democrat’s desire to use wind and solar power to supply America’s total energy needs is naïve — and dangerous.

Apart from being intermittent, inherently unreliable and grossly expensive, solar panels and wind turbines require tremendous amounts of copper, nickel, cobalt, rare earth and other minerals, including lithium for storage batteries.

The International Energy Agency reports that, with the exception of lithium (Australia), China enjoys substantial leads in deposits of and extracting those elements — and China dominates the processing of all of them.

China controls over 70 percent of the world’s solar panel market. Seven of the 10 largest wind turbine manufacturers are Chinese, and China controls 60 percent of global wind turbine production.

If solar panels and wind turbines performed adequately, China wouldn’t be building dozens of new coal-fired generation plants.

Even if relying on wind turbines and solar panels were feasible, doing so would effectively turn America’s energy sector — our economy — over to a dangerous geopolitical rival, and make the U.S. almost totally dependent on the Chinese Communist Party.

In a sane world, everyone could agree on nuclear power — a la France and Finland — as a far cheaper, more practical energy source. But America’s national suicide climate cultists reject zero-emission nuclear power, too.

America was the world’s largest oil producer before Joe Biden took office. The U.S. and Canada have tens of billions of barrels/cubic feet of accessible fossil fuels — centuries of supply — underground.

Remember, seventy percent of Americans want to extract and use ours.

Their callous disregard for ordinary Americans is another reason Joe Biden and the Democrats who support his energy policies will reap the whirlwind in November.