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By David Gaffen, Editor, Energy Markets

Hello Power Up readers! The energy world is still trying to make sense of ripple effects between the war between Israel and Hamas, but for the moment it has conceded that perhaps a wider conflict will be avoided that would threaten supplies worldwide. Instead, some are starting to turn their attention to the impending COP28 conference and the outlook for 2024. Here’s a bit of what’s happening:  

Today’s top headlines:

• Oil falls over 2% as concerns about Mideast supply ease
• World Bank sees lower 2024 oil price, but Middle East war could cause spike
• Argentine fuel pump crisis deepens as government threatens export halt

That’s the Cop28 UAE logo back during Abu Dhabi Sustainability Week earlier this year. REUTERS/Rula Rouhana

The head of the COP28 climate summit next month, along with two renewable energy organizations, said on Monday that governments need to triple renewable energy capacity by 2030 in order to stop global warming exceeding 1.5 degrees Celsius, as Yousef Saba and Kate Abnett report here. That’s not going to be easy with the world’s major oil companies’ plans to double down on oil and gas investment, but nonetheless, the COP discussions – led by oil producer the United Arab Emirates – continue. 

The conference in Dubai in late November will focus on trying to address holes in the 2015 Paris agreement, as the UAE, along with International Renewable Energy Agency (IRENA) and the Global Renewables Alliance all said that renewable energy capacity needs “to reach more than 11,000 gigawatts” by 2030. Most major world economies are on board with this including the G20, which agreed in September to pursue efforts to triple global renewable energy capacity by 2030. 

Still, scientists say Earth will cross the 1.5°C threshold in the coming decade, unleashing far more severe climate change effects on people, wildlife and ecosystems, and striking a deal among 200 countries at COP28 will not be easy.  

Chinese pipeline projects in a graphic.

Russia is banking on its big planned natural gas pipeline to China to make up for lost sales in Europe, but industry insiders say the project has lots of risks and may not justify the costs, as Vladimir Soldatkin reports here. The country for years has been talking about building a line to carry 50 billion cubic metres of gas a year from the Yamal region in northern Russia to China via Mongolia. 

That would be a giant line, with almost twice the capacity as the now idle Nord Stream 1 pipeline under the Baltic Sea that was damaged by explosions last year. With Europe no longer buying from Russia after that nation invaded Ukraine, Moscow is looking to double gas exports. But the cost is unclear – some put it at $13.6 billion – and the timing is still unclear. “There are too many risks, not least political ones. It’s too dangerous to depend on a single buyer which may change its decision to buy the product from you any time,” said a Russian industry source familiar with the talks.

Those are idle pumpjacks at a Hess site near Williston, North Dakota. REUTERS/Andrew Cullen

Chevron’s big deal to buy Hess, one of the largest operators in the Bakken shale play in North Dakota, won’t likely result in a return to its peak pre-pandemic boom days, as Stephanie Kelly reports here. 

The shale boom turned North Dakota into the nation’s second-largest crude oil-producing state from 2012 to 2020, a spot it then lost to New Mexico after the COVID-19 pandemic. However, the Bakken formation, along the Canadian border, is a long way from export terminals and refineries, which makes it harder to transport oil and results in typically smaller profits than competitors in Texas and New Mexico. Production in the Bakken region is around 1.27 million barrels per day (bpd), or 18% below the late 2019 peak, according to U.S. government data.

An offshore Siemens Gamesa wind turbine, seen from the Telde coast on the island of Gran Canaria, Spain. REUTERS/Borja Suarez

Shares of Siemens Energy have recovered somewhat from last week’s plunge after the German government made public that the company had previously revealed unveiled major quality issues at its wind turbine unit Siemens Gamesa, as Christoph Steitz and Markus Wacket report here. 

Talks between the government and Siemens Energy to try to strike a deal over around 15 billion euros ($15.9 billion) in guarantees for the power equipment firm continued through the weekend. The company is the world’s largest maker of offshore wind turbines – and it also makes gas turbines and power transmission equipment. The government guarantee would come in performance and warrant bonds, and on Monday, a spokesperson for the German economy ministry said “close discussions” with the company were ongoing.   

“You need dollars to pay for imports and the central bank does not have them. And even when they do import, the refining companies make a loss selling at the pump below the price they are buying.”  

An oil industry source in Argentina, amid the nation’s massive fuel crunch

Group of Seven (G7) members have offered Vietnam more than $300 million in grants to reduce coal use, documents seen by Reuters show, part of a package of costly loans that Hanoi has been reluctant to accept. The documents were finalized by donor countries in late October, and they reveal the breakdown of the $15.5 billion pledge that G7 countries and partners made to help the Southeast Asian manufacturing hub lower emissions, as Francesco Guarascio reports here. 

Vietnam has been pushing for a grants and cheap funding to phase out coal-fired power plants and replace them with wind farms and other renewables sources, but the donor packages have been more expensive as the country itself has to deal with chronic delays in the country’s power projects. 

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