Thankful Thursday: Biden Backs Willow. Pantheon’s Billion Barrels. Banks Keep Banking Fossil Fuels.

by wp_sysadmin | May 27, 2021 | News

NEWS OF THE DAY:

Biden administration backs Alaska oil drilling project approved under Trump
Kanishka Singh, Reuters, May 27, 2021

 U.S. President Joe Biden’s administration defended on Wednesday a proposed ConocoPhillips oil development in Alaska, backing the drilling project which was approved under the administration of former President Donald Trump.

“A Wednesday filing by the U.S. Department of Justice continues to defend a 2020 Record of Decision for the Willow Project in the National Petroleum Reserve – Alaska (NPR-A)” a spokesman of the U.S. Interior Department said in an email.

In February, an appeals court blocked construction of ConocoPhillips’ $2 billion-plus Willow crude oil project in Alaska. Wednesday’s development comes even as Interior Secretary Deb Haaland had opposed the project last year when she was a member of Congress.

The Trump administration approved the Willow development plan in October. Permits to mine for gravel and build roads were issued on the morning of Jan. 20, just before Biden was sworn in as the nation’s 46th president.

Environmental groups had sued, making the argument that the government failed to take into account the impact that drilling would have on fragile wildlife.

“The filing (on Wednesday) maintains that the decision complied with NEPA (National Environmental Policy Act) standards in place at the time, and that the plaintiffs did not challenge the Record of Decision within the time limitations associated with environmental review for projects in the NPR-A”, according to the statement shared by a Department of Interior spokesman.

The project has been pushed by Alaska Senator Lisa Murkowski, a Republican, who along with another Republican senator, Dan Sullivan, discussed the oil project during a meeting with Biden on Monday, according to Politico.

Murkowski said the engagement with the Biden administration officials since that meeting was “very productive”.

Willow holds 590 million barrels of recoverable oil and could produce up to 160,000 barrels per day as soon as 2024, according to ConocoPhillips’ previous estimates.

OIL:

U.K. explorer makes billion-barrel find along Dalton Hwy.
Elwood Brehmer, Alaska Journal of Commerce, May 26, 2021

The leaders of a small British explorer insist they have struck an oil accumulation measured in the billions of barrels that is also conveniently located alongside the Dalton Highway.

Pantheon Resources intersected two reservoirs near the bottom of its Talitha-A exploration well that, combined, likely hold roughly 1.4 billion barrels of recoverable light oil and more than 12 billion barrels of oil in place, according to Technical Director Bob Rosenthal.

The promising results from the Talitha well drilled and tested last winter transforms the prospect called “Theta West” within the company into an oil project, Rosenthal said.

Pantheon did the drilling approximately 10 miles from what would normally be the best location for a well targeting the Brookian Upper and Lower Basin Floor Fan formations that contain the discovery because the primary target for Talitha-A was a shallower zone known as the Shelf Margin Deltaic that the company was unable to test before spring put an end to the North Slope exploration season.

“We actually drilled this well 1,500 feet down-dip from the crest and we are actually 10 miles down-dip from its location, so this trap is huge,” Rosenthal described in an interview.

“We’ve drilled a huge step-out appraisal well before we drilled the crest location.”

Pantheon merged with Anchorage independent explorer Great Bear Petroleum in early 2019 and the blended operating company Great Bear Pantheon is conducting the fieldwork.

Rosenthal was a founding member of Great Bear, which previously explored the area about 20 miles south of Prudhoe Bay along the Dalton for years, first focusing on shale oil prospects and then shifting its focus to conventional plays after the oil market reset of 2015-16.

Pantheon leaders are particularly confident in their assertions about the first test results from Talitha-A because the company is also working off of data from the nearby Pipeline State-1 well drilled in 1988 by Arco that — combined with modern 3-D seismic data — has helped give them a better sense of what the rocks in the area hold.

In that sense, Talitha-A is not a true wildcat exploration well.

The Basin Floor Fan complex was also identified in data from the Pipeline State well, according to Rosenthal. He said previously that even though the 10,000-foot vertical Pipeline State-1 well has a roughly 2,200-foot oil-bearing column over four reservoirs, with the technology and oil prices of the late 1980s it did not add up to a viable prospect at the time.

Rosenthal said before the initial well tests that Talitha A was similarly expected to have an oil-bearing zone of roughly 2,000 feet in the wellbore of about 10,200 feet but that has since grown to approximately 3,700 feet of oil-bearing rocks, according to a company statement.

CEO Jay Cheatham also said prior to drilling that he thought Theta West could hold up to 500 million barrels of recoverable oil.

“We know where we have oil 10 miles down-dip from the crest (of the trap). We know that there is oil up-dip from there because, of course, oil migrates up,” Cheatham said.

Industry sources who have followed the Great Bear-Pantheon work generally said it is very probable the company hit a significant oil column but the porosity and permeability of the rock formations — and the ability to easily get the oil out of them — will most likely determine the ultimate size and success of the project.

Rosenthal said the company hopes to drill another well into the crest of the Basin Floor Fan trap located northwest of Talitha-A, where the rocks should have better characteristics.

“We expect to have thicker reservoir and because it’s shallower, better reservoir,” he said of the crest location.

Pantheon also still needs to test the Shelf Margin Deltaic that was the primary Talitha target. Cheatham said there are additional plans in the works to drill a second well at the company’s Alkaid prospect just to the north to prove up what Great Bear found when it drilled Alkaid-1 in 2015.

Cheatham acknowledged that the work the company hopes to do next winter is not yet funded; however, Rosenthal noted in a conference call that the early-stage economics of the project, which benefits greatly from its location adjacent to the Haul Road, helped convince investors to fund the Talitha work last year when work was otherwise being curtailed across the Slope due to the pandemic-induced oil market collapse.

At the time, the company was running economic development models with oil in the $40 to $45 per barrel range, according to Rosenthal.

“Oil prices are back up in the $60s,” he said. “COVID is hopefully going to be in our rearview mirror, and we’ve gone out and actually drilled the well and found a world-class resource.”

GAS:

From the Washington Examiner, Daily on Energy:

LNG COMPANY LAUNCHES CARBON CAPTURE PROJECT: Venture Global LNG unveiled plans this morning to install carbon capture equipment at two of its liquified natural gas export facilities, a first-of-its-kind project the company says will capture and store roughly 500,000 tons of carbon per year.

The company, whose projects are based in Louisiana, said its carbon capture project is “shovel-ready” and waiting only on regulatory approvals. Venture Global LNG said it is also planning a similar carbon capture project on another one of its LNG facilities. In total, the two projects would capture around 1 million tons of carbon per year, the company said.

“Through this historic carbon capture and sequestration project, we will build upon our existing state-of-the-art technology to develop even cleaner LNG at our facilities to displace coal around the world,” said Mike Sabel, the company’s CEO. The project also has the backing of Louisiana Gov. John Bel Edwards, a Democrat, who wants his state to take a leadership role in developing and commercializing carbon capture and storage technologies.

MINING:

Aluminum waste to critical minerals asset
Shane Lasley, Metal Tech News, May 26, 2021

Though originally developed to recover rare earths from recycled magnets and potential ore from its Montviel REE deposit in Quebec, Geomega Resources Inc.’s rare earths and critical minerals extraction technology may draw value from and reduce the environmental footprint of bauxite residues piling up at aluminum refineries.

Innord, a subsidiary of Geomega focused on developing solutions to large industrial mine waste challenges with its technology to extract critical minerals, has entered a research agreement with an undisclosed international partner to study the use of its environmentally friendly process to extract rare earths, scandium, and other critical metals from the readily available waste material being generated during refining of alumina using the Bayer process.

Commonly referred to as red mud, a reference to the color and consistency of this waste material, bauxite residues are typically stored in large containment facilities. The large quantities of this ofttimes caustic red mud have led researchers and refiners to seek alternative uses for it.

The process being developed and tested at the bench scale by Innord has the potential to significantly reduce the quantities of this red mud that would need to be stored at aluminum refineries.

“We are thrilled to be working on such an important environmental global challenge,” said Geomega Resources President and CEO Kiril Mugerman. “Aluminum, the most produced non-ferrous metal in the world, is a key material of the 21st century for such major industries as transportation, aviation, construction, and many other sectors. In the environmentally conscious world we now live in, local environmental regulations and social acceptability dictate that now is the time to find a solution to BR (bauxite residue) storage.”

At the same time as reducing the environmental footprint, the Innord process would also transform red mud from a liability to an alternative source of metals critical to modern technological applications.

“There is a tremendous economic potential benefit as well, as every tonne (metric ton) of BR contains between US$80 and US$120 worth of critical and strategic metals that are becoming imperative to recover,” said Muggerman. “We believe that Innord’s technology is well-positioned to offer economic and environmentally innovative solutions to sustainability challenges. We look forward to continue advancing the technology towards larger-scale testing.”

This work will continue to test and validate the process at the bench scale in preparation for potential pilot testing that could provide data for a feasibility study that details the economic and design parameters of the technology.

Innord’s unnamed industrial partner will be contributing material for this testing and expertise on various product stream specifications.

Ownership of the intellectual property developed by Innord through this research work will remain with Geomega. If the testing proves the Innord developed bauxite residue processing technology to be economically and environmentally feasible at the industrial scale, Geomega intends to make it available globally through a licensing and royalty structure.

POLITICS:

6 days into special session, Alaska’s budget progress has been slow with dividend debates still looming
Sean Maguire, KTUU, May 26, 2021

Almost one week into a 30-day special session, the Alaska Legislature’s progress on passing a budget and a Permanent Fund dividend has been slow.

The House of Representatives passed a budget late into the regular session after taking one month to organize. There were also delays waiting for federal guidance on how to spend from the latest COVID-19 relief package. The Senate then raced to pass a budget with a $2,300 dividend last Wednesday in the final hour of the regular legislative session.

Since the special session began last Thursday, only one substantive committee hearing has been held to resolve the differences between the budgets passed by the House and the Senate so a single bill can pass through the Legislature. The meeting on Wednesday afternoon dealt with largely uncontroversial differences between the two bills.

There had been hopes to pass a budget and adjourn before the Memorial Day weekend and then reconvene in August for another special session to tackle the state’s fiscal challenges. That timeline has been thrown out the window.

Nome Democratic Rep. Neal Foster oversees the operating budget in the House and said the Legislature doesn’t have a planned date to adjourn the special session.

“Speaking with the Senate, I think we’ve come to the conclusion that we’re just taking things one day at a time right now,” he said.

Pressure is on to pass an operating budget before layoff notices are sent out to 14,346 state employees ahead of the start of the next fiscal year on July 1. If a budget does not pass by then, Alaska’s state government would shut down for the first time.

Brent Wittmer, a spokesperson for the Alaska Department of Administration, said the goal is to provide 30 days of notice to state workers of a looming shutdown, but the administration must send out layoff notices 10 days before that is set to happen.

“There is significant costs associated with that,” said Sen. Bert Stedman, R-Sitka, on Monday.

He explained that when the Legislature has come close to a shutdown in the past, state employees have rushed to schedule medical appointments and cash in leave, costing the state millions of dollars.

Foster had suggested peeling off the operating budget from a bill that also contains the capital budget and the Senate’s dividend to pass it quickly and avoid that from happening. The plan now is to keep debating them all together to give legislators “maximum flexibility” to decide where funding comes from.

“It is all tied together,” Foster said of the appropriations bills, the dividend and how to spend $500 million in federal COVID-19 relief.

There have been conflicting accounts for the slow progress in the Capitol: From key legislators being away from Juneau for work and other responsibilities, which is typical as sessions drag into the summer, to organizational issues in getting committee work ready and then deadlock over the dividend.

The sharpest policy divide between legislators remains over the PFD. There are those who support a larger dividend than has been paid in recent years and those who are concerned about overdrawing the Permanent Fund by $1.5 billion, as would happen under the Senate’s dividend proposal.

Foster said the House majority coalition has a strong desire to not overdraw the fund. The nonpartisan Legislative Finance Division has previously estimated that for every $1 billion taken out of the fund, the state would lose $50 million in investment earnings each year in perpetuity.

Senate Minority Leader Tom Begich, D-Anchorage, voted for the Senate’s $2,300 dividend, following a new 50-50 formula supported by the governor, but said that was a starting point for a compromise. He suggested a $1,000 PFD could get enough support to pass.

One option is that that dividend could pass now and the August special session could see it increase during broader fiscal debates.

Senate President Peter Micciche, R-Soldotna, also voted for the 50-50 dividend. He said if the House doesn’t bend on the $1,000 dividend figure that could be an option but noted there were dozens of other ideas floating around the Capitol.

CLIMATE CHANGE:

Banks promise to keep cash flowing to fossil companies
Avery Ellfeldt, E & E News, May 27, 2021

Wall Street executives and several Republican lawmakers agreed yesterday that the most powerful U.S. banks should continue to do business with fossil energy companies despite pressure from progressives to do the opposite.

The consensus emerged during a hearing before the Senate Committee on Banking, Housing and Urban Affairs. It underscored the challenge Democrats and environmentalists face in weaving climate risks into financial regulation.

As part of yesterday’s three-hour hearing, lawmakers asked top banking executives if they planned to adopt policies that would curb the flow of cash into fossil energy companies.

“Do you now, or do you plan to have any time soon, a prohibition against financing the development of oil or natural gas?” ranking member Pat Toomey (R-Pa.) asked Jane Fraser, the CEO of Citigroup Inc.

“We don’t plan to have a prohibition against this, no,” Fraser responded. Instead, Fraser said the bank intends to help its “clients in the transition to the cleaner carbon technologies.”

The chief executive officers of the other five megabanks — Bank of America Corp., Goldman Sachs Group Inc., Morgan Stanley, JPMorgan Chase & Co., and Wells Fargo & Co. — echoed Fraser’s point when asked similar questions by lawmakers including Sens. Chris Van Hollen (D-Md.) and Steve Daines (R-Mont.).

Bank of America’s Brian Moynihan, for instance, said his firm is “standing ready” to help its clients through the transition to a low-carbon economy, and that it’s already working with companies in the oil and gas sectors to do so.

JPMorgan’s Jamie Dimon, meanwhile, argued that “we’re going to need oil and gas for a long time.” He said the financial sector needs to focus on facilitating the clean energy transition in a way that achieves emissions reductions while also protecting the economy.

Rather than starve the coal, oil, and gas sectors for cash, he said, the financial sector needs to focus on facilitating the clean energy transition, working with major emitters and protecting the economy.

“I just beg you, let’s have a rational conversation — mature and thoughtful — how to go about it,” Dimon said.

Sen. Kevin Cramer (R-N.D.) struck a similar tone. He decried the notion of fossil fuel divestment and touted the importance of protecting U.S. economic stability and access to affordable energy.

“Investing in the fossil energy sector in the United States of America is the single best way to lower carbon emissions globally, while working with these innovators in those industries to reduce it,” Cramer said.

The bankers’ and GOP lawmakers’ approach to the issue marks a major departure from that of Democrats and climate advocates, who in recent years have called on the financial sector to address its contributions and vulnerabilities to global warming. To some, that includes stopping “the money pipeline” between Wall Street banks and the principal drivers of climate change.

To be sure, the lending giants and other Wall Street firms have moved in a greener direction. All six big banks, for instance, have pledged to align their financing activities with the goals of the Paris Agreement, achieve net-zero emissions by 2050 or both.

But they have stopped short of saying they would fulfill those promises by divesting from carbon-intensive companies.

“This is always the crux of this conversation,” said Jordan Giaconia, of the Sierra Club. “A lot of these megabanks were more than willing to tout their green investments … but they failed to act on the other half of that equation, which is cutting ties with fossil energy companies.”

Even so, the banks’ climate commitments have sparked opposition from Republicans, who have accused them of succumbing to political pressure to de-bank entirely legal, yet politically controversial, companies.

Sen. Richard Shelby (R-Ala.) aired those concerns yesterday. He said financial firms have begun to restrict credit and financing services to energy companies and gun manufacturers, which he said could result in “higher costs for consumers and slower economic growth.”

Democrats, for their part, weren’t as forceful. But several did press the banks for more details on their climate ambitions.

Sen. Tina Smith (D-Minn.) asked the executives if they thought the Securities and Exchange Commission should require public companies to report their climate risks. Publicizing climate-related risks isn’t about “being woke,” she added, but instead about providing investors with critical climate-related information and promoting overall economic stability.

The head bankers of Goldman Sachs, Citi and JPMorgan said they were open to the idea and that having more consistent climate-related information would be beneficial.

In a separate hearing yesterday, SEC Chair Gary Gensler said the agency was working to address investors’ growing appetite for climate-related information. But he did not provide a concrete timeline for a potential rulemaking process in his testimony before the House Financial Services and General Government Appropriations Subcommittee

FERC won’t stall. Donlin drilling. Would you spend $1/month on climate change?

by wp_sysadmin | May 26, 2021 | News

NEWS OF THE DAY:

Biggest copper mining project in decades begins production
Cecelia Jamasmie, Mining.Com, May 26, 2021

Canada’s Ivanhoe Mines (TSX: IVN) has begun producing copper concentrate at its Kamoa-Kakula project in the Democratic Republic of Congo (DRC) months ahead of schedule as the metal continues to trade close to all-time highs.

Kakula, the first mine planned at the concession, is initially forecast to generate 3.8 million tonnes of ore a year at an average feed grade “well in excess of 6% copper” over the first five years of operation, the company said.

OIL:

Dutch court orders Shell to cut its emissions in landmark ruling
Andrew Freedman, Axios, May 26, 2021

In a precedent-setting ruling, a Dutch court ruled Wednesday in favor of environmentalists and more than 17,000 residents of the Netherlands, by ordering Royal Dutch Shell to cut its emissions of greenhouse gases.

Why it matters: It’s the first court ruling that orders a major oil company to make its emissions plans more consistent with Paris Climate Agreement targets, and it could spur legal action against other oil and gas firms.

Driving the news: The case was brought in April 2019 by Dutch citizens who alleged that Shell’s continued oil and gas exploration threatens their human rights by robbing them of a more stable climate. Environmental groups such as Greenpeace and Friends of the Earth also participated in the lawsuit.

Details: The Dutch district court in the Hague ordered Shell to cut its carbon emissions by 45% by 2030 relative to 2019 levels. The court ruled that the energy company’s existing emissions reduction plans, calling for a reduction of emissions intensity of 20% by 2030, were insufficient, and could result in human rights violations.

• The ruling includes so-called Scope 3 emissions, which are the greenhouse gases released when Shell’s oil and gas is burned for generating energy.
• While many court cases have been brought in the U.S. and elsewhere against governments for not acting to rein in planet-warming greenhouse gases, the Shell ruling is part of a wave of challenges from climate activists that target oil and gas companies.
• Shell “fully intends to appeal the ruling,” the company stated.

Between the lines: Shell has established a more aggressive emissions reduction strategy than many other major oil and gas companies, with the goal of reaching net zero “absolute emissions” in 2050.

What they’re saying: “This is a monumental victory for our planet, for our children, and is a stop towards a livable future for everyone,” said Donald Pols, director of Friends of the Earth Netherlands, in a statement.

• “Urgent action is needed on climate change which is why we have accelerated our efforts to become a net-zero emissions energy company by 2050, in step with society, with short-term targets to track our progress,” Shell said in a statement.
• We are investing billions of dollars in low-carbon energy, including electric vehicle charging, hydrogen, renewables, and biofuels. We want to grow demand for these products and scale up our new energy businesses even more quickly. We will continue to focus on these efforts and fully expect to appeal today’s disappointing court decision,” the company stated.

Go deeper: Shell CEO: You need us on climate change

GAS:

Responding to senators, Glick agrees FERC should not stall on gas projects
S & P Global Platts, May 25, 2021

Federal Energy Regulatory Commission Chairman Richard Glick has assured a group of senators that the commission would not delay acting on pending gas project certificates while it considers reforms to its policy for approving projects.

His comments responded to an April 29 letter from 25 US senators urging FERC to act promptly and also warning the regulator against adding new policy considerations into the decisions on those projects.

The lawmakers, including Senators John Hoeven, Republican-North Dakota, and Senate Energy and Natural Resources Committee Chairman Joe Manchin, Democrat-West Virginia, wrote that many of the proposed projects before the commission, some pending for more than a year, were “critical to addressing supply issues and strengthening our energy infrastructure.”

Glick responded in letters to individual senators made public in the FERC docket May 24. Agreeing that FERC should not delay, he stressed that on May 20 the commission had issued orders approving certificates for proposed pipeline projects in Minnesota and Nevada.

Just as former FERC Chairman Kevin McIntyre did after he opened an earlier inquiry into possible changes to FERC’s 1999 natural gas pipeline certificate policy in 2018, Glick said, “I can assure you that the commission will not wait to act on certificate applications while we consider options for approving the process.”

A new round of comments on FERC’s pipeline policy was due May 26, in answer to a February notice of inquiry seeking added input on environmental justice and climate issues (PL18-1).

In response to Glick’s letter, Hoeven said he was pleased to see FERC approve two pipeline certificates and appreciated Glick’s agreement that pending projects should not be delayed.

“However, there are still 12 projects awaiting consideration before the commission, some of which have been delayed for an extended period of time,” Hoeven said in an emailed statement May 25. “We look forward to FERC’s continued action on these applications, without delay and in accordance with Chairman Glick’s commitment.”

The back-and-forth comes amid a dispute over whether FERC should be adjusting its approach on contentious issues such as greenhouse gas considerations on a case-by-case basis, or instead wait until it tackles the review of the broader pipeline policy. Commissioners James Danly and Mark Christie have argued that FERC should address significant shifts in the broader docket, rather than in isolated project dockets with few participants.

Glick noted in his response to senators that while the notice of inquiry was first opened by McIntyre in 2018, no action was taken by the two subsequent chairmen. His reassurances about avoiding delay come after a tense May open meeting left behind questions about how quickly FERC can resolve differences and act on more projects.

The commission on May 20 approved by a 3-2 vote Northern Natural Gas’ Northern Lights 2021, a 45.6 MMcf/d project in Minnesota that entails additional compression, short segments of pipeline, and other modifications (CP20-503), along with Tuscarora Gas Transmission’s Tuscarora XPress project, a 15 MMcf/d compression project in Nevada (CP20-486).

FERC has yet to act on the 92.5-mile, 250 MMcf/d North Bakken Expansion Project, which would provide incremental firm capacity from six gas processing plants to a proposed interconnect with Northern Border Pipeline Company. Hoeven and other US lawmakers from North Dakota in March pressed FERC to act, contending the project had potential to cut methane emissions, alongside their assertions about its economic benefits. Adding a possible hurdle in that docket, the Institute for Policy Integrity has faulted FERC’s environmental assessment for a failure to project indirect GHG emissions or monetize emissions.

The Interstate Natural Gas Association of America, in an email, said it was “pleased to see dialogue between FERC and Congress around predictable permitting processes for natural gas infrastructure.”

“We continue to believe that timely regulatory reviews for pending natural gas projects can deliver environmental and economic benefits while ensuring reliable energy for Americans across the nation,” the group added.

MINING:

Donlin Gold announces plans for summer exploratory drilling season
Olivia Ebert, KYUK – Bethel, May 25, 2021

 During the week of May 14, Donlin Gold announced plans to continue with exploratory drilling for the 2021 summer season. The announcement came just a week before the State of Alaska is expected to issue a verdict on a key permit for the company.

Donlin said that as of last season, it has discovered higher grade thickness than previously expected at its mine site. According to a paper from Canadian mining company Peloton, that means more efficient gold extraction. Donlin said that its 2021 drilling season results could be used to update its feasibility study.

By May 27, Alaska Commissioner of Environmental Conservation Jason Brune could either rescind or uphold a 2018 state water quality certificate that was issued to the proposed mine. If the state water quality certificate is rescinded, Donlin may not be able to access another critical permit from the U.S. Army Corps of Engineers.

Donlin has hired workers from 18 Y-K Delta communities for the season. The company is requiring workers to follow pandemic safety protocols and encourages all employees to get vaccinated against COVID-19.

POLITICS:

From the Washington Examiner, Daily on Energy:

SENATE COMMITTEE PASSES INFRASTRUCTURE BILL WITH CLIMATE PROVISIONS: The Senate Environment and Public Works Committee unanimously approved a surface transportation reauthorization bill by a 20-0 vote this morning, demonstrating that some bipartisan movement is possible on infrastructure.

“This is barely the end, but it’s a good beginning,” said Sen. Tom Carper, the Democratic chairman of the committee from Delaware who brokered the legislation with top committee Republican Sen. Shelley Moore Capito of West Virginia. “This sends a strong signal to sister committees that it’s time to go to work.”

Their $303.5 billion bill, covering five years, includes some funding for electric vehicle charging infrastructure, as well as climate-related sections that would seek to increase infrastructure’s resilience to the effects of climate change and encourage states to curb carbon emissions from on-road transportation sources. It’s similar to legislation passed by the committee 18 months ago, which never made it to the Senate floor.

Even so, these provisions are far more narrow than what Biden is seeking in his infrastructure plan.

CLIMATE CHANGE:

More than One-third of Registered Voters Are Unwilling to Spend $1 Per Month on Climate Change Policies
Competitive Enterprise Institute, May 25, 2021

The Competitive Enterprise Institute (CEI) released a new poll today, measuring public sentiment on energy issues and climate change. The poll, conducted by CRC Research, is an online survey of 1,200 registered voters nationwide April 15-18, 2021 with a 2.83 percent overall margin of error.

Overall, the poll finds Americans are almost evenly split on the direction of the country, with 50 percent of respondents saying the United States is headed in the right direction and 48 percent of respondents saying things have seriously gotten off on the wrong track. Two percent of respondents were unsure or refused to respond.

While a strong majority of respondents (67 percent) are either somewhat concerned or very concerned about climate change, when asked whether climate change was a factor in their 2020 election vote or not 53 percent of respondents said no, climate change was not a factor. Only six percent of respondents said it was the top issue they considered when voting in 2020.

When asked about willingness to spend out-of-pocket to mitigate climate change, 35 percent of respondents said they would not spend a dollar. Fifteen percent said they would spend up to $10 of their own money on climate change policies. The poll also found 53 percent of respondents would be somewhat or very unlikely to spend extra money to replace a gas-powered car with an electric vehicle.

“When Americans unexpectedly pay more for gas and utilities because of events like electric grid failures and attacks on our pipelines and with the summer driving season ready to start next week, it is little wonder few voters clamor for costly new regulations.  There is a lesson here if politicians are willing to listen,” said CEI President and CEO Kent Lassman. “Americans recognize that the moment demands policies that lower regulatory barriers to foster economic resilience and to allow the space for an enduring recovery.”

“This poll shows once again that Americans are unwilling to pay for the left’s anti-energy policies,” said Director of CEI’s Center for Energy and Environment Myron Ebell. “The more people learn about the Biden-Harris Blackout Agenda, the less support there will be for spending trillions of taxpayer dollars for no measurable benefits.”

Click here to view the CEI Poll results.

Biden blow to US Miners. Reduce emissions with NG. AK Budget Negotiations.

by wp_sysadmin | May 25, 2021 | News

News of the Day:

Biden adviser Gina McCarthy calls it “ridiculous” to push climate sacrifice now
Mike Allen, Axios, May 23, 2021

On “Axios on HBO,” White House national climate adviser Gina McCarthy called for a practical rather than idealistic approach to getting Americans to change their routines to save the planet.

• McCarthy told me that with all the lost jobs, “Now is not the time to sit them down and say: ‘Let’s talk about climate. How can you sacrifice?’ … [I]t’s never going to be a winning strategy. Right now, it’s ridiculous.”

Why it matters: Electric vehicles have had a luxury image. But McCarthy took me for a spin in an electric Chevrolet Bolt before the interview, as part of an effort to show electric vehicles can be an economical part of the average American’s future.

McCarthy — the head of the EPA under President Obama, and now in a new job created by President Biden — noted that change is hard, because people love their routines.

• McCarthy said that with all the new technology, “the whole job is to get people excited about what’s available, get that deployed to its maximum.”
• “They don’t want to have to do research on things like cars,” she added. “They just want ’em to be what they used to be. And if you want to make the kind of shift that we need for climate, you’ve got to be optimistic about the future.”

OIL:

Goldman sees oil hitting $80/bbl despite likely return of Iran supply
Reuters, May 23, 2021

Goldman Sachs said it expects oil prices to climb to $80 per barrel in the fourth quarter of this year, arguing that the market has underestimated a rebound in demand even with a possible resumption in Iranian supply.

“The case for higher oil prices therefore remains intact given the large vaccine-driven increase in demand in the face of inelastic supply,” the bank said in a note dated Sunday.

Even “aggressively assuming” a restart of Iranian exports in July, Brent prices would still reach the $80 mark by the fourth quarter, it said.

Oil prices fell last week after Iran’s president, Hassan Rouhani, said the United States was ready to lift sanctions on Tehran’s oil, banking and shipping sectors.

Crude recouped some of those losses on Monday as a potential snag emerged in reviving the 2015 Iran nuclear deal that could add more oil supply, with indirect talks between Washington and Tehran due to resume this week. read more

Goldman Sachs said a demand recovery in developed markets would offset a recent coronavirus-led hit to consumption and likely slower recovery in South Asia and Latin America.

Global demand could increase by 4.6 million barrels per day through year-end, with most of the gains likely in the next 3 months, it said.

“Mobility is rapidly increasing in the U.S. and Europe, as vaccinations accelerate and lockdowns are lifted, with freight and industrial activity also surging,” the note said.

The bank also expects the Organization of the Oil Producing Countries (OPEC) and allies including Russia, a grouping known as OPEC+, to offset any ramp-up in Iran production by halting for two months an increase in its output in the second half of 2021.

This would help offset the perceived bearish impact in the physical market of the release of Iranian floating storage, it said.

GAS:

Co-Fueling Power Plants With Natural Gas Can Rapidly Cut GHG Emissions
Mark Green, API Blog, May 25, 2021

New, independent analysis says that the U.S. can rapidly reduce greenhouse gas (GHG) emissions by using natural gas as a co-fuel at coal power plants – pointing to another reason domestic natural gas is key to a cleaner future.

The analysis by Resources for the Future (RFF) outlines how EPA could foster natural gas cofiring at coal plants to reduce emissions. Authors Maya Domeshek and Dallas Burtraw write that a modest cofiring standard at coal plants can reduce carbon emissions significantly and rapidly and that adding a cofiring standard to other national electricity policies also accelerates emissions reductions. The analysis:

Using its existing authority under the Clean Air Act, the Environmental Protection Agency (EPA) can jumpstart the Biden administration’s plan to reduce US greenhouse gas emissions by 52 percent and contribute important air quality benefits in this decade.

The chart below shows the profile of emissions from coal plants over 15 years for a 20% cofiring standard under three forms of regulation described in the RFF paper.

We’ve pointed out how increased natural gas use in the power sector is the leading factor in U.S. carbon dioxide emissions falling to levels not seen in a generation. API’s new Climate Action Framework also describes the important role natural gas has played and will play in advancing the nation’s climate goals. Adding natural gas as a fueling component at coal-fired plans would mean even more reductions in CO₂ emissions, according to the RFF analysis.

Without endorsing RFF’s specific models, increasing natural gas use is part of a smart, practical path to meaningful emissions reductions, capitalizing on a domestic energy source that’s available, affordable, and reliable.

Of course, any plan to cofire natural gas at coal power plants will require new or expanded natural gas infrastructure, including pipelines to get the natural gas to the plants. Unfortunately, in recent years projects including the Constitution and Atlantic Coast natural gas pipelines have been blocked – ironically, with a lot of help from environmentalists – denying natural gas to customers, including power plants.

It’s something Americans should think about when there are local, state, and regional proposals to build or expand pipelines. Natural gas has significant environmental benefits, but to realize those benefits infrastructure is needed to bring the natural gas to where it can be used – such as for fueling electricity generation.

MINING:

Biden looks abroad for electric vehicle metals, in blow to US miners
Reuters, May 25, 2021

US president Joe Biden will rely on ally countries to supply the bulk of the metals needed to build electric vehicles and focus on processing them domestically into battery parts, part of a strategy designed to placate environmentalists, two administration officials with direct knowledge told Reuters.

The plans will be a blow to US miners who had hoped Biden would rely primarily on domestically sourced metals, as his campaign had signaled last autumn, to help fulfill his ambitions for a less carbon-intensive economy.

Rather than focus on permitting more US mines, Biden’s team is more focused on creating jobs that process minerals domestically into electric vehicle (EV) battery parts, according to the people.

Such a plan would help cut US reliance on industry leader China for EV materials while also enticing unions with manufacturing work and, in theory, reduce pandemic-fueled unemployment.

The US Commerce Department is organizing a June conference to attract more EV manufacturing to the country. Biden’s proposed $1.7 trillion infrastructure plan earmarks $174 billion to boost the domestic EV market with tax credits and grants for battery manufacturers, among other incentives. The department declined to comment.

“It’s not that hard to dig a hole. What’s hard is getting that stuff out and getting it to processing facilities. That’s what the US government is focused on,” said one of the sources.

The approach would see the United States rely on Canada, Australia, and Brazil – among others – to produce most of the critical raw materials needed, while it competes for higher-value jobs turning those minerals into computer chips and batteries, according to the two sources.

Securing the full supply chain from metals to batteries does not require the United States to be the primary producer of the raw materials, said one of the sources.

A full strategy will be finalized after a year-long supply chain review involving national security and economic development officials.

Biden officials want to ensure the administration’s EV aspirations are not imperiled as domestic mines face roadblocks, the sources said, both from environmentalists and even some Democrats.

“It rings hollow when I hear everyone use this as a national defense argument, that we have to build new mines to have a greener economy,” said US Representative Betty McCollum, a Democrat who has introduced legislation that would permanently block Antofagasta Plc’s proposed Twin Metals copper mine in Minnesota.

Ali Zaidi, deputy White House national climate advisor, said the administration was focused on a strategy that “leverages our domestic resources in a way that’s responsible”, noting that included recycling in the supply chain.

While US projects from small and large miners alike will feel the impact, the pain from any blocked projects will fall disproportionately on smaller, US-focused companies. Many large miners also have global projects that could benefit from the administration’s plan.

“We can no longer push the production of the products we want to places we cannot see and to people we will never meet,” said Mckinsey Lyon of Perpetua Resources Corp, which is trying to develop Idaho’s Stibnite mine to produce gold and antimony used to make EV battery alloys.

Investments

The US government in April became the largest shareholder in mining investment firm TechMet, which controls a Brazilian nickel project, a Rwandan tungsten mine and is a major investor in a Canadian battery recycler.

Washington also funds research into Canadian cobalt projects and rare earths projects in Malawi, among other international investments.

The State Department’s Energy Resource Governance Initiative (ERGI) is one of the main programs Washington plans to use to help allies discover and develop lithium, cobalt, and other EV metals.

To be sure, Washington is not ignoring domestic mining.

The US Department of Energy has awarded grants to help old coal mines find ways to produce rare earths. US officials have also funded MP Materials Corp, which owns the country’s only rare earths mine, though it relies on Chinese processors.

But the bulk of Biden’s approach is designed to sidestep battles with environmentalists and save capital for other fights, according to one administration source.

During a visit to a Ford Motor Co. plant in Michigan on May 18, Biden called for government grants for new EV battery facilities. He mentioned Australia’s lithium reserves during the tour, but not large US supplies of the key battery mineral.

Republicans say Biden’s EV plans will be impossible to achieve without more US mines.

“These ‘not-in-my-backyard’ extremists have made clear they want to lock up our land and prevent the mining of minerals,” US Representative Lauren Boebert, a Colorado Republican, told a House Natural Resources Committee forum held the same day as Biden’s Michigan visit.

Placating labor

Biden’s approach comes with risks, including angering political supporters within the labor movement who want the administration to have an openness to resource extraction and the attendant jobs.

“Let’s let Americans extract these minerals from the earth,” said Aaron Butler of United Association Local 469 union, which does work for Rio Tinto Ltd’s proposed Resolution copper mine project in Arizona and endorsed Biden in the elections. “These are good-paying jobs.”

Many of the skills that labor unions would use to build mines, including concrete and electrical work, can also be used to build EV metal processing plants.

The National Mining Association, an industry trade group, has been lobbying the White House and Congress to support domestic projects, arguing that the coronavirus pandemic showed the importance of localizing supply chains.

Biden’s White House is now quietly working to enlist labor support as it tries to build a case that its green policies are creating jobs, ahead of the 2022 midterm elections that could determine whether the strategy wins congressional backing, according to two organized labor sources familiar with the campaign.

Biden officials have reached out to unions across the country asking for specific job-boosting projects the administration can take credit for, the labor sources said.

POLITICS:

Lawmakers: Budget negotiations to begin Wednesday
Peter Segall, Juneau Empire, May 24, 2021

The legislative conference committee tasked with reconciling two versions of the state’s budget will likely begin Wednesday, according to Rep. Neal Foster, D-Nome, chairman of the committee. Still, the likelihood of lawmakers finalizing the budget before Memorial Day was slim, he said.

In a phone interview Monday, Foster said the committee hoped to meet Tuesday but some members were still traveling and might not be in Juneau until Wednesday. Some lawmakers had hoped to finish by the holiday weekend, Foster said, and while that wasn’t very likely he said the committee still intended to work as if Friday was their deadline.

“It’ll be really challenging to do that knowing we have so many pieces on the table,” Foster said.

The Alaska Senate passed a budget last week but members of the House of Representatives failed to concur with its passage, sending the bill to a bicameral committee where a few lawmakers hash out compromises in the budget. Once the conference committee agrees on a final budget, both bodies of the Legislature will have to vote a simple majority to approve it without being able to make any changes.

Staff had only just finished preparing the paperwork to allow the conference committee to do its work, said Sen. Bert Stedman, R-Sitka, co-chair of the Senate Finance Committee. In a meeting with reporters Monday morning, Stedman said conference committee members would address first areas where there’s mutual agreement and then work toward more contentious issues such as the Permanent Fund Dividend later in the negotiations.

“I don’t think the operating budget is going to be a complicated discussion,” Stedman said. “We’ll have a budget by July 1. We have to go through the process, it may come together faster than some of us think.”

Deeper divides

The Senate voted for a $2,300 PFD, an amount following the formula for calculating the dividend contained in Gov. Mike Dunleavy in his proposed constitutional amendments which uses half of the state’s yearly percent of market value draw from the Alaska Permanent Fund. But to pay of dividend of that size and keep the state budget mostly flat the state will have to overdraw from the Earnings Reserve Account, something several lawmakers, including Stedman, have said they’re against.

“50-50 doesn’t work,” Stedman said, referring to the proposed formula.

Division of Legislative Finance projections show the 50-50 model still leaving a gap in the state’s budget, requiring additional draws on the Earnings Reserve unless the state can raise additional revenue. However, Dunleavy has said his proposed amendments are meant to work together, and also proposed combining the principal and the earnings reverse accounts of the Permanent Fund which would increase the amount of the state’s current 5% percent of market value draw.

But the Permanent Fund is the state’s main source of revenue, Stedman said, and taking funds out of the fund today comes at the cost of future state revenues, something he and lawmakers in both bodies are opposed to.

“I’m not concerned about the amount of this year’s dividend as I am about the future of the dividend,” Stedman said. “When you overdraw the Permanent Fund, you damage future income for every Alaskan for now and perpetuity.”

Foster said he and most of the House Majority Coalition felt strongly about not overdrawing the ERA.

There are still lawmakers who say they support a dividend based on a statutory formula, but it’s not clear if they’ll vote against a budget that doesn’t pay one. House Minority Leader Cathy Tilton, R-Wasilla, said in a phone interview Monday the caucus didn’t have unified opinions on the PFD, but there was a desire to resolve the issue and have a formula the state follows.

“We still have the statutory formula on the books, we should be following the formula until we have a new amendment,” Tilton said, speaking for herself. “I would like to see it stay at least at that 50-50 point, but I have concerns that amount may be even lower.”

Tilton said her caucus was eager to resolve the state’s long-term fiscal issues. The House Minority generally doesn’t favor an income tax, she said, but is willing to consider a sales tax and wants to look at ways to increase resource development as a way of increasing revenue.

Several Republican lawmakers including the governor have been staunch defenders of the statutory formula, with some senators losing their committee assignments in the last Legislature for voting against a budget that didn’t pay a full PFD. But Dunleavy and some of those lawmakers said at a May 12, news conference they were willing to step away from that formula if it meant putting the state on stable fiscal footing.

Issues remain

But, Foster noted, the vote for a so-called “reverse sweep” which requires two-thirds of members in both bodies has yet to be addressed. The sweep is an accounting mechanism used by the state which automatically empties a number of state accounts at the end of the fiscal year. In previous years the sweep went unnoticed and lawmakers voted to reverse the move when passing a budget. But in 2019, Gov. Dunleavy expanded the number of programs susceptible to the sweep and there were initially not enough votes for a reversal when the Legislature passed its budget.

Sitting on the conference committee are the four co-chairs of finance committees from both bodies, Stedman and Sen. Click Bishop, R-Fairbanks and Foster and Rep. Kelly Merrick, R-Eagle River, and Sen. Donny Olson, D-Golovin, and Rep. Steve Thompson, R-Fairbanks, who represent their respective minorities.

The outcome of the budget negotiations could have an impact on the discussion for the second special session in August where lawmakers hope to address the fiscal issue and proposed amendments,” Stedman said.

“You have a lot higher degree of success if members are not upset about issues, they’re more willing to sit down and compromise,” Stedman said. “We’re going to button up the budget, and then, we’ll see what the attitude is. It might not be very positive.”

CLIMATE CHANGE:

From the Washington Examiner, Daily on Energy:

and transparent way. It has done so for decades.”

CLIMATE ACTIVISTS CLOSING PUSH ON INFRASTRUCTURE…IT’S GO TIME: The group Climate Power is launching a seven-figure ad campaign over the next two weeks urging Congress to pass an infrastructure package that invests heavily in clean energy and electric vehicles. The ads will air in D.C., on national cable, and online.

“The time has come to turn plans into action and invest in clean energy solutions like manufacturing electric vehicles in the U.S.,” said Climate Power executive director Lori Lodes.

Negotiations at an impasse: The push comes as bipartisan talks between the White House and Senate Republicans over infrastructure are collapsing, according to reports this morning by Politico and Punchbowl News.

Climate activists have urged Biden and Democrats to move on from negotiations and act alone using reconciliation, since Republicans are not interested in significant clean energy provisions, especially electric vehicle funding.

The White House’s latest $1.7 trillion offer costs $500 billion less than the original version of Biden’s plan, but it still proposes to extend renewable energy tax, provide point-of-sale rebates for electric cars, and include a clean electricity standard requiring utilities to purchase increasing amounts of carbon-free power.

Republicans plan to submit a counterproposal this week, but Democrats are facing pressure to forge ahead soon if the two sides can’t reach a deal.

Race to seize Arctic resources. G7 quiet on oil and gas. Ban on bitcoin?

by wp_sysadmin | May 24, 2021 | News

News of the Day:

Tensions over Arctic resource rights grow as Russia takes leadership role
Laura Millan Lombrana, World Oil, May 23, 2021

-A battle of words between top Russian and U.S. diplomats this week is the latest sign of rising tensions between superpowers racing to seize Arctic resources made more accessible by climate change.

Ministers gathering in the Icelandic capital Reykjavik for a meeting of the Arctic Council weren’t due to discuss security. But the issue dominated conversations on the sidelines after Russia’s Foreign Affairs Minister Sergei Lavrov declared ahead of the summit that the Arctic “is our land and our waters.”

“We are especially concerned with what’s going on close to our borders,” Lavrov said on Thursday after journalists asked him about what Russia sees as increased U.S. military activity in the region. “We are going to undertake necessary measures in order to ensure our security, but our priority is to ensure dialogue.”

At the summit this week, which marked Iceland’s handover of the Arctic Council presidency to Russia for the next two years, most representatives called for the eight-nation body to remain focused on peaceful cooperation. But Lavrov signaled that Russia could take a different approach.

“Within the next two years we will create proper conditions so proper security will be part of the work of the Arctic Council,” he said. “We believe we can revitalize this mechanism if we decide so.”

The Arctic is one of the regions most affected by climate change and is warming more than twice as fast as the rest of the world. Ice that used to cover the region’s waters for most of the year is shrinking and thinning. That’s opening new shipping routes and creating the prospect of easier access to once-trapped resources such as natural gas, oil, and minerals.

Superpowers including Russia have rushed to claim some of these assets, leading to a stronger military presence that has resulted in a series of confrontations.

Last year, Russian planes buzzed U.S. fishing boats on the northern Bering Sea during a military exercise. In February, the U.S. deployed bombers to Norway for the first time, strengthening its presence in the region, and the two countries signed a new agreement in April to boost military cooperation.

“The Arctic as a region for strategic competition has seized the world’s attention, but the Arctic is more than a strategically- or economically-significant region” U.S. Secretary of State Antony Blinken said at the Arctic Council’s meeting on Thursday. “Its hallmark has been and must remain peaceful cooperation.”

The council, which gathers the eight Arctic nations— Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the U.S.—as well as indigenous peoples, has no mandate to address security matters. These used to be negotiated at a separate Arctic Security Forces Roundtable, but Russia was removed from that forum, as it was from the Group of Eight advanced economies, following its annexation of Crimea from Ukraine in 2014.

The region doesn’t have a history of military conflicts because it’s difficult to access and its harsh climate makes it hard to position soldiers there. That’s changed as ice melts and countries try to get a foothold in the area, said Kate Guy, a senior fellow at the Council on Strategic Risks, a Washington-based nonprofit.

The Arctic is home to about 30% of the world’s undiscovered but recoverable gas reserves and 13% of undiscovered oil reserves, according to a report co-authored by Guy that was published this week. Private shipping activity has increased 25% in recent years. Having more tankers and fishing boats in the waters could lead to more accidents, with search and rescue operations often performed by the military, the report found.

Russia is making the so-called Northern Sea Route, which runs along its Arctic coastline, a key part of its strategy to boost natural gas exports to Asia. At the same time, China has signaled its interest in small islands such as Svalbard, Guy said.

Armed forces are also upgrading their facilities in the region as permafrost, the frozen ground that covers most of Arctic land, thaws. The U.S. Department of Defense has already requested over $1 billion to retrofit and repair three Alaskan bases in the past five years, according to the report.

“We’re concerned about the level of recent angry and provocative rhetoric,” James Stotts, president of the Inuit Circumpolar Council in Alaska, said at the summit. “We don’t want to see our homeland turned into a region of competition and conflict, we don’t wish to see our world overrun with other people’s problems.”

OIL:

From the Washington Examiner, Daily on Energy:

WHAT ABOUT OIL AND GAS? G7 countries aren’t saying whether they’ll limit investments in oil and gas projects, even as the International Energy Agency says new oil and gas development must stop immediately for the world to reach its climate targets.

Indeed, while G7 environment ministers agreed last week to end financing for new overseas coal projects by the end of this year, they didn’t address oil and gas investment at all. The G7 ministers instead acknowledged that natural gas could play a role in reducing greenhouse gas emissions in the near-term.

“We recognize that natural gas may still be needed during the clean energy transition on a time-limited basis and we will work to abate related emissions towards overwhelmingly decarbonized power systems in the 2030s,” the ministers said in a joint communique.

Their language on coal-fired power, however, was much different. The G7 leaders called coal power “the single biggest cause of global temperature increase,” and said they will take “concrete steps towards an absolute end to new direct government support for unabated international thermal coal power generation” by the end of this year.

The call last week from the IEA for new oil and gas development to end was welcomed by many environmentalists because it emboldens their calls for governments to keep fossil fuels in the ground. The IEA report will also increase pressure on both governments and private financial firms such as banks and asset managers to minimize their future investments in oil and gas.

Convincing governments to comply, however, won’t be easy: Already, some governments are pushing back on the IEA’s message.

Japanese minister Hiroshi Kajiyama said the Japanese government doesn’t agree with the IEA’s statements on stopping fossil fuel investment and eliminating coal, according to the Financial Times. Even though Japan signed onto the G7 commitment to end overseas coal financing, it has not revealed any plans to phase down its domestic use of coal power.

Norwegian oil minister Tina Bru said it wouldn’t “make a difference from a global perspective” if the country halted oil production, the outlet reported.

IEA executive director Fatih Birol, in a LinkedIn post over the weekend, addressed some of the criticism that the IEA would include “such a radical” scenario requiring such drastic changes to the world’s energy mix.
“[F]or many years, we have been focused on shaping a secure and sustainable energy future for all, which requires transitioning to clean energy,” Birol wrote. “A secure energy future demands this – a world ravaged by climate change from fossil fuel emissions won’t be secure.”

Related:          Five Reasons Why IEA’s Net-Zero Drive Needs Oil and Gas

GAS:

Can The U.S. Compete With Qatari LNG?
Irina Slav, OilPrice.Com, May 23, 2021

Qatar’s recent announcement that it would build the world’s largest LNG production facility did not prompt any applause from other LNG producers. Now, the tiny Gulf nation is also cutting its prices and expanding into the spot market to retain its number-one position in LNG exports. This could result in the death of some planned U.S. LNG projects.

U.S. liquefied natural gas quickly became a threat for the world’s top exporter. While Qatar is still the cheapest LNG producer, the abundance of shale gas made it cheap and competitive in some markets, which in turn led to a flurry of LNG projects as the U.S. staked its claim on the international market. 

The country quickly found a place among the world’s largest exporters, thanks not least to the fact that U.S. LNG producers index their gas to Henry Hub benchmarks rather than crude oil. The quickly growing spot market for LNG was also favorable for these producers. No wonder so many more projects followed the first wave of LNG capacity. Yet not all of them made it, and more are under threat of becoming commercially unviable.

Some already have: the list of LNG projects awaiting a final investment decision has shrunk in the last year and while part of the reason was the pandemic, the other part was that the economics for most of these projects had changed. According to Wood Mackenzie, this year, no new LNG project in the United States will reach a final investment decision, either. The reason: it’s tough to find long-term buyers.

“Generally, we’ve seen a slowdown in the pace of sales contract activity,” said Wood Mackenzie’s principal analyst for North American LNG, Alex Munton, as quoted by Natural Gas Intelligence. “Pre-FID projects will continue to struggle to secure buyers, given the huge wave of LNG currently under construction globally. For that reason, we see a limited window to project FIDs in the U.S. for the next couple of years.”

Competition is certainly tough in the LNG space, and with Qatar firmly on the path to securing its number-one spot over the long term, it will get even tougher. There are many LNG producers around the world, but they are all higher cost than Qatar.

“Nobody can compete with Qatari costs,” according to Jonathan Stern, a senior research fellow at the Oxford Institute of Energy Studies, as quoted by Bloomberg in a recent report. “They can do whatever they like and everybody will have to respond the way they can. And, especially when the market is in surplus and prices are low, that will impact the competition’s profits.”

One might reasonably ask why bother with LNG then if nobody can compete with Qatar on prices. The reason to bother is that large buyers like to have the comfort of supply diversity, and this makes them willing to pay a little more—or a lot more in some cases—to avoid being completely dependent on a single, albeit lowest-cost, producer.

Yet cost is important, and for some import markets, so are emissions. Europe is a big consumer of gas, but it is also a big proponent of renewable energy and low emissions. At the moment, renewable energy is winning the fight when it comes to new electricity generating capacity.

“Most European utilities don’t want to touch gas-related projects with a barge pole as companies seek to improve their ESG metrics, improve valuation and avoid stranded asset risks,” said Bloomberg Intelligence analyst Elchin Mammadov earlier this month.

What’s worse, per a Bloomberg report from earlier this month, European utilities are trying to come up with alternative uses for liquefied natural gas because there is not enough demand for it for electricity generation.

So, Asia remains the key focus for U.S. LNG producers. The problem here is that it is also the key focus for every other LNG producer in the world, from Qatar to Mozambique and Australia.

“With the Qataris adding more capacity at a very cheap cost, it does not make financial sense for U.S. companies to be building greenfield projects,” Reuters quoted Matt Smith, commodity research director at Clipper Data as saying this week. Smith said that in the current supply environment it made a lot more sense to add trains to already existing facilities.

There are currently three or four LNG projects in the U.S. that plan to have a final investment decision by the end of the year. Tellurian appears confident it would be able to make a final investment decision on its Driftwood project this year. Sempra Energy, on the other hand, has pushed the FID for its Port Arthur LNG project to next year. This is the latest in a series of delays in the final investment decision on the project.

Finding long-term buyers to make the necessary commitments for a whole new LNG plant was hard even before the pandemic. Now, with Qatar on the warpath, Wood Mackenzie’s forecast may turn out accurate, and all of these FIDs planned for this year might get pushed forward to 2022 or later. Worse, the projects might get shelved as Europe snubs hydrocarbon LNG and Asian buyers shun long-term contracts that secure the money for new LNG facilities that cost billions to build.

MINING:

China will likely ban all bitcoin mining soon
Tim De Chant, arsTechnica, May 24, 2021

Bitcoin took investors on another rollercoaster ride over the weekend after a top regulator in China announced a crackdown on mining, a new tack in the country’s ongoing fight against the cryptocurrency.

The government will “crack down on bitcoin mining and trading behavior and resolutely prevent the transfer of individual risks to the society,” said the statement, which was issued by the Financial Stability and Development Committee of the State Council, the country’s cabinet equivalent. The committee is chaired by Vice Premier Liu He, who acts as President Xi Jinping’s top representative on economic and financial matters.

The wording of the statement did not leave much leeway for cryptocurrency mining,” Li Yi, chief research fellow at the Shanghai Academy of Social Sciences, told the South China Morning Post. “When all mining activities are banned in China, it will be a turning point for the fate of bitcoin, as a large chunk of its processing power is taken out of the picture.”

The Chinese government isn’t just worried about financial stability, either. A commentary piece in Xinhua News, the Communist Party’s official media outlet, elaborated on the government’s stance, voicing concerns about bitcoin’s role in money laundering, drug trafficking, and smuggling. It also mentioned bitcoin’s profligate energy use. Last week, China warned financial institutions not to participate in crypto-transactions or related services.

Crypto payments above $10,000 would be reported to IRS under Treasury plan

China isn’t the only country concerned about the role of bitcoin and other cryptocurrency in illegal activities. Late last week, the US Treasury Department announced that businesses must report cryptocurrency transactions greater than $10,000 to the Internal Revenue Service. “Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the Treasury Department said. And earlier this month, news leaked that three US agencies, including the IRS, the Department of Justice, and the Commodity Futures Trading Commission, were investigating crypto-exchange Binance for potential criminal violations. A significant portion of illicit bitcoin makes its way through the Binance exchange, according to a 2020 report by Chainalysis.

China’s hardening stance toward bitcoin comes as the highest-valued cryptocurrency is under increasing scrutiny for its outsize carbon footprint. Fewer than two weeks ago, Elon Musk announced that Tesla would no longer be accepting bitcoin to buy one of its electric vehicles. When Tesla’s bitcoin purchase policy was announced, the bitcoin cost of a Model 3 produced about 400 metric tons of carbon dioxide, compared with just 8.85 metric tons to make and drive the car over its lifetime. When Musk canceled the policy—a decision apparently influenced by Ars’ coverage—the Model 3’s bitcoin carbon footprint had swelled to more than 500 metric tons. “We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions,” he wrote in a tweet.

The bitcoin network demands a staggering amount of energy. Today, it uses as much power as the Netherlands to maintain its normal operations. That load must be particularly obvious to the Chinese government, since a recent Nature Communications paper estimated that 75 percent of all bitcoin mining happens in China.

Private-equity firm revives zombie fossil-fuel power plant to mine bitcoin

The combination of bitcoin’s high price and its tremendous energy demand has pushed miners to take extreme positions. Miners in China have flocked to provinces such as Inner Mongolia, where cheap coal power makes mining more profitable. The scale of these facilities reflects how much money investors have sunk into the projects. At least one mining facility in Inner Mongolia draws more than 50 MW. Similarly large operations are popping up in the US, too. In upstate New York, a private equity firm bought and revamped an abandoned power plant just to mine bitcoin. When its data centers are completed, mining will consume 79 percent of the power plant’s capacity, or 85 MW.

China’s warning to bitcoin miners is certain to push many operations out of the country. At least one bitcoin observer said that he anticipates miners pushed out of China will set up operations in Mongolia, Kazakhstan, and Afghanistan.

POLITICS:

The last terrible idea of the 2021 Alaska legislative session
Anchorage Daily News, Editorial Board, May 21, 2021

It took 121 days, but the Alaska Senate found a way to make the dysfunction of this year’s Legislature even worse. In the waning hours of the regular session, senators voted on dozens of floor amendments totaling billions of dollars in changes from the last iteration of the state budget that Alaskans were able to weigh in on. The wholesale revision and horse-trading on the floor was itself a mockery of a process that residents should be able to witness and comment on, but the worst idea of the evening came last: An unlawful overdraw of the state’s last savings account, hobbling the state’s fiscal future to pay a fatter Permanent Fund dividend check.

Sen. Mike Shower of Wasilla, a self-avowed fiscal conservative, led the charge to raid the Permanent Fund’s earnings, successfully advocating for a $2,300 PFD check that — in defiance of all rationality — will overdraw the legal limit by a massive $1.5 billion. In doing so, he not only forfeited his right to the “fiscal conservative” claim, he tried to obfuscate the severity of the savings grab.

He did so by handing legislators a hastily-prepared chart that showed the gap could be covered in future years — if legislators suddenly decide that seven years of dithering away the state’s savings was enough, and move enthusiastically to pass multiple taxes: a substantial increase in oil taxes, to the tune of $300 million per year, and a 2% sales tax, which Sen. Shower claimed would bring in $600 million per year. In this fantastic scenario, the remaining $600 million gap was covered via a set of rosy assumptions about the state’s existing revenue streams. That apparently didn’t bother a majority of senators, who voted 12-8 to pass the budget amendment Shower authored (co-sponsored by Sens. Shelley Hughes, Mia Costello, and Senate President Peter Micchiche. The sponsors are fiscal conservatives all, or so their campaign literature would have you believe).

Speaking of campaign literature, Alaskans surely remember the analogy these senators ran their campaigns on the last time they were up for reelection: If our state were a household, they said, we’d be finding ways to cut expenses. Tighten our belts. Live within our means.

It sounded great. So relatable.

Imagine our state as a household. The primary wage earner has been working a single part-time job for the past six years but paying our mortgage and dining out by spending our now-depleted savings. Rather than lowering our monthly spending or looking for second job to make ends meet (the Legislature promises these will happen next year, as it’s promised for half a decade now), this plan would have us raid the last source of money — the kids’ college fund — not just to pay our overdue bills, but also to buy the big-screen TV we’ve had our eye on. It’s the height of short-term thinking and irresponsible budgeting, spending money today that could generate new money for Alaskans in perpetuity, all to send out bigger checks right now. These senators would never risk their own families’ livelihoods this way — why are they so cavalier about dipping into our state’s signature fiscal accomplishment, one that has the word “permanent” in its very name?

The audacity of the Permanent Fund overdraw is matched only by Sen. Shower’s debut of $900 million in notional new taxes on the Senate floor in the last hour of the session, after 121 days in which he could have introduced bills to institute either or both of those tax changes. Major revenue changes, as Sen. Shower and others reminded us last fall in opposing the oil tax hike initiative, were intended by Alaska’s constitutional framers to be debated at length, in public, transparently.

Justifying a $1.5 billion overdraw from the Permanent Fund with a few glossy pages of optimistic revenue assumptions is inexcusable, and Alaskans shouldn’t buy it. It’s like the weather forecast in the dead of winter, where the promise of warmer temperatures is always one day away: We know better than to trust it — especially when, unlike the weather, it hinges on legislators’ sudden willingness to make the hard fiscal choices they’ve now avoided for the better part of a decade by spending $16 billion of our savings.

The fact of the matter is, Alaska’s budget gap isn’t especially difficult to close this year if legislators abide by the legal limit on draws from Permanent Fund earnings. If lawmakers set the PFD amount at a sustainable level, around $1,000 — as the Senate Finance Committee approved before the floor shenanigans — and keep a tight lid on any “Christmas tree” additions to the operating and capital budget, no illegal overdraw would be necessary. The $1.5 billion Sen. Shower and others want to pour into a one-time check could remain in the Permanent Fund, providing close to $100 million every year for Alaskans, and more every successive year thanks to interest and investment gains.

Alaskans who don’t follow the budget process closely may wonder why this year’s proposed spend is substantially different than other years in which legislators have spent from savings. The answer lies in the source of the funds and the amount. The Permanent Fund is the last bastion of Alaska’s savings, and was established, according to former Gov. Jay Hammond, to provide “money wells” that could fund state services once the oil wells started running dry. It was not established to provide a government annuity for residents, much less one that took funding precedence over needs such as education and public safety. And if we let legislators spend past the legal limit established on draws from the Permanent Fund even once, it’s easy to see how things will go afterward. It’s a very short step from “just this once” to “just one more time.” After all, just look at the smoking craters where the $16 billion in Alaska’s statutory and constitutional budget reserves used to be.

If there’s any silver lining to this budget charade, it is that the Senate’s clown-car effort diverged so much from the House’s version that a conference committee is necessary to resolve the differences, which means the massive Permanent Fund overdraw can still be reversed. If the members of that committee have any regard for Alaska’s fiscal future, they must reverse the Senate’s disastrous, illegal overspending of the Permanent Fund.

CLIMATE CHANGE:

Nonprofit launches with new approach to offset CO2
Ben Geman, Axios, May 24, 2021

A new nonprofit group called Climate Vault aims to offer reliable carbon offsets while providing fresh support for CO2 removal technologies and methods.

Driving the news: It’s the brainchild of the University of Chicago team led by economist Michael Greenstone, who served in the Obama White House.

Why it matters: Offsets enable companies and people to help reduce emissions, but ensuring their integrity is notoriously tricky.

• Climate Vault aims to solve this problem by tapping into regulated cap-and-trade markets — in essence fusing voluntary efforts with the certainty of formal permit systems.
• The group calls its approach an “antidote to the frequent credibility problems and opacity of voluntary offset programs.”
• It then leverages this to support carbon removal methods that can complement fossil fuel emissions cuts to help reach ambitious climate goals.

How it works: Backers fund Climate Vault to buy emissions permits from cap-and-trade markets in North America, which operate in California, Quebec, and among northeast and mid-Atlantic states.

• Climate Vault then takes those permits off the market to prevent industrial emitters from using them (that’s the “vault” part).
• The group then can provide those permits to providers of carbon removal services, which could then sell them back into the market to finance the efforts.

Where it stands: Supporters include the trading firm DRW, whose CEO is a co-founder, Vanderbilt University, investment firm TPG and others.

• Supporters have already enabled reduction of more than 200,000 metric tons of carbon, “surpassing more than five percent of the total CO2 saved by all Tesla vehicles to date in the U.S.,” the group said.
• Advisers on the carbon removal side include former Energy Secretary Ernest Moniz.
• Forms of carbon removal include carbon mineralization, ocean storage, direct air capture tech and others.

Go deeper: Nonprofit Seeks to Trap Carbon in the Financial Markets (WSJ)