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Stephen Stapczynski Profile picture
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Mar 13 • 6 tweets • 2 min read
Biden is under pressure to invoke Cold War-era powers to force more domestic oil production and tame prices 🇺🇸 ⛽️

The President could compel drilling rigs to deploy using the 1950 Defense Production Act, which Truman used to make steel for the Korean War

bloomberg.com/news/articles/…
The power wouldn’t directly mandate drilling

The president could invoke the Defense Production Act to ease supply chain problems that are holding back crude production, by ensuring supplies of low-cost pipes, sand and other essential equipment
So far, the Biden administration has shown little enthusiasm for the move

“It would basically be providing money to oil companies to do something that they already probably have the capacity to do,” said White House Press Secretary Jen Psaki
Senator Joe Manchin, an influential Democrat from West Virginia, has urged Biden to wield the DPA to force construction of the Mountain Valley Pipeline to send gas to the east

The pipeline is ~90% complete but has been challenged by environmentalists

bloomberg.com/news/articles/…
Separately, four senators, including Manchin and Lisa Murkowski, an Alaska Republican, on Friday asked Biden to use the act to accelerate production of lithium-ion battery materials needed to power electric vehicles

bloomberg.com/news/articles/…
The Biden admin has so far resorted to imploring the oil industry to increase production, casting it as a patriotic duty in wartime

But companies/investors are wary of boosting crude for a year from now, when prices are see falling below current highs

bloomberg.com/news/articles/…

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More from @SStapczynski

Stephen Stapczynski Profile picture
Mar 13
Finland started its first new nuclear reactor in more than 40 years on Saturday ☢️ 🎉

> Olkiluoto-3 opens after more than a decade of delays
> The unit cost $6.4 billion, but will help Finland reduce expensive power imports from countries like Russia

bloomberg.com/news/articles/…
Finland imports about a fifth of its power, with flows from Russia peaking at about 15% of consumption in 2009

Swedish supplies became more prominent after a change in Russian export tariffs a decade ago
Once set to be the world’s biggest reactor, the 1,600 MW Olkiluoto-3 facility became a poster child of a nuclear industry promoting itself as a stable and clean power source

Construction began in 2005, but huge cost overruns and disputes saw the start delayed many times
Read 4 tweets
Stephen Stapczynski Profile picture
Mar 12
South Korea’s Jeju island is a net-zero cautionary tale 🇰🇷🌳

A decade ago, it set a goal to become independent of fossil fuels by 2030

But halfway through, Jeju is way behind. Emissions rose and it isn’t producing enough clean energy

@HEESU_LEE

bloomberg.com/news/features/…
But there may be at least as much to learn from failure as from success 💡

These are Jeju’s two biggest sources of rising CO2 emissions:

1) Gasoline-powered vehicles, which accounted for nearly 37% in 2019

2) Fossil fuel-based power generation, which contributed 26%
To tackle gasoline vehicles, Jeju island encouraged EV adoption and more sources of renewable power. The government provided subsidies and tax breaks

It assumed that an increase in both would crowd out traditional cars and fuel. It hasn’t, and gas-powered cars has increased 🚗
Read 9 tweets
Stephen Stapczynski Profile picture
Mar 11
The tycoon whose big short bet on nickel helped trigger a historic spike in prices doesn't want to reduce his position 🪙

LME was forced to halt nickel trading on Tuesday, and it won't restart until at least next week. It'll be interesting when it does

bloomberg.com/news/articles/…
Nickel had a crazy week

The London Metal Exchange suspended trading in nickel on Tuesday morning after this dramatic price spike 👇

A Chinese tycoon built a massive short position in nickel futures, then it was squeezed

bloomberg.com/news/articles/…
Who is the ‘Big Shot,’ aka Xiang Guangda, behind nickel’s bad short?

bloomberg.com/news/articles/…
Read 7 tweets
Stephen Stapczynski Profile picture
Mar 11
Uranium prices surged the highest since the 2011 Fukushima disaster on Russia supply concerns
📈☢️

Prices rose to $59.75/lbs, highest since March 2011, when meltdowns at Fukushima sent shockwaves through the nuclear industry and dashed uranium demand

bloomberg.com/news/articles/…
The White House is considering sanctions on Russia’s state-owned atomic energy company, Rosatom, intensifying concerns over disruptions to uranium exports from Russia

Rosatom and its subsidiaries account for more than 35% of global uranium enrichment

bloomberg.com/news/articles/…
By coincidence, it is the 11th anniversary of the Fukushima crisis

english.kyodonews.net/news/2022/03/5…
Read 4 tweets
Stephen Stapczynski Profile picture
Mar 10
Europe's plan to quit Russian natural gas is setting up a global fight for LNG 🇪🇺🥊

The EU aims to boost LNG imports by as much as 37 million tons this year (!), far outstripping supply

Asia and Europe will battle for spare LNG cargoes like never before

bloomberg.com/news/articles/…
So what does this mean? Higher spot prices for longer

“Europe will need to bid these cargoes away from Asia,” said Nikos Tsafos of CSIS. “But what does a bidding war look like when spot prices are already above $50? I have no idea.”
To be sure, Europe's plan to quit Russian natural gas is full of obstacles

Its import terminals are working near max-capacity, and it will require additional FSRUs to take a large jump in deliveries

bloomberg.com/news/articles/…
Read 5 tweets
Stephen Stapczynski Profile picture
Mar 9
European natural gas slumps as the bloc's government remains reluctant to sanction Russian supplies 📉📉

🇪🇺 Benchmark futures fell as much as 21%. But they're still way more expensive than normal
🇷🇺 Russian shipments are currently running as normal

bloomberg.com/news/articles/… Image
Looks like traders arent too worried about this...

But watch out for Asian demand…

🇯🇵 Japan LNG inventories held by utilities slumped to the lowest level since Dec 2020. They may be eager to snatch up more cargoes to refill storage
Read 5 tweets

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