by Owen Phillips | Nov 30, 2020 | News
OIL
Seven reasons a world without fossil fuels is not practical
Yves Siegel, Washington Examiner, November 24, 2020
There has been a lot of talk about a “Green New Deal” that will rapidly phase out the use of all fossil fuels. As an investor who has long experience in the energy field, let me say that it is not practical for us to live in a world without fossil fuels for seven reasons.
First, fossil fuels (oil, natural gas, and coal) account for nearly 85% of the world’s energy consumption. Renewable energy, such as wind and solar, while growing rapidly, only comprises about 5% of the world’s energy supply, based on data from the BP Statistical Review of World Energy June 2020. Cries for eliminating fossil fuels are akin to prescribing medicine that cures an illness but kills the patient. By the way, most medicines, such as aspirin, use oil and natural gas-based petrochemicals in their manufacture.
GAS
U.S. shale firms amp up natural gas output as futures signal more gains
Jennifer Hiller, Scott DiSavino, Reuters, November 30, 2020
Higher natural gas futures prices for 2021 and a continued glut of crude oil are prodding U.S. shale firms to boost gas drilling and production.
Shale producers are increasing spending on natural gas, a change from the past, amid forecasts for a 45% jump in gas prices next year compared to a 15% gain for Brent prices. The shift is a reminder to the Organization of the Petroleum Exporting Countries meeting this week how shale moves quickly in response to price. The OPEC group is considering whether to ease oil output curbs from Jan. 1.
The largest U.S. shale oil producer, EOG Resources, this month said next year it will start selling gas from 15 new wells from a newly discovered field holding 21 trillion cubic feet of gas. Continental Resources recently shifted drilling rigs to gas from oil in Oklahoma. Apache Corp this month said it plans to complete three Texas wells after lifting its third-quarter U.S. gas production by 15% over the second quarter and 6% over the same period last year.
MINING
Most important hole drilled at Estelle
Shane Lasley, North of 60 Mining News, November 30, 2020
As Americans were preparing for the most unusual Thanksgiving holiday in memory, Australia-based Nova Minerals Ltd. announced results from the most significant hole drilled to date at Estelle and the raising of A$21 million (US$15.5 million) to fund the ongoing exploration of this rapidly expanding gold project about 100 miles (160 kilometers) northwest of Anchorage, Alaska’s largest city.
Korbel, a growing gold resource area at the north end of the 85-square-mile (220 square kilometers) Estelle land package, currently hosts 291 million metric tons of Australian Joint Ore Reserves Committee- (JORC) compliant inferred resource averaging 0.4 grams per metric ton (3.3 million ounces) gold.
POLITICS
Trump banking proposal on fossil fuels sparks backlash from libertarians
Rachel Frain, The Hill, November 29, 2020
A new Trump administration proposal that could push more banks to finance fossil fuel activities is creating divisions in conservative circles as free market groups decry the move as government overreach. The proposed rule, which would put limitations on banks that try to exclude entire industries like oil and gas from financing, has garnered support from a number of Republican lawmakers who back fossil fuels while sparking criticism from libertarian-oriented organizations. Those groups argue the rule is inconsistent with free market principles and could backfire in the long run by forcing conservative bank owners to provide financing for abortion providers and other groups they don’t like.
CLIMATE CHANGE CONVERSATIONS
Why Oil Won’t “Go Gentle Into That Good Night”
Jude Clemente, Real Clear Energy, November 29, 2020
The progressive goal to “transition” away from oil might not be as easy as some proclaim. In the U.S., oil has been our main source of energy since 1950, when it surpassed coal. Along with its sister energy source, natural gas, oil dominates the immense U.S. energy complex (see Figure). In the U.S., more than 265 million cars run on oil-based products such as gasoline and diesel fuel; less than 2 million run on electricity.
Oil won the transport race because it packs a much bigger punch than alternatives. For example, the energy density of gasoline is approximately 47.5 megajoules per kilogram, or some 100 times more than that of an electric car’s lithium-ion battery (about 0.4 MJ/kg). Most Americans probably don’t realize that back in 1900, 40% of U.S. cars were electric, though they were soon overtaken by Ford’s more powerful Model T and its gasoline-powered internal combustion engine (ICE). Oil’s indispensability is clear for heavy trucking, and even more so in aviation: there is no battery-powered 737, and there never will be.
by Owen Phillips | Nov 25, 2020 | News
OIL
Arctic Refuge Oil Rights Auction Faces Uncertain Response
Associated Press, November 25, 2020
The Trump administration is preparing to auction oil drilling rights inside the Arctic National Wildlife Refuge, but the degree to which the industry will participate is uncertain. Leases on the land in northeast Alaska could be go on the block days before President-elect Joe Biden takes office, Alaska’s Energy Desk reported Tuesday.
Supporters, including Alaska’s congressional delegation, have celebrated the prospect of a lease sale as a way to create jobs and revenue. Opponents express concerns about impacts on ecosystems, Indigenous people, and the climate.
Kara Moriarty, CEO of the Alaska Oil and Gas Association, said oil and gas companies are unsurprisingly remaining quiet about their intentions. “Participation in lease sales is one of the most competitive and secretive things between companies,” Moriarty said.
The public likely will not learn about the industry’s level of interest until the federal government unseals the bids on the sale date, which has not yet been announced. There is a possibility that the sale could be held shortly before Biden’s Jan. 20 inauguration. Some industry analysts believe there is a measure of uncertainty and risk that could lead to limited interest in a lease sale within the next two months.
GAS
Corpus Christi drives U.S. LNG export feed gas to record high
Yahoo Finance, November 25, 2020
Gas flowing to U.S. LNG (liquefied natural gas) export plants was on track for a record high on Wednesday as Cheniere Energy’s Corpus Christi plant in Texas pulled in enough fuel to supply its three liquefaction trains. Corpus had been receiving small amounts of gas in recent weeks as it prepares to put the third train into commercial service during the first quarter of 2021. On Wednesday, Corpus was on track to pull in a record 2.0 billion cubic feet per day (bcfd), preliminary data from Refinitiv showed, which would be enough to supply gas to all three of its 0.66-bcfd trains.
MINING
Pebble mine critics say text messages reveal the state is helping the project. A state official says the texts have been misinterpreted.
Alex DeMarban, Anchorage Daily News, November 24, 2020
Text messages and other public records released by the state to a conservation group appear to show the Dunleavy administration supporting the proposed Pebble mine’s efforts to secure a key construction permit from the U.S. Army Corps of Engineers, mine critics say.
Dan Saddler, a spokesman with the state Department of Natural Resources, said the agency properly provided information about state laws and procedures at Pebble’s request. “DNR has engaged with the Pebble project proponents just as it would with any potential project applicant in the regular course of the department’s operations,” Saddler said. He said the released records have been misinterpreted, and that some people who don’t understand DNR processes might jump to false conclusions.
POLITICS
Progressives want Biden to sidestep Congress with green ‘national emergency’
Ari Natter, World Oil, November 25, 2020
Progressive environmentalists are mounting a long-shot bid to get President-elect Joe Biden to go beyond naming a climate czar and declare an environmental national emergency, borrowing a tactic employed by President Donald Trump to fund part of his border wall.
Invoking a climate emergency could give Biden the authority to circumvent Congress and fund clean energy projects, shut down crude oil exports, suspend offshore drilling and curtail the movement of fossil fuels on pipelines, trains, and ships, according to a research note by consulting firm ClearView Energy Partners.
“The president’s powers to address climate change through an emergency are very, very large,” said Kassie Siegel, an attorney with the environmental group Center for Biological Diversity, which is lobbying Biden’s team to act. “This is No. 1 on the list of things the Biden administration should do.”
In a statement, Biden’s transition team didn’t explicitly address the question of a climate emergency, saying only that he plans to follow through on his policy platform to fight the climate crisis while creating millions of jobs. Biden’s climate platform includes no mention of declaring a climate emergency.
CLIMATE CHANGE CONVERSATIONS
President Trump’s Underappreciated Climate Successes
John Hart & Jeff Luse, C3 Solutions, November 24, 2020
As the Trump administration winds down, Donald Trump continues to be assailed as an environmental catastrophe. He has been called a “threat to the planet,” the “worst President for the environment in our history” and a “worse threat to humanity than Hitler.” In September, the New York Times reported that President Trump’s 100 environmental regulatory rollbacks would “add up to a lot more planet-warming emission.” Joe Biden even indulged in histrionics by tweeting, “If we give Donald Trump another four years in the White House, our planet may never recover.”
Yet, the facts – and science – tell a different story. Carbon emissions actually decreased during the Trump administration, which is surprising for an administration with a supposed fossil fuels fetish.
Trump made progress by doing a few things well:
- Trump Embraced the Power of Markets
- Trump Streamlined Projects
- Trump Reclaimed America’s Conservation Heritage
- Trump Adopted an “All of the Above” Energy Approach
by Owen Phillips | Nov 24, 2020 | News
OIL
Trump Administration Backs Oil Industry in SCOTUS Climate Case
Bloomberg Law, November 23, 2020
The Trump administration threw its weight behind oil companies on Monday in a Supreme Court dispute that could affect climate litigation across the country.
In a new amicus brief, Justice Department lawyers urged the high court to side with BP Plc, Exxon Mobil Corp., and others in a highly technical dispute involving appellate review of a jurisdictional fight in Baltimore’s climate case against the industry.
Government lawyers also touched on an underlying debate in the case: whether claims from Baltimore and similar plaintiffs belong in state or federal court.
GAS
The looser grip of gasoline prices on consumer budgets
Ben Geman, Axios, November 24, 2020
A speech Friday by Esther George, president of the Federal Reserve Bank of Kansas City, offers an interesting high-level look at the economic influence of gasoline prices and why it may never be the same.
The big picture: Gasoline prices account for a smaller share of household spending than they once did — about 4% in the 1980s to roughly 2% last year, though it’s much higher for low-income families.
The intrigue: The pandemic is changing the picture even more. Per George, “The COVID-19 shock could further loosen the grip of gasoline prices on consumers’ budgets and reduce the already lowered sensitivity of consumption to changes in the price at the pump.”
How it works: Gasoline demand plummeted when commuting went way down due to working from home and job losses, and while there’s been some revival, it’s still below pre-pandemic levels.
What’s next: “One thing that seems unlikely to ever bounce back fully is the amount of commuting,” she said.
“With many workplaces offering, or likely to offer, increased workplace flexibility, not only is gasoline demand likely to be lower, but it is also likely to be more elastic.”
MINING
Mercedes tackles cobalt mining issues
Shane Lasley, Metal Tech News, November 17, 2020
Mercedes-Benz says it will follow its supply chains all the way back to the mines, if that is what it takes to ensure that the lithium and cobalt going into its rapidly expanding line of electric vehicles is produced with high environmental and human rights standards.
“Our aspiration is very clear – we want our products to contain only raw materials that have been mined and produced without human rights violations,” said Renata Jungo Brüngger, a board member of both Mercedes-Benz and Daimler AG, responsible for integrity and legal affairs.
“If there are any indications of risk, we take another, closer look at the supply chain. This involves us going beyond the direct suppliers and creating transparency – if necessary, all the way back to the mine,” Brüngger added.
POLITICS
Interior Department contender says Biden would target Trump Arctic drilling push on first day
Valerie Volcovici & Nichola Groom, Reuters, November 23, 2020
President Donald Trump’s last-minute push to allow controversial drilling in part of Alaska’s Arctic will be an early target for the next administration, according to Senator Tom Udall, a contender to lead the Interior Department under Joe Biden.
The New Mexico Democrat was speaking of the Trump administration’s plan to pull off a sale of oil drilling leases in the Arctic National Wildlife Refuge before Biden, who wants to ban new drilling on all federal lands and waters as part of a strategy to fight climate change, becomes president on Jan. 20.
“I would expect that there would be real scrutiny and analysis of these last-minute kinds of deals that are being done,” Udall said in an interview, adding that he expects they could be overturned by the courts. “That’s an issue that needs to be looked at on Day One.”
The Interior Department, which manages federal and tribal lands, last week issued a request to energy companies to identify tracts in the refuge to be offered for sale. That puts the administration on a timeline that could bring a lease auction by mid-January, only days before Biden takes office.
CLIMATE CHANGE CONVERSATIONS
U.S. oil industry group pledges to fight possible Biden fracking limits
Laura Sanicola, Reuters, November 23, 2020
If U.S. President-elect Joe Biden tries to restrict development of oil and gas drilling on federal lands, the American Petroleum Institute (API) will use “every tool at its disposal” including legal action, chief executive Mike Sommers said in an interview with Reuters on Monday. Biden has said he supports a ban on new gas and oil permits — including fracking — on federal lands.
Fracking, or hydraulic fracturing, is a drilling technology that has allowed the U.S. oil industry to vastly boost output in recent years, making the United States the world’s largest producer of crude oil. Environmental groups oppose fracking, saying it pollutes groundwater and exacerbates climate change.
Sommers said the API looks forward to working with the incoming Biden administration on energy but would “draw the line” if Biden implemented restrictions on lands that were “always meant for multi-use.”
by Owen Phillips | Nov 23, 2020 | News
OIL
Oil producers cautious as recovery hopes rise
Ed Crooks, Wood Mackenzie, November 20, 2020
On 10 November 1942, with Rommel’s army in full retreat across Egypt and French forces surrendering to the Americans and British in Morocco and Algeria, Winston Churchill gave a speech at Mansion House in London. “Now this is not the end. It is not even the beginning of the end,” he said. “But it is, perhaps, the end of the beginning.” That seems to be about where humanity is now in its battle against Covid-19.
So, while oil executives speaking at Wood Mackenzie’s online Americas Energy Summit this week were looking ahead to a better year in 2021, they were cautious about stepping up activity on hopes of a rebound in demand.
“We are taking a conservative approach to what we think prices will be,” said Vicki Hollub, chief executive of Occidental Petroleum. “I do believe that we’re going to see better prices towards the fourth quarter of next year… But for the near term, what we’re doing is we’ve capped our investment at $2.9 billion in 2021. That’s the maximum it would be, and if prices were for whatever reason to go lower than $40, we would probably adjust that.”
GAS
Demand Rising for LNG and Oil Cargoes
Matthew V. Veazey, Rigzone, November 22, 2020
Rigzone’s downstream readers paid considerable attention to articles this past week focusing on signs of improving fortunes of players within the global crude oil and LNG markets. However, readers also showed interest in another recent piece detailing one place that appears to want less of an important energy commodity. Keep reading for details.
The Great American LNG Comeback
Like others in the U.S. oil and gas industry, LNG exporters have had to contend with low prices and low demand this year. However, as this article from Rigzone contributor Jude Clemente points out, the market for LNG from U.S. export terminals has been improving. In fact, he observes that demand has entered record territory in recent weeks. Although there has been an uptick in traditional Asian demand centers, Clemente also discusses how U.S. producers and shippers can make further inroads into the European market.
MINING
Media gets documents on Pebble from SalmonState, discovers AKDNR is doing their job!
Liz Ruskin, KTOO, Alaska Public Media, November 20, 2020
Publicly, the Alaska Department of Natural Resources says it’s not involved with Pebble Limited Partnership’s application for a federal permit to dig an open-pit gold mine upstream from Bristol Bay.
But text messages and meeting notes — released in response to a public records request from mine opponents — show that behind the scenes, the leaders of the agency have been collaborating with Pebble to create the final piece of Pebble’s application.
“This will be a huge lift, but I have full confidence in this team,” Deputy DNR Commissioner Sara Longan wrote in a text to another DNR official on July 31.
POLITICS
Federal agency proposes rule aimed at blocking banks from not financing Arctic drilling
Alex DeMarban, Anchorage Daily News, November 21, 2020
The federal government on Friday released a proposed rule aimed at limiting large banks from pulling their financing from Arctic oil and gas projects, after several banks announced policies that prohibit or limit their investment in such projects, including in the Arctic National Wildlife Refuge. However, some experts and activists said the rule’s impact, if it is finalized, could be muted if banks can show that opting to not finance Arctic oil projects is a financial decision, not a political one.
The head of the Office of the Comptroller of the Currency, an independent bureau under the Treasury Department, said on Friday that the banking system’s capital and services must be accessible to everyone on equal terms.
Our Take: From Alaska’s Congressional Delegation: U.S. Senators Lisa Murkowski and Dan Sullivan, and Congressman Don Young (all R-Alaska), welcomed a proposed rule announced today by the U.S. Office of the Comptroller of the Currency (OCC) to ensure that national banks are providing fair access to banking services to customers based on objective risk, without excluding legal businesses and individuals. The announced rule comes after a sustained effort by members of Congress, led by the Alaska congressional delegation, urging the country’s senior federal financial regulators to examine the legality of decisions in late 2019 and early 2020 by several of the nation’s largest banks to withhold financing from oil and gas development projects in the Arctic, including the 1002 Area of Alaska’s Arctic National Wildlife Refuge (ANWR).
CLIMATE CHANGE CONVERSATIONS
Subsidizing and innovating away climate change
Amy Harder, Axios, November 23, 2020
Washington lawmakers may throw billions of taxpayer dollars at clean energy next year, prompting a rush of ideas about how to do it and how effective it can be at tackling climate change.
Driving the news: With the federal government’s political power likely divided, the biggest policies are likely to come through an economic recovery package in the form of subsidies and other spending.
Where it stands: Extending wind and solar tax credits are at the top of the list for Democrats and renewable-energy lobbyists. But more measures are in the works that could also hitch a ride on a stimulus bill.
The big picture: Washington has a decades-long practice of approving carrots (rewards) over sticks (penalties) to affect energy policy.
In fact, the federal government has almost never passed a major “sticks” policy — like carbon taxes and mandates penalizing oil, natural gas and coal — despite decades of debate about such approaches. (A federal ethanol mandate is a notable exception.)
What they’re saying: This debate about carrots and sticks is a perennial one.
by wp_sysadmin | Nov 20, 2020 | News
From the Washington Examiner – Barrasso replacing Murkowski?
ENERGY COMMITTEE SHAKEUP: Barrasso announced his intent yesterday to lead Republicans on the Senate Energy Committee next year, seeking to take over the top slot from term-limited Sen. Lisa Murkowski.
His move would open up the top GOP spot on the Senate Environment Committee, expected to be filled by West Virginia Republican Sen. Shelley Moore Capito. She would be the first woman to hold the Republican leadership position on that panel and the second-ever woman to chair the committee, behind Democratic Sen. Barbara Boxer, if Republicans keep the Senate.
Barrasso, who already sits on the Energy Committee, is likely to maintain a focus on low-carbon technologies such as carbon capture and advanced nuclear that Murkowski has also strongly backed. However, he might not lean as far into broader policy discussions as Murkowski, who has recently expressed an openness to consider policies like carbon pricing and talks frequently of how warming oceans, melting ice, and other climate change effects are harming her state.
The next DOE secretary? ‘This is the guy you want’
David Ferris, E & E News Reporter, November 19, 2020
Arun Majumdar is shaping up as the most influential energy adviser in President-elect Joe Biden’s transition circle.
He is heading the Department of Energy’s transition team and is a leading candidate to be its secretary, giving him a prime perch to guide Biden’s energy policy. But who is he and what is his vision for the agency?
An immigrant from India who worked his way into the top echelons of universities, national labs and President Obama’s Energy Department, Majumdar is recalled by former colleagues as a talented scientist and administrator who can explain complicated technical matters to a lay audience — and has the acumen to work across the aisle on Capitol Hill.
“He knows the building, he will hit the ground running,” said Brandon Hurlbut, a former chief of staff for Obama’s first Energy Secretary Steven Chu. “He knows how to engage with the national labs, he knows how to engage with Congress. He knows how to manage a large enterprise; he has the technical chops.”
Those skills could be put to the test if Majumdar takes a top government post, as DOE plays a leading role in Biden’s sweeping climate and energy agenda.
Biden has called for the nation’s electrical grid to be carbon-neutral by 2035, meaning that DOE will be the agency to lead initiatives to electrify cars and buildings, ramp up carbon capture at fossil fuel power plants, reinvent nuclear power, and navigate controversial calls to phase out natural gas, while also representing the U.S. around the globe as Biden tries to reassert U.S. leadership on climate change.
Biden’s DOE also may face a Republican Senate opposed to spending public dollars on energy, and conservative energy advocates who are ready to dismiss some or all of Biden’s energy priorities.
Other names under consideration as DOE secretary are Elizabeth Sherwood-Randall, who was deputy secretary under Obama and has long been a Biden adviser; Washington Gov. Jay Inslee (D), who ran for the 2020 Democratic presidential nomination with a strong climate and energy focus; Ernest Moniz, Obama’s second DOE secretary; and Dan Reicher, a Stanford University lecturer who had senior roles in President Clinton’s DOE and served on Obama’s transition team.
Majumdar has resigned from at least some of the many boards he sits on, a common sign that someone is being considered for a top government job. Asked if he was being vetted, Majumdar forwarded the request to Biden’s transition staff. Regardless of whether he ends up in a DOE position, Majumdar can leave his footprint on the agency now by directing future hires and the transition.
Majumdar came to Washington in 2009 as the first head of the Advanced Research Projects Agency-Energy (ARPA-E), an unusual arm of government that incubates transformational but underfunded energy technologies. He is a strong proponent of using government dollars to innovate the energy sector, including for fossil fuels.
Biden Urged to Make Haaland First Native American in Cabinet
Jennifer A. Dlouhy, Bloomberg, November 18, 2020
A campaign to pressure President-elect Joe Biden to put Representative Deb Haaland in charge of the Interior Department — and make her the first American Indian cabinet secretary in U.S. history — is gaining ground in Washington.
The effort, which involves lawmakers, tribal leaders, and some environmentalists, also is making headway with Biden transition officials, according to three people familiar with the matter who asked not to be named discussing deliberations over personnel.
Haaland, who was just elected to her second term in the House, is a top contender for the post of Interior secretary along with retiring Senator Tom Udall, the people said. Both are Democrats from New Mexico.
Representative Raul Grijalva, a Democrat from Arizona, just took himself out of the running, throwing his support behind Haaland for the post in a letter Monday to the Congressional Hispanic Caucus. Biden officials have been urged not to give serious weight to Senator Martin Heinrich, another Democrat from New Mexico, in part because of his decision to support current Interior Secretary David Bernhardt’s confirmation last year, two of the people said.
