OPEC boosts long-term oil demand outlook, driven by developing world growth

OPEC raised its forecasts for world oil demand for the medium and long term in an annual outlook, citing growth led by India, Africa and the Middle East and a slower shift to electric vehicles and cleaner fuels.

The Organization of the Petroleum Exporting Countries, in its 2024 World Oil Outlook published on Tuesday, sees demand growing for a longer period than other forecasters like BP (BP.L), opens new tab and the International Energy Agency, which expect oil use to peak this decade.

Future energy demand is found in the developing world due to increasing populations, middle class and urbanization,” said OPEC Secretary General Haitham Al Ghais during the report’s launch in Brazil, a country with which the group is seeking to form closer ties.

Al Ghais’ speech in Rio de Janeiro was briefly disturbed by a protester from Greenpeace.

A longer period of rising consumption would be a boost for OPEC, whose 12 members depend on oil income. In support of its view, OPEC said it expected more push back on “ambitious” clean energy targets, and cited plans by several global carmakers to scale down electrification goals.

All policymakers and stakeholders need to work together to ensure a long-term investment-friendly climate,” Al Ghais wrote.

HIGHER 2029 FORECAST THAN IEA

OPEC also raised its medium term demand forecasts, citing a stronger economic backdrop than last year as inflation pressure wanes and central banks start to lower interest rates.

World demand in 2028 will reach 111 million bpd, OPEC said, and 112.3 million bpd in 2029. The 2028 figure is up 800,000 bpd from last year’s prediction.

OPEC’s 2029 forecast is more than 6 million bpd higher than that of the IEA, which said in June demand will plateau in 2029 at 105.6 million bpd. The gap is larger than the combined output of OPEC members Kuwait and the United Arab Emirates.

In 2020, OPEC made a shift when the pandemic hit oil demand, saying consumption would plateau in the late 2030s. It has begun raising forecasts again as oil use has recovered.

By 2050, there will be 2.9 billion vehicles on the road, up 1.2 billion from 2023, OPEC forecast. Despite electric vehicle growth, vehicles powered by a combustion engine will account for more than 70% of the global fleet in 2050, the report said.

“Electric vehicles are poised for a larger market share, but obstacles remain, such as electricity grids, battery manufacturing capacity and access to critical minerals,” it said.

OPEC and its allies, known as OPEC+, are cutting supply to support the market. The report sees OPEC+’s share of the oil market rising to 52% in 2050 from 49% in 2023 as U.S. output peaks in 2030 and non-OPEC+ output does so in the early 2030s.

By Alex Lawler, Reuters / September 24, 2024

Crude oil edges higher due to the US Fed interest rate cut and renewed supply fears amid escalating geopolitical conflicts

Crude oil prices gained last week, reaching a two-week high, driven by a significant interest rate cut by the United States Federal Reserve (US Fed) and declining global stockpiles, which bolstered sentiment in both physical and futures markets. However, the surge was capped by forecasts of a decline in consumption in China, the world’s second-biggest economy. Analysts believe the energy sector will continue to gain in the near future, though global supply and demand uncertainty, following escalating geopolitical conflicts, remains a caveat.

Data compiled by Polymerupdate Research showed the benchmark Brent crude futures for near month delivery on the InterContinental Exchange (ICE) rose steadily by 4 percent last week, primarily due to cautious bullish activity despite the lack of a clear direction. The Brent crude contract started the week with a marginal gain, closing at US$ 72.25 a barrel on Monday, up from US$ 71.61 a barrel the previous Friday. The upward trend persisted across the energy contract, despite volatility, with the contract settling at US$74.49 a barrel on Friday.

A similar trend was observed in the Western Texas Intermediate (WTI) Cushing futures for near month delivery at the New York Mercantile Exchange (Nymex), with the contract starting the week with a gain, closing at US$ 70.09 a barrel on Monday, up from US$ 68.65 a barrel the previous Friday. With a weekly gain of 4.76 percent, WTI futures closed on Friday at US$ 71.92 a barrel.

Shaky fundamentals
Oil prices extended their recent recovery rally and rose last week as a 50 basis points (bps) interest cut to 4.75-5 percent in United States interest rates and declining global stockpiles helped offset some of the demand concerns arising from weak consumption in China. Interest rate cuts typically boost economic activity and energy demand, but some also saw the large cut as a sign of a weak United States labour market. The Bank of England on Thursday held interest rates at 5 percent. The declining global crude stockpiles should support oil prices going forward. Crude inventories in the U.S., the world’s top producer, fell to a one-year low last week.

A report from the broking and financial advisory firm AndndRathi Investment Services, said, “Oil may trade with upward bias in the near term on supply threat from renewed geopolitical tensions and weather disruptions along with declining Cushing stockpiles. But China remained a key pain point for crude markets, as economic readings from the world’s biggest oil importer showed little signs of improvement. Thus upside may remain capped around US$ 73.50 a barrel for WTI oil futures.

As expected, the People’s Bank of China (PBoC) kept its key lending rates unchanged at the September fixing, aligning with market estimates. The one-year loan prime rate (LPR), the benchmark for most corporate and household loans, was maintained at 3.35 percent. Meanwhile, the five-year rate, a reference for property mortgages, was held at 3.85 percent. Both rates remain at record lows following unexpected rate reductions in July. The government’s move came after the central bank delayed the medium-term lending facility (MLF) operation for the second time in two months, as the PBoC planned to let short-term rates play a bigger role in guiding markets.

Facing economic challenges across the region, the Bank of England kept the Bank Rate unchanged at 5 percent during its September 2024 meeting, following a 25 bps cut in August, the first reduction in over four years. This decision met market expectations, though one member favoured a further 0.25 percentage points cut to 4.75 percent. The annual inflation was 2.2 percent in August, and is expected to increase to around 2.5 percent towards the end of this year as declines in energy prices last year fall out of the annual comparison. The number of people claiming unemployment benefits in the United States dropped by 12,000 from the previous week to 219,000 on the period ending September 14h, significantly below market expectations of 230,000, and reaching a new 4-month low.

The world is facing two major geopolitical conflicts: the war between Russia & Ukraine, and Israel & Hamas-Hezbollah-Iran. These conflicts have created a global economic and oil supply uncertainty, especially in the Middle East, which accounts for over a third of production worldwide. Additionally, economic downturn in the United States with rising unemployment rates, and slow recovery in China, have also added to the existing problems.

Deceleration in China’s oil consumption
China, the world’s second-biggest economic after the United States, is facing an abrupt deceleration in oil consumption, which is cooling global demand growth sharply from the rates seen in recent years, according to the latest report by the International Energy Agency (IEA). World oil demand is on course to increase by 900 000 barrels per day (bpd), or 0.9 percent, in 2024 and 950 000 bpd next year, down from 2.1 million bpd, or 2.1 percent, in 2023. IEA’s monthly data reported by countries representing 80 percent of global oil demand for the first six months confirm the sharp slowdown in the rate of growth in oil consumption. Global demand rose by 800 000 bpd, or 0.8 percent, year on year during the first half of the year.

The recent downturn in China has been even more acute than expected, with oil demand in July declining year on year for a fourth consecutive month, according to IEA. At the same time, growth outside of China is tepid at best. This weaker demand environment has helped fuel a sharp sell-off in oil markets. Brent crude oil futures have plunged from a high of more than US$ 82 a barrel in early August to near three-year lows at just below US$ 70 a barrel on 11 September.

China has been the cornerstone of the growth in global oil demand so far this century. Dynamic factory activity, massive infrastructure investments and rising prosperity across a population of over 1 billion people driving what has, at times, felt like an inexorable expansion in oil consumption. Over the past decade, the annual increase in Chinese oil demand has averaged in excess of 600 000 bpd, accounting for more than 60% of the total global average increase. Moreover, China’s share of global demand growth has expanded since the pandemic. This year, demand outside China will remain 0.3 percent below 2019 levels, but in China, consumption will be 18 percent higher, IEA forecasts.

By: polymerupdate , DILIP KUMAR JHA / 23 Sep 2024 

Decline in natural gas price drove decrease in U.S. oil producer revenue in early 2024

Financial results for 36 publicly traded U.S. oil exploration and production (E&P) companies show that cash from operations in the first quarter of 2024 has decreased in real terms from the first quarter of 2023 due to lower natural gas prices.

Production expenses, which can also affect cash from operations, have stabilized after supply chain issues that caused increased costs appear to be largely resolved. Capital expenditures, which represent investment in oil and natural gas production, were flat over the same period.

In the first quarter of 2024, lower crude oil and natural gas prices helped reduce cash from operations by 12% compared with the first quarter of 2023, to $23.3 billion. Although West Texas Intermediate crude oil prices declined 2% over this period, U.S. crude oil production by these companies increased 5% to nearly 4.2 million barrels per day (b/d).

Relatively large production cuts by OPEC+ have supported crude oil prices and spurred production among non-OPEC+ sources, including U.S. producers. Increased production would normally result in more cash from operations, but substantially lower natural gas prices likely hampered revenue for these companies.

Natural gas prices fell 26% from the first quarter of 2023 to the first quarter of 2024 and reached their lowest average monthly inflation-adjusted price since at least 1997. Although the companies in this analysis focus on crude oil production, natural gas still typically makes up around 30% of what they produce because of associated natural gas present in crude oil deposits and more diversified operations by some of the E&P companies in the group.

Production expenses—such as the cost of goods sold, operating expenses, and production taxes—increased substantially per barrel of oil equivalent (BOE) in 2021 and 2022 as supply chain issues caused material and labor costs to more than double from the 2019 average. Production expenses have since declined, decreasing 40% between the second quarter of 2023 and the recent high in the second quarter of 2022.

Production expenses have been relatively flat since the second quarter of 2023, averaging $26/BOE. In addition to supply chain improvements, improved drilling productivity and increasing takeaway capacity in the Permian region have also reduced production expenses on a BOE basis.

We base our analysis on the published financial reports of 36 publicly traded oil companies that produce most of their crude oil in the United States. As a result, our observations do not represent the entire sector because we exclude private companies, which do not publish financial reports. The included 36 publicly traded companies accounted for 32% of the crude oil produced in the United States in the first quarter of 2024, or about 4.2 million barrels per day.

By: AJOT / Sep 23 2024 

Financial results for 36 publicly traded U.S. oil exploration and production (E&P) companies show that cash from operations in the first quarter of 2024 has decreased in real terms from the first quarter of 2023 due to lower natural gas prices.

Norway’s Equinor Scraps Plans to Export Blue Hydrogen to Germany

Norway’s Equinor has scrapped plans to export so-called blue hydrogen to Germany because it is too expensive and there is insufficient demand, a spokesperson for the energy company said on Friday.

Equinor and Germany’s RWE signed a memorandum of understanding in January 2022 to build a hydrogen supply chain for German power plants to help reduce greenhouse gas emissions.

The plans included producing hydrogen from natural gas in combination with carbon capture and storage – known as blue hydrogen – in Norway and exporting it to hydrogen-ready gas power plants in Germany via the world’s first offshore hydrogen pipeline.

“The hydrogen pipeline hasn’t proved to be viable. That also implies that hydrogen production plans are also put aside,” Equinor spokesperson Magnus Frantzen Eidsvold told Reuters.

“We have decided to discontinue this early-phase project,” he added.

The pipeline was not RWE’s project, but required support from both Norway and Germany, the German company said in emailed comments.

Last year, Equinor CEO Anders Opedal said the cost of the total supply chain could run into the “tens of billion euros”, while the pipeline alone would cost some 3 billion euros ($3.35 billion).

Eidsvold said Equinor also could not continue maturing the projects without firm long-term commitments from European buyers to import hydrogen.

“We are not able to make this kind of investments when we don’t have long-term agreements and the markets in place,” Eidsvold said.

Plans to develop hydrogen-ready gas power plants in Germany with RWE will go ahead but hydrogen for them will be procured on the continent, not exported from Norway, Eidsvold said.

The German government has been in intensive talks on the issue with Norway, a German economy ministry official told Reuters on Saturday.

The official said the new plan now includes converting Norwegian gas into blue hydrogen in the Netherlands and shipping the captured carbon dioxide back to Norway for storage.

RWE said hydrogen-ready gas power plants could start production at earliest from 2030 provided the German government approves a support regime for such plants.

Equinor will continue other early-phase hydrogen projects, such as in Britain and the Netherlands, as well, Eidsvold added.

By: Reuters / September 23, 2024

ONEOK to Buy EnLink Stake, Medallion Midstream from GIP in Two Deals Worth $5.9 Bln

U.S. pipeline operator ONEOK said on Wednesday that it struck two deals worth $5.9 billion with infrastructure investor GIP to boost its presence in the Permian Basin as well as mid-continent, North Texas and Louisiana regions.

In the first, ONEOK will buy GIP’s 43% stake in EnLink Midstream for $14.90 per unit and GIP’s full interest in EnLink’s managing member for a total of about $3.3 billion in cash.

The price per unit is a 12.8% premium to EnLink’s closing market price on Aug. 27.

In the second deal, ONEOK will buy GIP’s equity interests in Medallion Midstream, a crude gathering and transportation system in the Permian’s Midland Basin, for $2.6 billion in cash.

“We are particularly excited to meaningfully increase our company’s presence in the Permian Basin, which is expected to continue driving the majority of U.S. oil and gas growth,” ONEOK CEO Pierce Norton II said.

The deals, coming a year after ONEOK bought rival Magellan Midstream Partners for $18.8 billion, will boost the Tulsa, Oklahoma-based company amid plunging U.S. natural gas prices due to mild weather and high storage levels. Higher volumes helped bolster its profit in the latest quarter.

ONEOK said it expects the two deals to immediately add to its earnings and free cash flow, bolstering its ability to execute its planned $2 billion share repurchase program.

The company also expects synergies between $250 million and $450 million over the next three years as a result of these acquisitions, it said in a statement.

ONEOK has secured financing commitments worth up to $6 billion from JPMorgan Chase and Goldman Sachs to fund the deals, which it expects to close early in the fourth quarter.

By: Reuters, August 29, 2024.

Liquid terminals to fuel energy transition with government programs

As the U.S. transitions toward adopting more renewable liquid fuels, bulk liquid storage facilities serve as an ever-present constant in the supply chain, storing and handling commodities like petroleum-based products, biofuels like ethanol and beyond.

The public and market forces continue to push the industry to adapt to new and increasing quantities of greener, alternative forms of liquid energy. The federal government has developed several programs that terminal companies can leverage to jumpstart their efforts, capitalizing on these emerging markets.

Higher Blends Infrastructure Incentive Program

For example, in June 2023, the U.S. Department of Agriculture (USDA) announced the Higher Blends Infrastructure Incentive Program (HBIIP), designed to significantly increase the sale and use of higher blends of ethanol and biodiesel by expanding infrastructure for renewable fuels through quarterly grant competitions. The International Liquid Terminals Association (ILTA) held a webinar with Jeff Carpenter, HBIIP’s program manager, to discuss the initiative and how terminal companies can take advantage of the resources it offers.

Carpenter gave a high-level summary of the HBIIP program, outlining how it implements quarterly grant competitions for $90 million in projects to support higher blend fuel sales, including purchasing and installing or retrofitting fuel dispensers and related equipment and infrastructure. His presentation highlighted opportunities under HBIIP for fuel distribution facilities, and while installation of storage tanks for ethanol and biodiesel are common grant uses, the program is open-ended for terminal facilities if the project is tied to higher blends of biofuels. Carpenter also explained additional funding opportunities from the USDA for emissions reductions at liquid terminals, including the Rural Energy for America Program (REAP) and business and industry guaranteed loans. Although the last quarterly competition under HBIIP is open through September 30, 2024, Carpenter anticipates that the program will likely be renewed in the future because of its success and bipartisan support.

FAST-SAF programs

Likewise, in late 2022 the DOT and the Federal Aviation Administration established the Fueling Aviation Sustainable Transition (FAST) grant program. Created under the Inflation Reduction Act, the program offers funding to accelerate the production and use of sustainable aviation fuels (SAF) and the development of low-emission aviation technologies to support the U.S. aviation climate goal to achieve net-zero GHG emissions by 2050. For bulk liquid terminals, FAST offers almost $250 million in grants to support the build out of infrastructure projects related to SAF production, transportation, blending and storage.

Regional Clean Hydrogen Hubs program

Finally, the DOE formalized the Regional Clean Hydrogen Hubs (H2Hubs) in 2023, earmarking $7 billion in funding for seven clean hydrogen hubs across the U.S. These hubs work as a national network of clean hydrogen producers, consumers and connective infrastructure while supporting the production, storage, delivery and end use of clean hydrogen. H2Hubs is meant to accelerate the commercial-scale deployment of hydrogen, helping generate clean, dispatchable power, create a new form of energy storage and decarbonize heavy industry and transportation. Terminal companies can apply for funding to build hydrogen storage capabilities at their facilities if they are located within the seven hubs. The hydrogen hubs are named: Appalachian, California, Gulf Coast, Heartland, Mid-Atlantic, Midwest and Pacific Northwest.

As the bulk liquid terminals industry continues to navigate the wider energy transition, terminal companies will undoubtedly play a key role in the energy logistics supply chain far into the future. HBIIP, FAST-SAF and H2Hubs represent a unique opportunity for companies to hit the ground running as the nation moves to embrace more renewable liquid energies.

By  ILTA , JAY CRUZ / September 16, 2024

China’s energy playbook success not enough to secure climate goals

Energy planners in Beijing have found a winning approach, but the strength of China’s coal sector threatens to undo progress on emissions

News broke last month over the possible sale of Sinochem’s assets in a US shale oil play in the Permian Basin of Texas. The company holds a 40 per cent stake in the prolific Wolfcamp shale venture with US supermajor ExxonMobil.

While no reason was given for the possible divestiture, Reuters reported that the Beijing-based energy company has struggled with its oil production business in the past few years and wants to shift its focus to other sectors. The sale could fetch some US$2 billion for Sinochem. The company initially acquired the stake in 2013 from Pioneer Resources for US$1.7 billion as part of a strategic expansion into international oil and gas assets.

The Permian Basin in west Texas is one of the top oil-producing regions in the United States. It’s also one of the main reasons the US has become the world’s top oil producer, bypassing both Russia and Saudi Arabia, with production averaging almost 13 million barrels per day (bpd) last year.

The Sinochem development typifies a turning point in China’s energy sector. Simply put, China won’t need as much crude oil as before going forward, making overseas oil deals less crucial for its energy security. China’s oil demand is forecast to continue to taper off because of its massive renewables development along with domestic oil production, less petrol needed for its transport sector and prolonged economic contraction.

China’s purchasing managers’ index reached a six-month low in August. That month, China also reported its first decline in new export orders in eight months while a survey indicated new home prices grew at the slowest rate this year.

Meanwhile, last week UBS Investment Bank lowered its forecasts for China’s GDP growth to 4.6 per cent this year and 4 per cent next year because of a “deeper-than-expected property downturn” and its effects on household consumption. The downward spiral could worsen since China is trying to support the economy with stimulus measures, but it hasn’t been enough to stabilise its property sector.

Meanwhile, China imported 2.4 per cent less oil in the first seven months of 2024 compared to the same period a year earlier. While that might seem like a marginal amount, its impact on global oil prices this year has been immense. London-traded Brent crude futures, a global oil benchmark, dropped nearly 5 per cent to close below US$74 per barrel on Tuesday, its lowest price point since December.

Weaker economic data coming out of China and low refining margins in the US and Europe have kept pressure on oil prices. China’s lower oil demand has also forced the Organisation of the Petroleum Exporting Countries (Opec) to downgrade its global oil demand forecast for the first time this year. Lower global oil demand growth is also forecast for 2025.

While an improvement in economic conditions in China could stoke more oil demand, a shift in its transport sector will ensure its oil demand growth remains under pressure. Electric vehicles (EV) continue to make inroads. More than half of new car sales in China are now EVs or hybrid vehicles, while revenue in China’s EV market is projected to reach US$376.4 billion this year.

The share of overall EVs on China’s roads has reached 11.5 per cent of total vehicles, up from 7.7 per cent last year. Reports indicate this will cut petrol demand by around 4 per cent, some 150,000 bpd.

Liquefied natural gas (LNG) usage for China’s trucking sector is also reducing the country’s diesel demand, hence its overall oil demand. LNG usage for trucks and commercial vehicles helped slash 220,000 bpd of diesel last year.

Going forward, a decrease in China’s oil imports bodes well for its energy security and hence its overall national security. The country is also taking other steps to reduce its oil import burden, diversify its energy sector and jump-start its economy.

In August, China accelerated its nuclear power expansion with the approval of five new projects at an estimated cost of some 200 billion yuan (US$28 billion). Approval for the new projects are in the coastal provinces of Shandong, Zhejiang, Jiangsu and Guangdong, along with the Guangxi Zhuang autonomous region. China has 55 operating nuclear reactors with a total net capacity of 53.2 gigawatts as of April.

China is also ramping up its natural gas exploration and production, particularly in the South China Sea. All of these developments indicate that energy planners in Beijing have finally found the right playbook for the country’s energy sector after receiving criticism, often from abroad, for many years.

However, adjustments still need to be made. China’s solar and wind power capacity, along with its transition to more LNG-powered trucks and EVs to help lower its overall oil demand and reduce carbon dioxide emissions, will continue to be offset by the country’s coal sector. China remains the world’s largest coal producer and importer by far, and it accounts for more than half of the world’s coal-fired power capacity.

The only answer would be an unpopular one, but it still needs to be made – a moratorium on new domestic coal-fired power projects with a scheduled full phasing out of existing coal-fired power projects.

If these steps are not taken, China’s coal usage will threaten its ability to reach its goals of peak carbon dioxide emissions before 2030 and carbon neutrality by 2060. It could also jeopardise the international goal of limiting global warming as stipulated in the Paris climate agreement.

By: Tim Daiss, 15 Sep 2024.

Supply Chain Leaders Confident in Recovery Plans Despite Gaps in Scenario Planning, Study Reveals

New research from CargoWise shows that while supply chain professionals are increasingly diversifying their networks and utilizing real-time monitoring to address growing risks like geopolitical tensions and cybersecurity threats, many may be overconfident in their ability to recover from disruptions due to a lack of consistent scenario planning.

The study, *Future-proofing Supply Chain Operations: Leveraging Technology for Lasting Impact*, surveyed over 450 global logistics professionals between March and April 2024. Findings indicate that while 57% of respondents are confident in their recovery strategies, only 32% conduct regular scenario testing to assess their response to potential threats.

Top Concerns: Geopolitical tensions and cybersecurity threats rank as the top risks to global supply chains, with professionals in North America particularly concerned about cyberattacks (28%, compared to the global average of 19%).

Diversification and Real-Time Monitoring: To mitigate risks, companies are prioritizing multi-sourced supply chains and real-time monitoring, allowing faster decision-making when disruptions occur. North American respondents lead in diversifying supply routes (37%, compared to the global 33%).

Technology Integration: Nearly half of the respondents (48%) seek to streamline operations through technology integration, promoting real-time visibility and data accuracy for better decision-making.

However, Gene Gander, General Manager at CargoWise, emphasizes that confidence in recovery plans may be misplaced without thorough and regular scenario planning. “True resilience requires ongoing preparation and testing,” Gander noted, encouraging businesses to adopt unified platforms that support predictive analytics and fast decision-making.

Despite increasing awareness of potential threats, the gap between preparedness and confidence reveals an opportunity for the industry to strengthen its resilience strategies through more proactive measures.

By Global Trade , Tim Jay / September 13th, 2024

Trafigura to Convert More Supertankers If Oil Market Woes Linger

Trafigura Group could switch more of its crude-oil tankers to carry refined products if sluggish market conditions persist.

About 12% of Trafigura’s fleet of very-large crude carriers (VLCCs) and 20% of its Suezmaxes can carry those fuels on top of shipping denser crude, the trading house’s global head of wet freight, Andrea Olivi, said in an interview. “From what we see in the market today, I would expect this number to potentially increase,” he said.

The conversion, which began in recent months, was prompted by low crude-oil tanker rates amid weaker oil demand from China, Olivi said. He added that production cuts from the Organization of the Petroleum Exporting Countries also meant there was less oil that needed to be transported on tankers.

At the same time, attacks by Houthi militants on merchant vessels in the Red Sea have forced ships to take a longer route to reach Europe from Asia. That’s boosted charter rates for smaller ships that transport fuels like gasoline and diesel as they now need to sail around Africa, adding thousands of miles to their journeys.

VLCCs, with their large sizes and ability to sail longer distances, allow for greater economies of scale, said Olivi. “VLCCs have become the bellwether of the market, they are extremely flexible in adapting,” he said.

By: Weilun Soon / Trasfigura , September 11, 2024 

Savannah River deploys drones for tank inspections

The US Department of Energy (DOE) Office of Environmental Management (EM) is deploying drones for the first time to undertake internal inspections of the radioactive liquid waste tanks at the Savannah River Site (SRS) in South Carolina.

The radioactive liquid waste generated by the SRS chemical separations processes is stored in the Tank Farms in both solid and liquid forms. About 160m gallons of radioactive waste has been generated and concentrated by evaporation to a current volume of approximately 35m gallons. SRS has a total of 51 waste tanks built in the Site’s F and H Areas; eight of those tanks have been operationally closed. Several of the remaining 43 waste tanks are in various stages of the waste removal, cleaning, and operational closure process.

Since 1954, SRS waste tanks have provided safe and environmentally sound storage for nuclear waste. All of SRS’s high-level waste tanks are below ground with only the tank tops exposed for access. These tanks include four designs.

Until now, the SRS Liquid Waste programme had used wall-crawling robots that cling to the tank walls using magnets. The drones provide more flexibility and capability, as they can cover more area more quickly than a magnetic crawler. Additionally, the drones are equipped with 3D-scanning light detection and ranging equipment, which can generate precise 3D scans of the tank and its waste.

Initially, the inspections will be of the annulus space in the tanks. The annulus provides secondary containment and protection for these tanks in the event of a leak. The drones were implemented for inspections late last month.

Before the work can begin with the drones, all administrative and regulatory requirements must be satisfied. Pilots are required to be trained on drone operations, followed by advanced training on successfully navigating the environment of a waste tank and learning best practices for planning flights for optimal results.

The remote-controlled aircraft, the Flyability Elios 3, is a 19-inch diameter drone with four helicopter-like propellers, a high-definition camera, thermal camera, and additional features that will benefit the tank inspection programme. The drones also have advanced stability features that make them easier to manoeuvre in flight. Four drones have been purchased for the project, and all are designed to fly in confined spaces, thanks to a protective cage that shields the propellors and cameras from potential collisions with a tank wall.

The Elios 3 model drone has undergone extensive radiation exposure testing at the Idaho National Laboratory. The lab determined the level of radiation exposure the drone could withstand before experiencing a failure. That level was judged to be adequate for the needs of the liquid waste programme.

“These drones are an important step in our ability to perform inspections of the tanks,” said Savannah River Mission Complete Chief Operations Officer Wyatt Clark. “The drones will help us determine the effectiveness of our cleaning efforts.”

Jim Folk, DOE-Savannah River Operations Office assistant manager for waste disposition, said this new use of technology is a safe and effective method to continue to protect people and the environment. “DOE wants to ensure we can ultimately close the remaining 43 liquid waste tanks at SRS in a safe manner,” Folk said. “With the help of drones, we can advance our work to complete the liquid waste mission by 2037.”

By: Neimagazine , Tracey Honney  / September 9, 2024