Today’s Key Takeaways: Willow project has widespread support across Alaska. Long-term LNG contracts only way forward. The future of Biden’s public land oil strategy. Palin and Murkowski lead in fundraising. Explore a centuries-old cobalt mine rediscovered by a caving club.
NEWS OF THE DAY:
Alaska’s two U.S. senators are pressing the Department of the Interior to resist calls to extend a 45-day public review and comment period for the recently released Draft Supplemental Environmental Impact Statement, or DSEIS, for ConocoPhillips’ big Willow oil project on the North Slope.
Opponents to development projects, in this case conservation groups, typically call on federal agencies to extend comment periods on environmental impact statements as a way of dragging out the process.
ConocoPhillips is concerned that extensions of the review period could delay approval of the revised environmental statement and a new plan for the project, jeopardizing hopes of starting construction this winter.
Willow is a $6 billion project in the National Petroleum Reserve-Alaska that would, if built, add 180,000 barrels a day of new oil moving through the Trans Alaska Pipeline System.
Willow was to have been in construction in 2021 but was stopped by an Alaska federal judge after conservation groups filed lawsuits citing defects in the Interior Department’s review and approval of the big project in 2020.
Interior and ConocoPhillips worked on a revised plan for the project to address concerns raised in the decision by U.S. District Court Judge Sharon Gleason, and a resulting in the revised draft supplemental EIS issued recently.
Alaska senators Lisa Murkowski and Dan Sullivan, both Republican, wrote to Secretary of the Interior Deb Haaland to reiterate strong support of the project and to urge the Department to promptly approve it—with no extension of the current, 45-day public comment period.
In a letter sent to Secretary Haaland the Senators outlined how the Willow project has already gone through a rigorous and comprehensive review process, including multi-year environmental analyses led by BLM across multiple federal agencies, the State of Alaska, and affected communities on the North Slope.
The results of those reviews and analyses have shown that Willow will meet and exceed the strictest environmental standards, furthering the administration’s stated goals for U.S. energy security, energy prices, and social justice, the senators said.
“We therefore firmly believe that a 45-day comment period will allow all stakeholders and the general public more than enough time to review the SEIS and provide meaningful comment,” the senators said.
“Timely completion of this process is critical to the project’s ability to undertake any level of development activities during the rapidly approaching 2022-2023 winter season,” Murkowski and Sullivan said.
The North Slope’s winter construction season is the shortest in the world due to strict environmental standards for ice and snow roads and temporary snow pads that which virtually eliminate any surface disturbance.
Maintaining the schedule for the review would also demonstrate the urgency required to address rising energy costs, the need for U.S. energy security, and the Biden administration’s stated goals for environmental justice initiatives.”
The Willow project has widespread support across Alaska, including from the Alaska Federation of Natives, Alaska Native Village Corporation Association, ANCSA Regional Association, the Alaska District Council of Laborers and additional labor groups, as well as the communities of Utqiagvik, Wainwright, and Atqasuk located on the North Slope.
“Alaska Natives are also especially supportive of this project, as it would contribute to their economic well-being and prosperity for years to come,” Murkowski and Sullivan said.
“Julie Kitka, President of the Alaska Federation of Natives, wrote to you in a letter that Willow ‘could jumpstart our economy with thousands of jobs and be a model in community and environmental stewardship for years to come,” the senator said.
Other Alaska Native leaders are voicing support.
In their letter, the senators said, “Hallie Bissett and Kim Reitmeier, Executive Directors, respectively, of the Alaska Native Village Corporation Association and ANCSA Regional Association, have urged you (Secretary Haaland) not delay Willow ‘given the exhaustive and thorough review process it has already undergone, and the urgent need for vetted, economic opportunities for safe development in Alaska.”’
Among North Slope communities, “The cities of Utqiagvik, Wainwright, and Atqasuk have passed resolutions in support of oil and gas development projects, like Willow, within the NPR-A, and explicitly asked you ‘not to undercut us as a people and to honor the work’ they have done with your agencies throughout the development of Willow,” the letter said.”
The two senators restated the importance of the Department’s timely approval of the Willow project:
“Again, given BLM’s previous evaluations of Willow, a 45-day public comment period is a sufficient time frame for any interested party to wholly evaluate the SEIS,” Murkowski and Sullivan said.
“Willow has already faced multiple delays, and now again awaits approval at a pivotal moment. Given the current pace of inflation, high gas prices, and international geopolitics, we urge you to recognize the immense benefits this project will bring and act promptly to approve it,” Murkowski and Sullivan said.
How Manchin wobble may hit Biden’s public land oil strategy
Heather Richards, Energywire, July 18, 2022
After Sen. Joe Manchin sent climate negotiations into chaos on Capitol Hill last week, the pressure is on President Joe Biden to take his own concrete steps to halt global warming, like toughening his stance on drilling for oil on public lands.
The West Virginia Democrat waffled ahead of the weekend on whether he will support climate spending in ongoing negotiations over the reconciliation package that Democrats are trying to get passed ahead of the midterm elections — when the GOP is predicted to gain spots in Congress. He blamed inflation for his position.
The political jockeying puts in doubt a legislative answer to Biden’s critical climate ambitions, such as the $300 billion in clean energy tax credits on the table in recent negotiations.
But a slammed door in the Senate could also free the White House from having to appease Manchin, who’s made no secret from his bully pulpit as chair of the Senate Energy and Natural Resources Committee of his frustration with the White House’s response to high gas pump prices and its slow walking of federal oil and gas leasing.
“If the White House has been modulating its oil and gas policy in recent months to woo Manchin’s support for clean energy incentives, then his latest defection could augment a post-election green pivot, including further strictures on federal lands,” said ClearView Energy Partners LLC in a client note Friday.
Last week, The Washington Post reported the White House was considering Manchin as it decided whether to approve a controversial oil drilling project in the Arctic and future drilling access in federal waters in the Gulf of Mexico.
But by Thursday night, Manchin had quashed hopes of major climate spending. He pivoted again the next day by saying he might be open to talking about a deal in September — if the country’s inflation picture looked better (Greenwire, July 15).
“I can’t make that decision basically on taxes of any type and also on the energy and climate because it takes the taxes to pay for the investment in the clean technology that I’m in favor of,” he said in a recent interview with West Virginia’s MetroNews. “I’m not going to do something and overreach that causes more problems.”
The stance has sparked controversy on the political left, with prominent progressives like Sen. Bernie Sanders (I-Vt.) accusing Manchin of sabotaging climate talks because he is beholden to fossil fuel companies.
“We continue to talk to Manchin like he was serious. He was not. This is a guy who is a major recipient of fossil fuel money,” Sanders said yesterday on ABC News’ “This Week with George Stephanopoulos.”
Regardless of whether Manchin eventually jumps on board, environmental groups and many Democrats on Friday emphasized that the stalled negotiations should put the emphasis back on other tactics the Biden administration could deploy to meet its climate goals.
This could involve taking bold steps in management of the federal oil program, such as opting against some, or all, new offshore leasing for the next five years or killing ConocoPhillips’ Willow project on federal lands in the Arctic, which would be capable of producing fossil fuels for decades.
The federal oil program was once a focus of Biden’s climate and clean energy platform — he pledged during the campaign to end new leasing. Since then, however, the administration’s approach to the program has become entangled in political discord and litigation.
Additionally, Biden seems to have grown more ambivalent about public lands oil policy with rising energy prices in the wake of Russia’s invasion of Ukraine. The president has spoken out in favor of U.S. drilling to dampen prices at the pump and asserted that he is not standing in the way of U.S. oil production on public lands, despite industry’s accusations.
With a legislative climate package on life support — if not dead — the administration is out of excuses to return to its original pledges, said Brett Hartl, government affairs director at the Center for Biological Diversity. The group has put out a list of executive actions the president could take, such as declare a climate emergency, use legislation to drive electrification in the transportation sector, establish an export ban on crude oil and gradually retire the federal oil program.
“We certainly hope that the Biden Administration will take bolder action administratively now,” Hartl said in an email. “The Department of Interior has enormously powerful tools at its disposal to clamp down new oil and gas leasing, and to phase down production of fossil fuels on public lands and waters.”
Food & Water Watch Executive Director Wenonah Hauter said the ability to act on climate without Manchin-backed inclusions of fossil fuel supports like carbon capture funding is a “silver lining” to the potentially failed negotiations.
“Biden must take matters into his own hands by declaring a climate emergency and immediately moving to halt new drilling and fracking on federal lands and waters and denying the approval of new fossil fuel pipelines and infrastructure projects,” she said.
For his part, the president on Friday said he would move forward on his own without legislation but did not specify what that would look like.
“If the Senate will not move to tackle the climate crisis and strengthen our domestic clean energy industry, I will take strong executive action to meet this moment,” Biden said in a statement (E&E News PM, July 15).
The president reiterated this general promise yesterday when asked about the failed negotiations.
“I’m going to use every power I have as president to continue to fulfill my pledge to move toward dealing with global warming,” Biden said.
‘Not just Manchin’
While climate negotiations have pivoted around Manchin, some observers said the senator may have had less of a role in influencing Biden administration decisions than other political catalysts — such as inflationary energy prices.
Morgan Bazilian, director of the Payne Institute for Public Policy and professor of public policy at the Colorado School of Mines, predicted that federal drilling policy will continue to take a back seat to the administration’s strategies to lower prices with global levers, like urging OPEC to raise production.
“Drilling on federal lands is part of this, but not something that makes an immediate impact,” he said. “It is also not likely to play a huge role going forward.”
From that perspective, little may have changed in the last few days for the public land oil outlook, and Manchin’s importance may be overblown.
“It’s not just Manchin,” said Christopher Guith, senior vice president of the U.S. Chamber of Commerce’s Global Energy Institute, in an email, pointing to other powerful lawmakers the administration may be keeping in mind, like Sen. Lisa Murkowski (R-Alaska), who’s proved influential with this administration, even forcing them to swap out an Interior nominee she was opposed to (E&E Daily, April 15, 2021).
Guith said he also didn’t buy that the White House’s recent actions on significant federal oil policies, like “kicking the can” on the release of a final offshore oil and gas schedule until after the elections, had anything to do with concessions for Manchin.
Earlier this month, the Interior Department announced it was penning a new oil and gas lease schedule off the nation’s coasts that could end in polar opposite policies — either zero out the practice for five years or include up to 11 new sales between 2023 and 2028. Far from smoothing relations, the mere consideration of ending leasing aggravated the oil industry — and Manchin — while the indecisive plan won the administration few points from frustrated conservationists.
With the Willow project in the Arctic, which has the support of Murkowski, the administration similarly suggested it could block drilling entirely or approve a slightly reduced project.
In both cases, a final decision isn’t expected until late this year or early next year. But these high-profile decisions showcase the decidedly noncommittal approach by the Biden administration when it comes to the future of oil and gas on federal lands and waters.
Frank Maisano, a senior principal at law and lobbying firm Bracewell LLP, which represents clients in energy industries, said the White House has been stuck in a political bind between high energy prices and climate activism.
“You can have a strategy that is trying to duck away. And I think that’s what their strategy is,” he said. “They know, whichever way they go, they’re gonna get a punch.”
It’s not yet clear how failed climate legislation would influence the current doldrums on federal oil and gas policy. The Interior Department declined to comment for this story.
Manchin’s position aside, ClearView said the agency may have already been planning to accelerate energy transition policies once elections have passed — both boosting renewables and more boldly restricting oil and gas.
On federal lands, the Bureau of Land Management said it has no updates on scheduling new sales onshore after holding a suite of modest auctions last month under a court order. Kathleen Sgamma, president of the Western Energy Alliance, said she doubts that unofficial leasing pause will lift unless the administration is forced to continue leasing by a federal judge.
Instead, Sgamma said the White House may feel increased pressure to ramp up regulations on oil companies — “regulations that they’ve been neglecting in hopes that Congress would save them with a legislative fix.”
The administration had already pledged to move forward with more incremental reforms of the federal oil and gas program. By early next year, Interior has promised to propose an overhaul of oil and gas regulations, touching on bonding, royalties and fees, a goal that was originally scheduled for this summer (Energywire, April 26). It’s also promised to release new methane rules for oil and gas operations in the federal oil patch.
Often opposed by industry, such reforms have long been sought by conservationists and environmental groups. But in the climate-aware landscape of today’s policy debates, they are also viewed as disappointingly small measures.
Jeremy Nichols, the climate and energy program director for WildEarth Guardians, said activists want to hold the White House to action on climate policy regardless of the political backlash the president is facing.
“We’re not going to cut him a free pass because things got hard,” Nichols said of the White House — prior to the news of Manchin’s potential defection. “This is hard stuff.”
Long Term LNG Contracts Are The Future For Natural Gas Markets
Irina Slav, OilPrice.Com, July 18, 2022
- In the not-so-distant past, the natural gas spot market was one of the European Union’s great points of pride as it moved towards a future powered by renewables.
- Russia’s invasion of Ukraine combined with declining investment, long lead times on new projects, and emissions regulations have created a supply crisis.
- Now, the European Union and other gas importers are coming to terms with the fact that long-term LNG contracts are the only way forward.
Several years ago, the leaders of the European Union sat back contentedly and watched the spot market for the natural gas they had put so much effort into working like a well-oiled machine. Gas was cheap and there was plenty of it to go around. Then, all of a sudden, things changed dramatically. The spot gas market was one of the European Union’s great points of pride as it sought to wrest control of its own energy supply from Russia. The EU had snubbed Gazprom’s long-term deals, not wanting to get saddled with the obligation to buy Russian gas at a certain locked-in price as it was moving towards a renewable energy future. It didn’t need so much gas, the EU thought.
Yet the EU was not the only one taking advantage of flexible prices on the LNG spot market. Everyone was. Gas was abundant, and prices were low—it was a buyers’ market all around, at least for a while. Some serious consumers, those who had long-term plans for gas consumption, still opted for long-term contracts, whose biggest advantage over spot deals is also its biggest drawback: the price. It now turns out these serious consumers were right.
A decline in investments in new gas production, long lead times on liquefaction facilities, and growing pressure on emission reduction collided to result in tight gas supply as demand continued to grow globally. Europe, the poster child of the energy transition, was horrified to learn it did not have enough wind and solar generation capacity to replace gas consumption—especially amid low wind speeds and during the less sunny seasons.
And then Russia invaded Ukraine.
The convergence of factors resembles a plot for an apocalyptic movie. Indeed, developments in the European gas market have been in many ways apocalyptic: prices have been breaking record after record, energy bills for consumers are rising inexorably as the cost of producing electricity rises with gas prices, and developing nations are being forced into blackouts because Europe is taking every drop of LNG that is available on the spot market.
Long-term contracts are quietly reclaiming territory from the spot market as the world’s newest LNG growth market realizes it will need to secure long-term gas supplies.
French Engie earlier this year sealed a long-term LNG supply deal with U.S. NextDecade months after it walked out on the contract because the French government had concerns about the emissions footprint of the company’s LNG production facility.
German utility EnBW signed a similarly long-term LNG supply deal with Venture Global, as Europe’s biggest economy urgently seeks to wean itself off Russian gas even if it means doing a U-turn on all its climate priorities.
This is a trend across the whole of the EU. Australia is experiencing a shortage of floating regasification units because they are being sent to Germany, which has zero stationary LNG import terminals. But it is building some, and fast. Poland’s LNG terminal is operating at full capacity. Spain, the UK, and the Netherlands are importing LNG at record rates.
Calls for more LNG import infrastructure, meanwhile, are intensifying as the bloc inches closer to what may turn into one of its hardest winters yet. In this context, is it any wonder that Qatar has insisted that European buyers eager to get their hands on some Qatari LNG must make long-term commitments?
Qatar is currently in the middle of an ambitious capacity boost project that should allow it to export 110 million tons of superchilled liquefied gas annually, up from a current capacity of some 70 million tons.
Projects like this require billions in investments. Indeed, the North Field expansion has a price tag of close to $29 billion. This kind of investment needs guarantees it will not go to waste, and long-term offtake deals are just that kind of guarantee.
The energy transition is another reason long-term LNG contracts are back in fashion. After years of warnings from climate-focused think tanks that the oil and gas industry risks getting saddled with billions in stranded assets as the world moves on from oil and gas, that same oil and gas industry has become mistrustful and careful with its investment decisions. Long-term commitments are the way to convince companies investing in new gas production is worth it.
Not everyone likes it. Indeed, environmentalists very much dislike this current state of affairs. Warnings about stranded assets have not disappeared. The reality, however, is that even the most ambitious transition governments, such as Germany’s current coalition, appear to have realized that energy security is more important than emission reduction.
Even those most determined to effect a transition to renewables have had to heed warnings from industrial groups saying that without gas, companies will have to shut down, and the economy will eventually collapse. And they have started working on boosting their countries’ energy security through long-term LNG supply contracts that they shunned until just a while ago.
Cave explorers discover a 19th-century mining scene preserved like a time capsule
JoAnna Wendel, LIVE SCIENCE, July 18, 2022
Leather shoes, clay pipes, a mysterious inscription written in candle soot — these are just a few of the artifacts a group of cavers recently discovered in a centuries-old cobalt mine in Cheshire, England.
The mine, located near Manchester in a village called Alderley Edge, was once a source of cobalt, an element mined for the brilliant blue pigment imbued on pottery and glass. Cobalt mining was a lucrative trade for England in the 19th century. But imports from other countries became cheaper than English cobalt, so this particular mine, owned by Sir John Thomas Stanley in the early 1800s, was abandoned around 1810.
Members of the Derbyshire Caving Club have been exploring the Alderley Edge mine since the 1970s, leasing access from National Trust, a U.K.-based conservation charity. The caving group recently stumbled upon some personal items left behind in a previously unexplored part of the mine. The discovery was like opening a time capsule.
“To find a mine in pristine condition, together with such personal objects and inscriptions, is rare,” Ed Coghlan, a member of the Derbyshire Caving Club, said in a statement(opens in new tab) from National Trust. “It is a compelling window into the past and to the last day when the mine workers stopped their activities.”
Along with the shoes and pipes, the cavers found a bowl buried in a wall, which might be a sign of superstitious miners thanking the mine for its good ore, according to the statement. One rare finding was an instrument called a windlass, used for lifting and shifting heavy materials.
The fact that the miners left such an important tool behind makes Coghlan suspect that the miners “were told without much warning to collect their tools and move on,” he said.
One particularly mysterious finding was an inscription of the initials “WS,” with the date “August 20, 1810” written below.
“Our research so far has not identified who this could be,” Coghlan said. “Was it just an individual wanting to say, ‘I was here,’ or from a visit by a mine manager or estate owner, or could it have been to indicate the last day this mine was in use?”
The cavers found other words and numbers scratched into the mine’s walls.
“We found other more basic initials and numbers in what we believe were the ‘cribs’ or rest areas, as if someone had been learning and practicing their writing,” Coghlan said.
Now, you can tour the mine(opens in new tab) from the comfort of your home. To make the historic discovery more accessible to the public, the Derbyshire Caving Club and the National Trust teamed up with Christians Survey and Inspection Solutions, a company that uses technology to build virtual, 3D models of buildings and underground spaces.
In the Alderley Edge mine, the team used laser scanners, which shoot lasers around the environment. Those laser beams bounce back into the scanner, which calculates the distance each laser beam traveled. Doing that hundreds of times around a space produces a virtual 3D picture. The team also used remotely operated vehicles for the underwater portions of the mine, as well as other 3D imaging techniques.
“The objects found in the mine have been photographed and catalogued and left where they were found, to remain in the underground conditions which have preserved them,” Jamie Lund, an archaeologist at National Trust, said in the statement. “It leaves the mine as a time capsule, protecting a place that was once a hive of activity for future generations to explore and enjoy.”
In Alaska’s U.S. House race, Sarah Palin leads June fundraising, fueled by out-of-state donations
James Brooks, Alaska Beacon, July 18, 2022
One month before Alaska’s first ranked-choice election, former Gov. Sarah Palin has reported the largest recent fundraising haul among the three candidates seeking to temporarily succeed Congressman Don Young.
In campaign filings due July 15 to the Federal Elections Commission, Palin’s campaign reported raising $203,533 between May 23 and June 30.
Palin, a Republican, raised more than Democratic candidate Mary Peltola, who reported raising $161,543 during the same period. Fellow Republican candidate Nick Begich III reported raising $82,386 during that period.
For U.S. Senate, Murkowski outraises all other Alaska candidates combined
James Brooks, Alaska Beacon, July 18, 2022
As she seeks re-election to the U.S. Senate, Republican candidate Lisa Murkowski raised more money between April 1 and June 30 than all other candidates in the race, combined.
Murkowski’s re-election campaign reported raising $1.57 million in the latest quarterly reports submitted to the Federal Elections Commission. Her lead challenger, Republican candidate Kelly Tshibaka, reported $586,717 during the same period. Democratic candidate Pat Chesbro declared raising $37,977, and no other candidate reported more than $1,000.