MDN’s Energy Stories of Interest: Thu, Apr 10, 2025 [FREE ACCESS]

OTHER U.S. REGIONS: Chevron to ‘triple-frac’ half of Permian oil wells in 2025 to cut costs, time; Alaska could rival Canada’s LNG industry but the hurdles are high; NATIONAL: Airlines and shippers pounce on oil plunge to lock in prices; Crude prices surge after market rally; Rystad predicts ‘significant risks’ to USA operators; Responding to ten environmentalist lies; Stop wasting our money on green hydrogen pipe dreams; AEA statement on committee approval of Kate MacGregor and James Danly; INTERNATIONAL: USA crude flows to China trickle to near zero after tariff blitz; EU votes on zero-for-zero tariffs.

OTHER U.S. REGIONS

Chevron to ‘triple-frac’ half of Permian oil wells in 2025 to cut costs, time
Reuters
Chevron, a leading U.S. oil producer, is expanding its use of “triple-frac,” a technique that fractures subterranean rock in three wells simultaneously in the Permian basin, aiming to reduce production time and costs. This method, which Chevron began using in March last year, will be applied to 50-60% of its Permian wells in 2025, up from 20%, cutting completion time by 25% and costs by 12% per well. The efficiency improves capital use and investment returns, despite requiring 60% more water and sand daily and 50% more power for electric equipment. While fracking multiple wells is gaining traction, triple-frac remains niche. Chevron, which hit 1 million barrels daily in the Permian last December, plans a 10% output increase this year before slowing growth to focus on cash flow. The technique is also being used in Colorado’s Denver-Julesberg basin, supported by ongoing shale innovation like AI and horizontal drilling. [MDN: That’s interesting. The first time we’ve heard of “triple fracking.” We wonder if this technique could be used in gas wells in the M-U? We love how the O&G industry continues to innovate.]

Alaska could rival Canada’s LNG industry but the hurdles are high
Toronto (ON) Financial Post
The proposed US$44-billion Alaska LNG project could challenge Canada’s liquefied natural gas (LNG) industry by competing for Asian markets, but it faces significant obstacles, according to experts cited in a Financial Post article dated April 9, 2025. Revived by U.S. President Donald Trump’s tariff policies, the project has attracted interest from Asian nations like Japan, South Korea, and Taiwan, eager to secure American LNG to mitigate tariff impacts. However, its massive scope—including a pipeline nearly twice the length of Canada’s Coastal GasLink—could inflate costs to US$50 billion, with construction potentially taking over a decade. Alaska LNG’s export capacity would be smaller than the LNG Canada project in Kitimat, B.C., set to begin shipments in 2025 with plans for possible expansion. While both projects promise shorter shipping routes to Asia, skepticism remains about Alaska LNG’s economic viability amidst high costs and competition. [MDN: Let’s hope the Alaska LNG project happens and competes against Canada’s Kitimat project. Competition is good. Canada has an extremely liberal (fossil fuel hating) government working against it.]

NATIONAL

Airlines and shippers pounce on oil plunge to lock in prices
Bloomberg/Rigzone
As crude oil prices dropped below $60 a barrel, a 20% decline triggered by U.S.-China tariffs and an anticipated OPEC+ supply increase, consumers like airlines and shipping companies rushed to secure low fuel costs through derivatives. Over 25 million barrels of Brent benchmark options traded this week, the highest call option volume since October, reflecting hedging strategies to manage fuel, their largest expense. Analyst Arne Lohmann Rasmussen noted clients adjusted their hedge ratios during the selloff, with some awaiting this dip. Despite hedging’s benefits, it’s divisive—Southwest Airlines recently abandoned the practice due to high costs, despite past billions saved. The futures curve shifted, with December 2026 Brent trading $1 higher than 2025, indicating faster near-term price drops. Experts like Helge Andre Martinsen observed this hedging surge amid economic uncertainty, though shaky demand could alter future behavior. [MDN: Sounds like a smart strategy to us. Take advantage of these prices now. Sooner or later they will go higher again.]

Crude prices surge after market rally
Bloomberg/Rigzone
Oil prices surged as Brent crude rose above $65 and West Texas Intermediate climbed past $61 per barrel, rebounding from a four-session decline triggered by President Trump’s trade war with multiple trading partners. The increase followed a 90-day pause on higher tariffs affecting dozens of countries, though the U.S.-China trade conflict intensified with tariffs on China rising to 125%. This pause sparked a broader market rally, boosting equities and commodities amid hopes of easing trade tensions and averting a recession. However, experts like Rebecca Babin noted that China’s role in crude demand growth overshadows the tariff relief’s impact. Meanwhile, OPEC+’s decision to ramp up output faster than expected, alongside a Canadian pipeline shutdown, added complexity to oil market dynamics. Traders, previously bearish, now face potential short-covering surges, though uncertainty persists due to ongoing trade war developments and an anticipated oil oversupply. [MDN: WTI for May delivery rose 4.7% to settle at $62.35 a barrel in New York. Brent for June settlement climbed 4.2% to $65.48 a barrel. The interesting thing about the “tariff wars” is that the the world is lining up to talk to Trump about lowering their one-sided tariffs and regulatory blocks against American goods. But not China. The pundits said everyone would flock to China and leave America. It has been the opposite. China, our #1 world enemy, is now well and truly screwed. We love it.]

Rystad predicts ‘significant risks’ to USA operators
Rigzone
Rystad Energy’s market update to Rigzone warns of significant risks to U.S. oil operators if oil prices remain around $60 per barrel, predicting a potential slowdown in production growth. The report follows President Trump’s April 2 tariff announcement, which rattled global markets and led to the stock market’s second-lowest trading day since 2020. Matthew Bernstein, Rystad’s VP for North American Oil and Gas, noted that the “all-in” breakeven cost for many U.S. producers now exceeds $62, factoring in dividends, debt, and higher hurdle rates. With production growth already limited outside the Permian Basin, sustained low prices could force operators to cut activity, investor payouts, or inventory preservation. Mid-cap firms in the Delaware Basin face heightened risks due to steep production declines and high costs. Analyst Hassan Fawaz echoed concerns, linking volatile oil prices to tariff-induced demand fears, while the EIA forecasts U.S. oil production to rise slightly through 2026. [MDN: Whoops! Open mouth, insert foot. Rystad, a Norwegian O&G advisory firm, got it completely wrong. A day after Rystad issued this pontification, Trump paused tariffs, and everything, including the price of crude oil, went higher, destroying Rystad’s prediction of doom and gloom for the U.S. oil industry. NEVER underestimate Donald Trump.]

Responding to ten environmentalist lies
The New Americanist
The first Earth Day in 1970 was sparked by environmental concerns, ironically founded by a man who murdered his girlfriend. Early issues like the Cuyahoga River fire and LA smog spurred action, and over 55 years, the U.S. has advanced environmentally. However, the article critiques ten modern environmental “fabrications” as misguided or harmful: 1) The climate crisis lacks solid data and ignores natural cycles; 2) Overpopulation fears are outdated as birthrates drop globally; 3) Oil and fossil fuel reserves are abundant, not scarce; 4) Biofuels are inefficient and unsustainable; 5) Offshore wind harms marine life and ecosystems; 6) Renewables like solar and wind require unsustainable mining; 7) Oil remains irreplaceable for global energy needs; 8) Urban containment is unnecessary and drives up housing costs; 9) Mass transit is impractical outside dense hubs; 10) Wilderness protection often backfires, causing ecological damage. These policies, it argues, serve special interests over genuine environmental good. [MDN: Excellent article that eviscerates the lies of the environmental left.]

Stop wasting our money on green hydrogen pipe dreams
Watts Up With That?
Samuel Furfari, a European energy expert, compares green hydrogen (GH) to “burning Louis Vuitton handbags for heat” due to its exorbitant cost, despite $9.5 billion in federal funding and tax subsidies from the Inflation Reduction Act. GH is at least five times more expensive than batteries for transportation, requiring vast amounts of purified water and desalination, and lacks infrastructure, as hydrogen escapes pipelines, embrittles metal, and risks explosions akin to the Hindenburg disaster. Production demands constant energy, unfeasible with intermittent wind and solar, and involves heating water to 2,000°F, electrocution to separate molecules, chilling to -420°F, and compression to 10,000 psi, yet it yields less energy per volume than natural gas. Costly and inefficient, GH has failed to scale despite billions spent globally, with oil giants like BP and Shell abandoning unprofitable projects. Critics argue its energy-intensive production, water demands, and losses make it unsustainable, urging Trump and Republicans to halt funding this “expensive pipedream” adding to the $36.5 trillion national debt. [MDN: Hydrogen energy, particularly “green” hydrogen, is too costly and there aren’t enough customers for it. Let’s stop blowing OUR money on these idiotic schemes.]

AEA statement on committee approval of Kate MacGregor and James Danly
American Energy Alliance
On April 10, 2025, the Senate Committee on Energy & Natural Resources voted to approve the nominations of Kate MacGregor as Deputy Secretary of the Interior and James Danly as Deputy Secretary of Energy, advancing their nominations to the Senate floor for final confirmation. Tom Pyle, President of the American Energy Alliance, praised both nominees, highlighting MacGregor’s expertise in public lands, natural resource development, and regulatory efficiency, noting her proven ability to achieve results. He also commended Danly’s tenure as a Federal Energy Regulatory Commission Commissioner, where he ensured reliable and affordable electricity and resisted Biden administration efforts to block natural gas pipeline approvals. Pyle expressed enthusiasm for collaborating with both appointees, describing them as vital additions to President Trump’s energy team, and anticipated their Senate confirmation to advance America’s energy future. [MDN: It looks like both of these nominees will sail to a positive final vote in the Senate. James Danly was a “firebrand” who vigorously defended fossil energy during his tenure at FERC. He stepped down about six months short of a full term, leaving in December 2023 (see FERC Republican Commissioner James Danly Stepping Down Dec. 31st). He will be a good addition to the DOE under Chris Wright.]

INTERNATIONAL

USA crude flows to China trickle to near zero after tariff blitz
Bloomberg/Rigzone
The escalating trade war between the United States and China, the world’s largest oil producer and importer respectively, is poised to reduce US oil shipments to China to nearly zero in 2025. This decline follows a period of growth in oil trade, disrupted by US President Donald Trump’s successive tariff hikes, peaking at 125% on Chinese imports, and Beijing’s retaliatory 84% tariffs on US goods. These measures have made US crude, priced at $61 per barrel (WTI), uneconomical for Chinese refiners, adding an estimated $51 per barrel in costs, according to Vortexa Ltd. analyst Ivan Mathews. Although US oil constitutes only about 1% of China’s total imports, this drop reflects a broader deterioration in trade relations. Alternative buyers like India and Japan are snapping up US oil, while China may turn to Middle Eastern suppliers or increase purchases from Iran and Russia to fill the gap. [MDN: Good! Let China get its oil from their murdering thug dictator pals at OPEC+, including Russia. We must break the economic back of China and do it now.]

EU votes on zero-for-zero tariffs
Armstrong Economics
Ursula von der Leyen, the European Union leader, proposed a zero-for-zero-tariff deal with the United States in response to hefty tariffs imposed on EU steel and aluminum, escalating to an additional 20% levy. Despite her readiness to negotiate, mirroring successful deals with other partners, the proposal faces skepticism within the 27-nation bloc and from U.S. President Donald Trump, who deems it inadequate, citing a $350 billion trade deficit he aims to offset by pushing EU purchases of American energy. While Dutch Trade Minister Reinette Klever supports de-escalation, France, led by Trump’s adversary, President Macron, pushed for retaliation and a drastic cut in U.S. investments, potentially harming the EU. Von der Leyen showed openness to buying U.S. liquefied natural gas, a critical need since Russian oil supplies dwindled due to Ukraine’s actions. However, internal discord and a looming vote highlight the EU’s struggle with centralized governance, exposing deep divisions and national frustrations. [MDN: The EU did end up voting to offer a zero-for-zero tariff deal to the U.S. (after screwing us for DECADES), just prior to Trump pausing new tariffs. Trump is right. The trade decifict must end, meaning Europe must buy our LNG or face economic catastrophe. This is how leadership is done. Thank God for DJT!]