Good morning; here's what the Oilman has for you today:

• Brace Up for Summer Blackouts

• Shale for the Win: U.S. Leads Surge in Oil, Gas Investments

• Tweet of the Day

Brace Up for Summer Blackouts

Remember the rolling blackouts in California two years ago? Now these may be coming to most of the country courtesy of grid reforms.

The North American Electric Reliability Corp. has warned that the combination of peak demand and supply shortfalls may lead to blackouts across the U.S. West, Midwest, Texas, Southeast, and New England.

What is wrong with the grid?

It’s actually pretty simple.

Coal and gas-fired power plants are being put out of commission faster than their replacements are coming online.

To make things more interesting, these replacements are typically wind and solar, neither of which works 24/7.

The industry calls it baseload, and it’s vital for our reliable electricity supply.

Coal and gas plants provide a baseload.

With fewer coal and gas plants, we have less baseload.

It really is as simple – and as dumb – as this.

Because of that dumbness, NERC is saying:

“A combination of extreme peak demand, low wind, and high outage rates from thermal generators could require system operators to use emergency procedures, up to and including temporary manual load shedding.”

“Load shedding” is a polite way of saying “blackout”.

What do we do?

We buy generators; that’s what we do.

If you can afford them.

Because this is not going to get better.

It’s actually going to get much worse (and fast) if the administration continues pushing its transition agenda unopposed.

Which it will if this EPA proposal for stricter emission rules for coal and gas generation is passed.

Look at Germany, with all its wind and solar, and how much LNG it’s importing.

China has the world’s biggest wind and solar capacity and yet it is building coal power plants like there’s no tomorrow.

Baseload matters. Without baseload from fossil fuels and nuclear, we get blackouts.

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Shale for the Win: U.S. Leads Surge in Oil, Gas Investments

Oil and gas investments soared by $140 billion last year and so far this year, led by U.S. shale.

That’s according to a report from Rystad Energy, which said that investments in U.S. shale had surged by $80 billion.

When push comes to shove, security trumps emissions

The driver behind that massive increase in spending on oil and gas was energy security concerns.

Following Russia’s invasion of Ukraine, the world apparently woke up and smelled the NatGas.

Suddenly, a whole lot of energy supply was not guaranteed.

No wonder investments in finding additional supply increased…

Especially since the demand for hydrocarbons is seen rising too.

It is rising so fast that oilfield service providers couldn’t catch up with it, Rystad says.

In case you were wondering about that inflation in the shale patch, there you have it.

Will the surge hold?

A lot of people in important positions don’t want it to hold.

A lot of people would do their best to put an end to it.

But their best will not be good enough because when it comes to energy security, nothing else matters.

Literally.

Unless, of course, you’re a fan of the Middle Ages and don’t mind going back to those wonderful times.

The thing is that most people are not fans of the Middle Ages.

Most people are fans of the Industrial Age.

And that means demand for energy will hold—and with it, demand for oil and gas.

It’s either that or totalitarian transition rule for all. And that’s definitely not happening.

Around the Global Patch

🇮🇶 Iraq asks Turkey to resume Kurdistan oil transport from Saturday.
🇸🇾 Syria returns to Arab league After 12-Year hiatus.
🇷🇺 Russian forces retreat from Bakhmut.

Tweet of the Day

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