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• UK Wants To Import Solar Power from… the Sahara

• Shale Moves into Long-Term Survival Mode

• Upcoming Oil and Gas Events

• Tweet of the Day

UK Wants To Import Solar Power from… the Sahara

The UK has moved to fast-track a project for the import of solar power from Morocco.

The project will rely on the longest subsea cable in the world.

Oh, and it will cost about $24 billion.

Talk about a massive gamble

The Xlinks project is led by a former executive with supermarket chain Tesco.

It will involve the construction of 7 GW of solar capacity and 3.5 GW of wind capacity in the Moroccan part of the Sahara.

This will work, per the leader, Sir Dave Lewis, because “The sun shines every day there, and the wind blows every evening.”

It won’t even need batteries!

Now, from the Sahara, this apparently uninterrupted electricity flow will go into a 3,800-km cable and reach the UK.

3,800 km is about 2,400 miles.

The technology to build such a cable exists, we are being told.

Though nobody mentions losses along the way.

Who cares about these if “The sun shines every day there and the wind blows every evening.”

It could work… but only if the price is right

Xlinks sounds no doubt magnificent, but it won’t take off unless the UK’s government agrees to cough up a fixed price for the electricity…

Under a 25-year contract.

And the fixed price Xlinks wants is higher than the price for solar and wind power currently getting paid by that same government.

So, we have to wonder: why would any government agree to a higher price and for such a long contract term?

Well, with offshore wind in the doldrums, something’s got to save the transition.

Why not a 2,400-mile cable from a yet-to-be-built wind and solar farm in the Sahara?

History knows even crazier projects, like the whole concept of green hydrogen.

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Shale Moves into Long-Term Survival Mode

WTI is trading above $90, but nobody is rushing to add rigs in the shale patch.

The growth era is over. U.S. shale has settled into the long game of industry survival.

Even $100 per barrel is no incentive

Nobody would have believed it just three years ago.

WTI could rise to $100 per barrel, and shale drillers would still not lift a finger to boost drilling.

At least not in any meaningful way.

Apparently, they’ve developed a taste for healthy profits and happy shareholders.

They also don’t care much for the federal government’s energy policies.

Keeping production stable without a lot of investment in growth is a way to minimize the risk of any fallout from these policies.

A fundamental change in global supply balance

Up until three years ago, U.S. shale was the counterweight to OPEC.

When OPEC cut output to push prices higher, U.S. shale boosted output.

Meanwhile, we also became a major exporter of oil…

And we still are, but now this is draining our inventories.

And there’s no rising output to fill these up.

The counterweight to OPEC is pretty much gone.

It’s not very hard to see what the implications of that would be.

And here comes the White House planning a grand total of four—that’s four, not fourteen—offshore lease sales for the next five years.

Upcoming Oil & Gas Events

• October 1-5: 2023 SGA GMRC Gas Machinery Conference, Phoenix, AZ

• October 2: Energy Capital Conference 2023, Statler Hotel, Dallas TX

• October 2-6: SPE Gulf Coast Section-Electric Submersible Pumps, The Woodlands, TX

• October 8-10: New Mexico Oil & Gas Association Annual Meeting, Santa Fe, NM

• October 12: Arkansas Independent Producers & Royalty Owners Association Annual Meeting, Little Rock, AR

• October 12: Indiana Oil & Gas Association Annual Meeting, New Harmony, IN

• October 12: Oklahoma Oil and Gas Expo, Bennet Event Center, Oklahoma City, OK

Around the Global Patch

🇮🇳 India's Russian crude oil imports rebound.
🇮🇷 Iran, Venezuela, and Syria signed a historic oil refinery agreement.
🇷🇺 Pakistan welcomes first Russian crude oil shipment.

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