Ron Insana: It’s time to use an ‘all of the above’ energy policy to break up the OPEC+ cartel

Published

2 years ago

October 7, 2022

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An Austrian soldier guards the entrance to the OPEC headquarters on October 4, 2022 on the eve of the 45th Meeting of the Joint Ministerial Monitoring Committee and the 33rd OPEC and non-OPEC Ministerial Meeting held on October 05, in Vienna, Austria.

Joe Klamar | AFP | Getty Images

Saudi Arabia’s decision to ally with Russia and push through the largest supply cut by OPEC+ since 2020 means it’s time for the U.S. to take every available step it can to boost U.S. energy production.

That could even mean exploring the “nuclear option” — a point I mean literally, in terms of deploying nuclear power to assist in meeting the nation’s energy needs.

Energy policy is an instrument of U.S. foreign policy. Given that a former ally has joined with a current adversary, I would argue that, at least for the moment, all bets are off. It’s time to bring Saudi Crown Prince Mohammed bin Salman and Vladimir Putin to heel, and take away some of the power that OPEC and its allies have.

The OPEC+ cuts were set at some 2 million barrels per day. The decision appears aimed at bolstering oil prices, which had fallen to roughly $80 a barrel from more than $120 in early June. Oil has already started to climb back up above $92 a barrel, despite signs of economic slowing.

The Biden administration — short-term environmental concerns aside — should offer price supports to the entire oil and gas industry, beyond the subsidies already offered, to rapidly boost production in some areas where exploration and production have slowed.

Biden, no doubt, would get pilloried by environmental groups, progressives and even some middle-of-the-road Democrats for potentially accelerating climate change, but short-run needs are paramount if the U.S. would like to maintain long-term control of both our energy security and our national security.

A multiyear price floor

With the imposition of a multiyear price floor, the U.S. could support domestic crude prices at, let’s say, $65 per barrel. That’s high enough to encourage existing fracking efforts while also encouraging additional production. Yet, it’s low enough to help pull the rug out from under a former ally that has shown its allegiance to Moscow. (We do this for all manner of commodity producers, by the way.)

Further, a more rapid addition of U.S. supplies of oil and natural gas would pressure global energy prices greatly and hurt the bottom lines of both Saudi Arabia and Russia, who are trying to ensure $100 per barrel oil to prop up their budgets — and, for Putin, to finance the ongoing war in Ukraine.

A flood of U.S. oil could drive prices back into the $20s even as U.S. companies are guaranteed to earn more.

In the 1980s, when the Saudis were the world’s “swing producer” of oil, they set the global price by raising and lowering production to send prices up or down, depending on prevailing circumstances.

The U.S. is poised to return to being the No. 1 producer next year when daily production reaches the old record of 12.3 million barrels per day from the current 11.8 million. (The U.S. has been the world’s largest producer of natural gas since 2017.)

In addition, the U.S. should expedite the build out of pipelines, transmission lines and LNG terminals so that the U.S. can more effectively — and profitably — export surplus oil and natural gas to an energy-starved world.

Adding a little fuel to that fire could help Europe avoid future disruptions of supplies as long as sanctions remain in place against a would-be Peter the Great.

An ‘all of the above energy’ policy

Beyond that, continuing an “all of the above” energy policy — which should absolutely include modern nuclear power plants — would go far in stabilizing global energy markets, ensure more than adequate supplies of power and energy here at home and, once and for all, cripple the OPEC cartel and Russia, whose economy rests almost entirely on energy exports.

And, yes, the U.S. and Europe should place a cap on Russian oil prices to also rob Moscow of the revenue it needs to sustain its invasion of Ukraine.

And, as some foreign policy experts have suggested of late, the U.S. should cut off sales of military hardware to MBS and deprive him of U.S. intelligence, rendering the alliance moot and leaving the Saudis at risk of armed conflict with regional rivals. That should be their problem from now on.

The U.S. should also strike a deal with Iran and Venezuela to allow oil to flow from those pariah states.

At the end of the day — and this may be naive — but what’s the difference between doing business with Saudi Arabia and Russia compared with doing business with Venezuela and Iran? Long ago, we learned that the enemy of my enemy is my friend.

It may well be time to put that philosophy to work and turn the tables on nations whose revenue options are far more limited than our own.

— Ron Insana is a CNBC contributor and a senior advisor at Schroders.

Environment

A 100-MW solar farm just broke ground in Wisconsin

Published

11 hours ago

November 14, 2024

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A 100-MW solar farm just broke ground in Wisconsin

Wisconson solar — Image: National Grid Renewables

National Grid Renewables has broken ground on its 100 MW Apple River Solar Project in Polk County, Wisconsin.

The Wisconsin solar farm, which will use US-made First Solar Series 6 Plus bifacial modules, will be constructed by The Boldt Company, creating 150 construction and service jobs. Apple River Solar will generate over $36 million in direct economic benefits over its first 20 years.

Once it comes online in late 2025, Apple River Solar will supply clean energy to Xcel Energy, which serves customers throughout the Upper Midwest. According to National Grid Renewables, the solar farm will generate enough energy to power around 26,000 homes annually. It will also offset about 129,900 metric tons of carbon dioxide emissions each year – equivalent to taking 30,900 cars off the road.

“We are excited to see this project begin as it underscores our dedication to delivering clean, reliable and affordable energy to our customers,” said Karl Hoesly, President, Xcel Energy-Wisconsin and Michigan. “This project is an important step in those goals while bringing significant economic benefits to Polk County and the local townships.”

Electrek reported in February that Xcel Energy, Minnesota’s largest utility, expects to cut more than 80% – and possibly up to 88% – of its emissions by 2030, putting it on track to hit Minnesota’s goal of net zero by 2040. It also says it’s on track to achieve its clean energy goals for all the Upper Midwest states it serves – Minnesota, Wisconsin, North Dakota, South Dakota, and Michigan.

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Tesla announces 500 kW charging as it finally delivers V4 Supercharger cabinets

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12 hours ago

November 14, 2024

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Tesla announces 500 kW charging as it finally delivers V4 Supercharger cabinets

Tesla has announced that it will finally deliver 500 kW charging as it is about to install its long-awaited V4 Supercharger cabinets.

The rollout of Supercharger V4 has been a strange one, to say the least.

Tesla has been deploying the new charging stations for two years and calling them “Supercharger V4”, but it has only been deploying the charging stalls.

Supercharger stations are made of two main parts: the stalls, which are where the charging cable is located, and the cabinets, which are generally located further back and include all the power electronics.

For all these new “Supercharger V4”, Tesla was actually using Supercharger V3 cabinets. This has been limiting the power output of the charging stations to 250 kW – although

Today, Tesla officially announced its “V4 Cabinet”, which the automaker claims will enable of “delivering up to 500kW for cars and 1.2MW for Semi.”

Here are the main features of the V4 Cabinet as per Tesla:

Faster charging: Supports 400V-1000V vehicle architectures, including 30% faster charging for Cybertruck. S3XY vehicles enjoy 250kW charge rates they already experience on V3 Cabinet — charging up to 200 miles in 15 minutes.
Faster deployments: V4 Cabinet powers 8 posts, 2X the stalls per cabinet. Lower footprint and complexity = more sites coming online faster.
Next-generation hardware: Cutting-edge power electronics designed to be the most reliable on the planet, with 3X power density enabling higher throughput with lower costs.

Tesla reports that its first sites with the new V4 Cabinets are going into permitting now. The company expects its first sites to open next year.

We recently reported about Tesla’s new Oasis Supercharger project, which includes larger solar arrays and battery packs to operate the charging station mostly off-grid.

Early in the deployment of the Supercharger network, Tesla promised to add solar arrays and batteries to all Supercharger stations, and Musk even said that most stations would be able to operate off-grid.

While Tesla did add solar and batteries to a few stations, the vast majority of them don’t have their own power system or have only minimal solar canopies.

Back in 2016, I asked Musk about this, and he said that it would now happen as Tesla had the “pieces now in place” with Supercharger V3, Powerpack V2, and SolarCity:

It took about 8 years, but it sounds like the pieces are now getting actually in place with Supercharger V4, Megapacks, and this new Oasis project.

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Environment

Hyundai is launching an AI-powered EV next year to keep pace in China

Published

12 hours ago

November 14, 2024

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Hyundai is launching an AI-powered EV next year to keep pace in China

Hyundai has a new secret weapon it’s about ready to unleash. To revamp the brand in China and counter BYD’s surge, Hyundai is launching a new AI-powered EV next year. The new model will be Hyundai’s first dedicated electric car for the world’s largest EV market.

With the help of Haomo, a Chinese autonomous startup, Hyundai will launch its first EV equipped with generative AI. It will also be its first model designed specifically for China.

A Hyundai Motor official said (via The Korea Herald) the company is “working to load the software” onto the new EV model, “which will be released in the Chinese market next year.” The spokesperson added, “The level of autonomous driving is somewhere between 2 and 2.5.”

In comparison, Tesla’s Autopilot is considered a level 2 advanced driver assistance system (ADAS) on the SAE scale (0 to 5), meaning it offers limited hands-free features.

With Autopilot, you still have to keep your eyes on the road and hands on the steering wheel, or the system will notify you and eventually disengage.

Haomo’s system, DriveGPT, unveiled last spring, takes inspiration from the OpenAI’s popular ChatGPT.

The system can continuously update in real-time to optimize decision-making by absorbing traffic data patterns. According to Haomo, DriveGPT is used in around 20 models as it looks to play a bigger role in China.

Hyundai hopes new AI-powered EV boosts sales in China

Electric vehicle sales continue surging in China. According to Rho Motion, China set another EV sales record last month with 1.2 million units sold, up 50% from October 2023.

Over 8.4 million EVs were sold in China in the first ten months of 2024, a notable 38% increase from last year.

BYD continues to dominate its home market. According to Autovista24, BYD accounted for 32.9% of all PHEV and EV (NEV) sales in China through September, with over half of the top 20 best-selling EV models.

Tesla was second with a 6.5% share of the market, but keep in mind these numbers only include plug-in models (PHEV).

2025-Hyundai-IONIQ-5-prices — 2025 Hyundai IONIQ 5 (Source: Hyundai)

Like most foreign automakers, Hyundai is struggling to keep up with the influx of low-cost electric models in China. Beijing Hyundai’s sales have been slipping since 2017. Through September, Korean automaker’s share of the Chinese market fell to just 1.2%.

Last month, Hyundai opened its first overseas digital R&D center in China to help kick off its return to the region.

According to local reports, Hyundai is partnering with other local tech companies like Thundersoft, a smart cockpit provider, and others in China to power up its next-gen EVs

With its first AI-powered EV launching next year, Hyundai hopes to turn things around in the region quickly. The new model will be one of five to launch in China through 2026.

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