SHALE Magazine Volume 1 Issue 4 by SHALE Oil & Gas Business Magazine

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INTEGRATED DRILLING SERVICES—A BOON FOR THE OIL AND GAS INDUSTRY

HOW THE U.S. IS DECARBONIZING ITS HEAVY INDUSTRY THE HUGE NEED TO DEVELOP AND MANAGE U.S. BATTERY STORAGE

GREEN ENERGY TO HELP REGENERATE U.S. DISADVANTAGED COMMUNITIES

MEET THE ENERGY EXECUTIVE HOLDING THE REINS OF AMERICAN LNG A BRIGHT FUTURE FOR GREEN AMMONIA

INVESTING IN THE TRANSITION IS INVESTING IN OIL AND GAS

THE UNFORESEEN CONSEQUENCES OF OFFSHORE WIND

WHAT THE DEBT CEILING FALLOUT MEANS FOR ENERGY REFORM

O I L & G A S P L AY E R S

BUSINESS

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table of contents VOL UME 1 // ISSUE 4

cover story

14 Meet the Energy Executive Holding the Reins of American LNG

industry

COVER AND TABLE OF CONTENTS PHOTOS BY FONZIE MUNOZ

24 The Huge Need to Develop and Manage U.S. Battery Storage 26 Great Potential for American Lithium 28 A Bright Future for Green Ammonia 30 The Future of Lithium Mining

policy

44 What the Debt Ceiling Fallout Means for Energy Reform 46 The Woeful Inadequacy of the Russian Oil Price Cap 50 Is the Future of Nuclear in Jeopardy?

lifestyle

52 Green Energy to Help Regenerate U.S. Disadvantaged Communities

70 Sweat to Succeed: The Link Between Physical Fitness and Success

54 How the U.S. Is Decarbonizing Its Heavy Industry

social

34 Russia Could Overtake Saudi Arabia in Competition for China’s Oil Market

business

36 The Unforeseen Consequences of Offshore Wind

60 Is ESG Investing Dead?

40 The Bright Future of U.S. Lithium

68 Integrated Knowledge Management – A Shortcut for Enhancing Drilling Efficiency and Reducing Emissions

72 Practical Steps To Leverage LinkedIn for Business Promotion

58 Integrated Drilling Services—A Boon for the Oil and Gas Industry 64 Investing in the Transition is Investing in Oil and Gas

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KYM BOLADO

CEO/EDITOR-IN-CHIEF

Providing energy for the world while staying committed to our values. Finding and producing the oil and natural gas the world needs is what we do. And our commitment to our SPIRIT Values—Safety, People, Integrity, Responsibility, Innovation and Teamwork— is how we do it. That includes caring about the environment and the communities where we live and work – now and into the future. © ConocoPhillips Company. 2017. All rights reserved.

www.conocophillips.com

CHIEF FINANCIAL OFFICER Suzel Diego PUBLICATION EDITOR Tyler Reed ASSOCIATE EDITOR David Porter VIDEO CONTENT EDITOR Barry Basse STAFF WRITERS Felicity Bradstock, Tyler Reed DESIGN DIRECTOR Elisa Giordano VICE PRESIDENT OF SALES & MARKETING James Moreno james@shalemag.com ACCOUNT EXECUTIVES John Collins, Ashley Grimes, Doug Humphreys, Matt Reed SOCIAL MEDIA DIRECTOR Courtney Boedeker CONTRIBUTING WRITERS Felicity Bradstock, Joel Dahlenburg, Jess Henley, Tyler Reed CONTRIBUTING PHOTOGRAPHER Fonzie Munoz STAFF PHOTOGRAPHER Malcolm Perez EDITORIAL INTERN LeAnna Castro

www.shalemag.com For advertising information, please call 210.240.7188 or email james@shalemag.com. For editorial comments and suggestions, please email editor@shalemag.com.

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MOVING AMERICA’S ENERGY The Port of Corpus Christi puts its energy into what matters most - the needs of our customers. With our proximity and connections to Eagle Ford Shale, the Permian Basin, and beyond, we are built to meet the increasing production throughout Texas and the rising demand for energy across the globe.

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LETTER FROM THE CEO

FINISHING OUT THE YEAR RECOGNIZING THE INCREDIBLE CONTRIBUTION OF OIL AND GAS TO THE GLOBAL ENERGY TRANSITION Dear Readers, As the march of time continues ever on and we find ourselves already on the tail end of another year, we are grateful to look back and see how far we have come in just one year's time. From the criticality of U.S. ports, to brand new opportunities in Alaska oil and gas, to exploring the amazing potential of hydrogen, we have covered the stories that are shaping the future of energy. In this issue, we continue on that precedent by sitting down to an exclusive one-on-one with the energy executive holding the reins of American LNG, Corey Grindal. While big media continues to vilify oil and gas, the facts speak otherwise. In addition to the keen insights provided by Corey into how LNG is shaping the energy landscape of tomorrow, you’ll find our facts-based reporting on critical issues such as ESG investing, green ammonia, and even how health and effective leadership are undeniably intertwined. As always, I am ever grateful to our amazing staff of writers and editors who continue to uncover the truth and report to inform, not to influence. It is the hallmark of who we are at EN Media Group, the proud parent of SHALE Magazine. Thank you for continuing to support our mission and I hope you enjoy reading this issue as much as we enjoyed creating it. Sign up for our free digital issue and follow us on social media to be a part of the discussion of what’s next in energy. If you have a story idea or would like to be considered for a guest spot on our award-winning podcast, In the Oil Patch, please reach out to me personally at kym@shalemag.com. Until our next issue, take care!

KYM BOLADO

CEO/Editor-in-Chief kym@shalemag.com

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cover story

MEET THE ENERGY EXECUTIVE HOLDING THE REINS OF AMERICAN LNG By: Tyler Reed Photography by: Fonzie Munoz

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MEET THE ENERGY EXECUTIVE HOLDING THE REINS OF AMERICAN LNG Corey Grindal sits behind a modest desk inside a modest office high over the streets of Houston at Cheniere Energy’s downtown headquarters. Flanked, befittingly, by a hard hat and surfaces covered with the day’s work, Cheniere’s down-to-earth Chief Operating Officer sat down to an exclusive one-on-one with Shale Magazine to uncover how Cheniere went from a relative unknown to the largest producer of liquefied natural gas (LNG) in the country.

HOW TO SUCCEED IN U.S. ENERGY? BE LIGHT ON YOUR FEET Cheniere Energy is a Texas-based company with a rich history steeped in innovation and transformation. The company was founded in 1996 as an oil and gas explorer but quickly transitioned into regas. Regasification is the process of converting LNG back into a natural gas. For the uninitiated, LNG is natural gas cooled to incredibly low temperatures to turn it into a liquid, shrinking it by 600 times. That LNG is then loaded onto ships to be sent to countries around the world. Regasification takes a lot of energy to pull off. Once the LNG is regasified, natural gas can be transported through pipelines throughout the distribution system. That distinction is crucial to understanding from whence Cheniere’s LNG dominance was born. Building the Sabine Pass LNG port in coastal Louisiana was part of a push to hedge the U.S. from an anticipated gas shortage and thus create an import terminal for LNG. Work on the regas facility began in 2003, and was completed in 2008. Sabine Pass was meant to be a massive regas facility where imported LNG could be stored, warmed, and distributed throughout the United States’ natural gas pipeline. When the Great American Gas Boom turned the anticipated shortage into a surplus, Cheniere did what Cheniere does best - they pivoted. Throughout its history, Cheniere has overcome challenges and capitalized on opportunities by walking a tightrope of adaptability to market needs, a rare trait among energy corporations. “We don’t want to be the biggest; we just want to be the best,” Grindal explains in an unassuming Texas drawl that belies the genius behind the engineer-turned-executive’s vast experience. Cheniere announced plans to add liquefaction and export capabilities at Sabine Pass in 2010 and began commercialization in 2011. That milestone would grow Cheniere from a regional player into the leading producer of LNG in the U.S. and the second-largest operator in the world. Addressing the challenge required a slew of firsts. Cheniere penned its first LNG sale and purchase agreement (SPA) with a unique contract structure that would change the status quo. They achieved further industry renown with a first-of-its-kind federal authorization to add Sabine’s liquefaction services. That decision would result in their first two liquefaction trains.

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Over the next year, construction commenced on the first two trains at Sabine Pass, along with a second liquefaction facility in Corpus Christi that, in turn, would boast its own two trains (which has since grown to three with more expansion on the way). Construction for the trains at Corpus Christi would begin in 2015. In a long list of firsts, the Corpus Christi liquefaction facility is the first greenfield LNG facility built in the contiguous U.S. and the first fully operational LNG export plant in Texas. In 2016, Sabine Pass came fully online and began production. The first cargo of LNG was produced and exported in February of that year. 2018 would see LNG production begin in Corpus Christi, and with that landmark, Cheniere would find its name among Fortune 500 companies.

CONTINUING THE HIGHLIGHT REEL OF SUCCESS 2020 would mark a world record when Cheniere exported its 1,000th LNG cargo four years after starting those operations, faster than any other LNG operator had previously done. Taking the lead for its stakeholders, Cheniere would also create Cargo Emissions Tags. These tags help track emissions data for cargoes that Cheniere produces and is provided to all of their long-term customers. With transparent data, customers have greater access to this critical ESG element. With such a long road of relatively unfettered expansion, there’s no indication that Cheniere is slowing down anytime soon. So, where is Cheniere currently and where are they going? Today, Cheniere operates six trains and SPL and three trains at CCL with a combined LNG production capacity of 45 million tons per annum and with expansion projects under development at both facilities. In industry terms, Cheniere is moving some 7 to 7.5 billion cubic feet (BCF) daily - some 7% of everything the U.S. produces. More growth is on the way. Its CCL Stage 3 Project is a bustling construction site that will add 7 midscale trains that are expected to add 10+ million tons per annum (MTPA) of capacity. Another expansion project at CCL is currently in application with the Federal Energy Regulatory Commission (FERC), and, if approved, would add 2 more midscale trains (8 & 9). Furthermore, there’s an SPL expansion in the pre-filing stages that stands to add up to 20 million tons per annum of capacity at the Louisiana site. “We’re the largest owner of pipeline capacity in North America,” Grindal explains, “pipelines are a critical piece to meeting the obligations of our customers and shareholders,” he continues, “The existing infrastructure that goes to Sabine is fully contracted. So, yeah, we will need new infrastructure.” Tanks and berths aren’t the issue, however. With an administration that’s repeatedly bashed fossil fuels in general, there does loom some question as to whether permitting issues or other variables might impede the progress of the LNG behemoth Cheniere has grown into.

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THE ENERGY EXECUTIVE LEADING THE CHARGE Grindal is well poised to oversee pipeline infrastructure improvement since graduating from the University of Texas at Austin with a degree in mechanical engineering. Grindal began his storied career working at Tenneco/El Paso as a pipeline engineer before moving into marketing and eventually trading. Before coming to Cheniere, Grindal would spend time at Louis Dreyfus, a leading global merchant and processor of agricultural goods, and Deutsche Bank. In the trading realm, Grindal would be put in charge of several ventures that would alter his career trajectory. Notably, Grindal played a pivotal role in launching a gas and electricity trading group for Deutsche. When Cheniere received approval to transition from regasification to liquefaction, they needed a supply platform built. That's when they brought Grindal on board for the job. Coming to Cheniere in 2013, Grindal would start with the company as Vice President of Gas Supply. That initial role was all about building the essential groundwork for ensuring the company’s LNG deliveries to Cheniere’s terminals were as solid as a rock. Not only that but he was also put in charge of forging critical connections with the United States’ producer community. And, lest he be bored, he also had the monumental task of putting all the systems, processes, and people power in place that would catapult Cheniere to the top spot as the United States’ go-to LNG exporter. In his unassuming way, the global energy executive pointed out he’s worked with many great teammates and mentors along the way who have helped pave a successful career. But through it all, Grindal is quick to give a lot of the credit for his career’s success with his wife, Dana, and three children, who have “stood by him through thick and thin,” he says. Grindal even recounts working offshore when Dana suddenly went into labor with their second child. Placing family first, Grindal chartered a helicopter to get him there in time so he wouldn’t miss the birth. The changing global energy landscape in recent years means Cheniere must continue to adapt. When asked how they’ve transformed, Grindal was resolute in his response. “Our core principle has always been to honor our commitment to customers,” he explains. Those customers include China and others around the globe, including powerful European allies. This dedication remains unwavering, even considering the events leading up to 2022, before the conflict in Ukraine. Grindal explains that their fundamental business model has remained constant: Cheniere specializes in selling long-term contracts that underpin the development and financing of critical energy facilities. Therefore, adaptability lies in the simple ability to persist in selling energy well into the future.

THE INHERENT BEAUTY OF DESTINATION-FREE CARGOES In 2022, more than 70% of everything Cheniere produced found its way to Europe, emphasizing the significance of their exports to the continent during a time of incredible upheaval. What sets them apart is that a substantial portion, around 90% of their cargoes, was sold to third parties, most of whom are long-term customers, showcasing that U.S. LNG profoundly impacts the global LNG landscape. The unique approach offers destination-free cargo, affording both Cheniere and the customers the freedom to transport them to any corner of the globe. This market transition marks a significant departure from the rigidity observed in the pre-Cheniere LNG market. Back then, exporters lacked the destination flexibility enjoyed today.

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Note that Cheniere pioneered destination-free capability, contributing to the growth and evolution of the U.S. LNG export market, and from which their customers supremely benefit. Leveraging this flexibility empowers Cheniere to meet market demands and strengthens the United States’ geopolitical position.

KEEPING UP WITH GLOBAL DEMANDS FOR CLEANER FUEL In true gentlemen’s fashion, Grindal chose not to draw comparisons between Cheniere and other LNG players. Instead, he focused on Cheniere and its unique journey. Bear in mind that Cheniere’s current capacity of 45 million tons, will be bolstered with ongoing expansion efforts under construction that will quickly take them up to 55 million tons in the coming years. Additionally, they’re addressing bottlenecks, expecting to free up an extra 3-5 million tons, bringing them to a total of 60 million tons in the near future. Their expansion plans, which include adding up to approximately 20 million tons, aim to ultimately place them in the neighborhood of 80 million tons. Cheniere adheres to stringent investment rules to accomplish aggressive goals and a structured checklist guiding their decisions. They commit to selling capacity in long-term contracts, aligning with their financial metrics and only proceeding with construction when they meet all criteria. Cheniere’s goal is to secure contracts that tick all the boxes on its investment checklist, ensuring that they expand their capacity in tandem with the demand from willing customers, thereby delivering the best outcomes while prudently allocating capital. This approach underscores a commitment to treating shareholders across the board fairly. Looking back to 2015, the U.S. witnessed a significant grid shift, which was not initially geared toward gas exports. Fast forward to today, with several projects in play, and they’re seeing their capacity grow from 13 billion cubic feet to approximately 20 billion cubic feet. Note that infrastructure plays a pivotal role here. Washington desperately needs to hear the critical message that we must continue bolstering American infrastructure, not just for gas but also for power, natural gas liquids, and crude oil. These resources are essential for our global allies and crucial in the context of evolving electric vehicle technology and geopolitical considerations. “LNG will be needed for the foreseeable future and longer than that. We can’t deploy other sources fast enough and efficiently enough to meet the needs of the people,” says Grindal.

WHAT ABOUT SUSTAINABILITY? As we highlighted above, Cheniere has taken significant steps to understand and mitigate its emissions over the

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past couple of years. One notable effort is developing its QMRV program, which enables Cheniere to accurately measure methane emissions—helping the company look for actionable ways to mitigate emissions over time. They’re actively testing various technologies, from satellites and helicopters to drones and fixed equipment, to ensure accurate and robust monitoring and measurement. It’s important to note that they’re not just embracing these technologies blindly; they’ve experimented with various approaches and have discarded some that didn’t make the cut. The almost unheard-of corporate dedication to ESG transparency is evident in their corporate responsibility reports, where investors and stakeholders alike will find a strong emphasis on sustainability efforts. And all of this from a company which purveys in fossil fuels, you say? As our society moves towards expanding renewables, building infrastructure, developing tech like microgrids, and adopting electric vehicles (EVs) over gas, infrastructure must be in place. The transition away from fossil fuels will take time. Cheniere aims to be at the forefront, leading the way, testing, and reducing emissions while ensuring they have the necessary infrastructure “to support customers, allies, and stakeholders, all in an environmentally sound manner,” Grindal notes.

GET THE STORY BEHIND AMERICAN ENERGY’S MOVERS AND SHAKERS At Shale Magazine, we sit one-on-one with energy executives like Corey Grindal to get the true pulse of the industry today and see where it’s heading tomorrow. To dig deeper, check out our past issues, where we interview thought leaders, present groundbreaking studies, and dig deeper into the facts so our readers can be informed, not influenced. If you’re on the go, consider checking out our award-winning “In the Oil Patch” podcast.

About the author: Tyler Reed began his career in the world of finance managing a portfolio of municipal bonds at the Bank of New York Mellon. Four years later, he led the Marketing and Business Development team at a high-profile civil engineering firm. He had a focus on energy development in federal, state, and local pursuits. He picked up an Executive MBA from the University of Florida along the way. Following an entrepreneurial spirit, he founded a content writing agency. There, they service marketing agencies, PR firms, and enterprise accounts on a global scale. A sought-after television personality and featured writer in too many leading publications to list, his penchant for research delivers crisp and intelligent prose his audience continually craves.

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INDUSTRY

The Huge Need to Develop and Manage U.S. Battery Storage By: Felicity Bradstock

The Current Outlook The U.S. battery storage capacity is expected to increase from 7.8 GW of utility-scale

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storage in operation in 2022 to around 30 GW by 2025. This could rise to a staggering 95 GW by 2035, in response to the rapidly increasing demand. This growth in U.S. battery storage capacity will support the expansion of the renewable energy sector, helping to ensure the stable delivery of power to households across the country 24 hours a day. By 2021, the global investment in battery energy storage stood at $10 billion. Grid-scale deployment accounted for over 70% of the total sector spending. And spending on battery energy storage was expected to reach $20 billion last year. In the U.S., the 2022 Inflation Reduction Act (IRA) will provide an investment tax credit for stand-alone storage, which is expected to increase the competitiveness of new grid-scale storage operations. Dependence on Foreign Powers However, sourcing the necessary batteries is not so simple. The energy sector must contend with the electric vehicle (EV) industry

By 2021, the global investment in battery energy storage stood at $10 billion. for its battery power. And the U.S. continues to be heavily reliant on foreign powers, such as China, to source many of its battery components. China currently produces around threequarters of the world’s lithium-ion batteries, providing 60% or more of the world’s lithium supply. The global dominance of the Chinese battery industry means that several countries are competing to establish supply chains with

DEPOSITPHOTOS/ EVERYONENSK

he battery storage market is expected to expand significantly over the next decade as the U.S. rolls out more renewable energy projects across the country. As more green energy sources come online, the need for battery storage will be great. Lithium-ion batteries allow energy producers to store power rather than waste energy, as many do now, due to a lack of adequate infrastructure. For example, solar panels only produce power during the day, demonstrating the need for battery storage to be incorporated into solar farms and grid systems to ensure the steady, reliable flow of energy throughout the day and night. But to develop enough battery storage to manage all this power, the government must establish clear regulations and oversight for the industry.

Whether the batteries come from the U.S. or elsewhere, there is no doubt that battery storage will play an essential role in the decarbonization of the U.S. economy.

China to ensure their battery supply is in line with the green transition, essentially having to rely on China for its energy security. But there is great potential for the U.S. to develop its domestic battery manufacturing power thanks to the country’s lithium reserves that remain largely untapped. The U.S. is sitting on top of approximately 750,000 tons of this ‘white gold’. Yet it produces just 1% of the world’s lithium supply at present. This supply comes from the U.S.’s only active mine, in Nevada. However, as part of government plans for an accelerated green transition, the Biden Administration plans to rapidly develop the country’s lithium mining to support the development of a domestic battery production industry and reduce reliance on foreign powers. Whether the batteries come from the U.S. or elsewhere, there is no doubt that battery storage will play an essential role in the decarbonization of the U.S. economy. Grid-scale storage will be used to provide short-term balancing and operating reserves, ancillary services for

grid stability and deferment of investment in new transmission and distribution lines, to long-term energy storage and restoring grid operations following a blackout, according to the International Energy Agency (IEA). Achieving Net-Zero Despite Challenges But according to a September 2022 report from the IEA, the U.S. was not on track with its energy storage to achieve the Net Zero Scenario. At present, meeting the rising demand for flexibility while also decarbonizing U.S. electricity is a core challenge for the power sector. The U.S. must invest heavily in the expansion of its grid-scale battery storage if it hopes to achieve net-zero carbon emissions by 2050. To reach this goal, the country’s gridscale battery storage capacity must increase 44-fold from 2021 to 2030, to 680 GW, growing by an average of 80 GW a year between now and the end of the decade. But further challenges stand between the U.S. and its battery storage expansion,

including the disruption of metals and minerals supply chains due to the Covid-19 pandemic and the Russian invasion of Ukraine. Several key materials for battery manufacturing, such as cathode (nickel and cobalt) and anode (graphite), have been negatively affected by the Russian-Ukraine conflict, thereby limiting global battery production. Russia is the biggest producer of battery-grade Class 1 nickel, providing around 20% of the world’s total. It is also the second-biggest producer of cobalt and the fourth of graphite. While several challenges need to be overcome to successfully roll out grid-scale battery storage in the U.S., the rapid expansion of the country’s battery storage capacity will be vital to achieving the government’s climate pledges. The development of a domestic lithium and battery production industry could help boost U.S. energy security and reduce its reliance on foreign powers for its battery supply. And the 2022 IRA climate policy is expected to help the U.S. attract greater investment in the sector to help achieve the government’s decarbonization goals.

About the author: Felicity Bradstock is a freelance writer specializing in Energy and Industry. She has a Master’s in International Development from the University of Birmingham, UK, and is now based in Mexico City.

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INDUSTRY

Great Potential for American Lithium By: Felicity Bradstock

U.S. Lithium Supply Lithium can be used to produce cathode materials for lithium batteries, needed for a range of products, from consumer electronics to electric vehicles (EVs) to gridscale energy storage systems. However, most lithium production currently takes place outside of the U.S. This means that the country’s battery supply chain is vulnerable, an issue made clear during the supply chain disruptions of the pandemic. But the U.S. does have the potential to develop its domestic production of lithium through geothermal brines. In November, the Department of Energy (DoE) announced that it would be investing millions in the U.S.’s lithium potential following the release of the Biden administration’s far-reaching Inflation Reduction Act (IRA) last summer. The DoE will provide $12 million in funding to advance the science of safe, cost-efficient lithium extraction and refining from geothermal brines. Geothermal brine is a hot, saline fluid that flows within the Earth’s crust. The brine can be pumped to the Earth’s surface to rotate turbines, which generate electricity using natural heat.

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lithium mine, in Nevada, which provides around 1% of the global production. Yet, the states of Nevada, North Carolina, and California together hold an estimated 4% of the world’s lithium reserves. But there are several reasons why the lithium industry faces opposition. Lithium extraction can be an ecologically and culturally destructive process and communities across the country are standing up against mining project proposals due to either the environmental impact of the developments or the disruption to the area. Many worry that developing new mines

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s the world undergoes a green transition, we are seeing a rapid rise in demand for metals and minerals, particularly lithium used for rechargeable batteries. These batteries will be key to the electrification of transportation, as well as for storage in renewable energy operations, to ensure the steady and reliable flow of energy to the grid. At present, China dominates the lithium market, producing around 60% of the world’s supply. However, other powers, such as the South American lithium triangle of Bolivia, Chile and Argentina, are gradually increasing their market share. And, as the U.S. looks to decrease its reliance on foreign powers for its energy supply by boosting national production and developing regional supply chains, the U.S. is expected to rapidly tap into its lithium potential in line with an accelerated green transition.

In optimal conditions, lithium can be extracted from brines, with very little waste and carbon pollution. There is the potential to develop these types of operations in some areas of the U.S., such as California’s Salton Sea, which could provide 600,000 tons of lithium annually. gold to manufacture 1 million EVs by 2025, making it the biggest facility in North America. The advanced facility will expand the company’s operations beyond EV manufacturing to include lithium refining and processing. The plant is expected to be completed next year, to commence full production around a year after. This will help Tesla to become more competitive in the EV market, as several well-known automakers launch new EV models, with China quickly rising as a major EV producer. To date, Musk has not stated where he will source the raw lithium from. does not support a green transition, due to its detrimental impact on the environment. Others are concerned about the activities taking away from the livelihoods of ranchers, as the biodiversity of the region is destroyed. In addition, health is a recurring concern, due to the disregard of such issues with previous energy projects across the U.S., and communities want to be reassured that mining operations will not contaminate the water and air

of surrounding populations, leading to health issues. Tesla Lithium Refinery in Texas Nonetheless, there has been optimism around the country’s lithium potential in recent months, with the breaking of ground at Elon Musk’s massive Texas lithium refinery in May. Tesla Inc just began construction on a $375-million lithium refinery in Texas that CEO Elon Musk hopes will produce enough of the white

The Role of Climate-Tech Startups The rise of thousands of clean energy startups could also be key to tapping into the U.S. lithium mar-

ket. The energy-technology startup EnergyX aims to reshape the world of electric batteries with a paradigm shift in how the world sources lithium with a unique process for Direct Lithium Extraction (DLE). Climate-tech startups are rapidly putting Austin, Texas – well known for its oil and gas production – on the map as a renewable energy hub. EnergyX is currently in the piloting and demonstration phase for its DLE extraction plants, having raised over $21 million from 5,000 investors, to carry out research and development in U.S. lithium. And many other energy-tech startups across the country are currently working on developing other lithium projects, largely thanks to funding from the IRA as well as greater investor interest in green energy.

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INDUSTRY

A Bright Future for Green Ammonia

he world depends heavily on ammonia for its food production, but most of the world’s ammonia operations are still carbon intensive. As food demand continues to increase, countries worldwide will have to shift to using green ammonia in fertilizers if they hope to decarbonize their energy and industrial sectors in support of a green transition. With the expansion of green hydrogen production, it is only a matter of time before green ammonia production becomes more commonplace, with some projects already taking off in several states across the U.S. Why Ammonia? Ammonia is used for around half of the world’s food production, with ammonia-based fertilizers helping to increase crop yields in countries across the globe. Around 80% of ammonia worldwide is used in fertilizer production, and the rest is used for industrial applications, such as plastics, explosives, and synthetic fibers. Fertilizer helps plants to absorb the nitrogen needed for growth, to help crops flourish and meet the growing global food demand. The global production of ammonia accounts for approximately 2% of the world’s energy consumption and 1.3% of its carbon emissions. This figure is expected to expand as the world’s food demand – and therefore fertilizer demand – increases. However, there may be a more environmen-

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tally-friendly alternative – green ammonia. Traditionally, ammonia is produced via natural gas steam reforming (around 70% of ammonia worldwide), coal gasification, or oil and electricity. But recently there has been a shift to green ammonia production, which is created using hydrogen from water electrolysis and nitrogen separated from the air. The Haber process is applied, using green electricity, to produce ammonia. Green Hydrogen for Ammonia Production The green hydrogen market is rapidly being developed in various regions around the globe. It was valued at $4.02 billion in 2022 and is expected to achieve a compound annual growth rate (CAGR) of 54.98% over the next decade, to reach $331.98 billion by 2032. Although, much of the new green hydrogen production is being used to develop clean

fuels for transport and industrial uses. But there is also a significant opportunity to use this green hydrogen to produce ammonia needed for fertilizer. According to a study from November 2022, the green ammonia market size is expected to achieve $73.05 billion by 2030, with a CAGR of 127.9% over the next decade. Demand for green ammonia is expected to increase in line with rising consumer demand for more sustainable food products, as well as with the green transition being pushed by several governments worldwide. U.S. Ammonia Development In the U.S., several clean ammonia projects are currently underway. In April this year, in West Virginia, Senator Joe Manchin announced plans for the Adams Fork Energy multi-billion-dollar clean ammonia project. The plant will be developed on a disused

Ammonia is used for around half of the world’s food production, with ammoniabased fertilizers helping to increase crop yields in countries across the globe. Around 80% of ammonia worldwide is used in fertilizer production, and the rest is used for industrial applications, such as plastics, explosives, and synthetic fibers.

coal mining site in Mingo County. The facility will continue to rely on gas feedstock to produce the ammonia but carbon capture and storage (CCS) technology will be incorporated into the project to make production cleaner. Once operational, the plant is expected to produce around 2.16 million tons of ammonia per year, with the potential for further expansion in the future. Construction of the plant is expected to commence in 2024. The Flandreau Santee Sioux Tribe will be consulted during the building process to ensure community approval. The project will be supported by the Appalachian Regional Clean Hydrogen Hub (ARCH2), which is one of twenty-two applications under consideration by the U.S. Department of Energy for funding as part of the $7 billion Regional Clean Hydrogen Hubs program. In Texas, the U.S. engineering firm KBR has been chosen by green hydrogen producer Avina Clean Hydrogen to provide its K-GreeN® technology for Avina’s green ammonia project. The contract states that KBR will provide the technology license and engineering design for the project to produce 2,200 metric tons of green ammonia a day. The production process will be powered with 100% renewable energy, with the first of the two phases of the project expected to be up and running by 2025. Meanwhile, in Georgia, a consortium of eight major maritime stakeholders has drawn up a memorandum of understand-

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By: Felicity Bradstock

ing to explore the potential of developing a supply chain for green ammonia bunkering at the Port of Savannah, Georgia. The consortium includes ABS, AP Moller–Maersk, Fleet Management Ltd, Georgia Ports Authority (GPA), Maersk Mc-Kinney Moller Center for Zero Carbon Shipping, Savage Services, Sumitomo Corp and TOTE Services. Ammonia is considered one of the most promising alternative marine fuels as it does not emit greenhouse gases when combusted, mean-

ing that if it can be produced in a clean way; it could allow for green shipping operations. What Next? There is significant potential for green ammonia, which could be used for a variety of applications, from fertilizer to industrial operations and clean shipping fuels. However, the global drive to develop green ammonia projects is only just being seen. The development of the green ammonia industry relies heavily

on green hydrogen production that can be used in ammonia operations. As governments and private companies worldwide invest in green hydrogen, some of this

investment must be aimed at developing the green ammonia market to support the growing demand for sustainable agriculture processes, as the global food demand continues to rise.

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INDUSTRY

The Future of Lithium Mining By: Tyler Reed

All About Lithium Since its discovery in 1817, lithium has had many uses over the years. Lithium is known for its soft silvery-white texture and low density. Lithium is the lightest of all metals, and its properties and uses are unique. While lithium has been used in the world of medicine, it’s typically recognized for its application in lithium batteries. Rechargeable lithium batteries have been used for years in power supply for small electronics, such as laptops, cellphones, cameras, and tablets. Lithium can be used as batteries for electric vehicles in more potent doses. Approximately 8 kg of lithium is used to create an electric vehicle battery. While this number is likely to decrease as technology progresses, it still creates a massive demand for lithium mining. The lithium mining process involves drilling in salt-rich areas, like deserts or saltwater regions. Most lithium is drawn from salt flats. This process consists of evaporating the current saltwater, drilling through the earth to find

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the lithium deposit, and removing the lithium after the saltwater has evaporated. Its delicate process must be handled correctly, as lithium is highly reactive with water. When run properly, lithium mining can be a safe and extremely efficient process—as our cover story on Teague Egan, CEO of EnergyX documented in-depth. Unfortunately, many companies still rely on open pit mining, massive evaporation ponds, and other ecologically-harmful practices. In any case, lithium mining practices are sure to progress as the demand for the world’s lightest metal increases. Lithium Deposits Around the World Deposits of lithium can be found all around the world. The United States, Canada, Asia, Australia, and South America have numerous sites where lithium can be found. With stores of the powerful metal all over the planet, Lithium is a valuable export for many nations, including China, Australia, and the United States. In South America, the nations of Chile, Argentina, and Bolivia are clear front-runners in lithium mining. Producing upwards of 60% of the world’s lithium supply, these three nations are known as the lithium triangle. Even though a mere five years ago, Australia was in the running for the top spot, Chile rapidly increased its mining efforts to become a prolific lithium producer.

The rich deposit of the lightest metal within the lithium triangle puts other deposits to shame. However, these Latin American nations have recently demonstrated a move towards resource nationalism. If the trend continues of hoarding the world’s largest storehouse of the “battery metal,” it could mean electric vehicles may be challenging to acquire in the future. The Lithium Triangle: Argentine, Bolivia, and Chile By far, the largest lithium deposits in the world are contained within the South American countries of Argentina, Bolivia, and Chile. These three earned their shared-moniker as the lithium triangle because they have deposits that makeup the majority of the world’s lithium supply. If these three nations form the lithium triangle, Chile is at the top of the triangle, with the largest deposit. The lithium triangle boasts some of the driest lands on the planet. The widespread salt flats, also known as Salars, across these three nations, are the ideal environment for producing rich battery metal deposits. Through the process of finding these Salars, these three nations have capitalized on becoming world leaders in lithium supply. However, while these nations may have a wealth of natural resources, they are economically poor. The economic challenges facing

By far, the largest lithium deposits in the world are contained within the South American countries of Argentina, Bolivia, and Chile.

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s the market for electric vehicles continues to rise rapidly, the need for lithium has also grown. This essential metal component of electric vehicle batteries is a highly sought-after and powerful metal. The World Economic Forum estimates that one in every seven cars is now electric. When we look to the future, it’s safe to assume the demand for lithium will only increase. Fortunately, the world has several rich deposits to draw from. Argentina, Bolivia, and Chile have historically provided upwards of 60% of the world’s lithium supply. Recently, however, Chile has clamped down on state control over its lithium deposits. This decision will potentially impact the global energy market significantly. As the United States and other governments continue to push for the green energy revolution, it’s important to understand how the future of lithium mining may be affected.

the lithium triangle nations have undoubtedly led to the untapped potential for the wealth of resources they possess when it comes to lithium mining. Chile Clamps Down on Lithium Control Chile has had a tenuous history when it comes to resource mining. While hosting a combination of public and private mining firms, Chile has seen turmoil over its prosperous resources. Chile recently announced a bid towards more state control over its lithium resources. In an effort to focus more on production rather than mining, the nation holding the world’s largest deposit of lithium is moving towards resource nationalism. While this move is said to broaden Chile’s focus and explore higher-margin industries, it could significantly impact the electric vehicle market. If Chile restricts lithium mining, the world’s largest resource for the essential battery component, it may be limiting supply. This move follows a wave of other Latin

American nations moving towards resource nationalism. With some of the world’s largest producers restricting or outright banning the exportation of essential battery components and metals, the economic downturn for the auto and a myriad of other dependent industries could be devastating. The impact of Chile’s announcement has already seen a significant downfall in US-based stockholders for Chilean mining companies. The new public-private model that Chile is implementing has investors wary of what the future may bring for lithium battery production. Future Opportunities for the Lithium Triangle While Chile is cracking down on lithium mining, other members of the lithium triangle could be ramping up their drilling efforts. Argentina began exploring more lithium opportunities, which could prove vital to the world market in the future. As Argentina also boasts a massive amount of lithium deposits, it could

become a potential powerhouse for lithium mining in the future. If Argentina chooses to capitalize on Chile’s decision to further restrict lithium mining, they could have an opportunity to be a new supplier for lithium on a global scale. Though Bolivia has historically kept a tight lid on its natural resources, the Salars within the third nation in the lithium triangle are largely untapped. Despite Bolivia’s historic tendencies towards resource nationalism, the potential for lithium mining could be vast. Should Bolivia choose to center itself on the exportation of lithium, it could become a wealthy supplier of the sought-after metal. The Potential Outside the Lithium Triangle Fortunately, the lithium triangle is not the world’s only resource for the alkaline metal. Australia, Canada, and the United States all have great potential in lithium mining. Though these areas may not have the vast quantities of lithium that belong to South America, they

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all have the potential to provide for the everincreasing global lithium supply needs. The deposits of lithium outside the South American nations within the lithium triangle could prove to be a valuable stockpile in the future. As the world hurtles towards a lithium-powered planet, exploring other options for lithium mining could prove to be a priceless investment.

Look to the Future of Energy with Shale Magazine As the world of energy is rapidly changing and ever-growing, you can always count on Shale Magazine to keep you up to date on the latest energy information. We drill down deep to provide the facts surrounding the latest news in energy production.

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As we look to the Future of Energy, we are your source for fresh insight and the truth behind the current events that affect the world. Keep up to date on the latest inside

knowledge in the oil and energy Industries by checking out our latest issues. If listening to content is more your speed, we recommend our award-winning podcast, In the Oil Patch.

About the author: Tyler Reed began his career in the world of finance managing a portfolio of municipal bonds at the Bank of New York Mellon. Four years later, he led the Marketing and Business Development team at a high-profile civil engineering firm. He had a focus on energy development in federal, state, and local pursuits. He picked up an Executive MBA from the University of Florida along the way. Following an entrepreneurial spirit, he founded a content writing agency. There, they service marketing agencies, PR firms, and enterprise accounts on a global scale. A soughtafter television personality and featured writer in too many leading publications to list, his penchant for research delivers crisp and intelligent prose his audience continually craves.

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Lithium Mining In the United States: The Salton Sea, California While the global market for lithium mining is ever-changing, the US also has the potential to become a crucial source of the lightest metal in the future. In California, the lithium deposits in the Salton Sea are poised to be a significant player in lithium mining and production. Where 50 years ago a desert oasis resided, now it remains a massive dry region. However, what seems to be a wasteland is actually one of the wealthiest lithium deposits in North America. Now becoming known as Lithium Valley, this area of California promises a more productive future for lithium batteries. Because of the rich deposits of lithium underneath the desert, the Salton Sea has the potential to power electric vehicles in the United States for the foreseeable future. Though the lithium triangle still provides around 60% of the world’s lithium supply, this US-based deposit could be a major contender in the coming years. The promise of a brighter lithium future in California will affect more than the environment. As a significant boon to the economy, the mining of Lithium Valley has the potential to radically change the economy of the surrounding areas and the nation as a whole. Assemblymember Eduardo Garcia (D-Coachella), Chair of the Assembly Select Committee, said in a recent press release, “Lithium Valley has the potential to accelerate our nation’s clean energy future while uplifting one of our most economically underserved regions.”

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INDUSTRY

Russia Could Overtake Saudi Arabia in Competition for China’s Oil Market By: Felicity Bradstock

China’s Biggest Oil Exporter This month, a Wall Street Journal article stated that Russia is on the cusp of overtaking Saudi Arabia as the biggest oil supplier to China. This had already been suggested by other media sources earlier in the year, as Russia overtook Saudi Arabia as China’s biggest crude supplier in the first two months of 2023. Since Russia invaded Ukraine early last year, several state powers have increased their imports of Russian oil and gas because of the low price point. While some countries, including EU member states and the US, have introduced sanctions on Russian energy to condemn the conflict and encouraged others to do the same, many powers are using this as an opportunity to stockpile low-cost oil and gas. Two of the biggest importers of Russian energy at present are China and India. Russia is undercutting the Organization of the Petroleum Exporting Countries (OPEC+) significantly, selling its crude at heavily discounted prices to ensure its energy revenues remain stable during a time of economic turmoil. This has led to falling oil prices despite production cuts by OPEC intended to boost prices. While OPEC member states may be growing increasingly unhappy with Russia, whose oil industry it continues to support, Russia is prioritizing maintaining its energy export partnerships over keeping OPEC happy. And it appears to be succeeding. The Battle Between Russia and Saudi Arabia Russia and Saudi Arabia are now battling for domination of China’s energy market, the biggest in the world. For several years, Saudi Arabia has been China’s top oil supplier. In 2022, China purchased the equivalent of 1.75 million bpd of crude from the world’s biggest oil producer. But according to Chinese government data,

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Russia overtook Saudi Arabia to become China’s biggest crude supplier earlier this year. This figure has gone back and forth, meaning the two countries are continuing to battle for China’s energy business, with Russia looking like it could take the lead. Russian shipments of crude to China account for around 14% of its supplies, an increase from 8.8% before the war. Meanwhile, Saudi Arabian oil supplies account for around 14.5% of the total. A similar pattern has been seen in India, which has reduced its Saudi Arabian oil imports from a 20% market share before the war to a 13% share now while increasing its Russian imports from 3% to

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hanks to its heavily discounted crude, Russia has won China’s favor over the last year, at certain points even overtaking Saudi Arabia as the country’s main exporter. The Russian invasion of Ukraine early last year, and subsequent sanctions on Russian energy, have led Russia to reduce the price of its oil and gas to encourage countries in Asia and other parts of the world to increase their imports. However, China has big plans to deepen its trade and business ties with Saudi Arabia, meaning it is still unclear how the future of the China-Russia relationship will look.

Russian shipments of crude to China account for around 14% of its supplies, an increase from 8.8% before the war.

40%. China and India have both remained neutral in the conflict, refusing to condemn Russia’s actions or to introduce sanctions on Russian energy. While they claim to support a peace agreement, revenues earned from Russia’s oil exports to China and India are undoubtedly contributing to the ongoing war effort. China appears to be stockpiling Russian crude just in case the price of oil begins to rise once

again, a smart move considering the soaring energy prices of 2022. It added around 1.77 million bpd to its inventories in May, the largest amount since 2020. But as this drives the global oil benchmark down, with Brent standing at $75 a barrel, Russia is antagonizing Saudi Arabia, which needs oil prices to be around $81 a barrel to support its economy. However, although Russia’s energy relationship with China appears

strong, the Asian superpower has been strengthening its economic partnership with Saudi Arabia

in recent months, with plans to establish greater energy and trade links in the coming years. The Long-Standing China-Saudi Relationship In December 2022, Saudi Arabia hosted the China-Arab Summit, which included a state visit from Chinese President Xi Jinping. Jinping and Saudi Crown Prince Mohammed bin Salman discussed trade ties and regional security, deciding to align across several policy areas without interfering in each other’s internal affairs. And in March this year, China and Saudi Arabia announced they had plans to work in partnership on the construction of a landmark $10 billion refinery in the north-eastern Liaoning province of China, with funding from Saudi’s state-owned Aramco; solidifying the partnership between the world’s largest importer and its largest exporter. Saudi’s Energy Minister, Prince Abdulaziz bin Salman, confirmed that the Kingdom was looking for greater cooperation with China on trade and energy, rather than competition. While China’s high level of imports from Russia are helping keep its energy industry afloat, with sanctions preventing other countries from buying Russian oil and gas, it is unclear whether this relationship will last. China and Saudi Arabia have a longstanding energy partnership and have recently agreed to align on other areas of trade and business, meaning China will likely continue importing large amounts of crude from the Middle Eastern oil giant. However, as Russia continues to sell its oil at a heavily discounted price it will remain highly attractive in the Asian market.

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INDUSTRY

The Unforeseen Consequences of Offshore Wind By: Jess Henley

s the globe continues to transition into a new era of energy and explores long-term energy solutions, offshore wind has garnered much attention of late. With the Biden Administration pushing for strategic offshore wind farm development and renewable energy deployment, the race to invest in offshore wind properties and infrastructure has boomed. On the surface, investing in offshore wind seems like a good idea. However, some unforeseen consequences and complications could be associated with a rapid transition to the renewable energy source. Like any major transition, the story has two sides, and the other side of the coin may be less pretty. A Brief Overview of Offshore Wind Offshore wind farms involve the creation of massive wind turbines designed to harness wind energy and convert it to electricity. Because wind off the coast and in open water is a vastly untapped resource, harnessing offshore wind power has the potential to be a massive energy supplier for future generations. The idea is relatively simple: take advantage of areas that are uninhabited by humans to minimize the impact on valuable real estate—utilizing the strong force of ocean winds to capture energy and create electricity to be integrated with the power grid. Offshore wind energy is considered a renewable resource and is part of a rapidly growing sector in the green energy transition. However, moving too quickly to build these massive structures may have some potential pitfalls. The Other Side of the Coin As appealing as offshore wind may sound on a surface level, there are multiple angles to consider before diving headfirst into a total transition. Naturally, investing in renewable energy resources is a significant step toward sustainable energy production. However, like any new energy resource, examining all sides and potential pitfalls of investing in offshore wind farms is essential. Massive Construction One of the first considerations is the sheer size of constructing offshore wind farms. On average,

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most offshore windmill designs utilize rotors with a diameter of 148 meters and stand 90 meters tall. However, in the near future, this size is expected to increase to approximately 230 meters to generate more electricity. Considering most wind farms will have dozens if not hundreds of windmills, the area necessary to support such mega-farms is staggering. With every massive construction project comes a monumental effort and industrial complexity. To begin building a building farm, the first step is to drill into the ocean floor using enormous equipment. Once the site is prepared, the base of the windmill is transported from the mainland to the installation site. When considering the sheer size of these offshore windmills, transportation and installation are no small feat. In fact, the cost associated with building a single offshore windmill is staggering. The Math Doesn’t Add Up The initial construction cost of an offshore wind farm can cost billions of dollars. According to the Institute for Energy Research (IER), offshore wind turbines cost nearly four times more than natural gas production. Furthermore, the estimated cost of operating an offshore wind turbine translates to over $6,000 per kilowatt of energy it produces. According to an analysis by IER comparing the Cape Offshore Wind Farm to a natural gas facility in the same region, natural gas supplied 320 trillion BTUs of energy annually. In contrast, the Cape Offshore Wind Farm provided a little more than 1% of that figure with a meager 5.4 trillion BTUs of energy annually. With this staggering difference in energy output in mind, the viability of focusing primarily on offshore wind farms is undoubtedly in question. Location, Location, Location Naturally, the location of these wind farms can make a significant difference in both energy output and viability. States with fewer traditional energy resources, like New England, could benefit greatly from focusing on renewable resources such as offshore wind farms. Installing offshore wind farms to supply these states with more prominent renewable energy resources could help the energy market and deliver their electricity needs. On the other hand, states at the forefront of energy production, like Texas, with its leading oil and nuclear

Offshore wind farms involve the creation of massive wind turbines designed to harness wind energy and convert it to electricity. DEPOSITPHOTOS/BIANCOBLUE

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energy supply, could be jeopardizing their energy market by pitting resources against each other. By forcing the existence of offshore wind farms in Texas, the titans of energy production go head to head in a bid for support and resources. When comparing the cost and potential ROI on oil and natural gas versus offshore wind farms, offshore wind turbines cannot compete monetarily. Therefore, pushing for their immediate existence is not monetarily viable. However, over time, it could prove to be feasible in a slow transition. The Biden Administration Pushes Offshore Wind The White House has made its intentions to ramp up offshore wind construction abundantly clear. On March 23rd, the White House announced its continuation of plans to advance offshore wind construction to keep in step with Biden’s promise to construct 30 gigawatts of offshore wind. The White House claims this endeavor will supply 10 million American homes by 2030 with clean energy. According to White House analytics, the industry has tripled because of the President’s plan in 2021 to increase offshore wind farms. The President’s investment in renewable energy continues to grow more ambition to produce 110 gigawatts of offshore wind by 2050. Unforeseen Environmental Impacts of Offshore Wind Farms Unfortunately, little research has been done into the potential environmental impacts of ramping offshore wind farm construction. While there is undoubtedly a distinct change in the environment due to the nature of construction, several factors could be affected by constructing the massive windmills off American coastlines. The sound pollution from drilling and operation could be detrimental to the delicate oceanic ecosystem. Most marine wind farms are 15 to 23 miles offshore, so their construction could damage coastal reefs and invaluable aquatic biomes. Furthermore, connecting transmission lines from wind farms to the mainland involves disrupting a larger surface area than solely the windmill’s location, potentially affecting a larger environmental area. Above the surface, the massive windmills can obscure aviary wildlife such as coastal birds, migrating fouls, and other flying animals. The simple truth is the research needs to be conducted sufficiently to say with certainty how creating a massive infrastructure

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of offshore windmills will impact the delicate ocean environment. Economic Complications Another angle to consider is the potential economic pitfalls of filling our coastlines with offshore windmills. Tourism & Property Values Because of their size and structure, many offshore wind facilities can be seen from the coastlines. This could be considered unsightly and decrease property values, hinder tourism, and prevent economic growth in popular coastal areas. For smaller oceanside communities, a downturn in tourism could be disastrous and devastating for their economy. Who’s Going to Pay for All This? Let’s be honest; you already know the answer. The American people will pay for increased offshore wind facilities for generations. As the national debt crisis continues to increase with little signs of stopping, spending billions upon billions on a less-than-viable return on investment is questionable, at the least. The cost for construction, upkeep, and potential economic impacts will eventually come from the American taxpayer’s pockets. Navigational Hazards By placing offshore wind facilities around every coastline, shipping channels and navigational vessels could be hindered from navigating coastal ways. Creating a giant infrastructure of offshore windmills could lead to congested waterways and difficult ocean navigation. Maintenance and Repair Inaccessibility Due to the nature of offshore wind facilities, maintenance and repair can be challenging. Not only do workers face environmental difficulties, but structural and accessibility issues as well. This means that the upkeep required for offshore wind facilities can be extremely expensive and difficult to maintain. Infrastructure and Grid Connection Cost When compared to nuclear and oil energy transmission fees, the cost of offshore wind grid connection is astronomical. In fact, offshore wind energy transmission fees are nearly twice as expensive as traditional energy resources. Also, offshore wind infrastructure is much more costly than conventional energy sources.

Part of a Whole, Not the Whole Itself As with any transition to a new energy source, it’s essential to consider all angles and recognize that no one resource is the end-all, be-all solution. The world of energy is rapidly changing, but that doesn’t mean we should put all our eggs in one basket. With offshore wind energy production, Americans must recognize that it is but one of many Avenues to invest in for the clean energy shift. That’s why focusing on one energy resource is unwise for the future. Instead, American energy investors should broaden the scope of renewable energy to help balance the transition with sustainable and reasonable progress. Too Much Change Too Quickly Of course, the energy sector must evolve as resources continue to change and develop. However, it’s important to understand that change takes time, especially supplying American homes with power and energy. Diving headfirst into any one form of renewable energy could be a deficit to other resources that still have much to offer. Investigate Energy Impacts With Shale There’s much to know about the goings-on of the energy world, and our investigative reporters have the inside scoop. Our dedicated team drills down deep to uncover the facts and necessary information about everything happening in oil and gas, renewable energy, and other happenings in the ever-changing world. You can rely on Shale Magazine to have the intel you need to make informed decisions about your energy investments. Check out our latest issues of Shale Magazine to hear from our experts. If you don’t have time to read our past issues, listen to our award-winning podcast, In the Oil Patch, for on-the-go news inside the energy sector.

About the author: Jess Henley began his career in client relations for a large manufacturer in Huntsville, Alabama. With several years of leadership under his belt, Jess made the leap to brand communications with Bizwrite, LLC. As a senior copywriter, Jess crafts compelling marketing and PR content with a particular emphasis on global energy markets and professional services.

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INDUSTRY

The Bright Future of U.S. Lithium By: Felicity Bradstock

Increasing Demand for Lithium The International Energy Agency (IEA) anticipates the global demand for lithium will increase by around 90% over the next two decades. Batteries for EVs will be the main market driver, having overtaken electronic devices. Ensuring a stable supply of critical metals and minerals, such as lithium, is seen by the IEA as key to a successful green transition, helping consumers move away from the fossil fuels that currently power transportation. At present, there are not enough mining operations underway worldwide to provide the lithium needed to meet the growing global demand, which has sent prices soaring over the last year. Lithium reserves worldwide are thought to total over 14 million tonnes.

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The amount of lithium required to meet current goals is estimated at somewhere between 0.5 and 1.3 million tonnes, and extraction peaked in 2022 at 100,000 metric tonnes. The amount of lithium required to meet current goals is estimated at somewhere between 0.5 and 1.3 million tonnes, and extraction peaked in 2022 at 100,000 metric tonnes. Most of the world’s lithium is sourced from the South American Lithium Triangle, which consists of mining projects in Argentina, Bolivia and Chile. But now governments around the globe are looking to expand lithium mining beyond traditional regions to ensure the future of their supply. Lithium’s Role in the Green Energy Transition The U.S. Department of Energy (DoE) has repeatedly highlighted the need for lithium to fuel a green transition, offering funding to national projects. In November 2022, the DoE announced a $12 million funding opportunity to advance the science of safe, cost-efficient lithium extraction and refining from geothermal

brines. And in January, the DoE offered the Australian mining company, Ioneer, a $700 million loan to construct a lithium carbonate plant at a lithium mine in Nevada, providing it can secure the relevant permits. However, there are several environmental concerns around developing new mining operations at a time when the U.S. is supposed to be more cautious about its environmental actions. At present, there is only one active lithium mine in the U.S., located in Nevada. It provides just 1% of the world’s lithium. President Biden has regularly discussed the possibility of increasing the national lithium mining capacity by approving new mining projects, which has been met with praise by EV manufacturers and mining companies. However, the communities living in lithium-rich areas are concerned about the impact of new mining activities on the environment and local populations.

Several communities across the U.S. have complained about the failure of mining companies to include residents in their decisionmaking during past projects, making them fear new developments. Meanwhile, indigenous communities fear being displaced or having their ancestral lands destroyed. Others worry about the potential impact of new mining projects on the environment and whether developments will align with recent U.S. climate policy advances. Private Sourcing Grows for Lithium But it’s not just the government that’s looking to ensure its lithium sources, as private companies launch lithium strategies and pump huge amounts of money into the metal and minerals industry. In January, General Motors (GM) announced it would be investing $650 million in a lithium company to support its electric vehicle business. Seeing lithium as a vital component for battery production, GM has decided to invest in lithium extraction from the U.S. Thacker Pass mine in Nevada. The mine is expected to provide enough lithium for GM to produce around 1 million EVs a year. GM has been ramping up its EV production in recent years and expects to produce 400,000 EVs in North America between 2022 and quarter two of 2023. The investment will ensure GM is given exclusive access to the first phase of lithium production from the mine. Lithium production at the mine is scheduled to

DEPOSITPHOTOS/VIOLKA08

overnments worldwide are racing to secure their supply of lithium as the global demand for lithium rapidly increases. The demand coincides with the boom in electric vehicle (EV) manufacturing and the uptake of billions of electrical devices, all requiring lithium-ion batteries. But the U.S. may have a strategic position in the lithium market, with access to national lithium reserves that are not available in all areas of the world. As the Biden administration fosters relationships with other energy powers to ensure the future of U.S. lithium supply chains, it is also investing heavily in the national supply of “white gold.”

With international demand for lithium rapidly increasing, the U.S. and other world powers are looking to secure their supply to support the green transition. commence in the second half of 2026, creating around 1,000 jobs during construction and 500 when in operation. The Chair and CEO of GM, Mary Barra, stated: “Direct sourcing critical EV raw materials and components from suppliers in North America and free-tradeagreement countries helps make our supply chain more secure, helps us manage cell costs, and creates jobs.” Meanwhile, the CEO and President of Lithium Americas President, Jonathan Evans, stated

“It’s an exciting milestone, and we couldn’t ask for a better organization than General Motors to become our largest investor. ” Barra added, “GM shares our commitment to meaningfully advancing the energy transition, and I’m confident that together we can make Thacker Pass a major player in a secure, integrated North American supply chain from critical battery materials to EVs.” The Future of Lithium With international demand for lithium rapidly increasing, the

U.S. and other world powers are looking to secure their supply to support the green transition. But this will likely require the expansion of mining activities beyond traditional lithium regions of the world. While some companies are investing in new supplies, the U.S.

government appears to be at an impasse, unsure whether the development of new mining projects will help or hinder the transition to green.

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VOLUME 1 // ISSUE 4

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POLICY

What the Debt Ceiling Fallout Means for Energy Reform By: Tyler Reed

paying its debts. This default could result in a cut down on payments like Social Security veterans benefits, federal employees’ salaries, and more. With the prevailing threat of debt default growing, lawmakers felt the pressure to present a viable solution. In the last days of May and the first few days of June, House Speaker Kevin McCarthy and the White House agreed to raise the debt ceiling. Fortunately, this agreement could be a real solution to the debt issue— but only for the time being. In addition to increasing the borrowing limits for the United States government, the debt ceiling agreement includes actionable measures for the energy sector.

The Debt Ceiling and the Threat of Federal Default As the threat of federal default loomed over the past several months, House Republicans and the White House finally came to an agreement to raise the debt ceiling. Now that Congress passed this agreement, it will increase the maximum amount the federal government could borrow for the next two years in order to cover national expenses. In January of 2023, the United States government hit the debt ceiling, causing some anxiety in Washington. With little time to spare, the White House and House Republicans needed to move quickly to propose a solution. Significant repercussions would begin throughout the nation if an agreement could not be reached. The national Treasury could delay

How Raising the Debt Ceiling Could Aid Energy The question remains—how does raising the debt ceiling affect the energy sector? A significant portion of the debt ceiling agreement includes energy-related provisions. This bipartisan agreement is a rare platform both sides want in some measure. Since Congress passed the deal, it could be a positive step forward for energy reform. The bill (now signed into law) outlines energy permissions, which shortens the time required to provide permits for innovative energy solutions. This significantly reduces the amount of time it takes to get new projects approved to move forward. That fact not only has the potential to ramp up clean energy research but could make the transition to green

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ongress recently passed the agreement reached by President Biden and House Speaker Kevin McCarthy to increase the national debt ceiling. Of course, this increase in the debt ceiling allows the US government to avoid a default on its debt. It also represents a crucial moment for energy reform. Within the debt ceiling agreement are some significant energy provisions. These provisions will majorly impact the energy sector over the next several years. As the world transitions to green energy, the energy permissions within the debt ceiling agreement will prove to be a linchpin for actionable change.

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As lawmakers move forward with raising the debt ceiling, the impact on the economy and the energy sector could be game-changing. In addition to advancing the clean energy movement, the passed debt ceiling increase comes with the following core benefits to the energy sector. power achievable sooner than we think. Increasing the debt ceiling could allow energy innovators the freedom and funding to explore new technology, research, and renewable energy strategies. Though we still rely on fossil fuels for the majority of our energy production in the United States, reducing the approval process for new energy solutions could expedite the green transition. Energy Permitting Explained The process to gain permission or approval to move forward with energy research is complex and lengthy. The multiple layers of government red tape currently in place hinder energy companies from rapid progress. New technologies for green energy require sufficient research, permission, and funding before they can move to mass production. Project designers must answer to multiple layers of government and go through several agencies before moving forward with their energy ambitions. The bipartisan agreement enacted in the debt ceiling agreement helps alleviate some of the restrictions on energy projects. However, this agreement was not without dispute or controversy. The main issue at hand is determining which projects should be included in the energy permitting provisions. Renewable energies, like solar and wind, crude oil, and other fossil fuels, were all contenders for the energy permitting conditions. Other Energy Benefits to Raising the Debt Ceiling As lawmakers move forward with raising the debt ceiling, the impact on the economy and the energy sector could be game-changing. In addition to advancing the clean energy movement, the passed debt ceiling increase comes with the following core benefits to the energy sector.

Streamlining Energy Permitting Process The passed agreement would impose a restricting timeline for government agencies to approve new energy projects. This time limit would significantly decrease the amount of time it takes for project managers to receive permission for their energy project. By enforcing a tighter deadline, project managers could move their energy motions forward in less time. This deal outlines a strict time limit of 2 years for agencies to approve new energy projects. This bill requires agencies to conduct their research within a tighter timeline. Not only would this move projects along, but it would also force agencies to have efficient communication and processes for approving energy permits. If projects are approved more timely, it would decrease the time it takes for the construction and infrastructure of new energy facilities, decreasing the waiting period before they reach operational status. This bill also outlines a green light for the Mountain Valley Pipeline in West Virginia and Virginia. Opening this natural gas pipeline could provide a much-needed boost for the economy and the energy sector. Investing In Clean Energy Innovation If energy projects are streamlined and the permission process is less involved, this could prompt more significant investment in clean energy research and innovation. A boon for green energy companies would result in new economic opportunities. With clean energy research investment comes new jobs, facilities, and opportunities for clean energy breakthroughs. As the world transitions to clean energy, investing in research, developing energy positions, and creating energy-efficient infrastructure is vital to our progress.

Promoting Energy Efficiency An essential benefit of the energy permitting provision is promoting energy efficiency. Maximizing projects’ energy efficiency could cost developers less to operate and initialize their projects. In the long term, energy efficiency promotion could reduce the cost of energy and lessen the negative impact on the environment. The Long Road Ahead for Energy Reform Although the debt ceiling increase is a significant leap forward for green energy, and energy permitting reform, we still have a long way to go. The current climate crisis and energy deficit still require much work, revision, and debate. The permitting reform does not include local or state governments. These are two areas where clean energy projects could be delayed or discontinued. Still, the progress that could be made from passing the debt increase would be a major step for the green energy movement. Keep Current with Shale Magazine As the energy news unfolds, Shale Magazine is your home for the inside scoop. Our team of researchers and reporters keep a finger on the pulse of the world of energy. We provide our readers with the insight and accurate information they need to make informed decisions in the energy sector. You can rely on us to keep you up to date with the latest happenings. Check out our past issues for more information. If you’re on the go, our award-winning podcast, In the Oil Patch, keeps you in the know wherever you are. Listen to the latest energy podcast episodes today.

About the author: Tyler Reed began his career in the world of finance managing a portfolio of municipal bonds at the Bank of New York Mellon. Four years later, he led the Marketing and Business Development team at a highprofile civil engineering firm. He had a focus on energy development in federal, state, and local pursuits. He picked up an Executive MBA from the University of Florida along the way. Following an entrepreneurial spirit, he founded a content writing agency. There, they service marketing agencies, PR firms, and enterprise accounts on a global scale. A sought-after television personality and featured writer in too many leading publications to list, his penchant for research delivers crisp and intelligent prose his audience continually craves.

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POLICY

The Woeful Inadequacy of the Russian Oil Price Cap By: Jess Henley & Tyler Reed

s the Russian invasion of Ukraine continues to evolve, members of the G7 Summit in Elmau agreed to place a price cap on Russian oil exports of $60 per barrel. This price cap contained a twofold goal of restricting Russia’s oil revenue while maintaining the global oil supply. While the Treasury asserts the Russian oil price cap is effective, the recent U.S. Treasury press update on August 3rd, 2023, leaves reasonable doubt. The Treasury claims the price cap has seen significant success since its implementation. However, China and India continue to help Russia subvert sanctions and evade the so-called “successful” price gap. What the Price Cap Entails The price cap on Russian oil operates under the policy that coalition countries are allowed to continue to provide maritime services to transport Russian crude under the condition the oil has been sold at or below the price cap level. According to the US Treasury statement in May of 2023, this price cap policy “Incentivizes the continued sale of oil and petroleum products on the market at a steep discount from Russia’s wartime premium.” Just before Russia’s illegal invasion of Ukraine, the average cost of oil was over $100 per barrel. This price cap policy significantly reduces potential wartime profiteering for Russia’s oil sales by implementing a maximum cost of $60 per barrel. Additionally, most coalition countries have all but prohibited the import of Russian oil, meaning the beneficiaries are the low and middle-income nations purchasing the discounted barrels. Naturally, a policy such as this requires a massive collaborative effort to accomplish. After a monumental movement to reduce Russian oil revenue, it seems the economic impact has been successful. Between January and March of 2023, the Russian Minister of Finance reported oil revenues War over 40% lower than the year prior. Europe’s Sixth Sanctions Package The European Union adopting the sixth sanctions package was pivotal to disrupting Russian revenue from oil exports. In June 2022, the EU banned importing Russian oil and providing maritime services from the DEPOSITPHOTOS/MAXXYUSTAS

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Since Russia’s invasion in February of 2022, the Ukrainian people have shown undeniable resilience in spite of the brutal oppression they have faced. EU, which contributed to Russian trade. The action represented a significant deterrent for Russian exports as Europe has historically provided the majority of naval transportation services for Russian oil. The significant actions taken by the European Union, the United Kingdom, and the United States all had a severe economic impact on Russian crude exportation. However, the brutal invasion of Ukraine continues, in spite of the severe detriment to Russian oil revenue. In fact, the strict sanctions and price cap may have resulted in some unforeseen economic turn of events.

tions was India. The South Asian nation became one of the largest buyers of Russian oil following the bans on Russian oil. In fact, Indian procurement of Russian oil has exceeded that of the combined purchases of the United Arab Emirates, the United States, Saudi Arabia, and Iraq. Data suggests India took 1.96 million barrels of Russian oil per day in the month of May, which constitutes the highest percentage of Russian-bought oil from a single country in years. The reason for India’s staunch support of the Russian oil industry? The answer is simple; Russian oil is cheap. Thanks to the sanctions placed on Russian oil, India has taken full advantage of the low cost of Russian crude. The discounted oil is significantly less costly than that of Saudi Arabia or Iraq, meaning Indian refineries are more than thrilled to capitalize on the imposed sanctions. However, India reportedly purchases Russian oil at an average cost of over $68 per barrel. Since the price cap on Russian oil is set at $60 per barrel, it begs the question, why are our Indian oil refineries ignoring the imposed price cap?

18 Months of the Russian-Ukrainian War Since Russia’s invasion in February of 2022, the Ukrainian people have shown undeniable resilience in spite of the brutal oppression they have faced. Although Russia has continued to double down on its efforts, Ukraine seems to have had several significant victories throughout the invasion. Ukrainian defenders have destroyed multiple Russian vehicles, sabotaged several Russian bases, and continue to show an overall tenacity in their fight. However, the war continues and shows little signs of ending anytime soon. Despite coalition countries’ best efforts to hinder Russian revenue, Russian forces continue to push their severe invasion further, dragging the battle on. This persistence may be due to Putin’s lack of understanding of the challenges his military faces. Furthermore, Putin is far from alone regarding potential methods of undercutting the efforts against his invasion.

India Pays in Chinese Yuan for Russian Oil As part of the continued support of Russian oil, Indian refineries recently settled payments using the Chinese Yuan. Although India has long sought an alternate currency for settling oil purchases than USD, using the Chinese Yuan is significant in several ways. Because of the sanctions placed on Russia by the West, Moscow’s oil customers have had to turn to other means of settling purchasing debts. At least two Indian refineries are paying for Russian oil in Chinese Yuan. Although it is not clear how much Russian oil Indian refineries have bought using Yuan, it has significantly benefited the Russian oil trade and sparked questions about Chinese and Indian alliances where energy resources are concerned. Historically, the Chinese and Indian governments have been less than friendly concerning energy resources. So, why the sudden collaboration of currency between the two countries? Could it be that China and India are uniting under the opportunity created by Russia’s invasion of Ukraine and the sanctions placed on Moscow as a result?

India Becomes Biggest Buyer of Russian Oil Perhaps one of the most unexpected allies Putin found in evading the oil sanc-

China Aids Russia to Skirt Around Price Cap and Sanctions Despite the event sanctions and price caps the West is placing on Russia, China

(CONTINUED NEXT PAGE) SHALEMAG.COM

Treasury Sugarcoats the Problem Despite the alarming support from India and China, the Treasury Department still asserts the Russian sanctions are sufficient and successful. Of course, the sanctions have made some economic impact on Mos-

cow. However, they have also given way to strengthen the economic partnership between Russia, India, and China. Although the Chinese embassy in Washington upholds that all interactions with Russia have followed the imposed restrictions, there is clear evidence to instill significant doubt. Chinese officials also reiterate their objectivity in the Ukrainian issue. However, the actions and consistent economic support that China has shown to Russia tell a different story. In early August, the Department of the Treasury released an update on the price cap of Russian oil, claiming it has been an evident success. While the sanctions have placed an economic strain on the Russian government, they only led to other avenues and potentially less-thanlegal methods of procuring oil revenue. A “New OPEC” on the Horizon? With the trifecta of Russia, India, and China seemingly working in cohesion despite Western efforts, one has to question if this is a sign of a new energy powerhouse made in the image of OPEC. If these three nations were to align in other areas, it could spell disaster for the global market and significantly impact the outcome of the Ukrainian conflict. If the three nations ally themselves beyond economic resources, it could spell disaster

for the future of the energy sector. Furthermore, the aftershocks of a triad of powerful Asian countries could spark further conflict on a global scale. As the situation continues to unfold, it will be essential for oil investors and energy marketers to keep a close eye on Russian activity. Follow Along with Global Energy Updates with Shale The world of energy changes rapidly. From one moment to the next, it’s essential to remain abreast of the global goings-on to make informed investment decisions. The team of expert reporters and investigators at Shale Magazine provides the actionable material and information you need to navigate the ever-changing global energy market. Stay up to date on the fax and figures with our latest issues. Or, when you’re on the go, check out our award-winning podcast, In the Oil Patch, to hear our experts discuss the inside scoop on energy.

About the author: Tyler Reed began his career in the world of finance managing a portfolio of municipal bonds at the Bank of New York Mellon. Four years later, he led the Marketing and Business Development team at a highprofile civil engineering firm. He had a focus on energy development in federal, state, and local pursuits. He picked up an Executive MBA from the University of Florida along the way. Following an entrepreneurial spirit, he founded a content writing agency. There, they service marketing agencies, PR firms, and enterprise accounts on a global scale. A sought-after television personality and featured writer in too many leading publications to list, his penchant for research delivers crisp and intelligent prose his audience continually craves.

VOLUME 1 // ISSUE 4

DEPOSITPHOTOS/MAXXYUSTAS

has made critical efforts to support Russia’s illegal war on Ukraine. China has drastically increased its purchase of Russian oil, blatantly ignoring the price cap and importation restrictions. Beyond profiting from Russia’s oil industry, the Chinese government is rumored to have supplied Moscow with essential technology to aid their war efforts. China’s actions severely undermine Western efforts to squelch the brutality shown by Moscow since February 2022. This vehement support of Russia by the Chinese government aligns with the Russian war effort in Ukraine. China has become a critical Financial partner and economic ally by “mitigating the impact of Western sanctions.” “Russia’s war against Ukraine has been enabled in no small part by China’s willingness to support them, in direct and indirect ways. I hope this report makes clear to Beijing that the United States, and the world, will know if they take further actions to enable Putin’s brutal invasion,” said Rep. Jim Himes of the House Intelligence Committee.

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POLICY

Is the Future of Nuclear in Jeopardy? By: Tyler Reed

ith Germany’s recent announcement for shutting off its nuclear plants, nuclear energy may be on a downward slope. The last three nuclear power plants in Germany have officially ended operation. This polarizing decision is part of a larger trend to move away from nuclear power as a source of energy. The German government seems to be following popular opinion that nuclear power is unstable and potentially dangerous. Meanwhile, the scope of nuclear energy around the world may be following in the same direction. If public opinion shifts to what’s deemed more renewable sources of energy, the future of nuclear power could be tenuous. While some argue that nuclear energy could help make the transition to green power easier, many are vehemently against the progression of nuclear energy. It’s Been Decades Coming Nuclear power in Germany has certainly been tumultuous in the past. Germany made significant progress in nuclear technology at the height of the atomic era. However, it was not met without opposition. In the 1970s, a significant anti-nuclear movement took place. Global nuclear disasters like Fukushima and Chernobyl only served to fuel the fire of more recent anti-nuclear sentiment. The recent decision to close the doors of the last three nuclear power plants in Germany is part of a 20-year plan. In 2000, the German government began making preparations to move away from nuclear power. This movement initialized the shutdown of power plants across the European country. After the Fukushima disaster, Chancellor Angela Merkel announced Germany would double down on efforts to shut down their nuclear power resources. After Russia invaded Ukraine, Germany delayed its shut down of its nuclear power plants. However, the delay has now ended, and Germany moved forward with removing atomic

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power plants from their energy resources. This marks the end of nuclear power reliance in Germany for the foreseeable future. The End of the Nuclear Era in Germany With the closing of its final three nuclear power plants, Germany is following a trend of navigating away from nuclear energy. While this is still a polarizing decision, many in the anti-nuclear movement are delighted at the news. The end of the nuclear era in Germany is a landmark event in the world of energy. Undoubtedly, this decision by Germany will form a catalyst for other nations to either follow suit or move against the grain. The Downward Spiral of Nuclear Power There’s no question that many nuclear power plants across the world have been in a steady decline. In the United States alone, many of the nuclear power plants are considered past their prime. Though they were initially built to last multiple decades, many US nuclear plants have reached retirement early. As the world’s nuclear power plants age, many are set to be shut down. In fact, approximately 25% of nuclear capacity is expected to be retired by 2025. Barring intervention or lifetime extensions, we could see a downward spiral in nuclear dependence in the coming years. Germany’s decision may only be the tip of the iceberg. Some in the anti-nuclear corner feel that less dependence on nuclear energy is the right direction. However, this line of thinking is undoubtedly divided. Global Trends in Nuclear Energy Many other countries are following the same lines as Germany for nuclear energy. Several other European countries have either completely shut down their nuclear plants or are well on the way there. However, the war in Ukraine is giving several nations pause to shutting down their nuclear industries. For

example, the UK views atomic power as an essential component of its clean energy plan. Additionally, France, Finland, and Japan have all made efforts or considered expanding nuclear power reliance. Meanwhile, there is also a demand for nuclear rethinking in the United States. Over the last 60 years, 90 operational licenses have been given to nuclear power plants. However, many of those plants have been shut down or are at risk of retiring. This trend has many concerns in the energy world. There are certainly some legitimate arguments for concern over nuclear power production. As the nuclear energy story continues to unfold, it will be important to consider the benefits and arguments on each side. Arguments Against Nuclear Energy Despite the many advantages of nuclear energy, it is often viewed by the public with a negative connotation. Some of its negative publicity undoubtedly comes from historical atomic accidents. Media and popular opinion have exaggerated or exacerbated a negative stigma around nuclear energy. However, there are some legitimate things to consider when looking at the challenges to nuclear energy. A few challenges surrounding nuclear energy production are: • Costly initial expense: The initial investment in a nuclear power plant can be quite costly. Additionally, it can take a decade or longer to complete a nuclear power plant. The time and money spent on the front end could be a legitimate concern for creating new power plants. • Fuel transportation, storage, and disposal: After nuclear energy is created, the question arises of what to do with the spent fuel. The radioactive material must be transported, stored, and disposed of

safely. Many are concerned about the risks involved in eliminating the used power. The Department of Energy is responsible for these processes in the United States. • Limited fuel supply: There is growing concern about the limit of nuclear material available to create nuclear power. If the supply of uranium were to dissipate, nuclear energy could be in danger. • Risks and accidents: The creation of nuclear energy comes with a certain amount of risk. Historical events, like the tragedies of Chernobyl and Fukushima Daiichi, have demonstrated the potential catastrophe caused by a nuclear accident. These cons of nuclear power production are certainly worth considering. However, like everything in the energy world, the negatives of nuclear energy must be weighed against the advantages of nuclear power investment. Advantages of Nuclear Energy In spite of the declining nuclear power usage around the world, nuclear energy has many advantages. Nuclear power still has vast potential. As a significant provider of energy resources, nuclear power could still have a spot at the world’s energy table. As the largest clean energy supplier in the United States, nuclear power still has a substantial part to play. Some of the key benefits of investing in nuclear power are as follows: • Low carbon emissions: Nuclear energy has some of the lowest carbon emissions in the energy industry. In fact, nuclear power plants in the United States produce more than half of the nation’s emissionfree energy. • Reliable and cost-effective energy source: While the initial cost of building nuclear power plants may be expensive, the production process is relatively affordable. Nuclear energy is a reliable energy source when other renewables have fluctuating potentials. • Small carbon footprint: As a whole, nuclear power plants boast some of the lowest carbon footprints in the energy industry. Though nuclear power plants can produce massive amounts of energy, the plants themselves can be relatively compact. • Can help close the energy gap: As a reliable source of electricity, nuclear energy

There’s no question that many nuclear power plants across the world have been in a steady decline. In the United States alone, many of the nuclear power plants are considered past their prime. Though they were initially built to last multiple decades, many US nuclear plants have reached retirement early. can help bridge the energy gap for the power grid. This could be a game changer as the world transitions to cleaner energy. • Economic boon: Nuclear power plants can provide thousands of jobs for United States citizens worldwide. While there may be a stigma around nuclear energy, some clear advantages exist. As the future unfolds, nuclear energy could still play a vital role in providing the world with power. How Nuclear Energy Could Help in the Clean Energy Solution Today, nuclear energy plays a significant role in generating electricity. In 2018, nuclear energy provided 18% of the global electricity supply. While nuclear power usage has declined over recent years, it can still play a vital role in the transition to clean energy. As technology progresses toward the green revolution, nuclear power will be needed to create a cleaner environment. The low carbon emissions brought about by atomic energy have vast untapped potential in the future. Nuclear power’s low-emission energy could revolutionize transportation, heating, manufacturing, and nearly every other industry. Nuclear power plants aid in keeping the power grid stable. As the world transitions to green energy solutions, brand new concepts like miniature nuclear power plants and breakthroughs in nuclear fusion can help stabilize the variable renewable energies. This benefit could provide a reliable backup energy source should renewable energy fluctuate. The future of nuclear energy hangs in the balance. As nuclear plants continue to age, future policies and regulatory actions will be pivotal. Of course, you can count on Shale

Magazine to keep you up to date on everything happening with nuclear energy. Gain Nuclear and Energy Insight with Shale Magazine As the face of energy changes, you can rely on Shale Magazine to keep you in the know. We thoroughly investigate every angle of the energy market to bring you actionable facts. You can expect every issue to provide the truth about the goings on in the energy world. Our readers gain the insight and fact-based evidence they need to stay informed. Peruse our past issues for more information on what’s happening around the world in energy. If you’re on the go, give a listen to our awardwinning podcast, In the Oil Patch.

About the author: Tyler Reed began his career in the world of finance managing a portfolio of municipal bonds at the Bank of New York Mellon. Four years later, he led the Marketing and Business Development team at a highprofile civil engineering firm. He had a focus on energy development in federal, state, and local pursuits. He picked up an Executive MBA from the University of Florida along the way. Following an entrepreneurial spirit, he founded a content writing agency. There, they service marketing agencies, PR firms, and enterprise accounts on a global scale. A sought-after television personality and featured writer in too many leading publications to list, his penchant for research delivers crisp and intelligent prose his audience continually craves.

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POLICY

Green Energy to Help Regenerate U.S. Disadvantaged Communities

iden is hoping to spur green energy development to support the regeneration of low-income communities across the U.S. The development of renewable energy projects in low-income areas could promote job creation, economic development could help accelerate the green transition. This has already been seen at the state level in California and New York, with recent announcements for plans to drive climate equity.

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How Is the Administration Accelerating U.S. Energy Manufacturing? In February 2023, the Biden Administration announced plans to accelerate domestic clean energy manufacturing and ensure traditionally underserved communities benefit from clean energy technologies. The U.S. Departments of Energy (DoE), the Treasury and the Internal Revenue Service will oversee two programs, funded by the 2022 Inflation Reduction Act the Low-Income Communities

Bonus Credit Program (48(e)), and the Qualifying Advanced Energy Project Credit (48C). This initiative is expected to support the government’s aim of achieving an equitable clean energy transition. Several of the DoE’s green energy programs will support smalland medium-sized manufacturers in energy communities, to ensure that energy workers are not left behind in the green transition. The U.S. Secretary of Energy, Jennifer M. Granholm, stated, “Underserved communities

DEPOSITPHOTOS/WDGPHOTO

By: Felicity Bradstock

Which States are Leading the Way in Climate Funding? And these federal ambitions are spilling over to the state level as, in March, New York State identified 1,736 “disadvantaged communities” that will be eligible for higher levels of climate funding. These communities were chosen based on several factors, considering environmental burden and future risk, such as flooding, exposure to pollution, health vulnerabilities, income levels, and the proportion of minority households. Doreen Harris, president and CEO of the New York State Energy Research and Development Authority stated, “The final adoption of this criteria solidifies New York State’s commitment to climate justice for those underserved communities most impacted by air pollution and harmful greenhouse gas emissions.” New York is viewed as one of the most ambitious states when it comes to climate action after passing the far-reaching Climate Leadership and Community Protection Act (Climate Act) in July 2019. The state aims to cut greenhouse gas emissions by 40% by 2030 and by at least 85% by 2050, compared to 1990 levels. As part of this plan, New York will focus on achieving climate justice. It hopes to achieve this by providing the identified communities with at least 35% of the clean energy project spending. New York believes the total cost of meeting its climate aims could be as much as $340 billion.

have the people, the skills, and the willpower, but often lack the opportunities and resources to invest in clean energy infrastructure to revitalize their local economies.” She added, “These transformative programs and grants will strengthen the nation ensuring U.S. workers and businesses lead us around the globe and deliver on the President’s promise to not leave communities behind during this critical energy transition.”

California’s Support of Clean Energy for Disadvantaged Communities The idea to support disadvantaged communities was based on an existing program in California, which also encouraged the development of the Biden Administration’s “Justice40 Initiative.” The initiative requires federal agencies to give at least 40% of the benefits from federal investments in climate change and clean energy to disadvantaged communities. In California, the Cap-and-Trade Program dictates that at least 25% of proceeds must be given to disadvantaged communities to improve public health, quality of life, and economic opportunities. And in 2022, California spent almost $1.3 billion in Cap-and-Trade proceeds on nearly 19,5000 climate equity projects. California aims to achieve net-zero carbon emissions by 2045, which is expected to reduce smog-forming air pollution by 71%. The Cap-and-Trade Program is just one of the ways the state hopes to achieve this aim. The program provides companies with a maximum stipulated amount of greenhouse gas emis-

sions to use, and if they exceed this amount they are fined. However, companies can sell and buy shares to increase or reduce their allotted emissions. Setting the Global Stage California’s ideas are nothing new in theory, but in practice they could be revolutionary, as many countries have failed to follow through on promises to support developing states in the past, driving many to develop a dependence on fossil fuels and unable to invest in establishing a green energy sector. At the COP27 climate summit in November, leaders from around the world promised to establish a fund for developing countries to tackle the challenges of climate change and support a global green transition. But several state governments and international organizations, such as the World Bank, have been accused of failing to provide this funding. We have seen how a lack of funding in poorer countries and communities can not only negatively affect the region in question but can significantly limit the success of the transition to green. If the political powers of a city, state, or country are unable to publicly fund renewable energy programs and combat climate change, they must rely on external investment, and if this financing does not come, green resources remain undeveloped. In contrast, greater investment in disadvantaged regions can help promote economic growth and job creation and could enhance climate equity over the coming decades. Keep Up with the Global Energy Transition At Shale Magazine, we keep our fingers to the pulse of energy to deliver the most relevant news and current events from across the industry. Tune into our award-winning podcast, In the Oil Patch, with host Kym Bolado, for exclusive one-on-ones with the movers and shakers changing the energy landscape. You can also find energy industry networking opportunities, check out our past issues, and always stay up to date on all things energy.

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POLICY

How the U.S. Is Decarbonizing Its Heavy Industry

s the U.S. pursues a green transition through the establishment of ambitious climate policies and strict regulations for the energy sector and other industries, public and private companies are looking at ways to effectively decarbonize some of the most polluting economic activities, such as heavy industry. Manufacturing, chemical production, and a wide array of other industrial activities consume a huge amount of fossil fuels and produce significant carbon emissions at present. As the U.S. looks to reduce its greenhouse gas emissions, as well as its reliance on fossil fuels, many industries are introducing innovative new technologies to clean up their activities in support of a green transition.

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A U.S. Manufacturing Hub Since President Biden came into office in 2021, he has pushed the idea of more domestic manufacturing, signing Executive Order 14005 – Ensuring the Future is Made in America by All of America’s Workers, in his first week in office. This led to the establishment of the Made in America office within the White House Office of Management and Budget (OMB). But with more domestic manufacturing comes higher carbon emissions, unless something is done now to prevent it. In 2022, the U.S. Department of Energy (DoE) launched its Industrial Decarbonization Roadmap, which identifies four key pathways to reduce emissions in

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By: Felicity Bradstock

In March, the government announced $6 billion in funding to accelerate decarbonization projects in heavy industry, including aluminum aånd cement making, under the Industrial Demonstrations Program. carbon fuels, feedstocks, and energy sources (LCFFES), and carbon capture, utilization, and storage (CCUS). The crosscutting decarbonization pillars are expected to support an immediate and long-term reduction of greenhouse gas emissions across the mostpolluting U.S. industries. The incorporation of several new technologies and climate policies is key to the future of industries that are unlikely to see a decrease in demand, such as cement, steel, and food and beverage as a production cut would be detrimental to the U.S. society that relies on these products.

positphotos/industrial activities. The roadmap offers an agenda for government, industry, and other stakeholders to work towards decarbonizing U.S. industry. The DoE sees the decarbonization of the industrial sector as key to creating goodpaying jobs for American workers, spurring economic growth, and creating a cleaner, more equitable future for all Americans. By 2020, industry contributed around 30% of U.S. primary energy-related carbon emissions. The five most carbon-intensive industries were petroleum refining, chemicals, iron and steel, cement, and food and beverage, producing approximately 51% of U.S. energy-related CO2 emissions in industry. A Decarbonization Roadmap The DoE roadmap focuses on four areas of improvement – boosting energy efficiency, industrial electrification, introducing low-

Public Investment In March, the government announced $6 billion in funding to accelerate decarbonization projects in heavy industry, including aluminum and cement making, under the Industrial Demonstrations Program. The funds come from the 2021 bipartisan Infrastructure Investment and Jobs Act (IIJA) and the 2022 Inflation Reduction Act (IRA). The program will offer competitive grants to technology developers, industry, and universities for up to 50% of project costs, where the project is aimed at emissions reduction in industry. The U.S. Energy Secretary, Jennifer Granholm, believes the project will help reduce pollution and promote competitive domestic manufacturing operations. Granholm stated: decarbonization technologies should be something “we can learn from and then have that technology be replicated and taken to scale.” The IIJA and the IRA will help the industrial sector achieve the second largest emissions reduction after the power sector, according to the DoE. While CCUS technologies will support the short-term reduction of carbon emissions, the electrification of operations and the adoption of clean fuels, such as green hydrogen, will

help the U.S. to decarbonize its industry in the long term. Green hydrogen is produced using electrolysis to split oxygen and hydrogen, relying on renewable energy sources for power. Tax credits for hydrogen from the IRA are expected to drive down production prices, with subsidies potentially allowing green hydrogen to fall to below $0/kg by 2030. Long-Term Carbon Cutting Green hydrogen can be used for a range of economic activities including power generation, manufacturing processes, such as steelmaking and cement production, fuel cells for electric vehicles, heavy transport such as shipping, green ammonia production for fertilizers, cleaning products, refrigeration, and electricity grid stabilization. The U.S. green hydrogen industry is expected to undergo a rapid expansion in the coming years thanks to favorable climate policies and government funding supporting research and development. Steel manufacturing is one of the most polluting industries not only in the U.S. but worldwide, with around 75% of steel still being made in coal-fired blast furnaces, which produces a high amount of carbon emissions. In 2022, steel production accounted for around 8% of global emissions. It is one of the industries that could benefit significantly from the switch away from fossil fuels to green hydrogen. However, the shift to green hydrogen will require substantial investment in the hydrogen industry to ensure enough of the green fuel is available for use in manufacturing and other industries. There is great potential for the decarbonization of heavy industry, and the U.S. is off to a good start thanks to the introduction of ambitious national climate policies, high levels of government funding, and the publication of the DoE’s Industrial Decarbonization Roadmap. However, to ensure that the aims outlined in these documents are achieved, the government must support the development of a green hydrogen industry and encourage private company efforts to reduce greenhouse gas emissions across a range of heavy industries.

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BUSINESS

Integrated Drilling Services— A Boon for the Oil and Gas Industry Special to SHALE

n integrated commercial model offers today’s exploration and production companies a comprehensive approach that combines drilling-related services, technologies, and expertise into a unified package and encompasses drilling engineering, project management, equipment rental, logistics, data analysis, and other components. To stay afloat in this highly volatile market, exploration and productions (E&P) companies rely on high cash flow by reducing their CapEx (capital expenditures) and OpEx (operational expenditures), which directly strains oilfield services & equipment (OFSE) companies. The reduction is significant in drilling new wells, aggravating the oil market’s volatility by reducing the oil supply and decreasing hydrocarbon availability. However, because OFSE and E&P companies both depend on the technical expertise of OFSEs for their project success, they must work towards creating value, not claiming the values. E&P and OFSE must understand the entire value chain and develop modified commercial models that are win-win for both. E&P companies have adjusted contracts for risk-reward sharing, prompting OFSEs to adopt a performance-driven strategy with integration and synergy at its core. To find work in the cost-driven market, OFSEs strive to secure integrated multi-product line contracts that foster synergy among their offerings, improving performance and efficiency and reducing operating costs. The latest trends indicate that E&Ps seek comprehensive solutions for their well construction and production processes. This demand has led large OFSEs to offer lump-sum services covering all well-site operations by expanding their existing workflow and addressing gaps in their portfolio. Consequently, several OFSEs are in a position to deliver complete end-to-end solutions for entire well constructions and production value chains through integrated services. Discrete Service Model & Value Claiming In the past OFSE companies were invited by E&P companies to bid on different aspects of well construction including directional drilling services, drilling fluid services, cementing services, completion equipment services, and more drilling execution work. E&P companies selected vendors on pricing and technological schedules included in the bids, often selecting several different OFSE vendors for the same project and assigning each vendor different key performance objectives (KPO). While this approach provided E&P companies with autonomy and control, it lacked synergy throughout the value chain. In a high oil price environment, efficiency and performance enhancement become crucial when the oil prices are low. Additionally, in discrete service models, OFSE companies could not benefit from remote services, reduced crew, and cross-trained personnel, which are all vital for improving

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commercial success. The discrete services model lacks optimization for these activities as it involves multiple vendors. OFSE companies under time-based contracts, tend to benefit from these inefficiencies (accounting for ILT). Instead, companies should use an integrated commercial model as it provides a comprehensive approach that combines drilling-related services, technologies, and expertise into a unified package. It encompasses drilling engineering, project management, equipment rental, logistics, data analysis, and other components for successful operations. These models are often referred to as integrated drilling services (IDS). Larger OFSE companies realized this potential recently, resulting in multiple acquisitions and portfolio expansion to cover the well lifecycle. OFSE companies offering integrated services can reduce costs through remote operations, reduced crew, cross-trained workforce, and enhanced tech-

Figure-01: Risk profile of different commercial models

nical solutions such as bit designing, BHA design, mud design, cement design, and data analytics. It also helps E&P operators to have a single responsible party and foster interdisciplinary team efforts. Integrated oil and gas industry models vary based on the risk level involved. Here are some areas that vary by risk: • • • • •

Fee for services Business Line Integration AFE Assurance Lump Sum Turnkey $ Bonus/bbl of hydrocarbon

Figure 1 captures multiple commercial models and risk factors for the EFSE vendor offering specific services at a defined fee/day rate. As the OFSE vendor’s revenue is time-and-quantity-driven, more time translates to higher earnings. The most basic integration model is called bundled services. Under this commercial agreement, an OFSE vendor is awarded more than three business lines’ services for a well. They can optimize their resources to reduce costs and have a dedicated project manager for better coordination between business lines. The integration model, where the OFSE vendor's revenue and well production are linked, is considered the riskiest. However, the reward is higher if the well meets the production target. Many integration model variations exist based on the risk tailored to the project demand. Risk management becomes the most critical factor in any integration model, as this risk can be positive or negative. E&P operators and OFSE vendors should approach discussions openmindedly. To ensure controlled risk and avoid conflicts, it is essential to establish clear and close-ended terms and conditions, preventing openended agreements. IDS providers (OFSE) work closely with E&P operators to develop customized solutions that meet project requirements, leading to enhanced efficiency and a seamless drilling process. However, several components of IDS contribute significantly to achieving synergy and promoting engineering and operational excellence. Key Components of IDS a. Drilling Engineering and Planning: IDS covers several drilling engineering and planning services, including designing well trajectories, casing, cementing programs, developing drilling fluids, and well construction strategies. IDS providers utilize their advanced engineering knowledge and global expertise to assist operators in optimizing their drilling performance and achieving the best outcomes. b. Project Management: Effective project management is crucial for IDS due to inherent risks in integration models. Planning and managing the inherent risks in integration models is essential for avoiding disastrous outcomes, including health, safety, and environment (HSE), logistics, and resource allocation. c. Advanced Drilling Technologies and Equipment: IDS providers utilize cutting-edge drilling technologies and equipment to enhance drilling operations, including advanced drill bits, measurement-whiledrilling (MWD) tools, and logging-while-drilling (LWD) systems that provide real-time data for precise decision-making. They offer access

to modern drilling rigs and associated equipment, ensuring efficient and reliable drilling performance. d. Real-time Data Analysis and Reporting: IDS incorporates real-time data analysis capabilities, enabling operators to make informed decisions. IDS providers collect and analyze data from several sources to identify potential issues, optimize drilling parameters, and mitigate real-time risks. Detailed reporting and performance analysis help operators evaluate and fine-tune drilling strategies for improved efficiency. Benefits of IDS a. Improved well design and planning: IDS providers leverage advanced technologies, data analytics, and global experience to design wells. They employ cutting-edge technology, including finite element analysis, to engineer drill bits, enhancing drilling performance and reducing NPT caused by downhole tool failures. Through advanced planning and design, IDS can improve well quality and minimize NPT events. a. Enhanced Drilling Efficiency and Performance: IDS providers integrate various drilling services and technologies, optimizing the drilling process. With integrated workflows, data analysis, and project management, IDS minimizes downtime, improves drilling rates, and maximizes overall operational efficiency. a. Cost Optimization: IDS helps operators reduce costs through effective project management, streamlined logistics, and optimized drilling strategies without compromising quality or safety by eliminating redundancies and leveraging economies of scale. a. Safety and Risk Management: IDS is centered around effective risk management to safeguard OFSE and E&P companies. With robust risk assessment methodologies, real-time data analysis, and adherence to industry best practices, IDS minimizes potential hazards, enhances wellbore integrity, and ensures the well-being of personnel and assets. a. Access to Expertise and Resources: IDS offers operators diverse expertise and resources. IDS providers, being at the forefront of developing advanced technologies, enhance sub-surface understanding. Through partnerships, operators can leverage the specialized technology, knowledge, and experience of industry professionals, ensuring optimal drilling performance and successful project execution. a. Optimized well delivery and lifecycle: IDS excels in integrating drilling operations with subsequent phases of the well lifecycle, including completion, stimulation, intervention, workover, and abandonment. This seamless integration ensures a smooth transition between phases and maximizes well value throughout its lifespan. In conclusion, the symbiotic relationship between E&P and OFSE companies through IDS creates value and benefits all stakeholders. IDS has emerged as a boon for the drilling industry in the current volatile oil market, utilizing advanced technology and global expertise to enhance performance and maintain low costs.

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BUSINESS

Is ESG Investing Dead? By: Joel Dahlenburg

What are the ESG Ratings Criteria? Companies are rated by ESG firms, such as CDP and ISS-ESG, which assess the environmental, social, and corporate governance practices of the organization. Investment rating service, Morningstar®, has also added ESG ratings to its company and fund evaluations. The three categories

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of ESG are used to determine if a company is being responsible and making progress towards improved corporate practices. The details of these three criteria in ESG ratings are: • Environment: This new generation of investors are concerned with the long-term effects on the local and global environment. How a company is impacting and investing in the health of the planet is important to these heirs of the earth. They not only highly value the natural word, but want to repair and preserve it for future generations. Under this guidance, companies can no longer afford to carelessly dump pollutants into the earth. They will need to demonstrate environmental responsibility. • Social: Social ratings include the impact of the company on current social issues, including diversity, equity, and inclusion (DEI) policies, and its role in supporting social issues. Corporate policies on, and action towards, improved diversity, equity

Investors are influenced by many factors, not just the financial data. The trend in the American workforce, where the majority of employees are choosing to sacrifice salary for more meaningful work, seems to carry over into investing. and inclusion are important factors for minority investors. • Governance: Governance ratings pertain to how leadership manages company resources, including its employees and its efficacy in driving positive change. For example, corporate taxes percentages, wage gap discrimination, public policies on maternity leave and leadership relatability influence public perception of corporations. According to Forbes, within these criteria there are differences in how ESG rating firms rate

companies. However, there are a few common tools used across the board, reports Forbes, such as “annual reports, corporate sustainability measures, resource/ employee/financial management, board structure and compensation and even controversial weapons screenings.” These tools are used to help to determine where a company’s money is going and how the company is being managed. This rating system helps to promote corporate transparency and provide investors greater insight into their investments.

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nvesting in companies that focus on their impact on the environment, in support of social issues, and on corporate governance (ESG) seems to be the focus of a newer generation of investors. This newer generation seems to care more about how companies are participating in socio-economic and environmental progress, than maximizing personal financial success. There are many factors that can impact returns on ESG investments, contributing to this apparent decline. But rather, could these factors indicate a cyclical nature to ESG investing? This post will explore the criteria for ESG rating, the factors that contribute to its profitability, the recent trends in ESG investing, and if we ought to invest in ESG companies.

public perception. Companies that adapt to cultural paradigms, such as renewable energy and inclusion, who promote themselves on social media, and work to be culturally relevant to a younger generation of investors can improve their public perception. Investors are influenced by many factors, not just the financial data. The trend in the American workforce, where the majority of employees are choosing to sacrifice salary for more meaningful work, seems to carry over into investing. It is more important for Millennial and Gen. Z investors to invest in companies that align with their values rather than their pockets. They want to make a difference and feel purposeful rather than propagate corporate greed and make a profit. Is ESG Investing Profitable? Profitability can be relative. Financially speaking, a fourth grader selling candy bars on the school bus can make a profit. However, buying and selling luxury real estate properties can also make a profit. However, the latter has higher profit potential than the former. When it comes to investing, investors tend to put their money into companies with higher returns on their investment (ROI). Factors to Consider in ESG Investing ESG ratings help investors incorporate a wider range of metrics when choosing where to invest their money. There are both internal and external factors that can influence an investor’s decision to add a company to their portfolio. Financial profitability is not the only factor in play. Additional factors affecting investment decision-making include: • Demographics: There is a new generation of investors who

are impacting ESG investing. According to Nasdaq.com, this new generation comprises women, millennials, Gen. Z’ers, and those “underrepresented” cultural minorities. Their priorities differ from previous generations, desiring their money to support companies that align with their beliefs on ESG progress, rather than those promising high ROI. • Economic Stability: Changes in the stability of the economy impacts investors’ priorities. An article in the Harvard Business Review states that investments

in highly rated ESG funds performed more poorly compared to lower rated funds. This can influence investors in a weaker economy to focus on ROI rather than on ESG ratings. Pressures from rising interest rates, slow post-COVID economic recovery, and global economic challenges, such as the Russia/Ukraine war, may reduce investor confidence, prioritizing higher ROI’s over high ESG rates. • Public Perception: There is pressure to conform to a changing culture and resistance can negatively impact a company’s

ESG Investing is Typically Less Profitable As mentioned above, highlyrated ESG companies tend to be less profitable than lower rated companies. Looking at Investors. com rating of the top 100 ESG companies as of August 2023, of the companies with the greatest return on equity (ROE), only three of the top twenty companies have a “top ten” ESG rating. The average ROE of top ten ESG companies is 38.3% compared to the rest averaging about 50.5% ROE.

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regulations.” A broken ratings system destroys investor confidence in ESG ratings and hurts companies with actual ESG-positive policies.

ESG Can Be Less Stable Additionally, the current global economic headwinds and geo-political unrest may be forcing investors to change their focus, placing financial profitability over ESG. Depending on the investor, High ESG ratings may not be enough to compensate for lower returns. Investing in ESG conscience companies help strengthen the importance of ESG policies. If companies with low ESG ratings are losing investors to those with high ESG ratings, they may be inclined to change their corporate policies. Is ESG Investing Facing Extinction? It may depend on who you ask. It would seem ESG investing is declining. However, some statistics reveal an increase in ESG in-

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vesting, despite the lower profitability of highly rated ESG companies. It seems social awareness on corporate responsibility keeps ESG investing relevant, despite lower profitability. This new generation of investors is leading the way to reforming the corporate and investor mindset. Their outspoken beliefs on socio-ethical and environmental issues are transforming the culture and persuading political positions. In a recent high-profile example, climate protesters attempted to storm Shell’s annual shareholders meeting over its climate strategy, and CEO, Wael Sawan, had to be whisked away by security. Lack of Regulation However, one problem with ESG investing is undermining investor confidence in ESG ratings. These ratings can be misleading due to poor ESG regulations and inadequate ratings, calling for a reformation of the current rating system. The Harvard Business Review (HBR) reports that “companies in the ESG portfolios had worse compliance records for both labor and environmental rules.” HBR also found that “companies added to ESG portfolios did not subsequently improve compliance with labor or environmental

Stay Up-to-Date with the Business of Energy At Shale Magazine, we keep our fingers on the pulse of industry so that our readers can be informed, not influenced. With accurate, fact-based reporting we shed light on issues like ESG investing that matter most to energy industry stakeholders. Stay connected by checking out our latest issues or tuning into our award-winning podcast series, “In the Oil Patch,” with host, Kym Bolado.

About the author: After a career in golf, Joel Dahlenburg worked for nearly a decade in corporate finance in various industries. Currently, Joel teaches as an adjunct professor and enjoys providing content on finances, sports, and other current issues in his spare time.

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ESG Investments May Come at a Premium Furthermore, the Forbes article mentioned above says ESG investors “may be paying a slight premium to invest in funds that are targeting ESG criteria.” This can reduce their ROI and is something to consider when investing. Investors focusing on financial profitability may choose to ignore ESG ratings if they want higher returns.

Is ESG Investing Cyclical? What seems to be a more relevant question is, “Is ESG investing cyclical?” Its lower profitability, cultural pressure, investor demographic, and the economic and political environment all contribute to the fluctuation of ESG investing. It almost seems like ESG investing is a luxury, like cars, rather than a staple, like milk. So, is ESG investing dead? Maybe not. Rather, it may be going through a trough in the cycle. However, to keep ESG ratings accountable and investing progressing, there must be action from both investors and corporations. For the investor, research and profit sacrifice can help support ESG investing. Additionally, growth in ESG investing can drive corporate reform and strengthen the market for it. If more money is being invested in ESG conscious companies, this may set the example for others to strengthen their ESG policies. For the corporation, a re-aligning of the company mission to meet their customers’ needs while also implementing ESG conscious policies may be needed. This updated corporate mission must begin with the company’s leadership if the rest of the company is to adopt an ESG conscious mission.

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BUSINESS

Investing in the Transition is Investing in Oil and Gas As the world transitions to clean and renewable energy sources, oil and gas companies are at the forefront of the effort. Although it’s a popular opinion to disagree, the fact is the majors and supermajors are some of the most staunch supporters and investors in making the transition possible.

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It’s Not What You Think Contrary to what many believe, oil and gas companies are on the front lines of funding and investing in the green movement. As the world transitions to clean energy, renewable resources, and exploring new methods of generating power, it is major oil and gas companies leading the charge and carrying the torch to light the way.

It’s a popular opinion that oil and gas oppose the clean energy movement. Nothing could be further from the truth. It may surprise you that some of the leading investors in clean energy are oil and gas companies. While there are countless examples of oil and gas companies’ significant investment in clean energy, we’ve only highlighted a few here. These

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By: Jess Henley

impactful investments are just the tip of the iceberg with what the majors and other oil and gas companies are currently undertaking in the energy shift. How the Supermajors are Leading the Green Energy Transition The world’s largest and most influential oil and gas companies have taken the helm to steer the green movement forward. Although each one of these companies has made a significant impact on the green movement individually, together, they represent an unbelievable investment force. Major oil companies are some of the most influential money movers in the world. Because of their potential value and financial influence, major gas and oil companies have the power to make a significant impact. It may surprise you to learn that the majors and super majors are using their profits to help fund research, invest in clean energy infrastructure, and lobby to help reduce environmental footprints. Although there are numerous ways the super majors are funding eco-friendly energy ventures, one of the most staggering Investments in recent years is the combined investment in offshore wind energy. Now that offshore wind energy is beyond its infancy stage, supermajors are heavily investing in its expansion. In many ways, the potential for offshore wind energy is vastly untapped as of yet. However, the super majors are making incredible steps to change that for the future. That’s a Trillion, With a T One of the most significant investments the supermajors make toward clean energy is offshore windmills. Over the next few years, the most influential oil and gas companies are estimated to invest upwards of $1 trillion into the renewable energy resource. That number is correct; $1 trillion. This staggering amount of money has the potential to be a game changer for renewable energy projects. The plan is to make this massive investment over the next ten years. Naturally, one of the

attractions of offshore wind energy is its potential opportunity for creating cash margins on par with a per barrel of oil equivalent (BOE). However, as a renewable energy resource, the investment in offshore wind would significantly impact the energy spectrum. Offshore windmills present the opportunity for renewable energy that could potentially deliver up to 25% higher margins than oil. Additionally, the operating costs for offshore windmills are significantly lower than those of deepwater drilling platforms. As big oil companies continue to invest in offshore wind energy projects, the transition to renewable energy is also pushed forward. Gas and Oil Companies Building a Cleaner World Offshore windmills are not the only energy projects oil and gas companies are investing in. On the contrary, big oil plays a heavy role in bankrolling and supporting countless clean energy projects and endeavors. In spite of the criticism that oil and gas companies often receive, they’re responsible for a significant portion of the funding for multifaceted energy projects. British Petroleum (BP) and Shell have taken drastic and consistent steps to transition away from solely fossil fuels. The European companies are making headway toward net-zero goals by reducing their carbon outputs, investing in CO2capturing equipment, and prioritizing clean energy investments. Furthermore, BP representatives say the major energy company made a $1.6 billion investment in low-carbon energy in 2022. BP’s efforts alone constitute a significant step in the shift to clean power. However, other companies have been instrumental in investing in the transition on several energy frontiers. Resilient Hydrogen One such exciting energy investment on the horizon is further research and development of hydrogen fuel. Green Hydrogen has much fewer emissions than tradi-

Major oil companies are some of the most influential money movers in the world.

tional energy sources like coal and fossil fuels. Green hydrogen can be developed through renewable resources, like solar and wind power, to separate water molecules into fuel. This process is known as electrolysis and presents exciting new possibilities for low-emission energy production. Recently, Congress passed the Inflation Reduction Act, which could make it much easier for companies to invest in green hydrogen capabilities. This opens the door for major oil and gas companies to play a more active role in supporting the clean energy source. In fact, Congress estimates they will see $369 billion invested in renewable energy and climate change. The movement towards hydrogen fuel represents a significant step forward for the United States’ energy production and the shift towards clean energy. Bioenergy Bioenergy is a relatively new frontier for eco-friendly. The concept is derived from harnessing the potential in recently living organisms, like plants, and converting it into a viable fuel source. Typically, the waste from plants such as corn, wood, and food crops is harvested and repurposed to create biofuel or bioenergy. This is classified as a renewable resource that could produce sustainable energy. ExxonMobil has made a significant investment in biofuel research to advance the technology and methodology necessary for harvesting the potential of bioenergy. ExxonMobil invested $250 million in biofuel research in the last decade, making it one

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of the largest investors in recent years. As the global energy demand continues to rise, the benefits of major oil companies investing in bioenergy and renewable energy resources cannot be understated or more timely. Creating Lower-Emissions Fuel The demand for personal transportation has increased dramatically since the 90s. The greater the demand for personal transportation, the more fuel is needed. So one way gas and oil companies are doing their part in the green transition is to create lower-emission fuels to meet the demand of global commuters. In particular, ExxonMobil has made great advances in producing eFuel, an energy source that is said to reduce emissions by up to 85%. By replacing traditional fuel with eFuel, vehicles can significantly reduce their CO2 emissions and lessen their impact on climate change. This advanced fuel system is in partnership with ExxonMobil’s biofuel research, advanced testing of lower carbon resources, and commitment to making a positive impact.

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Working Together for the Benefit of Us All One aspect to consider that is truly remarkable is the cooperation the energy world is seeing between major oil firms. When considering the fact that the majors and supermajors are putting forth a collective effort to press toward clean energy represents a greater mentality of collaboration. “Big Oil” (which, with recent events, is growing into something of a misnomer) is sending the message that together we can accomplish more, go further, and succeed beyond what any individual could. Though there have been many difficulties on the journey, we are seeing a brighter future through the collaborative help of the supermajors. Transition Takes Time One of the resounding criticisms of Big Oil has been the pace at which they are making the energy transition. However, it is essential to remember that change takes time. The power demand is such that we still rely heavily on traditional fuel sources to supply our energy. However, every step to lowering emissions, helping the environment, and investing in new tech is a step toward the ultimate goal.

Gain Energy Insight With Shale Magazine Shale Magazine remains committed to briShale Magazine remains committed to bringing you the latest, most accurate info on the energy transition. Our team of writers is dedicated to the truth and facts about what you need to know. When you need applicable intel on the rises and falls of energy investment, our keen reporters have you covered. Check out our latest blog posts to stay in the know. Or, give a listen to our award-winning podcast, In the Oil Patch, for on-the-go oil and energy updates. About the author: Jess Henley began his career in client relations for a large manufacturer in Huntsville, Alabama. With several years of leadership under his belt, Jess made the leap to brand communications with Bizwrite, LLC. As a senior copywriter, Jess crafts compelling marketing and PR content with a particular emphasis on global energy markets and professional services.

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Renewable Energy Renewable energies, like solar and wind power, have long been thought of as the first steps toward the green transition. Harnessing these forms of energy production has been on the horizon for several major oil and gas companies for some time. In addition to making significant investments in research and development of technologies, the supers have made great strides towards utilizing renewable energy in their operations. One such example of a major oil company utilizing renewable energy is Shell’s promotion of the Houston Dash Stadium, using nothing but renewable energy. This represents a significant step forward in harnessing the power of renewable energy. The massive amount of power necessary for maintaining and operating an entire soccer stadium is staggering. The fact that the Shell powered arena as a whole utilizes clean energy in itself is a remarkable achievement. Shell’s contribution is just one of the many ways major oil companies are driving the transition to clean energy. Major oil and gas companies are putting their money where their mouth is and exemplifying the use of clean energy in countless projects.

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BUSINESS

Integrated Knowledge Management – A Shortcut for Enhancing Drilling Efficiency and Reducing Emissions Special to SHALE

he drilling & completion (D&C) operation is among the most intricate and critical operations of the oil and gas industry, involving diverse disciplines, technologies, and contributors. All these D&C activities require meticulous planning, implementation, and surveillance. The D&C team includes various participating groups like rig providers and operators, services providers, contractors, and regulators. Collaborative efforts among stakeholders can lead to success in the (D&C) operations, leveraging their expertise and years of experience. However, the fragmented and inefficient approach often prevails, causing the loss of integration and collaboration spirit. It results in failures, delays, and cost overruns. Due to the fluctuating oil prices and highly volatile market conditions since the 2015 downturn, oil and gas companies prioritize improving efficiency and maximizing stakeholder return on investment (ROI) over investing in new projects. The D&C cost for any project is estimated to account for 50 percent of capital in an operator’s exploration and production (E&P) budget. Hence, operators always seek ways to reduce the D&C cost to improve the project’s economics. While utilizing the best technology for D&C projects, the best technology is expensive and increases capital expenditures. Therefore, prioritizing the utilization of appropriate fit-for-basin technologies becomes crucial to achieve the commercial success of any D&C. Now the question arises - what is fit-for-basin technology? How to identify this fit-for-basin technology? Further, how to optimize the new technology implementation? The answer to these questions lies in utilizing the learning curve. Here’s what every D&C project needs to take from the integrated knowledge management process to maximize efficiency with

minimum capital expenditure. This article will explore the importance of knowledge management and its elements to determine how it drives efficiency, performance, safety, and reduced emissions. Integrated Project Management Methodology Figure 1 illustrates the Project Management methodology to execute the D&C Project. This methodology is inspired by Project Management Process groups developed and published by the PMI (Project Management Institute). Components of Integrated Knowledge Management The integrated lesson learned, or knowledge management, is a crucial process comprising 8 interlinked steps. Here’s a breakdown of each step: 1. Promoting Collaboration and Communications Collaboration and communication among the project team members play a vital role. Here, the project manager is responsible for providing the right collaboration platform, enabling the team to share information, insights, and experiences in real time. It enhances their decision-making and problemsolving abilities. By removing the silos and fostering a culture of collaboration, the oil and gas operators can tap into their team’s collective intelligence and drive continuous improvement. Regular team meetings, preferably face-to-face, help foster a collaborative team environment.

Figure 1

2. Effective Data Management D&C operation generates a massive database ranging from subsurface data to drilling data. In the current age of the data-driven

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world, capturing and managing data is essential. For this, multiple solutions, such as MDTotco, Rigsense, DrillOps, etc., are available in the D&C industry. The next step is to analyze the data and generate insights. 3. Creating and Modifying Standard Operating Procedures Standard operating procedures (SOPs) involving safety protocols, best practices, and step-by-step guidelines are the building blocks of the D&C Program. SOPs provide a standardized framework for various D&C-related activities, equipment, and tools. These resources ensure consistency and efficiency in operations and adherence to industry regulations. However, regular modification is required based on the previous lesson learned as captured in After Action Reviews (AAR). 4. Capturing Lessons Learned One of the most vital steps of the knowledge management process is to capture the lesson learned, executed at the end of each section. Otherwise, the chances of losing the lesson learned are high due to the D&C operation pace. The project manager should foster the habit of capturing lessons learned by each team member and ensure conducting After Action Review (AAR) after each session to identify the most impactful action items. Some lessons may demand immediate action, while others are far-sighted. Furthermore, some of them may require introducing new equipment, adding cost to the project to ensure the well’s safety & integrity. 5. Adopting the Technology In the digital transformation era, knowledge management in D&C operations must embrace technological advancements. Data analytics, artificial intelligence, machine learning, and automation tools have immense potential in extracting insights from D&C data, predicting operational outcomes, and optimizing D&C processes. These technologies can help organizations enhance efficiency, decrease costs, mitigate risks, and innovate in their D&C operations. Predictive analytics can help identify potential drilling risks or equipment failures in advance, alerting teams to take proactive maintenance steps and improve safety. Multiple tools available in the market employ ML and AI to predict risks such as stuck pipes, mud losses, rig equipment failures, etc. 6. Building a Knowledge Database Creating a centralized knowledge database is a treasure trove of technical documents, research papers, case studies, drilling reports, risk assessments, and lessons learned. Personnel involved in D&C operations can utilize these repositories to gain insights, learn from previous experiences, and access critical knowledge when needed. It enhances decision-making, problem-solving, and innovation. Every major oil and gas company has heavily invested in building knowledge databases. 7. Continuous Improvement Knowledge management is an ongoing continuous improvement process and not a one-time effort. Organizations can identify areas for improvement and implement corrective actions with the help of data captured and lessons learned. It allows organizations to learn from project successes and failures. It also helps them adapt to changing market conditions and prioritize technological advancements. Learning Curve A sigmoid curve signifies the most prominent relationship between learning efforts and performance in the learning curve theory.

The learning curve has 4 phases – latent phase, rapid learning rate, inflection point, and asymptotic learning. The latent learning phase happens during the initial stages of a project when the team is either starting anew or is inexperienced. It coincides with the team’s forming and storming phase with multiple activities that might not appear coherent immediately. A collaborative team will outperform this latent phase than a non-collaborative one, advancing to the norming phase early. Here the project manager’s role becomes crucial to help teams collaborate by conducting team-building activities and regular meetings. The rapid learning starts after teams transition to the norming phase, propelling them swiftly into the performing stage. In this phase, the overall performance shows daily increments, especially in repeated tasks. It helps teams become efficient in routine jobs such as making drill pipe and casing connections, BOP N/U and N/D, Bottom Hole Assembly (BHA) makeup and lay down, etc. They also develop local fieldrelated procedures by capturing regular lessons learned and conducting AARs. However, this rapid learning phase does not last very long, and the team eventually reaches a point where pushing for further performance improvement becomes difficult. Hence, further performance improvement requires a change in technology or methodology. But bringing change in technology or methodology requires teams to go through a similar learning curve again. For an informed decision, the project manager must perform a cost-benefit analysis deciding whether to introduce a new technological framework to increase the maximal performance or shift the inflection point. Conclusion The integrated knowledge management process can significantly improve the performance of the D&C Project by optimizing the learning curve and reducing the demand for capital expenditure. Since drilling efficiency is inversely proportional to the drilling emission, it can lead organizations closer to sustainability. At the core of this process lies the human factor. People excel at learning from previous actions and mistakes. To help the project, the project manager should provide the proper tools and techniques and implement the knowledge management framework with assigned responsibilities.

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LIFESTYLE

SWEAT TO SUCCEED: THE LINK BETWEEN PHYSICAL FITNESS AND SUCCESS By: Jess Henley

hat's the first thing you think of when you hear the word "success?” While your mind likely goes to financial success, there's much more to it than that. As any entrepreneur or business person knows, success comes from a long journey of dedication, resilience, and balance. While most focus on the strategic side of success, exercise is one of the most powerful tools that is often overlooked. The relationship between physical fitness and success can be the missing link to finding a balanced lifestyle. Beyond its physical benefits, exercise plays a pivotal role in the mental fortitude and resilience of truly successful people. Physical Health Shouldn’t Be An Afterthought, But the Foundation In the pursuit of financial success, many focus primarily on the business and investment side, sometimes to the detriment of their physical health. Think about how many hours in the day you spend sitting or being physically inactive. It's probably most of the workday for many professionals. However, physical exercise is a foundational principle for a successful, balanced life. Being more physically fit leads to a multitude of benefits that can have real-world effects on your business success. Instead of considering your physical fitness as a small part of your daily routine, exercise should be the foundation on which you build the rest of your mentality, work ethic, and, ultimately, your success. Business Benefits of Physical Exercise • Sharpen the Mind: Physical exercise is proven to improve mental clarity and fortitude. As any executive, investor, or entrepreneur knows, mental acuity is pivotal for cultivating success.

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• Mitigating Stress: Exercise helps relieve stress by “pumping up your endorphins” and improving your overall mood. In the professional work environment, anything to help relieve stress and improve your outlook can be a game changer for your success. • Improved Relationships: It may surprise you that exercising can actually improve your relationships. With elevated mental clarity and lower stress, it seems you'll be more likely to maintain and form successful relationships. • Growing Confidence and Self-Esteem: According to CrossFit Fit Lab, being in shape leads to self-confidence, which is a pivotal component of leadership. • Cultivating a Healthy Balance for Longevity: Being physically fit lays the foundation for longevity in business. Maintaining this balance of physical health and work gives you valuable tools to succeed. Naturally, there are several more benefits of staying physically healthy. Not only will you reap the physical benefits, but also the mental and social benefits of maintaining a healthy lifestyle. Stay Sharp With Shale Whether you're a financial investor, an energy connoisseur, or a savvy observer, stay in the know with Shale Magazine. Our dedicated reporting staff digs deep to find the inside scoop on real-world issues that affect your finances, energy consumption, and investment. Check out our blog posts for on-the-go information on current economic and energy events.

THE RELATIONSHIP BETWEEN PHYSICAL FITNESS AND SUCCESS CAN BE THE MISSING LINK TO FINDING A BALANCED LIFESTYLE.

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SOCIAL

Practical Steps To Leverage LinkedIn for Business Promotion By: Jess Henley IN TODAY'S RAPID-PACED online society, few tools are as valuable to your business as LinkedIn. Since 2003, LinkedIn has become a powerhouse for networking, business promotion, career advancement, and more.

1/ Optimize Your Profile and Business Page The first step to creating a successful LinkedIn page is strategically positioning it strategically. Strategically optimizing your LinkedIn page involves a professional profile photo, SEO-minded materials, strategic keywords, and company page optimization. Ensure your company page provides the relevant information potential clients need to connect with your business. 2/ Stock You Content Content is King. Your LinkedIn page should be filled with blog posts, articles, thought leadership, and consistent material that engages and delights your audience. Every piece of content you publish on your LinkedIn page is an opportunity to connect with professionals and potential clients. If you struggle to maintain a consistent content flow, consider hiring a copywriting agency to help keep your audience hungry for more quality content. 3/ Use Your Network to Your Advantage Let's be frank: LinkedIn is not Facebook or Instagram. While it is a networking platform, the connections you make in your network should be strategic and thoughtful. While utilizing other social media platforms to connect with everyone you know is fine, your LinkedIn should be more selective and strictly used for work relations and potential contacts for your business. 4/ Showcase Testimonials and Client Experiences Testimonials, reviews, and genuine client experiences are powerful weapons in your

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Utilize LinkedIn ads to draw traffic to your website, get your organization noticed, and engage your audience. arsenal. Use your clients' experiences to your advantage and consistently provide updated content reviews. If a client had an exceptional experience and communicated their gratitude to you, encourage them to leave a review that can be used to encourage others to have the same experience. 5/ Leverage LinkedIn Ads and Analytics As with any social network, advertisements are pivotal to a thriving and valuable LinkedIn page. Utilize LinkedIn ads to draw traffic to your website, get your organization noticed, and engage your audience. Once you've circulated ads and promotions, utilize LinkedIn's analytics platform to monitor the success and engagement of your promotional materials. 6/ Maintain Consistency Nothing will kill the success of your LinkedIn page faster than inconsistent or unmaintained content. Your LinkedIn page is a valuable asset that needs proper care and constant material to be successful. In today's fast-paced digital landscape, consistency and

up-to-date materials are paramount. Don't let your material grow stale for your audience; post thought leadership content regularly. Don’t Miss a Beat with Shale Magazine At Shale Magazine, we are dedicated to uncovering the truth behind the stories. We cover the unfolding events that affect your finances, energy consumption, and investments. Never the story by subscribing to Shale Magazine.

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But just how can you tap into the vast potential of this professional networking site? The practical steps to taking advantage of all that LinkedIn offers may be simpler than you think. Here are a few ways you can leverage LinkedIn for your business promotion.

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