Pumping up the Hydrogen Volumes

With oil prices now dancing in the skies like  Trinidad and Tobago’s  Peter Minshall dingolaying  “Tan Tan and Saga Boy” over the Barcelona 1992 Olympics and other shows, the air is rare as simple Hydrogen seeps threateningly into ethereal fields of energy dreams and nightmares across our restless planet.

No traditional big oil player is more keenly aware of the tricks lurking in a trade so full of potential for sudden change where one solitary dry hole can leverage the commodity Demand-Supply balance over one degree in one drop of a second chance.

It’s no wonder therefore that, even as countries delightedly collect the benefits of current high product sales margins, the Saudi Arabia Energy Minister is respectfully cautioning producers about the ease and speed with which their economies can dive south as demand begins to outstrip supply.

The Saudi Energy Minister warned traders on Thursday against betting heavily in the oil market saying he will try to make the market “jumpy” and promised those who gamble on the oil price would be hurt “like hell”.

The comments by Prince Abdulaziz bin Salman, OPEC’s most influential minister, came after a virtual meeting of a key panel of OPEC and allies, led by Russia, known as OPEC+.

“Prince Abdulaziz told the gathering OPEC could hold an extraordinary meeting in October if the oil market soured because of weak demand and rising coronavirus cases, according to an OPEC source.”, he report from Reuters stated

“Anyone who thinks they will get a word from me on what we will do next, is absolutely living in a La La Land… I’m going to make sure whoever gambles on this market will be touching like hell,” Prince Abdulaziz told a news conference when asked about OPEC next steps.

According to the report written by Dmitry Zhadannikov, he said OPEC “would take a pro-active and pre-emptive stance in addressing oil market challenges”.

To those who want to short the oil market, Prince Abdulaziz had the following warning: “Make my day,” he said in an apparent reference to Hollywood star Clint Eastwood’s expression from the Dirty Harry thriller.

Brent oil prices extended their gains to trade up 3% on the news about a possible extraordinary meeting, above $43 per barrel.

On Thursday, OPEC’s key panel, known as the joint ministerial monitoring committee, pressed for better compliance with oil output cuts against the backdrop of falling crude prices as uncertainty reigns over the global economic outlook.

The group warned that rising COVID-19 cases in some countries could curb energy demand despite initial indications of a decline in oil stocks.

The panel did not recommend any changes to their current output reduction target of 7.7 million barrels per day (bpd), or around 8% of global demand.

OPEC has been reducing production since January 2017 to help to support prices and reduce global oil stockpiles. They increased their cuts to a record 9.7 million bpd from May to July after demand plunged due to the coronavirus crisis.

The panel pressed laggards such as Iraq, Nigeria and the United Arab Emirates to cut more barrels to compensate for overproduction in May-July while extending the compensation period from September to the end of December.

The panel said cumulative overproduction has reached 2.38 million bpd from May until August.

Benchmark Brent futures rose as much as 1% to almost $75 a barrel on Wednesday, the highest price since April 2019.

It’s against this background that Royal Dutch Shell Plc is reviewing its holdings in the largest oil field in the U.S., a possible sale that could raise as much as $10 billion, according to Reuters.

The potential sale could include all of Shell’s 260,000 acres in the Permian Basin, Reuters reported citing unidentified people familiar with the matter. Shell declined to comment on Reuters’ report.

“The oil and gas behemoth is under pressure to accelerate carbon emissions cuts after a Dutch court ruled last month that the company’s climate plans didn’t go far enough. The order to cut emissions faster and more drastically than planned is likely to have far-reaching consequences on the sector”, the report stated.

Shell, which has 92,000 employees spanning 70 countries, had planned to cut emissions by 20% by 2030. The court in The Hague, however, ordered it to reduce its absolute emissions by 45% compared with 2019 levels, after the Dutch arm of Friends of the Earth sued Shell for violating human rights by contributing to global warming.

Chief Executive Officer Ben van Beurden said Shell expects to appeal the verdict, and that the company has been unfairly targeted. Still, the CEO described a plan to take “bold but measured” steps to cut emissions.

Evidence of the kind of exploration risk which companies like Shell have been taking over the last century or so can be seen in the reach the  Netherlands-based transnational has been willing to engage in.

Take tiny Trinidad and Tobago which, as a producer of less than 0.1 percent of the world’s oil, has been giving the world this black gold since 1859 – just seven years after the first well was drilled in the world in Pennsylvania, USA and known as the famous Drake’s Oil Well.

In this regard, the very exciting but perhaps little known story of how a company can transform a community and a country, can be found in Point Fortin, a small village on the south west coast of Trinidad where oil was discovered and Shell was among those making the biggest moves in that they constructed an oil refinery and established an entire community to service its strategically located exploration operations in the Caribbean.

This also worked very well in the hierarchical structure where various clubs, schools and sport facilities blossomed to nurture the citizenry which represented a shining community of vastly higher income than the capital city of Port of Spain.

With the rapid decline of the oil industry over the years, hard assets such as refineries and housing estates have lost their appeal although governments in their desperate bid to corral votes in clusters have rallied around the improvement and enlargement of such spaces.

In this context,  prospects for the exploration and exploitation of opportunities for the capturing the ubiquitous and simply constructed Hydrogen pose a whole new set of challenges.

Hydrogen is pure gas in so much abundance in the atmosphere that it forms a vital  “better” half of the magic Formula to keep the planet alive with Water being the third element responsible for the crystallization of life from the highest to the lower chakra on life’s zig zagged wheel of fortune.

Although forecasters have been cautious about making long term predictions for growth, no oil producer is complaining about the way prices are skyrocketing to the rescue of a number of economies that were teetering on the brink of failure in this COVID-ridden environment and fast falling production.

Take little Trinidad and Tobago (1.5 million approx.) whose big claim to respect is based on the less than 0.1 percent of world production, have employed fine strategies on a consistent basis to maintain a steady stable and prosperous economy that keeps all citizens at a high standard of living.

In keeping with the close watch it has always maintained on its neighbors’ behavior, T+T has however continued to tow a line at the cutting edge of overspending and thrift while holding the force on new technologies as emerging products come to the fore to create a new future for the nation.

Having cautiously set its annual budget at US$45 per barrel of oil, TT Finance Minister Colm Imbert is grinning from ear to ear at the windfall especially in light of  back up funds available to meet enormous unexpected expenditure occasioned by the COVID 19 pandemic.

So that even as the Shells and bp’s invest heavily in Hydrogen, the TT government is trumping and following suit by doing all it can to encourage the discovery of the airborne product in alignment with the oil still being drawn from the ground.

Such is the wise strategy being adopted and adapted by very small players who felt they had so much leverage at one point that many here fondly recall how this country’s first Prime Minister Dr Eric Williams actually applied for membership in the Oil Producing Countries of the world (OPEC) and, according to some confidants, was genuinely puzzled that he should have been rejected.

This is the kind of confidence that pervades among the people of Sweet T+T  who gave the world the first musical instruments of the 21st Century in the Steel Pan, and Carnival, and three Olympic Gold medals with Tan Tan and Saga Boy plus a Nobel Prize.

With this kind of performance, the world’s smallest and most highly diversified and harmoniously living people can afford to bare their glistening bodies on a stage for all the world to see their rhythm and sensuousness resonating and trembling under nearly see-through costumes that would make a Muslim cleric cringe.

For “dis is how we does wine!”, the calypsonian sings in sultry fashion on stage, welcoming all to be enfolded in the fire within her country’s long legs and the temptation of a journey into hell with no clothes on.

This is the dance macbre of the Trini as we pack the Oxygen, Hydrogen and whatever other gases in our lungs and exhale in a rush to draw in and hypnotize all the world to see with eyes wide shut.

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