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By David Gaffen, Editor, Energy Markets

Hello Power Up readers! The story over the past few years has been the energy transition, and about how some oil companies have been pulled – reluctantly at times – into it. Now there’s been some pushback on this front, particularly from the likes of Shell, while some investors aren’t really pushing much at all, as it turns out.  

Today’s top headlines:

• OPEC+ working against ‘uncertainties and sentiment’ – Saudi energy minister
• COLUMN: Oil investors ignore Saudi production cut
• TC Energy shuts two compressor stations due to Alberta wildfires

Wael Sawan, CEO of Shell, and an oil man, as you can see. REUTERS/Callaghan O’Hare

Shell’s new CEO Wael Sawan is shifting the company back in the direction of more oil output for the remainder of the decade, trying to shore up investor confidence due to poor renewables returns and as its stock has lagged other majors that haven’t shifted as dramatically to renewables, as Ron Bousso reports here.  

The company has a big event coming on Wednesday where it will announce that it is cancelling a target to reduce oil output by 1% to 2% per year – as the company says oil and gas will remain central to the UK-based major. That’s a conclusion Exxon, for instance, has never wavered from, and Shell thinks it has already reached its goal for output cuts by selling assets like its shale business (which, presumably, the buyers are using to make oil, so those cuts aren’t really cuts the planet can bank on anyway).  

Shell in recent months scrapped several projects, including in offshore wind, hydrogen and biofuels due to projections of weak returns and is dumping its European power retail businesses, seen not long ago as key to the energy transition. 

Companies are spending, but nowhere near what has been pledged. 

The largest investor coalition that’s focused on convincing the corporate world to act on climate change isn’t really doing a lot of convincing, as Tommy Wilkes reports here in a notable insight story. The group is called Climate Action 100+ (CA100+), set up in 2017, and comprises more than 700 investment firms representing $68 trillion in assets. But the shareholder voting data reviewed by Reuters show they’re not using their biggest weapon, which is to vote against board directors when these big climate laggards aren’t doing anything.  

The group has a lofty goal – getting the biggest 166 corporate emitters of greenhouse gases to commit to net-zero targets – but they’re mostly engaging in lobbying directly rather than using the stick, as it were. The slow-goes-it approach alarms some, particularly as major energy companies like Shell have recently backed off their earlier ambitions to cut emissions, and corporate spending plans – as the graphic shows – are far behind their pledges.  

China is installing lots of renewable power generation. It still relies on coal. 

More than half of China’s electricity generation capacity comes from non-fossil fuel energy sources, per the country’s state media outlet Xinhua, as Andrew Hayley reports here. That doesn’t mean China is currently producing half of its power through renewable sources, though.  

The Chinese government had a target to get non-fossil fuel power sources to more than 50% of its installed capacity by 2025 – so this beats that goal. However, the country still uses a ton of coal, as it accounted for about 56% of its overall energy consumption last year. In 2020, per U.S. Energy Information Administration data, about 67% of China’s power consumption came from fossil fuels. The U.S. figure, by contrast, is 59% from fossil fuels, weighted more to natural gas. 

That’s the Tidewater Renewables’ renewable diesel and renewable hydrogen complex in Prince George, British Columbia. (Tidewater Renewables/Handout)

The biggest Canadian biofuels producers are threatening to build new projects in the United States to benefit from the subsidies offered by the U.S. Inflation Reduction Act passed in 2022 – and Canada’s a bit worried about that, as Rod Nickel reports.  

In one example, fuel retailer Parkland decided in March to cancel a planned renewable diesel plant in British Columbia because of the IRA bill, and others like Arbios Biotech, is considering a U.S. site for its next planned commercial plant. “We’re looking at a large pipeline of projects in the future,” said chair Don Roberts. “If we’re looking at our next big investment, chances are that will be south of the border.” And Enbridge, one of the bigger pipeline companies in Canada, has asked the government there to narrow the gap between the country and the United States.  

“The Nucera IPO is essential for the transformation of ThyssenKrupp. It will provide Nucera with urgently needed funds for expansion.”  

Ingo Speich of Deka Investment, a top-20 shareholder of Thyssenkrupp, which launched a long-delayed IPO of its hydrogen division this week. 

Analysts at Jefferies this past week noted a bunch of ways artificial intelligence may become part of the oil-and-gas industry. A lot of their thoughts are speculative, but still, it’s worth highlighting a few ideas.  

The brokerage firm predicted that future applications of AI in energy will include developing digital replicas of infrastructure to predict maintenance and showing how to map ways to recover volumes from discovered reservoirs.

They see it as being able to produce designs to boost output, and more importantly, for monitoring and adjusting well output and flow rates on other properties. So if such algorithms can do so, pipeline spills could get less severe if detected more quickly – though the jury is still out, given that current tech already has had mixed success rates (say, the Keystone Pipeline). Or AI could be used to detect methane emissions.   

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