How has Hurricane Harvey impacted the United States energy sector?
Hurricane Harvey has had a devastating effect on the Texas Gulf Coast and for millions of people life will never be the same again - but on a wider scale it has also had a huge impact on the United States energy sector.
The oil and gas industry has been heavily disrupted with dozens of platforms shut down and evacuated, whilst plants and refineries have also been closed.
"Because it is a slow-moving storm, it (Harvey) is dropping massive amounts of water on the region. As a result of the flooding, a large amount of refining capacity is offline meaning that gasoline production is severely curtailed," William O'Loughlin, investment analyst at Rivkin Securities, told Reuters.
The US Bureau of Safety and Environmental Enforcement estimated that platforms accounting for about 22 percent of oil production and 23 percent of natural gas output in the Gulf had been shut down, although some have now reopened.
Around a third of US refining capacity sits in low-lying areas along the Texas and Louisiana coast, so the markets have also been affected with US gasoline futures reaching a two-year high of $1.7799 a gallon.
According to an analyst from FX Pro: "Although the full impact of the storm's damage is yet to be determined, the markets expect the impact will be felt globally and affect energy markets for many weeks."
The US Dollar also sank to its lowest level in almost a-year-and-a-half today with the storm being blamed as being negative for economic growth.
Analysts from Goldman Sachs, speaking to the Financial Times, said: "Information on the extent of the damages incurred by the oil and gas infrastructure remains limited at this point. Nonetheless, data available so far points to sizeably larger refining than production disruptions.
"Should these levels of outages remain in place, and using past hurricanes as proxies for the impact on oil demand, we roughly estimate that the impact of Harvey on the US oil market would be to increase domestic crude availability by 1.4 million barrels per day while removing 615-785 kilobarrels per day of gasoline and 700 kilobarrels per day of distillate supplies.
"Larger refinery outages would increase these long crude and short product impacts.”
Nobody is sure how much of an impact this is going to have yet but what is quite clear is that it’s certainly going to have an impact on the US and probably globally as well.
Robin Mills, writing in The National, suggested: “This hurricane is an important test of a transformed US oil industry. It is an opportunity to fix vulnerabilities that it reveals – the exposure of shale oil wells, refineries and the Houston energy complex.
"And it is a warning of the confluence of a warming climate, higher seas and more coastal energy infrastructure. Katrina was largely a US domestic disaster, but the ripples of future hurricanes will spread further into global oil and gas markets."
Form Energy receives funding power for iron-air batteries
Form Energy believes it has cracked the conundrum of commercialising grid storage through iron-air batteries - and some of the biggest names in industry are backing its potential.
The startup recently announced the battery chemistry of its first commercial product and a $200 million Series D financing round led by ArcelorMittal’s XCarb innovation fund. Founded in 2017, Form Energy is backed by investors Eni Next LLC, MIT’s The Engine, Breakthrough Energy Ventures, Prelude Ventures, Capricorn Investment Group and Macquarie Capital.
While solar and wind resources are the lowest marginal cost sources of electricity, the grid faces a challenge: how to manage the multi-day variability of renewable energy, even in periods of multi-day weather events, without sacrificing energy reliability or affordability.
Moreover, while Lithium-ion batteries are well suited to fast bursts of energy production, they run out of energy after just a few hours. Iron-air batteries, however, are predicted to have theoretical energy densities of more than 1,200 Wh/kg according to Renaissance of the iron-air battery (phys.org)
The active components of Form Energy's iron-air battery system are some of the cheapest, and most abundant materials: iron, water, and air. Iron-air batteries are the best solution to balance the multi-day variability of renewable energy due to their extremely low cost, safety, durability, and global scalability.
It claims its first commercial product is a rechargeable iron-air battery capable of delivering electricity for 100 hours at system costs competitive with conventional power plants and at less than 1/10th the cost of lithium-ion and can be optimised to store electricity for 100 hours at system costs competitive with legacy power plants.
"This product is our first step to tackling the biggest barrier to deep decarbonisation: making renewable energy available when and where it’s needed, even during multiple days of extreme weather, grid outages, or periods of low renewable generation," it states.
Mateo Jaramillo, CEO and Co-founder of Form Energy, said it conducted a broad review of available technologies and has reinvented the iron-air battery to optimise it for multi-day energy storage for the electric grid. "With this technology, we are tackling the biggest barrier to deep decarbonization: making renewable energy available when and where it’s needed, even during multiple days of extreme weather or grid outages," he said.
Form Energy and ArcelorMittal are working jointly on the development of iron materials which ArcelorMittal would non-exclusively supply for Form’s battery systems. Form Energy intends to source the iron domestically and manufacture the battery systems near where they will be sited. Form Energy’s first project is with Minnesota-based utility Great River Energy, located near the heart of the American Iron Range.
Greg Ludkovsky, Global Head of Research and Development at ArcelorMittal, believes Form Energy is at the leading edge of developments in the long-duration, grid-scale battery storage space. "The multi-day energy storage technology they have developed holds exciting potential to overcome the issue of intermittent supply of renewable energy."
Investors in Form Energy's November 2020 round included Energy Impact Partners, NGP Energy Technology Partners III, and Temasek.
In May 2020, it signed a contract with Minnesota-based utility Great River Energy to jointly deploy a 1MW / 150MWh pilot project to be located in Cambridge, MN. Great River Energy is Minnesota's second-largest electric utility and the fifth largest generation and transmission cooperative in the US.
Last week Helena and Energy Vault announced a strategic partnership to identify additional opportunities for Energy Vault’s waste remediation technologies as the company begins deployment of its energy storage system worldwide. It received new investment from Saudi Aramco Energy Ventures (SAEV) in June.
Maoneng has revealed more details of its proposed 240MWp / 480MWh Battery Energy Storage System (BESS) on Victoria’s Mornington Peninsula in Australia (click here).
The BESS represents hundreds of millions of dollars of investment that will improve electricity grid reliability and network stability by drawing energy from the grid during off-peak periods for battery storage, and dispatching energy to the grid during peak periods.