Oil Prices Still not Reflecting Reality

Ill considered Iran War continues to reveal how vulnerable global economies are in their dependence on fossil fuels.
A generation of business and political leaders are internalizing this message, and making plans accordingly.

CNBC:

Crude oil prices jumped Monday after Saudi Arabia closed its critical pipeline that bypasses the Strait of Hormuz, a disruption that will constrain global supplies at a time when the market is already tight.

Drones launched from Iraq damaged the East-West pipeline on Thursday, forcing the Saudi government to close the key crude oil artery. Riyadh has not disclosed how badly the pipeline is damaged or how long it will remain shut. 

“The relatively contained price reaction suggests the market still expects Saudi inventories to cushion exports in the near term, but if the disruption extends beyond the five-to-seven-day inventory cushion, that could change quickly,” said Janiv Shah, an oil market analyst at Rystad Energy, in a Monday note.

A pump station appears to have taken serious damage, said Andy Lipow, president of Lipow Oil Associates. Riyadh may be able to bypass the pump and restart the pipeline with lower output, Lipow said. This is why prices have not surged even higher, he said.

“The longer the shutdown, the higher the price. Judging from the on-line pictures, it will take months to repair,” Lipow said in a note Monday.

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Court Strikes Down Trump’s Beautiful Coal Ball Room

The Trump administration’s arbitrary and corrupt “emergency” orders to keep obsolete, polluting coal plants burning is, like the hideous “Ball Room” monstrosity, yet another example of the rampant corruption siphoning money directly from ratepayer and taxpayer pockets to the accounts of banksters, gangsters and the big donor Epstein class.
Finally, a Court has said Hell No.

New York Times:

A federal appeals court on Friday struck down an order from the Trump administration that forced a coal plant in Michigan to stay open past its scheduled retirement date — dealing a blow to President Trump’s efforts to promote the coal industry.

For more than a year, the Energy Department has ordered the J.H. Campbell coal plant in West Olive, Michigan, to keep running despite its plans to close in May 2025, citing an “energy emergency.”

On Friday, a three-judge panel at the United States Court of Appeals for the District of Columbia Circuit ruled that the administration overstepped in its use of emergency powers.

The Michigan plant is one of several coal plants that the Energy Department has forced to stay open using emergency orders under a provision of the Federal Power Act. The provision had been used by previous administrations for only a few days at a time during extreme weather events.

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Supply Shortages About to Get Real. Really Real.

Above, clip from Oil analyst Jeff Currie on Bloomberg News, discussing the fulminating situation with supply chains in the Middle East and globally – thanks to the Trump administration’s war for oil, a warming climate, and a monster El Niño.

Vladimir Putin’s wildest wet dreams could not have imagined what Donald Trump’s sheer stupidity, greed, and venality has wrought.
Chickens—>roost.

Associated Press:

 Saudi Arabia said Friday it shut down a major pipeline a day after it was attacked by drones, and Yemen’s Iranian-backed Houthi rebels captured a strategic island at the southern entrance to the Red Sea, two officials said, opening a new front in the Iran war.

The Houthis made their biggest territorial gains in years along the Bab el-Mandeb Strait, one of the world’s key shipping lanes. The advance could boost Iran’s strategy of driving up world oil and gas prices to pressure the United States.

Saudi Arabia said it had shut down the East-West pipeline after it was attacked the day before. The Saudi Ministry of Energy called the shutdown “a precautionary measure.”

The Saudi Foreign Ministry blamed the attack on several drones that came from Iraq. In a statement carried by the state-run Saudi Press Agency, the kingdom said it would not respond to give the Iraqi government “an opportunity to take the necessary measures.”

New York Times:

To get from Minnesota to China, a load of soybeans might meander down the Mississippi River on a barge, transferring around New Orleans to a ship that carries it through the Panama Canal and across the Pacific.

But this summer, low water levels have throttled traffic moving through the canal and limited barge cargo on the river. In Europe, the Rhine and Danube rivers, both important shipping channels, also saw record-low water levels.

Across the logistics industry, it’s been a season of bottlenecks caused by low rainfall and shrinking rivers.

In addition to the heat, floods and storms that have delivered acute shocks to local economies in recent months, climate change is worsening droughts, increasing shipping costs and slowing movement through the waterways that act as conveyor belts for global trade. Add in record-setting prices for the diesel that powers the global cargo industry, and it’s no wonder costs of goods are climbing.

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The Last Playlist: Your Guide to Streaming AI Dystopias

Feel free to weigh in with your favorite nightmare, here’s my incomplete list.

My number one is the largely forgotten “Colossus: The Forbin Project”, which I saw at a tiny theater in Frankfort, Michigan in 1970, the year it came out, and just rewatched recently.
Totally holds up, and, if anything, is more terrifying.
What’s unique about it is that the clunky tape and typewriter technology of the era provide jarringly anachronistic visuals, but the story, which starts right out and doesn’t let up, is completely contemporary and immediate.

Fun Fact: Elon Musk perversely named his disastrous Hyperscale project outside of Memphis “Colossus” after the rogue AI in this movie.

Highly, highly recommended if you have not seen, “Ex Machina” is a humanoid robot nightmare scenario, directed by genius Alex Garland (28 Days Later) with a creepy Tech Bro unforgettably played by Oscar Isaac.

The Marvel franchise (if you partake) has a major vein of AI paranoia, best represented by the “Age of Ultron”.

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Traders Win by Shorting Nuclear

More sobering reports about the small nuclear reactor industry, now from the Financial Times. I posted about the Wall Street Journal’s recent reality check here.

In January, I posted similar assessments that appeared in the conservative financial paper Barrons. (If you don’t know Barrons, it makes the Wall Street Journal look like Rolling Stone.)

I’m not anti-nuclear, I’m pro reality.
We have to accelerate solar, wind and batteries not just for the birds, the bees, and our grandbabies, but also because we need to keep the lights on, and these are the lowest hanging fruit and nearest in the pipeline, full stop.

Financial Times:

Short sellers have reaped large profits from betting against small modular nuclear reactor companies, as the collapse of the “hype cycle” that had sent their share prices soaring wipes billions off their market value.
Funds made an estimated $2.1bn shorting three stocks — US-listed NuScale Power, Nano Nuclear and Sam Altman-backed Oklo — over the past year, according to data provider S3 Partners.
The three companies, which are lossmaking and have little or no revenue, surged last year as investors raced to capitalise on growing interest in nuclear energy among AI hyperscalers looking for new sources of power. Regulatory changes and funding announcements from the Trump administration also helped the sector.
But a total of $30.3bn has been wiped off their collective market value since their peak in October last year amid growing concerns over the lack of immediate revenue and the long build-out timelines for the technology.

Only two commercial SMRs are currently operable — in Russia and China, with more than 80 designs in various stages of development.
A key test of investor appetite towards the nuclear sector is expected in the coming weeks, when Holtec International and Westinghouse, two US-based companies with SMR divisions, are expected to list.

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Big Breakthrough with “the Other Kind” of Geothermal

Whenever I say “geothermal” in discussion, I always have to make clear which version of that technology I’m referencing.
One is the “Advanced” Geothermal, which uses cutting edge drilling techniques from the fracking industry to access heat buried deep in the earth’s crust – and I’ve posted recently on how rapidly that is progressing.

The other kind that might be more familiar to homeowners, which is shallow wells or trenches that access the stable temperatures just below the frost line that exist everywhere, and can be cheaply accessed to provide both heating or cooling.
The big barrier has always been the cost of drilling those wells or trenches.
Now, somebody claims to have solved for that.
Big if true.

Farther below, Jesse Jenkins of Princeton University suggests that the applications for cooling Data Centers, one of the toughest technical issues, could by itself be a paradigm shift.

Canary Media:

Dig Energy, a startup on a quest to vastly improve geothermal drilling, has completed its first commercial project, digging seven boreholes for a geothermal heating and cooling system at the headquarters of Boston general contracting firm Suffolk Construction.

Dig first stepped into the public eye almost exactly a year ago, when it announceda $5 million funding round after some five years of developing its technology behind the closed doors of a barn in New Hampshire. At the same time, Dig was selected to participate in Boost, an accelerator program run by Suffolk Technologies, the venture capital affiliate of Suffolk Construction.

Dig’s innovation: a rig purpose-built to drill geothermal boreholes with less noise, less water usage, and far lower cost than conventional drilling equipment.

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Musk Documentary Raises Questions on AI, and US Elections

Above, trailer for a new Documentary about Elon Musk that premiered on September 8 at the Venice Film Festival.

Below, press conference with filmmaker Alex Gibney, and Ashley St. Clair, who is the mother of one of Musk’s children, and has emerged as a sharp and informed critic on social media.

Gibney discusses what he found about Musk’s DOGE project, the theft of American’s personal data, and implications for American elections. Gibney’s comments about possible election interference and DOGE start at about 19 minutes in.

Can We Separate Data Centers from Legit AI Angst?

Data Center paranoia has reached fever pitch, but anxieties about AI are not misplaced.
My concern is that people think that by blocking this or that data center, they are stopping AI. Hyperscalers will build data centers in another state, in Tierra del Fuego, in space, underwater or on the moon to feed this market.
What is needed is federal regulation of both data centers, and critically AI and its components.

Wondering how AI could wipe out humanity? Here’s a clue.

CNN:

Scientists used an artificial intelligence program to create new viral genomes that are different from any known natural viruses and that targeted specific hosts, according to a new study. The development is a hopeful step toward medical advances, but it also raises concerns around the potential for misuse.

The study, published Thursday in the journal Science, says that genetic sequences from millions of sources “from all domains of life” served as the language library for the AI tool Evo, much like ChatGPT and other language models are trained on large sets of existing text material.

It’s a notable scientific milestone, especially as scientists race to combat rising drug resistance within germs such as E. coli.

“The breakthrough achieved is significant,” Jordi García Ojalvo, professor of systems biology at the Pompeu Fabra University of Barcelona, said in a comment to the Science Media Centre.

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