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Oil prices could climb higher despite the U.S. and other major consumers releasing millions of barrels of oil from their reserves to try to keep energy prices down, one analyst told CNBC.

“It’s not going to work simply because the strategic petroleum reserve — any country’s strategic petroleum reserve is not there to try to manipulate price,” Stephen Schork, editor of the Schork Report, said Wednesday on CNBC’s “Squawk Box Asia.”

Strategic petroleum reserves exist only to offset short-term, unexpected supply disruptions, he explained.

“There’s a considerable amount of bets out there that we will see $100 a barrel oil,” Schork said, adding it could happen as early as the first quarter of next year, especially if there is a cold winter in the Northern Hemisphere.

Calming oil prices

Oil prices have jumped more than 50% this year, with demand outstripping supply as more countries emerge from national lockdowns and severe restrictions imposed since last year due to the pandemic. Resumption of international travel as more nations re-open borders is also boosting jet fuel demand.

Global benchmark Brent surpassed the psychologically key threshold of $80 per barrel in October and prices have held near that level. As of Wednesday afternoon in Asia, the international contract traded near $82.50.

It is a clear sign of desperation that this is the only tool in the box and it is not going to work.
Stephen Schork
editor of the Schork Report

U.S. President Joe Biden announced Tuesday that the U.S. will release 50 million barrels from its reserves as part of a global effort by energy-consuming countries to calm the rapid rise in fuel prices. Of that total, 32 million barrels will be an exchange over the next few months, and 18 million barrels will be an acceleration of a previously authorized sale.

Other countries that made the joint commitment include China, India, Japan, South Korea and the United Kingdom.

So far, the U.K. has agreed to release about 1.5 million barrels while India committed to 5 million barrels. China, Japan and South Korea have yet to announce specific numbers.

“We are talking 50 million barrels coming out of the United States, potentially another 50 from our partners. That’s 100 million barrels of oil — that is one day’s worth of a global demand for crude oil,” Schork said.

Vivek Dhar, a mining and energy commodities analyst at the Commonwealth Bank of Australia, was more conservative in his estimates. He predicted in a Wednesday note that the number of barrels released by the six oil-consuming countries could amount to “just north of 70 million,” as the release of oil stockpiles from the other countries may be “relatively tame.”

The world consumed 97.53 million barrels of oil per day this year, up from 92.42 million barrels a day in 2020, according to the U.S. Energy Information Administration. In 2022, that figure is set to rise to 100.88 million barrels a day.

“It is a clear sign of desperation that this is the only tool in the box and it is not going to work. I do believe the market will call the U.S.’s bluff on this and we’re likely to see higher prices rather than lower prices one month from now,” Schork said.

Under such conditions, countervailing moves by each side are likely to lead to increased volatility, producing seesawing oil prices and added uncertainty.
Eurasia Group

The U.S. should consider bringing American producers to the table and ask them to ramp up output to offset the supply imbalance, he added.

Commonwealth Bank’s Dhar said a rebound in oil prices on Tuesday indicated that “markets were underwhelmed with the co-ordinated release of strategic oil reserves.”

Showdown with OPEC+

The latest development came after OPEC and its oil-producing allies decided not to pump more oil despite crude prices climbing to multi-year highs and U.S. pressure to help cool the market.

Under its current output plan, the group, known as OPEC+, will gradually increase oil production by 400,000 barrels per day each month. They are due to meet again next month.

Oil well pump jacks operated by Chevron Corp. in San Ardo, California, U.S., on Tuesday, April 27, 2021.
David Paul Morris | Bloomberg | Getty Images

“There have, as of yet, been no signs that OPEC+ is reconsidering its plan,” Eurasia Group analysts said in a note dated Nov. 22, prior to Biden’s announcement overnight. A large-scale stock release by oil consumers before OPEC+ meets may prompt a countermove by the group, resulting in a “disruptive standoff,” they said.

“Under such conditions, countervailing moves by each side are likely to lead to increased volatility, producing seesawing oil prices and added uncertainty,” the Eurasia Group analysts said.

“This would neither alleviate consumer price pressure nor give producers the required stability to ensure steady and reliable supply to a global economy that is still grappling with the worst pandemic in a century,” they added.

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Caterpillar is putting MASSIVE 240-ton electric haul truck to work in Vale mine

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Caterpillar is putting MASSIVE 240-ton electric haul truck to work in Vale mine

Mining company Vale is turning to Caterpillar to provide this massive, 240-ton battery-electric haul truck in a bid to slash carbon emissions at its mines by 2030.

Caterpillar and Vale have signed an agreement that will see the Brazilian mining company test severe-duty battery electric mining trucks like the 793 BEV (above), as well as V2G/V2x energy transfer systems and alcohol-powered trucks. The test will help Vale make better equipment choices as it works to achieve its goals of reducing direct and indirect carbon emissions 33% by 2030 and eliminating 100% of its net emissions by 2050.

If that sounds weird, consider that most cars and trucks in Brazil run on either pure ethyl alcohol/ethanol (E100) or “gasohol” (E25).

“We are developing a portfolio of options to decarbonize Vale’s operations, including electrification and the use of alternative fuels in the mines. The most viable solutions will be adopted,” explains Ludmila Nascimento, energy and decarbonization director Vale. “We believe that ethanol has great potential to contribute to the 2030 target because it is a fuel that has already been adopted on a large scale in Brazil, with an established supply network, and which requires an active partnership with manufacturers. We stand together to support them in this goal.”

Vale will test a 240-ton Cat 793 battery-electric haul truck at its operations in Minas Gerais, and put energy transfer solutions to a similar tests at Vale’s operations in Pará over the next two-three years. Caterpillar and Vale have also agreed to a joint study on the viability of a dual-fuel (ethanol/diesel) solution for existing ICE-powered assets.

Vale claims to be the world’s largest producer of iron ore and nickel, and says it’s committed to an investment of between $4 billion to $6 billion to meet its 2030 goal.

Cat 793 electric haul truck

During its debut in 2022, the Cat 793 haul truck was shown on a 4.3-mile test course at the company’s Tucson proving grounds. There, the 240-ton truck was able to achieve a top speed of over 37 mph (60 km/h) fully loaded. Further tests involved the loaded truck climbing a 10% grade for a full kilometer miles at 7.5 mph before unloading and turning around for the descent, using regenerative braking to put energy back into the battery on the way down.

Despite not giving out detailed specs, Caterpillar reps reported that the 793 still had enough charge in its batteries for to complete more testing cycles.

Electrek’s Take

Caterpillar-electric-mining-truck
Cat 793 EV at 2022 launch; via Caterpillar.

Electric equipment and mining to together like peanut butter and jelly. In confined spaces, the carbon emissions and ear-splitting noise of conventional mining equipment can create dangerous circumstances for miners and operators, and that can lead to injury or long-term disability that’s just going to exacerbate a mining operation’s ability to keep people working and minerals coming out of the ground.

By working with companies like Vale to prove that forward-looking electric equipment can do the job as well as well as (if not better than) their internal combustion counterparts, Caterpillar will go a long way towards converting the ICE faithful.

SOURCES | IMAGES: Caterpillar, Construction Equipment, and E&MJ.

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Argonne Nat’l Lab is spending big bucks to study BIG hydrogen vehicles

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Argonne Nat'l Lab is spending big bucks to study BIG hydrogen vehicles

Argonne National Laboratory is building a new research and development facility to independently test large-scale hydrogen fuel cell systems for heavy-duty and off-road applications with funding from the US Department of Energy.

The US Department of Energy (DOE) is hoping Argonne Nat’l Lab’s extensive fuel cell research experience, which dates back to 1996, will give it unique insights as it evaluates new polymer electrolyte membrane (PEM) fuel cell systems ranging from 150 to 600 kilowatts for use in industrial vehicle and stationary power generation applications.

The new Argonne test facility will help prove (or, it should be said, disprove) the validity of hydrogen as a viable fuel for transportation applications including heavy trucks, railroad locomotives, marine vessels, and heavy machines used in the agriculture, construction, and mining industries.

“The facility will serve as a national resource for analysis and testing of heavy-duty fuel cell systems for developers, technology integrators and end-users in heavy-duty transportation applications including [OTR] trucks, railroad locomotives, marine vessels, aircraft and vehicles used in the agriculture, construction and mining industries,” explains Ted Krause, laboratory relationship manager for Argonne’s hydrogen and fuel cell programs. “The testing infrastructure will help advance fuel cell performance and pave the way toward integrating the technology into all of these transportation applications.”

The Hydrogen and Fuel Cell Technologies Office (HFTO) of DOE’s Office of Energy Efficiency and Renewable Energy is dedicating about $4 million to help build the new Argonne facility, which is set to come online next fall.

Electrek’s Take

Medium-sized Hydrogen FC excavator concept; via Komatsu.

It’s going to be hard to convince me that the concentrated push for a technology as inefficient as hydrogen fuel cells has more to do with any real consumer or climate benefit than it does keeping the throngs of people it will take to manufacture, capture, transport, store, house, and effectively dispense hydrogen gainfully employed through the next election cycle.

As such, while case studies like the hydrogen combustion-powered heavy trucks that have been trialed at Anglo American’s Mogalakwena mine since 2021 (at top) and fuel cell-powered concepts like Komatsu’s medium-sized excavator (above) have proven that hydrogen as a fuel can definitely work on a job site level while producing far fewer harmful emissions than diesel, I think swappable batteries like the ones being shown off by Moog Construction and Firstgreen have a far brighter future.

Speaking of Moog, we talked to some of the engineers being their ZQuip modular battery systems on a HEP-isode of The Heavy Equipment Podcast a few months back. I’ve included it, below, in case that’s something you’d like to check out.

SOURCES | IMAGES: ANL, Komatsu, and NPROXX.

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Velocity truck rental adds 47 high-speed truck chargers to California dealer network

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Velocity truck rental adds 47 high-speed truck chargers to California dealer network

Velocity truck rental is doing its part to help commercial fleets electrify by energizing 47 high-powered charging stations at four strategic dealer locations across Southern California. And they’re doing it now.

The new Velocity Truck Rental & Leasing (VTRL) charging network isn’t some far-off goal being announced for PR purposes. The company says its new chargers are already in the ground, and set to be fully online and energized by the end of this month at at VTRL facilities in Rancho Dominguez (17), Fontana (14), the City of Industry (14), and San Diego (2).

45 120 kW Detroit e-Fill chargers make up the bulk of VTRL’s infrastructure project, while two DCFC stations from ChargePoint get them to 47. All of the chargers, however, where chosen specifically to cater to the needs of medium and heavy-duty battery electric work trucks.

The company says it chose the Detroit e-Fill commercial-grade chargers because they’ve already proven themselves in Daimler-heavy fleets with their ability to bring Class 8 Freightliner eCascadias, Class 6 and 7 Freightliner eM2 box trucks, and RIZON Class 4 and 5 cabover trucks, “to 80% state of charge in just 90 minutes or less.”

At Velocity, we are not just reacting to the shift towards electric mobility; we are at the forefront with our customers and actively shaping it. By integrating high-powered, commercial-grade charging solutions along key transit corridors, we are ensuring that our customers have the support they need today. This charging infrastructure investment is a testament to our commitment to helping our customers transition smoothly to electromobility solutions and to prepare for compliance with the Advanced Clean Fleets (ACF) regulations.

David Deon, velocity president

Velocity plans to offer flexible charging options to accommodate the needs of different fleets, including both managed, “charging as a service” subscription plans and self-managed/opportunity charging during daily routes. While trucks are charging, drivers and operators will be able to relax in comfortable break rooms equipped with WIFI, television, snacks, water, and restrooms.

Electrek’s Take

Image via DTNA.

While it feels a bit underwhelming to write about trucking companies simply following the letter of the law in California, the rollout of an all-electric, zero-emission commercial trucking fleet remains something that, I think, should be celebrated.

As such, I’m celebrating it. I hope you are, too.

SOURCE | IMAGES: Global Newswire; Daimler Trucks.

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