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A judgment delivered but nothing resolved. The United Nations Convention on the Law of the Sea tribunal has rejected China’s claim to large swatches of the South China Sea. China’s claim to the huge area of sea is based on what it calls a ‘historic ownership’, regarding the area for centuries as an integral part of China, the same claim it uses for Tibet. The so-called nine-dashed line issued by China, eats in the territory of several countries, including the Philippines, which brought the case to the tribunal after talks with China failed. The tribunal yesterday held that China had breached the sovereign rights of the Philippines and found no legal basis to its claims on the area. China, as it warned, has rejected the decision and is ignoring it. The oil and shipping markets have reacted to the news with worry, with crude prices jumping over fears that the situation could escalate militarily.

 

At the centre of this dispute are the Spratly and Paracel islands, where China has been furiously constructing communities and airstrips to back its claim, going as far as to issue banknotes for the uninhabited islands. This is where it gets messy. Vietnam claims that it has administered both island chains since the 17th century. China’s claim to the islands date to before the founding of the People’s Republic, meaning it may have been transferred to Taiwan. The Philippines’ contention is not so much about the islands, but over Scarborough Shoal, within its legal sovereign zone, but claimed by China. Brunei and Malaysia both claim some of the southern islands of both chains. But China’s purported historical documents only claim the islands; it’s nine-dashed line – a graphical flourish that includes no exact points or coordinates - extends well beyond the Spratlys and Paracel, coming within a dozen miles of Sarawak, Sabah and Brunei. Essentially, China believes it can bully the countries into handing over sovereign territory.

 

The prize is large. This area of the South China Sea is the most-trafficked shipping route in the world, connecting China, Japan and South Korea with Africa and Europe. Control over the sea, which is now considered international waters, could disrupt trade, and the US has supported ‘freedom of navigation.’ The area is also rich in fishing resources, which China wants to feed its population. And finally there is the question of oil (and gas). Though unmapped and largely unexplored, several large discoveries of oil surround it – Malaysia’s deepwater fields in Sabah, Vietnam’s southern offshore fields and the Philippine oil and gas deposits off Palawan – suggesting there could be rich pickings of energy buried beneath the sea. China, whose own crude oil production is declining, wants it.

 

The decision creates a stalemate. The Philippines, along with Vietnam, will champion the decision. China has chosen to ignore it, claiming the tribunal has no authority and would prefer to negotiate directly with the individual countries, prompting worries of economic bullying. The US is pivoting to the area, attempting to act as a counterweight to China’s worrying dominance. There is no clear solution, only clear continued antagonism. China will continue to stake its claim, and unless the US chooses to intervene, there is not much other countries can do to stake their claim. If the US does choose to intervene, it could mean war; war would settle the issue – to the victor goes the spoils – but war is something no side wants.

 

#CHexit – referencing to the recent popular term used for Britain’s referendum vote to leave the EU.

 

 

 

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Chicago Cubs Shirts: Wear Style with Ultimate Comfort!

For most people, embracing style can be really overwhelming. The bodycon dress might look fabulous but what about comfort? This type of dress clasp all the body and sometimes it becomes really hard to take a fine breath! In fact, the satin cloths that look super lustrous and voguish, but only the person who is wearing that knows how uneasiness feels like. Moreover, these types of clothing can not be worn on all occasions. You literally have to pick the right piece of outfit according to a specific occasion keeping the ambiance of the situation in mind. This is simply the reason, why ladies always complain that they have nothing to wear. To save people from this fashion crisis, sport wears emerges to be the ultimate lifesaver and in this connection, the mention must be made of Chicago Cubs Shirts.


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September, 16 2021
The New Wave of Renewable Fuels

In 2021, the makeup of renewables has also changed drastically. Technologies such as solar and wind are no longer novel, as is the idea of blending vegetable oils into road fuels or switching to electric-based vehicles. Such ideas are now entrenched and are not considered enough to shift the world into a carbon neutral future. The new wave of renewables focus on converting by-products from other carbon-intensive industries into usable fuels. Research into such technologies has been pioneered in universities and start-ups over the past two decades, but the impetus of global climate goals is now seeing an incredible amount of money being poured into them as oil & gas giants seek to rebalance their portfolios away from pure hydrocarbons with a goal of balancing their total carbon emissions in aggregate to zero.

Traditionally, the European players have led this drive. Which is unsurprising, since the EU has been the most driven in this acceleration. But even the US giants are following suit. In the past year, Chevron has poured an incredible amount of cash and effort in pioneering renewables. Its motives might be less than altruistic, shareholders across America have been particularly vocal about driving this transformation but the net results will be positive for all.

Chevron’s recent efforts have focused on biomethane, through a partnership with global waste solutions company Brightmark. The joint venture Brightmark RNG Holdings operations focused on convert cow manure to renewable natural gas, which are then converted into fuel for long-haul trucks, the very kind that criss-cross the vast highways of the US delivering goods from coast to coast. Launched in October 2020, the joint venture was extended and expanded in August, now encompassing 38 biomethane plants in seven US states, with first production set to begin later in 2021. The targeting of livestock waste is particularly crucial: methane emissions from farms is the second-largest contributor to climate change emissions globally. The technology to capture methane from manure (as well as landfills and other waste sites) has existed for years, but has only recently been commercialised to convert methane emissions from decomposition to useful products.

This is an arena that another supermajor – BP – has also made a recent significant investment in. BP signed a 15-year agreement with CleanBay Renewables to purchase the latter’s renewable natural gas (RNG) to be mixed and sold into select US state markets. Beginning with California, which has one of the strictest fuel standards in the US and provides incentives under the Low Carbon Fuel Standard to reduce carbon intensity – CleanBay’s RNG is derived not from cows, but from poultry. Chicken manure, feathers and bedding are all converted into RNG using anaerobic digesters, providing a carbon intensity that is said to be 95% less than the lifecycle greenhouse gas emissions of pure fossil fuels and non-conversion of poultry waste matter. BP also has an agreement with Gevo Inc in Iowa to purchase RNG produced from cow manure, also for sale in California.

But road fuels aren’t the only avenue for large-scale embracing of renewables. It could take to the air, literally. After all, the global commercial airline fleet currently stands at over 25,000 aircraft and is expected to grow to over 35,000 by 2030. All those planes will burn a lot of fuel. With the airline industry embracing the idea of AAF (or Alternative Aviation Fuels), developments into renewable jet fuels have been striking, from traditional bio-sources such as palm or soybean oil to advanced organic matter conversion from agricultural waste and manure. Chevron, again, has signed a landmark deal to advance the commercialisation. Together with Delta Airlines and Google, Chevron will be producing a batch of sustainable aviation fuel at its El Segundo refinery in California. Delta will then use the fuel, with Google providing a cloud-based framework to analyse the data. That data will then allow for a transparent analysis into carbon emissions from the use of sustainable aviation fuel, as benchmark for others to follow. The analysis should be able to confirm whether or not the International Air Transport Association (IATA)’s estimates that renewable jet fuel can reduce lifecycle carbon intensity by up to 80%. And to strengthen the measure, Delta has pledged to replace 10% of its jet fuel with sustainable aviation fuel by 2030.

In a parallel, but no less pioneering lane, France’s TotalEnergies has announced that it is developing a 100% renewable fuel for use in motorsports, using bioethanol sourced from residues produced by the French wine industry (among others) at its Feyzin refinery in Lyon. This, it believes, will reduce the racing sports’ carbon emissions by an immediate 65%. The fuel, named Excellium Racing 100, is set to debut at the next season of the FIA World Endurance Championship, which includes the iconic 24 Hours of Le Mans 2022 race.

But Chevron isn’t done yet. It is also falling back on the long-standing use of vegetable oils blended into US transport fuels by signing a wide-ranging agreement with commodity giant Bunge. Called a ‘farmer-to-fuelling station’ solution, Bunge’s soybean processing facilities in Louisiana and Illinois will be the source of meal and oil that will be converted by Chevron into diesel and jet fuel. With an investment of US$600 million, Chevron will assist Bunge in doubling the combined capacity of both plants by 2024, in line with anticipated increases in the US biofuels blending mandates.

Even ExxonMobil, one of the most reticent of the supermajors to embrace renewables wholesale, is getting in on the action. Its Imperial Oil subsidiary in Canada has announced plans to commercialise renewable diesel at a new facility near Edmonton using plant-based feedstock and hydrogen. The venture does only target the Canadian market – where political will to drive renewable adoption is far higher than in the US – but similar moves have already been adopted by other refiners for the US market, including major investments by Phillips 66 and Valero.

Ultimately, these recent moves are driven out of necessity. This is the way the industry is moving and anyone stubborn enough to ignore it will be left behind. Combined with other major investments driven by European supermajors over the past five years, this wider and wider adoption of renewable can only be better for the planet and, eventually, individual bottom lines. The renewables ball is rolling fast and is only gaining momentum.

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Market Outlook:

  • Crude price trading range: Brent – US$71-73/b, WTI – US$68-70/b
  • Global crude benchmarks have stayed steady, even as OPEC+ sticks to its plans to ease supply quotas against the uncertainty of rising Covid-19 cases worldwide
  • However, the success of vaccination drives has kindled hope that the effect of lockdowns – if any – will be mild, with pockets of demand resurgence in Europe; in China, where there has been a zero-tolerance drive to stamp out Covid outbreaks, fuel consumption is strengthening again, possibly tightening fuel balances in Q4
  • Meanwhile, much of the US Gulf of Mexico crude production remains hampered by the effects of Hurricane Ida, providing a counter-balance on the supply side

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