🔁 Anti-Coal Policy Crumbles under Blacklist Brunt

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Today’s Key Takeaways: 1.3B barrels of recoverable oil and gas on the North Slope. Big reversal of anti-coal policy. Senate vote today to overturn Biden rule on highway emissions.


Pantheon Resources increases Alaska’s Kodiak oil and gas recoverable resources to 1.3 Bbbl
World Oil, April 9, 2024

Pantheon Resources plc shared the results of the updated Independent Expert Report (“IER”) by Netherland Sewell & Associates, Inc. (“NSAI”). The update includes approximately 43,000 acres located on its 100% owned Kodiak oil and gas field on the North Slope of Alaska.

NSAI’s best estimates of Kodiak’s contingent recoverable resources sum to 1.2 Bbbl of marketable liquids (oil, condensate, and natural gas liquids) and 5.4 Tcfg. The new resource represents a 25% increase (963 MMbbl to 1.2 Bbbl) in recoverable marketable liquids compared to NSAI’s previous 2023 report.

The updated numbers include c. 43,000 of the c. 66,000 acres of the expanded acreage footprint following successful lease bids in December 20231, and a higher average recovery rate due to the better reservoir properties in the shallower, updip portion of the field secured by the new leases.

The Kodiak oil and gas field is a large basin floor fan accumulation with three well penetrations. Recent drilling activity and acreage acquisition strategy has focused on moving structurally higher into better reservoir rocks where porosity and permeability are substantially improved.

The potential improvement in reservoir quality in the newly acquired acreage underpins the c. 40% increase in the high estimate of recoverable resources to 2.8 Bbbl of marketable liquids and 11.75 Tcfg.

The 5.4 tcf of recoverable gas (Best Case) is important as additional support for a proposed agreement with Alaska Gasline Development Corp (“AGDC”) to bring gas to southcentral Alaska markets.

The Kodiak oil and gas field currently represents Pantheon’s largest project development candidate, currently defined by three well penetrations into the Basin Floor Fan structure, which extends more than 10 miles from the deepest part of the fan to the 2021 updip Theta West-1 appraisal well.

The additional recent successful lease bids secure the remainder of the accumulation to the northwest and adds a significant volume of recoverable oil and gas to the Kodiak field.



BMO Reverses Anti-Coal Policy
Charles Kennedy, OilPrice.Com, April 9, 2024

BMO dropped plans to curb lending to the coal industry last year to avoid accusations of energy boycotting from West Virginia, Bloomberg has reported, citing an update from West Virginian Treasurer Riley Moore.

The update came in the form of a list of financial institutions that restrict lending to the state’s major industry and are exposed as seeking to destroy the state’s vital energy industry, per Moore. The list is a result of a Republican law passed in 2022, which names financial firms that have “publicly stated they will refuse, terminate or limit doing business with coal, oil or natural gas companies without a reasonable business purpose.”

The list released this week includes majors such as BlackRock, Goldman Sachs, Morgan Stanley, Wells Fargo, and JP Morgan, but the name of Bank of Montreal’s U.S. subsidiary BMO was not mentioned by the West Virginian Treasurer, suggesting it had done a U-turn on its coal curb plans. HSBC, Citigroup, and Northern Trust were also named among the energy boycotters.

“We cannot allow institutions that seek to destroy our state’s critical energy industries and the economic activity they generate to also profit from handling the very taxpayer dollars they seek to diminish,” the West Virginian Treasury said in a statement.

The companies on the list were warned they would end up on it earlier this year. In response, a counselor for BMO wrote back to West Virginia’s Moore, saying, per Bloomberg, that “As a result of policy changes made in November 2023, we removed a Coal Statement from BMO’s websites as it did not fully reflect our current policies.”

“After receipt of your letter, we realized that a cached version of the statement remained on our websites and took it down. We have no plans to republish the Coal Statement,” Timothy Cox also wrote.


THIS AFTERNOON’S VOTE: The Senate is set to vote on a disapproval resolution overturning a Transportation Department rule requiring states to measure and set goals for reducing carbon emissions from cars and trucks on the road – and at least one Democrat is on board with Republicans to pass the measure. 

Republican Sens. Kevin Cramer and Shelley Moore Capito and Democratic Sen. Joe Manchin, along with GOP Reps. Rick Crawford and Sam Graves,introduced a bipartisan resolution under the Congressional Review Act to block the rule, arguing that the policy is an overreach from the Biden administration and would saddle states with “burdensome and unlawful requirements.” 

“New York and North Dakota have very different transportation systems, needs, and capabilities, but under this one-size-fits-all mandate, they’re effectively treated the same,” Cramer, the ranking member of the Senate Environment and Public Works Subcommittee on Transportation and Infrastructure, said in a statement in February. 

More about that rule: The rule, finalized by the Federal Highway Administration in November, establishes a method for the agency to measure and report greenhouse gas emissions from vehicles. It also requires state DOTs and local planning organizations to establish carbon targets and report on progress towards meeting those goals. 

What the rule doesn’t do: The rule doesn’t mandate how low the targets should be – but rather that states have targets. Local authorities are provided the flexibility to set their own goals that are appropriate for their own communities’ climate change priorities, “as long as the targets aim to reduce emissions over time.” However, it’s ultimately up to the FWHA to assess if state DOTs have made significant progress toward achieving their targets.

In defense of the rule: In a blog post defending the rule, the Natural Resources Defense Council pushed back against claims made by Republicans, emphasizing the flexibility that states are given in implementing the policy, and asserting that the administration does have the authority to impose GHG emissions performance measures. The group also pushed back on the claim that the rule would undermine state economies, arguing that compliance costs associated with the policy are projected to be “minimal” considering that states have the tools they need to set targets and track progress. 

Senate math: All 49 Republicans in the Senate cosponsored the resolution. Assuming that all Republicans vote to overturn the rule, along with Manchin, the measure would still be defeated at a tie vote – or can be defeated if Vice President Kamala Harris breaks the tie. But the measure can pass if at least one more Democrat votes with Republicans. Be on the lookout for more Democrats who cross the aisle to vote for the CRA. 

The W.H. response: The White House has not issued a statement of administrative policy on the CRA, but it’s unlikely they would overturn their own policy. 

A fight in the courts: A Texas judge struck down the climate rule last month, arguing it was not within the agency’s legal authority. In a separate case in which 21 GOP-led states sued the Federal Highway Administration and others, a federal judge in Kentucky ruled the policy was unlawful, but declined to vacate it.

From the Washington Examiner, Daily on Energy, April 10, 2024