Exxon's power play

PLUS: Heirloom DAC, BKV-EnLink CCS, Total's $635mm buy, NuScale cancels project, Venture Global disputes, Niron Magnetics

Good Morning. This is the Sunya Scoop. The newsletter that takes energy transition news and turns it into an easy-to-read email for you.

Here’s what we have for you today:

  • ExxonMobil plans to become a leading producer of lithium, a key component of electric vehicle (EV) batteries.

  • The company has initiated the first phase of North America lithium production in southwest Arkansas, known for significant lithium deposits, and will brand the product as "Mobil Lithium."

  • ExxonMobil aims to unlock North American lithium supplies with fewer environmental impacts by using direct lithium extraction (DLE) technology, which involves accessing lithium-rich saltwater from underground reservoirs using conventional drilling methods.

  • The DLE process produces fewer carbon emissions than traditional mining and requires less land.

  • ExxonMobil acquired rights to 120,000 acres of lithium-rich land in southern Arkansas in early 2023.

  • The company targets its first lithium production by 2027 and aims to supply the manufacturing needs of over a million EVs per year by 2030.

  • Demand for lithium is expected to quadruple by 2030, and ExxonMobil's project supports energy transition goals and domestic sourcing.

  • ExxonMobil is in discussions with potential customers, including EV and battery manufacturers.

  • Heirloom has unveiled the United States' first commercial Direct Air Capture (DAC) facility, aiming to mitigate the impacts of global climate change.

  • The DAC facility is located in Tracy, California, and uses limestone rocks to capture and permanently sequester CO2 from the atmosphere.

  • The facility is fully powered by renewable energy and constructed with union labor.

  • It has a capture capacity of up to 1,000 tons of CO2 per year and will provide CO2 removal credits to companies like Microsoft, Stripe, Shopify, and Klarna.

  • The DAC facility aligns with President Biden's 2050 net-zero goal and California Governor Gavin Newsom's 2045 state net-zero targets.

  • Heirloom's technology uses abundant limestone to capture CO2 from the air and sequester it underground or in concrete.

  • The company aims to remove 1 billion tons of CO2 from the atmosphere by 2035.

  • The facility was constructed with a commitment not to use removed CO2 for enhanced oil recovery and to involve union labor.

  • Heirloom has also established a community governance model to gather feedback and provide investments in community organizations.

  • Heirloom's progress has accelerated since its founding in 2020, with significant investments and partnerships in the field of carbon removal.

  • Notable attendees at the unveiling ceremony included Secretary of Energy Jennifer M. Granholm, California Lieutenant Governor Eleni Koulanakis, and other community leaders and officials.

  • BKV Corporation and EnLink Midstream commence the first carbon capture and sequestration (CCS) project in the Barnett Shale.

  • Carbon dioxide (CO2) waste from EnLink's Bridgeport natural gas processing plant and neighboring operations is injected into BKV's Barnett Zero CCS facility.

  • The project is one of the first purpose-drilled, Class II commercial carbon sequestration wells in the United States.

  • EnLink transports natural gas produced by BKV to its Bridgeport plant, captures the CO2 waste stream, compresses it, and sequesters it underground via BKV's well.

  • The project aims to sequester up to approximately 210,000 metric tons of CO2e per year.

  • BKV plans to achieve net-zero Scope 1, 2, and 3 emissions from its upstream operations by the early 2030s.

  • The project is approved by the Texas Railroad Commission and the EPA.

  • BKV envisions future CCS projects, including Cotton Cove, and is actively pursuing expansion.

  • Three additional potential natural gas processing projects with a combined forecasted annual sequestration volume of at least approximately 970,000 metric tons per year of captured CO2e are identified.

  • TotalEnergies is acquiring three gas-fired power plants in Texas from TexGen for $635 million.

  • The three plants have a combined capacity of 1.5 GW and are connected to ERCOT (Electric Reliability Council of Texas), the second largest power market in the United States.

  • The plants include Wolf Hollow I (745 MW combined-cycle gas turbine), Colorado Bend I (530 MW combined-cycle gas turbine and 74 MW open-cycle gas turbine), and La Porte (150 MW open-cycle gas turbine).

  • These flexible assets, near Dallas and Houston, will help meet the growing energy demand in these cities and offset renewable power intermittency.

  • The acquisition complements TotalEnergies' existing renewable capacity in Texas and strengthens its trading capabilities in gas and power markets.

  • BP, Edison, and Shell have requested intervention from the U.S.-EU Task Force on Energy Security in a dispute with Venture Global LNG over unfulfilled contract supplies of liquefied natural gas (LNG).

  • Shell has urged the task force to require Venture Global LNG to start fulfilling its signed contracts.

  • At least four customers, including BP and Shell, are pursuing contract arbitration claims due to a lack of gas supplies from Venture Global LNG.

  • Venture Global LNG cited faulty power equipment repairs as the reason for the Louisiana plant's operational issues.

  • Shell accused Venture Global LNG of prioritizing a second LNG export plant over completing repairs to the first, which has raised concerns about the trustworthiness of American LNG suppliers.

  • The EU and U.S. officials view the dispute as a contractual matter between commercial parties and have not taken action to date.

  • BP and Shell have expressed concerns about Europe's energy security and alleged that Venture Global LNG profited from global gas market rallies while failing to deliver on contracted amounts.

  • Venture Global LNG stated that it is diligently working toward full completion but did not specify a timeline.

  • The company claimed that Shell and BP purchased commissioning cargoes and traded them outside of Europe for higher profits.

  • Repsol's attempt to have the U.S. energy regulator reopen its approval of the Calcasieu plant due to startup problems was rejected.

  • NuScale Power terminates its small modular reactor (SMR) project in Utah.

  • The project, known as the Ca

    rbon Free Power Project, was approved for $1.35 billion in DOE funding in 2020, with around $600 million provided since 2014 to support SMR technology commercialization.

  • The plan was to develop a six-reactor, 462 MW project with Utah Associated Municipal Power Systems (UAMPS) by 2030, but rising costs led to several towns withdrawing from the project.

  • NuScale intends to continue working on SMR technology for domestic and international markets in Romania, Kazakhstan, Poland, and Ukraine.

  • The Utah SMR project was expected to be the first to receive a license from the U.S. Nuclear Regulatory Commission, but insufficient subscriptions made deployment unlikely.

  • The project's target power price increased from $58 per MWh to $89 per MWh, raising concerns about customer willingness to pay.

  • DOE remains committed to deploying nuclear technologies to combat climate change despite this setback.

  • SMRs are seen as replacements for coal plants and are designed for various applications, including remote communities.

  • NuScale's SMR design is the only one approved by the NRC.

  • The DOE funding for NuScale was awarded through a non-competitive funding mechanism predating the Biden administration's energy and climate bills.

  • General Motors (GM) and Stellantis are investing in startup Niron Magnetics to develop electric-vehicle magnets without rare earths.

  • The goal is to reduce reliance on China for rare earth materials in the automotive industry.

  • The automakers joined Niron's $33 million funding round to develop permanent magnets without rare earths.

  • Currently, approximately 90% of rare-earth magnet supply is dependent on China.

  • The move follows China's announcement of export permits for some graphite products used in EVs.

  • GM invested $7 million, and Stellantis invested $5 million in Niron.

  • Permanent magnets are crucial components in EVs, especially in the drivetrain.

  • EV motors typically use rare-earth minerals like terbium, dysprosium, praseodymium, and neodymium, which are expensive and processed mainly overseas.

  • Niron believes its iron nitride magnet, branded as a Clean Earth Magnet, is more magnetic than traditional rare earth magnets.

  • The investment aims to reduce reliance on rare earth minerals and create a North American-based supply chain for EVs.

  • GM previously had an agreement to buy rare-earth magnets from MP Materials.

  • Offshore wind projects are being canceled, and renewable energy companies are facing declining share prices.

  • U.S. automakers are scaling back electric vehicle plans due to faltering demand.

  • The oil and gas industry is pursuing megadeals and asserting that fossil fuels will remain essential for a long time.

  • Carbon emissions are expected to reach record levels this year.

  • Energy-mix forecasts indicate that natural gas, oil, and renewables will all play significant roles until 2050.

  • Despite challenges, solar and wind capacity is growing, and investments are flowing into low-carbon technologies.

  • Some companies are shifting investments back into traditional energy assets, such as liquefied natural gas facilities and pipelines.

  • Macroeconomic factors, including high interest rates and supply chain disruptions, are affecting the clean-energy industry.

  • Some renewable-power developers have raised prices for electricity and rewritten contracts to cover increased costs.

  • Challenges in the renewable energy sector have led to share price declines for many companies.

  • Geopolitical factors and challenges in decarbonization are reducing pressure on fossil fuel companies to transition quickly.

  • Growing energy needs in Asia and Africa may require continued reliance on traditional energy sources.

  • Energy giants like Exxon Mobil and Chevron are acquiring oil and gas assets, arguing for their long-term necessity.

  • Investors are more accepting of such acquisitions compared to a few years ago when there was more pressure for energy transition and climate strategies.

  • PDF presentation can be found here

  • Video link can be found here

The link to the PDF is above and here’s the interactive version

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.