When will oil sustainably break out of the “Virus Alley”—that $40 to $50 band that has held oil prices in check for months? That’s Question No. 1 going into 2021 for an oil industry that has dramatically retrenched and investors who have abandoned the sector because of a lack of returns. It will also determine when U.S. shale recovers from its pandemic malaise and resumes growth.
Only a year ago prospects looked pretty good. Optimism about the world economy at the beginning of 2020 had a barrel of Brent crude at $70. Then came a pandemic that was in almost no company’s—or country’s—emergency plans. The general view of something called SARS-CoV-2 was initially conditioned by the experience of SARS-1 in the early 2000s, which had about 8,000 cases world-wide and fewer than 800 deaths.
But by March the highly transmissible coronavirus was precipitating a world-wide shutdown, the worst global recession in 74 years, and the constriction of movement by both car and plane. That led to a plummeting of global oil demand and a price collapse that saw prices go “negative,” or below zero, as producers paid people to take their oil away because storage tanks were filled to overflowing.
The rebound from negative prices and the stabilization of the market was made possible by unprecedented production cuts by the group that calls itself OPEC-plus—the 13 Organization of the Petroleum Exporting Countries, led by Saudi Arabia, and a group of 10 other producing nations led by Russia. That U.S.-brokered agreement got oil prices up into the $40 to $50 range of Virus Alley, blocked at one end by the virus and at the other by the uncertain prospect for vaccines. Now that vaccines are here, prices have moved to the $50 end of the alley. But will they rise into that higher band of $50 to $65 that will enable companies to start spending and attract investors?
The result marked a big disappointment for BP’s partners in the prospect, which had been seen as a potential gas supplier to the North West Shelf liquefied natural gas (LNG) plant, where BP is a co-owner, within five to 10 years.
“BP Australia can confirm that no significant hydrocarbons have been found at the Ironbark exploration well in Western Australia,” the company said in an emailed statement.
It said the well, which was drilled to a total depth of 5,618 metres, will be plugged and abandoned, but had no further comment.
“Bugger. A very disappointing result for us all,” New Zealand Oil and Gas Chief Executive Andrew Jefferies said in a statement.
“Ironbark was a world scale prospect in a highly prospective address, and it needed drilling. We got an answer, but it was not the one we wanted,” he said.
The lawsuit alleges Northern Dynasty and senior executives misled investors about the viability of the company’s proposed Pebble Project, a large mining project in Alaska.
Washington, DC—U.S. Sen. Lisa Murkowski (R-Alaska) released the following statement after securing a number of western water provisions in the Consolidated Appropriations Act, 2021, which President Trump signed into law on Sunday evening. Murkowski worked with Ranking Member Joe Manchin (D-W.Va.) and the leadership of the Senate Committee on Indian Affairs and the House Committee on Natural Resources to address a number of western water priorities, including provisions that:
Begin to tackle the massive aging infrastructure issues facing water users.
Ensure Bureau of Reclamation facilities can be utilized to improve groundwater storage and management.
Authorize crucial water projects; and Extend several programs important to modernizing water systems and saving water.
“It is critical that we invest in our water infrastructure and enact federal policies that provide water managers with the tools they need to deliver reliable water supply. The western water title in the omnibus accomplishes both of these goals,” Murkowski said. “This package will improve water security and drought resilience for farms and communities in many western states. After considerable process in this Congress, I’m glad these provisions are now signed into law.”
Among other things, which shall remain nameless, 2020 has been notable for the rush of activity in the green hydrogen space.
Using renewable-powered electrolyzers to create low-carbon hydrogen can squeeze emissions out of sectors where direct electrification isn’t going to cut it. Green hydrogen could replace methane to generate heat or power. It could replace high-carbon, or gray, hydrogen in a number of industrial and chemical processes. It could even be used as a fuel in heavy transport.
As 2020 unfurled and then unraveled, climate change mitigation ambition ramped up. “Green recovery” emerged as a favored approach to stoking flagging economies — tackling the unparalleled challenge of climate change to invest our way out of an unrivaled economic test.
The public will be barred from the Alaska State Capitol, members of the news media will be prohibited from entering the House and Senate chambers, and lawmakers must wear masks under a set of new anti-COVID rules approved Monday by a committee of the Alaska Legislature.
Any legislator that refuses to submit to a health screening at the Capitol’s entrance “will be denied entrance to the Capitol.” Any lawmaker who refuses to wear a face covering on the floor of the House or Senate “will be escorted … to their individual office where they shall remain,” according to the new enforcement guidelines.
The rules will be in effect only until the House and Senate elect new leaders for the upcoming legislative session, but both halves of the Legislature are deadlocked, and it isn’t certain when either the House or Senate will resolve the leadership question.
In January, as a mysterious illness ripped through the Chinese city of Wuhan, global oil prices plunged. Two thousand miles away in the island state of Singapore, one of the most powerful men in the world of commodities trading, Lim Oon Kuin, quietly added to his vast stockpiles of fuel – making a bet that China would successfully control the spread of the new disease.
That gamble soured quickly. While China did curb the coronavirus at home, the pandemic that followed brought crude oil prices tumbling as much as 70%. Banks tried to recover loans from Lim’s company, Hin Leong Trading Pte, triggering one of the biggest scandals in the oil industry this century. Lim’s empire collapsed, owing $3.5 billion to 23 banks, and the fallout from the debacle is still reverberating into 2021, shaking out large tracts of the vast and often opaque $4 trillion global oil-trading industry.
Gov. Phil Murphy says he will try to stop a controversial plan to ship liquefied natural gas through New Jersey’s first LNG export terminal at Gibbstown in Gloucester County, two weeks after New Jersey voted to approve the dock’s construction as a member of the Delaware River Basin Commission.
Murphy said in a statement to NJ Spotlight News on Dec. 22 that New Jersey’s vote at the DRBC on the controversial project was on the narrow issue of whether to allow dredging for construction of the dock where LNG would be loaded onto ocean-going tankers. But the statement also said the Murphy administration remains committed to its clean-energy policies, and so would do everything in its power to prevent the new dock being used to transport the fuel.
“The DRBC vote was in support of upholding a dredging permit for the construction of a dock,” Murphy said in a statement issued by his deputy press secretary, Alex Altman, on Tuesday. “It was based upon an extensive and comprehensive scientific and technical analysis of its impact on water quality performed by DRBC staff and examined again during a subsequent hearing.
“The Administration, however, remains unwavering in its commitment to continue advancing critical initiatives to protect the environment and public health for future generations. It will explore all avenues within its authority to prevent the use of this dock for LNG transport,” the statement said. Murphy did not say how he would do that.
Altman declined to explain, after follow-up questions, how the administration can reconcile the vote to approve construction with Murphy’s newly declared intention of stopping LNG transfers there. She refused to say whether the administration understood that approval of construction also meant approval of the LNG project.
The good times for gold miners are expected to continue next year, especially for those that are able to tighten spending and increase returns to investors.
The rally in gold prices has helped miners expand their margins and generate record levels of free cash flow, allowing many to pass on profits to shareholders already, Scotiabank analyst Tanya Jakusconek said.
“With miners’ balance sheets in great shape, we believe investors will benefit from much higher dividends over the coming years,” Jakusconek wrote in a note to clients. Kinross Gold Corp., for example, offers “particularly compelling value,” as long as it continues to demonstrate sustainable cash flow over the coming quarters.
Our Take: That’s great news for Alaska’s producing (Fort Knox, Kensington, Pogo) and developing (Donlin) mines!
Alaska Gov. Mike Dunleavy told Fox News in a weekend interview he supports a proposal by congressional Democrats and President Donald Trump to pay a $2,000 federal stimulus to most Americans.
The measure passed the U.S. House of Representatives on Monday, but Senate Majority Leader Mitch McConnell, R-Kentucky, refused to hold a vote in the Senate on Tuesday. If it passes the Senate and is signed into law by the President, it would replace a $600 payment in the just-passed coronavirus relief bill.
In his Sunday interview, Dunleavy said, “I agree with the president: The people of this country need money in their pockets now.”
Alaska’s U.S. senators, Republicans Lisa Murkowski, and Dan Sullivan have not answered questions sent Monday asking whether they support the proposal.
Rep. Don Young, R-Alaska, skipped Monday’s vote in the House.
You might say IBM has joined the Plastic Avengers. The technology giant’s superpower: Designing a new data platform to help track plastic waste and recovery on a global scale.
The Avengers group in this example is officially called The Alliance to End Plastic Waste, and it includes 50 member companies. IBM’s platform is called the Plastics Recovery Insight and Steering Model, or PRISM for short.
The effort is about organizing data so it can be acted on, says Nick Kolesch, vice president of projects at the Alliance to End Plastic Waste.
Alaska is positioned to possibly become an even more popular destination when travel eventually resumes en masse but oil markets aren’t likely to rebound nearly as well despite relative recent strength, according to the leaders of some of the Alaska Permanent Fund Corp.’s large investment partners.
Recent gains in oil markets have surpassed the expectations of most investors but are also tentative, given the dominant presence COVID-19 continues to have over much of the world, according to the leaders of Riverstone Holdings LLC.
Riverstone is a $40 billion private market investment firm that focuses on the energy and infrastructure sectors.
“While (oil) prices are up in the near-term, they are lower in the medium- to long-term,” said Pierre Lapeyre Jr., co-founder of Riverstone Holdings.
Oil prices have hovered around $50 per barrel for Alaska North Slope crude in mid-December on hopes that the first round of COVID-19 vaccines will translate into greater demand before too long.
A weary world rejoiced as the coronavirus vaccine began its rollout in December. Oil prices hit $50 per barrel, the highest levels since March, on the news. But the celebrations were short-lived as medical experts warn of a long dark winter ahead.
In fact, optimism in the oil markets was premature as analysts say oil prices are in for a rough first half of 2021. New lockdowns have arrived, OPEC is set to increase supply, and President-elect Joe Biden has vowed to hammer out a new Iran nuclear deal; all of which are expected to drag on oil prices.
“We expect a pullback (of oil prices) here shortly, similar to what we saw happen in early September,” Allyson Cutright, director of the global oil service division at Rapidan Energy Group. “And that’s primarily because we don’t see the vaccines really impacting demand until the second half of the year.”
Rapidan expects Brent to average $45 per barrel for 2021 and West Texas Intermedia at $43. If that looks familiar, that’s because it is.
Since taking over operatorship of the Cook Inlet Kitchen Lights unit on July 1 with its purchase of bankruptcy debtor Furie Operating Alaska LLC and related firms, HEX Cook Inlet LLC touts a surprisingly hefty list of accomplishments.
The company, a joint venture between HEX LLC (80%) and Rogue Wave AK LLC (20%), was founded in 2020 by Alaskan John Hendrix, its president and CEO. Hendrix, who was raised in Homer and is an engineer, has close to four decades of experience in the energy industry in Alaska, the Lower 48 and internationally with Apache, BP, and Schlumberger.
In a Dec. 18 presentation to a Commonwealth North study group, Hendrix listed HEX CI’s accomplishments, the most recent being record natural gas production in 2020 of 15.4 million cubic feet per day, as compared to about 12 million when HEX took over on July 1. T
Researchers from the Carnegie Institution for Science and the University of Colorado Boulder are proposing a new “evolutionary system” of mineral classification that includes historical data and reflects changes in the diversity and distribution of minerals through more than four billion years of Earth’s history.
Diamonds are the inspiration behind the scientists’ proposal because even though many of them differ in both composition and genesis, they are all categorized as “diamonds” by the International Mineralogical Association’s Commission on New Minerals, Nomenclature and Classification.
This means that the historical context of the gems is left behind and this has become problematic for planetary scientists, geo-biologists, paleontologists, and others who have to treat equally rocks that formed billions of years ago in space as the carbon-rich atmospheres of dying stars expanded and cooled or diamonds that formed 5,000 years ago when a large meteorite struck a carbon-rich sediment on Earth.
No one needs to tell Alaskans that climate change is real. We see the impacts as glaciers retreat, permafrost thaws, sea ice melts and weather patterns change dramatically. We see increased coastal erosion threatening two dozen Alaska Native villages.
Locally and globally, people are losing so much as the climate changes so rapidly. To slow it down, we’re going to need all hands-on deck and every tool in the toolbox. That means bringing all the best solutions, even some technologies that are still in development, need more research or require additional investments to bring to the marketplace.
One recent positive step to make that happen came from Congress, with an Alaskan leading the way: Sen. Lisa Murkowski.
Congress passed the Energy Act of 2020 as part of a larger spending bill this month. It does several key things to help our economy, our health, and our climate.
In their latest attempt to prove just how radical they are, more than 300 left-wing environmental groups penned a letter to congressional Democrats expressing concerns over a bipartisan energy package that may soon become law. As is often the case with the environmental left, their opposition is not rooted in principle, but rather in a quest to demonstrate that they are the only ones who actually care about climate change.
Putting their performative tactics aside, far-left environmental groups seem to believe that addressing climate change requires fierce opposition to any reasonable proposals that could make a difference. The latest energy package they oppose includes measures to support carbon capture, advanced nuclear, and battery storage, but these provisions are apparently not good enough. In fact, the provisions, according to the letter’s signatories, are “dirty energy handouts” and “false climate solutions.”
On what planet is supporting nuclear energy—the nation’s largest source of carbon-free electricity—a dirty energy handout? And since reducing emissions is goal number one when it comes to combating climate change, carbon capture cannot possibly be dubbed a false climate solution. Then again, it’s probably a waste of time to try to understand the environmental left’s nonsensical positions since its goal is not to reduce emissions, but rather to manufacture as much hysteria and outrage as possible.
These 300+ environmental groups would rather go down kicking and screaming in the absence of a Green New Deal as opposed to promoting realistic climate solutions. Leaders of these groups have made clear that they want congressional Democrats to walk away from negotiations on this energy package and focus on “aiming higher” under a Biden administration. This position wouldn’t be so outlandish if these weren’t the same people shouting to the rooftops that we only have twelve years left to address climate change. In spite of their manufactured time crunch, far-left environmental groups have no problem with undermining climate action that could happen right now.
What’s more is that in holding out for the incoming presidential administration, these groups must have forgotten that candidate Biden released a climate platform supporting investments in carbon capture and nuclear technology. Also noteworthy is that more than seventy senators were involved in writing the individual bills that make up the energy package, making it an overwhelmingly bipartisan piece of legislation. By the far-left environmentalists’ standards, do the dozens of Democratic senators who were involved in crafting this bill support dirty energy handouts and false climate solutions? It’s unlikely that we will ever get an answer to this question.
Perhaps the most outrageous line of attack against the energy package is that, according to the letter, it contains policies that will “forward energy injustice.” It would be one thing if these environmental groups were claiming that the package does not allocate enough funds for energy technologies, resulting in an injustice. But instead, these groups take a Green New Deal or bust approach and believe that only it will serve as a cure-all solution to environmental challenges. Ironically, the Green New Deal would produce the most injustice of any environmental proposal. It would crush free markets, enforce mandates, and decimate the working and middle classes by way of soaring energy prices.
The environmental left’s latest performative gesture demonstrates once again that it does not actually care about addressing climate change. Despite the narrative painting President Trump, Republicans, and congressional gridlock as the biggest barriers to climate action, the truth is that far-left environmental activists are the largest force standing in the way. Congress should tune out these unserious actors and pass this energy package.
Inspired by his own service dog, #ConocoPhillips IT Infrastructure Analyst Kevin Doncaster began a new mission: WarHawk PTSD Service Dogs, a nonprofit that trains and delivers companions at no cost to veterans, first responders and others with PTSD: https://t.co/r6etiXx8xbpic.twitter.com/yIagqhpHOT
ConocoPhillips has made a large oil discovery in the Norwegian Sea close to a producing oilfield, the U.S. oil and gas company said on Tuesday.
Preliminary estimates point to the field containing between 75 million barrels and 200 million barrels of recoverable oil equivalent, ConocoPhillips said, adding that additional appraisal would determine the flow rates and the ultimate resource discovery, as well as a potential plan for development.
Carnival Cruise Line, the world’s largest cruise ship operator, informed that its newly built LNG-powered cruise ship Mardi Gras has made its first port call in Rotterdam. The vessel will complete its first LNG bunkering operation since being delivered from the Finnish shipbuilder Meyer Turku.
Mardi Gras is scheduled to depart Rotterdam on Wednesday and then sail to Barcelona, Spain, before making its eventual arrival in the U.S.
The ship’s inaugural voyage from Port Canaveral is scheduled for April 24, 2021. The vessel will be sailing from Port Canaveral in Florida and will be the first cruise ship in the Americas to be powered by LNG.
University researchers working in tandem with the European Space Agency, have tested the use of a new, smokeless, carbon-free energy by burning iron powder. And what better way to assess the potential of this new type of fuel than by brewing beer with all the flavor and less carbon emissions than traditional brews?
First tested in microgravity aboard European Space Agency sounding rockets, a team at McGill University in Canada and Eindhoven University of Technology in the Netherlands have discovered the recipe for igniting iron powder to produce fire.
“The basic idea of burning metal is hardly new, especially in the space field, because solid rockets rely on aluminum particles as fuel – burning many tons within a few minutes,” explains Antonio Verga, an ESA engineer who worked on the team’s experiments. “But aluminum only burns with very tiny particles – iron is a more practical fuel for controlled combustion, while having a comparable energy density to gasoline.”
The combustion process for metal works differently from “conventional” carbon fires, with the burning process transferred between adjacent metal particles by heat radiation, akin to the way neighboring trees can burst into flames during a forest fire.
Known as discrete burning, this occurs when a piece of fuel ignites and burns completely due to the ambient heat radiated by nearby fuel elements.
POLITICS
From the Washington Examiner, Daily on Energy:
CRUZ SEEKS SENATE VOTE ON PARIS DEAL: Sen. Ted Cruz, in a letter earlier this week to Trump and Secretary of State Mike Pompeo, said Trump should fix the “great damage” done to the separation of powers by former President Barack Obama not sending the Paris climate deal to the Senate for a ratification vote.
“The only reason the Obama Administration refused to submit these agreements to the Senate as treaties was that it knew that the agreements were deeply unpopular and doomed for defeat,” Cruz wrote of the Paris Agreement and the Iran nuclear deal.
Cruz’s letter is the latest in a push from conservative groups and lawmakers to get Trump to send the Paris climate deal to the Senate for a vote, where it would face fierce Republican opposition. Sen. Lindsey Graham also called for Trump to take such a step in a tweet last week.
If the Senate voted down the Paris Agreement, conservatives hope it could make it more difficult for Biden to rejoin the climate deal, which he has said he will begin the process to do on day one.
Norway’s supreme court on Tuesday approved government plans for oil exploration in the Barents Sea off the country’s northern coast, rejecting a lawsuit by environmental groups.
The groups, including Greenpeace, had claimed the oil licenses breached an article in the Norwegian constitution which guarantees the right to a healthy and viable environment.
“The supreme court is rejecting the appeal,” Chief Justice Toril Marie Oeie said as she announced the verdict on Tuesday.
The Nature and Youth advocacy group denounced the ruling in a tweet: “This means today’s youth lacks fundamental legal protection from environmental damage jeopardizing our future… This is shocking and we are furious.”
Norway ‘must be held accountable’
The verdict upheld rulings made by two lower courts, dismissing the arguments by Greenpeace and the Nature and Youth group that a 2015-2016 oil licensing round giving awards to Equinor and others had violated the constitution.
