Challenges to the US Energy Grid

No other energy source has seen more rapid growth in the United States over the past half a decade than solar power. But soaring solar installations have begun to distort the power distribution and transmission systems in the top solar-producing states such as California, creating challenges for utilities and the grid.

Battery storage could help alleviate these challenges, and although it is also surging, it is still lagging behind solar capacity additions.

It is no wonder then that despite a continuous decline in U.S. coal power generation, the share of coal in America’s electricity mix is still above 15%, more than any renewable energy source.

All renewable energy sources combined—wind, solar, hydropower, biomass, and geothermal—surpassed coal-fired generation in the U.S. electric power sector for the first time in 2022. But coal still holds about a 16% share of electricity generation, more than wind’s share of around 11%, hydropower’s 6%, or solar power’s 4% share of the electric generation mix.  READ MORE...

Boosting Domestic Uranium Production

The U.S. and Europe face challenges with uranium supply due to dependence on Russian imports and global shortages.

The U.S. is advancing in high-assay low-enriched uranium (HALEU) production with projects like Centrus Energy Corp's facility in Ohio.

The U.K. plans to invest in developing HALEU production capabilities for its next-generation nuclear reactors.

There is great potential for several new uranium production markets as the U.S. and Europe look to diversify away from Russia for new nuclear energy pursuits. The U.S. and several European countries have announced ambitious nuclear power plans for the coming decades, in support of a green transition. 

However, the lack of uranium production outside of Russia is posing a threat to achieving these plans. Sanctions introduced on Russian energy and other products, following the 2022 Russian invasion of Ukraine, have led to global shortages of natural gas, uranium, and other critical materials. 

This has driven several state powers to diversify their supply chains and increase the regional production of a variety of energy sources and related materials. This means we could soon see new uranium-producing markets emerge in Europe and the U.S.  READ MORE...

America's New Oil & Gas Boom

Last week I pointed out in a TikTok video that the U.S. is poised to set a new oil production record. In response, someone took exception to my claim by stating that he works in the industry, and drilling rigs are stacking up.

It is correct that the rig count has fallen. According to data from Baker HughesBHI, the number of rigs drilling for oil and gas has fallen by about 20% in the past year.

This decline reversed a steady increase that began after the rig count bottomed out below 300 in the early stages of the Covid-19 pandemic in 2020. The rig count recovered back to nearly 800 rigs by the end of 2022 but has since declined back to about 620.

Nevertheless, U.S. oil and natural gas production are both poised to set new annual production records, after monthly production has risen steadily all year. How can that be if the rig count is falling?  READ MORE...

A Reduction on Oil Production in Saudi Arabia

Saudi Arabia could begin easing its production cut sooner than oil market participants believe as the world’s top crude oil exporter wouldn’t risk demand destruction through too high prices, consultancy Rapidan Energy Group says.

Due to the Saudi and OPEC+ cuts and falling commercial crude inventories in the U.S., oil prices climbed to their highest levels in months in early trade on Thursday —the U.S. benchmark jumped to a 13-month high and Brent hit the highest price since November 2022 and a new high for 2023.

Early this month, Saudi Arabia extended its 1 million bpd cut through December. The production levels would be reviewed each month until the end of 2023.

According to Rapidan Energy’s president Bob McNally, Saudi Arabia could start easing the cuts sooner than traders realize as it wouldn’t want to overheat the market.

“They do not want to deliberately over-tighten the market, because if you get a spike, then you get a demand collapse, and you get a bust,” McNally told Bloomberg Television in an interview on Thursday.

“The real sensible way to bring prices to heel is for Saudi Arabia and OPEC+ to say: ‘We’ve made our point, we’ve scared away the speculative shorts’,” the energy expert added.

Last week, Warren Patterson, Head of Commodities Strategy at ING, said that even though the oil price rally had “more room to run,” a break above $100 per barrel for Brent wouldn’t be sustainable.

“OPEC+ will also want to be careful about overtightening the oil market. They will be shooting themselves in the foot if they push prices to levels where we start to see an increased risk of demand destruction,” Patterson wrote in a note.  READ MORE...