Today’s Key Takeaways: Major win for American Energy – permanent injunction against Biden Administrations illegal moratorium on oil & gas leasing. Political unrest in Iraq threatens their oil supply. Australian energy prices see 400% increase – highlight need for new gas sources. Nova Minerals Ltd. results at Estelle gold deposit. CA takes wrong turn with ban on gasoline powered vehicles.
NEWS OF THE DAY:
A federal judge in Louisiana sided with Texas Attorney General Ken Paxton and 12 other plaintiff states (including Alaska) in a Louisiana-led lawsuit, issuing a permanent injunction against the Biden Administration’s illegal moratorium on oil and gas leasing on federal public lands and offshore waters.
The permanent injunction comes after Attorney General Paxton joined the lawsuit in 2021 and successfully obtained a preliminary injunction last year.
As high energy costs and skyrocketing inflation continue to crush American families, the Biden Administration’s moratorium would only have increased the suffering. This all-out assault against oil and natural gas production would have killed good-paying jobs and increased consumer energy costs, all while decreasing funds that could be used for the restoration of state coastlines.
“Joe Biden may have declared war on American energy independence, but we’re fighting back and we’re winning in court,” said Attorney General Paxton. “The executive order was a clear example of unconstitutional federal overreach, and I’m pleased to see the court make the right decision in issuing a permanent injunction to prevent it from taking effect.”
In recognizing the damage done by the Biden Administration’s actions, the court stated: “Millions and possibly billions of dollars are at stake. Local government funding, jobs for Plaintiff States’ workers, and funds for the restoration of . . . Coastline[s] are at stake. Plaintiff States have a reliance interest in the proceeds derived from offshore and onshore oil and gas lease sales. Additionally, the public interest is served when the law is followed. The public will be served if Government Defendants are enjoined from taking actions contrary to law. In a time of high gas and oil prices, draining of the Strategic Petroleum Reserve, and looking to other nations to supply the United States’ oil and gas needs, the public interest would be served by a permanent injunction.”
Read the full court order here.
OIL:
Oil Sinks By 3% As Economic Slowdown Fears Weigh On Market
Tsvetana Paraskova, OilPrice.Com, August 30, 2022
- Oil prices saw their largest daily gain in nearly six weeks on Monday, with supply concerns in both Libya and Iraq spurring bullish sentiment.
- On Tuesday morning, however, that bullish sentiment had decidedly turned, with oil prices falling by 3% as inflation fears and concerns about demand returned.
- Violence in Iraq overnight failed to spark further concerns about the country’s oil demand, with the director general of SOMO claiming it could export more oil if necessary
Oil prices dipped by nearly 3% early on Tuesday, losing around $3 from Monday’s close, as fears of a global economic slowdown intensified while fears of a loss of supply from OPEC’s second-largest producer, Iraq, abated.
As of 8:43 a.m. ET on Tuesday, Brent Crude was down by 2.82% at $102.19. The U.S. benchmark, WTI Crude, traded down 2.46% on the day at $94.62.
Oil prices saw on Monday their biggest daily gain in nearly six weeks after Brent hit $104 per barrel yesterday due to concerns about supply from both Libya and Iraq, as well as the possibility of an OPEC+ production cut.
On Tuesday, concerns about demand prevailed, with prices losing ground amid continuous fears that aggressive interest rate hikes from central banks, including the Fed, would slow down economies for a prolonged period of time.
In a Friday speech, Federal Reserve’s Chair Jerome Powell said that large interest rate hikes could continue and could slow the economy “for some time,” and that rates could be higher for longer.
In addition, the oil market swept aside, for now, concerns that the deadly clashes in Iraq would hurt the country’s oil industry and exports.
At least 15 people have been killed and scores of others wounded in overnight fighting in the Iraqi capital, following protestors’ storming of the presidential palace on Monday. Fighting broke out in and around the Green Zone after hundreds of protesters loyal to powerful Shi’ite cleric Moqtada al-Sadar tore down cement barriers and charged through the Republican Palace following the cleric’s announcement on Monday that he would withdraw from politics.
Iraq can ramp up its oil exports and will not decline any requests for more crude, Alaa Al-Yassiri, director general of state oil marketing company SOMO, told Bloomberg in an interview on Tuesday. SOMO could even redirect more Iraqi oil to Europe, if necessary, a source at the marketing firm told Reuters today.
GAS:
Soaring Australian Energy Prices Point To Need For New Gas Supply
Bojan Lepic, Rigzone, August 30, 2022
Australian east coast energy prices skyrocketed earlier this year as a winter cold snap sent gas, coal, and electricity to record-highs, triggering price caps in Brisbane, Sydney, and Melbourne at around $27/Million British Thermal Units, around 400 percent above the normal price range.
The situation highlighted the delicate scenario in which the need for new gas sources must be balanced against government attempts to meet net-zero goals, say analysts at Wood Mackenzie.
“This recent crisis was caused by a perfect storm of under-investment in new energy supplies, as well as cold weather hitting at the same time as coal outages and supply shortages, low renewable generation, and high global commodity prices. It was an incredible combination that pushed the market to the breaking point. LNG suppliers stepped in to divert gas to areas that needed it, but the situation did highlight the need for new sources of energy supply to meet current and future demand,” Daniel Toleman, Principal Analyst for Global LNG at Wood Mackenzie said.
This is amidst efforts from many governments, including Australia, to transition to a net-zero economy. For many, the challenge will be finding a balance between providing energy security at the same time as decarbonizing energy systems to meet net-zero emissions by 2050.
“To manage the Australian east coast energy balance, the federal government needs to walk a bit of a tightrope. After this winter’s energy crisis, prioritizing Australian gas resources for Australian consumers is very much in the spotlight. But the government also needs to manage new gas projects and gas supply including those of the LNG projects,” said Lucy Cullen, Principal Analyst for Global Gas.
Australia requires gas for both power generation as well as other industrial uses including mineral processing, mining, chemical production, and fertilizer.
“For the Australian east coast, future gas projects are critical to meeting domestic demand keep prices in check. With LNG imports, one of the solutions, now likely delayed until at least the mid-2020s, the government should look to support new fast-to-market gas projects. Another solution could be a behavioral change that can reduce demand in peak periods,” added Toleman.
The Australian Domestic Gas Security Measure (ADGSM) is currently in place to ensure enough natural gas is in place to meet domestic demands.
“While the ADGSM offers some assurance to the domestic markets, implementation of any domestic market obligation mechanism must balance investor concerns and must not be counterproductive by
discouraging future gas developments and investment. The government must keep these factors in mind as it reviews the ADGSM ahead of its year-end expiry,” said Cullen.
To meet net-zero targets, Australia undoubtedly requires renewable energy. But it also requires gas and LNG to ensure affordable and reliable energy throughout the energy transition,” Toleman concluded.
MINING:
Nova drills 258m of 5.1 g/t gold at RPM
Shane Lasley, North of 60 Mining News, August 26, 2022
Results bode well for upgrading, expanding deposit at Estelle
Nova Minerals Ltd. Aug. 22 followed up on the long sections of high-grade gold assays reported earlier this month from drilling at RPM North with even longer sections of higher-grade gold at this exciting gold deposit on the Australia-based explorer’s Estelle property in Alaska.
Located about 16 miles south of the 8.1-million-ounce Korbel gold deposit at the north end of the Estelle property, RPM hosts 23.1 million metric tons of inferred resource averaging two grams per metric ton (1.5 million oz) gold.
This resource was calculated from the results of six holes drilled prior to the 2022 summer exploration season in Alaska. To upgrade and expand upon this resource, Nova plans to complete at least 40 more holes at RPM North and adjacent RPM South gold target.
On Aug. 8, the company reported long sections of strong gold mineralization in the first four holes drilled at RPM North this year; highlights include:
• 140 meters averaging 6.5 g/t gold from a depth of 44 meters in RPM-008, including 56 meters averaging 10.1 g/t gold and two meters averaging 53.4 g/t gold.
• 155 meters averaging 2.4 g/t gold from a depth of 16 meters in hole RPM-010, including 30 meters averaging 10 g/t gold and three meters averaging 56.4 g/t gold.
Further details from this drilling can be found at Nova drills 140m of 6.5 g/t gold at RPM in the August 12, 2022 edition of North of 60 Mining News.
The latest batch of assay results continued to encounter long sections of strong gold mineralization at RPM, including:
• 258 meters averaging 5.1 g/t gold from surface in hole RPM-015, including 161 meters averaging 8.1 g/t gold, and 14 meters averaging 51.2 g/t gold.
• 113 meters averaging 1.4 g/t gold from a depth of eight meters in hole RPM-018, including 55 meters averaging 2.1 g/t gold and 11 meters averaging 4.5 g/t gold.
“I am pleased to report more shallow high‐grade broad mineralization from our drilling at RPM,” said Nova Minerals CEO Christopher Gerteisen. “This program is part of a targeted program designed to allow for further increases to potential measured and indicated resources in the next MRE (mineral resource estimate) on the high-grade RPM deposit.”
In addition to upgrading the current resource, drills are stepping out to the west to test a roughly 1,400-meter-long magnetic anomaly associated with the high-grade gold currently being drilled.
The company is also testing RPM South, a zone about 600 meters southeast of current drilling at RPM North. Rock samples collected by Nova geologists at RPM South returned assays with as much as 103 g/t gold. RPM South also hosts a magnetic geophysical anomaly that is similar but smaller to the one found at RPM North.
The volume of samples from the companies carrying out mineral exploration during the summer season in Alaska and northern Canada has slowed assay turnaround times. Because of this, Nova has assays pending from more than 50 holes drilled at RPM and Korbel this year.
This assay lab backlog will likely slow the completion of Nova’s phase-two scoping study for RPM and Korbel, which was originally slated for completion later this year.
“As we continue with our aggressive 2022 diamond drilling program, we are mindful of the extensive delays currently being experienced in the laboratory assay turnaround times, and while we are still hoping to deliver the Phase 2 Scoping Study on time, the latest results show that it is important that we include as many of the drill results from the current program as we can in the upcoming MRE,” said Gerteisen. “In light of this, PFS level trade off studies will now commence in tandem, which aims to optimize the project with a view to increasing the gold production schedule and NPV (net present value) significantly across the Estelle Gold Trend, as we continue on our path towards commercial production.”
POLITICS:
10 Things Supporters of California’s Car Ban Aren’t Telling You
Power the Future, August 30, 2022
There are about 35 million Americans looking to hit the road this Labor Day weekend, but that’s a number that could shrink in the future because of California’s ban on gasoline-powered vehicles by the year 2035 in favor of expensive electric vehicles (EV.) In little more than a decade, the number of electric vehicles (currently accounting for 16 percent of sales in the state this year) will be mandated to 100 percent.
Unfortunately, what happens in California doesn’t stay in California. One in eight U.S. residents call the Golden State home and its economy is the fifth largest in the world. Already, as many as 17 other states are looking to follow California down this disastrous road. If this mandate is not stopped in its infancy, there will be no turning back.
American families already struggling with massive inflation will feel even more pressure if more state’s follow California’s wrong turn. Here are 10 reasons why:
1. EVs are powered by fossil fuels. According to the U.S. Energy Information Administration (EIA), fossil fuel–based power plants—coal, oil, or natural gas—create about 60 percent of the nation’s electrical grid, while nuclear power accounts for nearly 20 percent.
2. The batteries of EVs rely on cobalt. An estimated 70 percent of the global supply of cobalt emanates from the Democratic Republic of the Congo, a country with deplorable working conditions, especially for children.
3. A study released earlier this year by an environmental group showed nearly 1/3 of San Francisco’s electric charging stations were non-functioning. The population of San Francisco represents roughly two percent of California.
4. Supporters of the California law admit there will be a 40 percent increase in demand for electricity, adding further strain to the grid and requiring increased costs for power and infrastructure.
5. According to one researcher, the strain of adding an EV is similar to adding “1 or 2 air conditioners” to your home, except an EV requires power year-round.
6. Today, 20 million American families, or 1 in 6 have fallen behind on their electric bills, the highest amount ever.
7. Utility companies will need to add $5,800 in upgrades for every new EV for the next 8 years in order to compensate for the demand in power. All customers will shoulder this cost.
8. The average price for an electric vehicle is currently $66,000, up more than 13 percent in just the last year, costing an an average of $18,000 more than the average combustible engine. Meanwhile, the median household income is $67,521. For African American families, the average is $45,870 and Hispanic households at $55,321.
9. A 2022 study found that the majority of EV charging occurs at home, leaving those who live in multi-family dwellings (apartments) at a real disadvantage for charging.
10. The same study also noted that many charge their EVs overnight when solar power is less available on the grid.