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By David Gaffen, Editor, Energy Markets

Hello Power Up readers! The markets are swinging between what matters more, China’s woes or Saudi Arabia’s efforts to rein in production to keep prices higher. Right now, the latter seem to be more in charge. But first let’s look at what’s going on in Australia, where LNG output could be interrupted by labor issues. 

Today’s top headlines:

• California grid warns heat wave will stoke power demand
• Chesapeake to complete Eagle Ford basin exit with SilverBow deal
• Indian refiner MRPL to phase out exports as it adds retail outlets

That’s an LNG carrier, dwarfed by an enormous cat. 

Workers at two major Australian liquefied natural gas (LNG) facilities could be on strike before long after a regulator in the nation – one of the biggest LNG producers – cleared the way for a strike if workers vote in favor to walk off the job, as Reuters reports here. Australia is one of the largest exporters of LNG to the world, along with Qatar and the U.S., but workers there have been bargaining for better pay and improved conditions at these facilities. 

The plants in question are owned by Chevron. Australia’s Woodside Energy Group is also in talks as they own the North West Shelf offshore gas platform, which supplies LNG to a plant it operates in the same area; workers at those platforms are backing industrial action.  

Together the plants supply about 10% of the LNG market and any disruption would likely cause an increase in prices, which last week weren’t far off a two-month high.  

The crude rally has been significant of late, but some wonder if it is nearing its apex. (Refinitiv)

The oil market has been steadily gaining ground in recent weeks due to OPEC’s decision to reduce production overall, but the rally may be on the verge of stalling out with China continuing to disclose poor economic news. Property lenders are struggling, and exports have waned in the world’s second largest economy and biggest oil importer.  

However, analysts still believe that Saudi Arabia, OPEC’s de facto head, will ultimately be able to keep supply constrained enough to maintain prices in the $80-per-barrel range at least. “Crude has been in overbought territory for some time now, defying expectations of a correction. It has been singularly focused on U.S. economic optimism, to the exclusion of the increasingly stronger headwinds blowing in the eurozone and China,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.

That’s U.S. Treasury Secretary Janet Yellen in Beijing in July. REUTERS/Thomas Peter

U.S. Treasury Secretary Janet Yellen is speaking on Monday on the importance of not seeing energy supply chains become too dependent on a couple of nations, as Andrea Shalal reports here. As countries rely more on solar power, wind and batteries, there is a danger of overdependence on nations like China for key materials for solar and wind system manufacturing.  

Critical materials used for such industries are heavily concentrated. For instance, the Democratic Republic of Congo supplies 70% of cobalt and China 60% of rare earth elements, and Indonesia 40% of nickel, as the International Energy Agency noted in a report earlier this year.  “As we move away from fossil fuels, we remain concerned about the risks of over-concentration in clean energy supply chains,” she said in excerpts of the speech obtained by Reuters. “Today, the production of critical clean energy inputs – from batteries to solar panels to critical minerals – is concentrated in a handful of countries.” 

Those are miniatures of a windmill and electric pole in front of the Siemens Gamesa logo. It’s a photo illustration. REUTERS/Dado Ruvic/Illustration

Siemens Energy has fixed quality issues at onshore wind turbines that it is selling to customers, said Jochen Eickholt, CEO of the group’s wind division Siemens Gamesa, after the parent company recently said that it had to take a charge of about $2.4 billion related to its wind division, as Christoph Steitz reports here. The company has had issues with supplying turbines to buyers due to the ongoing problems, and has to spend about two-thirds of that money on repairs related to rotor blades and gears for its onshore 4.X and 5.X models.  

“Although I am very disappointed that we are experiencing these issues, it’s worth mentioning that the variants of the 4.X and 5.X onshore wind turbines that we are currently selling to our customers have already been modified,” Eickholt said in a LinkedIn Post. 

“If it is discarded, radioactive substances contained in the contaminated water will eventually destroy the marine ecosystem.” 

Choi Kyoungsook of Korea Radiation Watch, a South Korean group against Japan’s plan to release treated radioactive water from the Fukushima nuclear plant into the ocean 

Norway will avoid a power deficit in the next five years even though it has added little in new production, Nora Bull reports here, in part due to more permanent demand cuts stemming from high prices, the Norwegian Water Resources and Energy Directorate said Monday. 

Norwegian power demand fell sharply in 2021 and 2022 as prices hit record highs, and right now that change seems to be sticky – even though prices are lower. “We still see a considerable growth in power consumption, while we expect little new electricity production in Norway until 2028,” NVE’s director Kjetil Lund said. 

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