America’s oil producers are boosting output at a slower place as record costs hammer the shale patch, according to a survey of industry executives.
Out of 47 responding companies that supply producers with everything from software to workers, just one reported lower input costs in the third quarter, according to a report released Wednesday by the Federal Reserve Bank of Dallas.
Hiring has become a big headache for oilfield service companies trying to meet increased demand from explorers. Of those reporting difficulties in attracting workers, 70% blamed it on a lack of qualified applicants. Wages are up 20%, and companies are poaching employees from competitors, according to an unidentified survey respondent.
“Labor is causing major problems,” the person said. “We are finding it difficult to increase prices to match our increase in costs.”
The outlook comes as a global energy crunch sends prices for oil, natural gas, and power soaring, roiling everything from manufacturing to food production. U.S. drillers are keeping output in check as they respond to investor pressure to pay down debt and return cash to shareholders, adding to the inflationary pressure.
Of all the labor shortages that are wreaking havoc on the U.S. economy — from cashiers to chefs — few are as thorny or potentially as permanent as the one that has a grip on the oil sector. Thousands of roughnecks and engineers are wary of returning to jobs like the ones they lost when the pandemic sent the price of crude oil crashing last year.
Meanwhile, supply-chain snarls mean it’s “taking longer for companies to receive inputs,” the Dallas Fed said. The index for supplier delivery time rose to the highest since the survey’s inception in 2016.
For most of this year, oilfield service companies have mostly been able to pass along input costs to their clients in the form of higher service prices, but that’s also generally kept them from booking extra profits, Citigroup Inc. has said. Inflation could reach 12% or more by the end of this year for the sector in North America, analysts including Scott Gruber wrote in a June investor note.
One respondent to the Dallas Fed survey pinned the blame for inflation on closely held shale explorers that aren’t beholden to investor demands for discipline. Private producers are running the most drilling rigs in almost two years.
“Increased activities by private E&P firms is leading to cost inflation,” the respondent said. “Continued oilfield services consolidation may contribute to it further.”
OIL:
OPEC: Oil will be world’s No. 1 energy source for decades Associated Press, September 29, 2021
While acknowledging the inevitable advance of alternative energy sources and technology, OPEC said that oil would be the leading energy source for decades to come as crude prices reached three-year highs yesterday.
In its annual World Oil Outlook, OPEC acknowledged that more electric vehicles on the road and the push for alternative and renewable energy will indeed usher in an era of declining demand for oil in rich countries.
But the energy needs of expanding economies in other parts of world mean that oil will be the world’s No. 1 source of energy through 2045, OPEC said yesterday.
The long-term report from OPEC arrives as economies emerge from the most severe economic shocks from the pandemic, snarling supply lines and creating tight supplies of nearly everything, including oil. Brent crude touched $80 per barrel yesterday while the U.S. oil benchmark crude wasn’t far behind, both reaching three-year highs. Hurricane Ida slammed into a critical port that serves as the primary support hub for the Gulf of Mexico’s deepwater offshore oil and gas industry in the U.S., worsening the supply situation, at least temporarily.
The average price for gasoline in the U.S. rose again over the weekend, according to the Lundberg Survey, and now costs $1 more per gallon than it did last year at this time.
After being stung by deep production cuts in 2020 during the depths of the pandemic, OPEC has increased production slowly.
“What is clear in this year’s WOO is that energy and oil demand have picked up significantly in 2021, after the massive drop in 2020, and continued expansion is forecast for the longer-term,” OPEC said. “Global primary energy demand is expected to increase by 28% in the period between 2020 and 2045, with all energies required, driven by an expected doubling in size of the global economy and the addition of around 1.7 billion people worldwide by 2045.”
Only coal will see less use, while other sources of energy will see increasing demand, though the share will shift to include a bigger proportion for renewables, nuclear and natural gas, according to the group.
The 340-page report sketches out a future of declining demand for oil in wealthier countries that belong to the 38-member Organisation for Economic Co-operation and Development, as efforts to fight climate change take hold in the form of renewables and alternative fuels in cars, airplanes, and ships. It forecasts that the world’s vehicle fleet would grow by 1.1 billion to 2.6 billion by the end of the report’s time frame in 2045 — and that 500 million of those would be electric powered, or 20% of all vehicles.
But growing populations and expanding middle classes in the rest of the world including China and India will mean increased demand for oil between 2020 and 2045, although much of that increase will take place in the earlier part of that period, said the report, produced by OPEC’s secretariat in Vienna.
Oil will satisfy 28.1 percent of the world’s energy demand by 2045, down from 30 percent in 2020 — but ahead of natural gas with 24.4 percent and coal with 17.4 percent. Hydroelectric, nuclear and biomass energy sources and other renewables such as wind and solar make up the rest.
A key reason cited for declining energy use in the more-developed world was demography: shrinking and aging populations that usher in lower economic growth.
The World Bank has taken its anti-LNG stance to the International Maritime Organization (IMO).
Ahead of November’s gathering of the Marine Environment Protection Committee (MEPC) at the UN body’s London headquarters, the World Bank has renewed its attacks on liquefied natural gas as shipping’s fuel of the future.
Now the bank has decided to take the matter up with shipping’s governing body, sending the IMO various documents in submission for member states to deliberate at MEPC.
Among the documents submitted, the bank states that it sees green ammonia and green hydrogen as the most promising options to decarbonise international shipping. The bank goes on to state: “LNG is likely to play a limited role in shippingʹs decarbonization, and countries should avoid new public policy that supports LNG as a bunker fuel, reconsider existing policy support, and continue to regulate methane emissions to put shipping on a Paris-aligned GHG emissions trajectory”.
Going on to highlight why it is concerned about the growing number of newbuilds coming out of Asian yards with LNG capabilities, the bank stated: “Methane leakage can occur at each stage of LNGʹs lifecycle (i.e. during extraction, distribution, and combustion), and represents the accidental release of a gas which is 86 times or 36 times more potent than CO2 over a 20-year or a 100-year period, respectively. Therefore, even small volumes of methane leakage can diminish any GHG and climate-related justifications for using LNG as a low-carbon substitute for oil-derived fuels.”
The bank then went on to take down arguments for greener gas forms that backers of LNG have been proposing lately.
Analysis was undertaken by the World Bank to examine a transitional role for LNG, whereby LNG infrastructure and ships could be reused from 2030 onward with compatible zero-carbon bunker fuels such as liquefied biomethane (LBM) and liquefied synthetic methane (LSM). However, evidence showed that there are expectations of limited availability and therefore lack of price competitiveness of sustainably sourced LBM, and that the production of LSM is expected to be more expensive than alternatives such as ammonia or hydrogen.
Conversely, the World Bank reckons natural gas in its non-liquefied state may play a different and more important role as a feedstock in kick-starting the commercial production of zero-carbon bunker fuels. In the early stages of decarbonisation, before enough renewable electricity supply becomes available to generate green hydrogen or green ammonia economically and at scale, natural gas with carbon capture and storage (CCS) could offer a viable way of reducing GHG emissions significantly on the way toward full decarbonisation, the bank has suggested.
In terms of gross tonnage, latest data from Clarksons shows 28.8% of today’s bumper order book is for LNG fuel capable tonnage.
Keen to dismiss the methane leakage argument, two LNG bunker lobby groups revealed details earlier this year of an independent, peer-reviewed study that claims GHG reductions of up to 23% are achievable now from using LNG as a marine fuel, depending on the marine technology employed. This is compared with the emissions of current oil-based marine fuels measured from well-to-wake.
This report used the latest primary data to assess all major types of marine engines and global sources of supply with data provided by original equipment manufacturers including Caterpillar MaK, Caterpillar Solar Turbines, GE, MAN Energy Solutions, Rolls Royce (MTU), Wärtsilä, and Winterthur Gas & Diesel, as well as from ExxonMobil, Shell, and Total on the supply side. Methane emissions from the supply chains as well as methane released during the onboard combustion process – also known as methane slip – have been included in the analysis.
Peter Keller, chairman of lobby group SEA-LNG, commented on the publication of this review: “Often based on outdated data, methane slip has become an overused argument for those wishing to justify inaction.”
The study claims that by 2030 methane slip will have been “virtually eliminated” as technological improvements continue.
The 77th gathering of MEPC is due to be held from November 8 to 12, coinciding with COP 26, a major international climate summit, also taking place in the UK. Splash will be bringing readers updates from both events.
The mining and metals sector will see sweeping changes from the transition to a low carbon economy out to 2030, says market analyst Fitch Solutions in its latest industry report.
Some of these changes have already begun and will be accelerated in 2021 and beyond as government policy becomes increasingly stringent and investors’ pressure on ESG credentials rises. The transition will require large investments to reduce miners’ emissions and to increase exposure to new growth markets, Fitch points out.
“It will also disrupt industry trends for almost all sub-sectors, dooming the coal industry, reviving copper and green steel, and prompting the emergence of new sectors including lithium. As such, it poses key risks and opportunities to the entire mining and metals sector.”
The decarbonisation megatrend will bring risks to the sector, as it will require large investment to adapt processes and reduce emissions. It will also disrupt businesses linked to the commodities in decline, which include coal, along with low-quality iron ore, steel, and zinc, says Fitch.
Opportunities for mining and metal players
While the energy transition will require the sector to adapt deeply, these shifts also present a number of key opportunities for the mining and metal players, Fitch predicts. Overall, large players will likely benefit, the analyst says, from being able to rely on stronger investment capacity and more robust risk management functions. This could help them gain market share at the expense of junior miners, which will struggle to adapt to the low carbon economy.
There will be key direct business opportunities for players producing or operating in the space of the critical materials for the battery revolution, the boom in renewables capacity or the for the ‘zero carbon economy’ which include copper, nickel, aluminium, tin, lithium, cobalt, and low-carbon steel.
Mining and metal players that have reduced significantly their emissions or that have developed new techniques to produce low-carbon products (low-carbon aluminium, steel, ‘zero-carbon lithium, etc) will also likely be able to command a price premium, as their clients strive to reduce their own scope-3 emissions, Fitch says.
Business strategies starting to evolve
Companies have already started to position themselves and invest to benefit from these trends since 2020. This will be strongly encouraged by earnings at multi-year highs in FY2021 (and likely into FY2022), Fitch says, and as mining and metal players are planning on increasing significantly their capital expenditures.
In July, Rio Tinto committed $2.4bn to its Jadar lithium mine project in Serbia, a project which is expected to begin production in 2026 and which would help make the company among the top 10 lithium producers globally. Rio Tinto could look at acquiring other lithium-related projects in the coming years. The company is also moving forward with the Winu copper-gold project in Australia and the Oyu Tolgoi expansion in Mongolia.
Meanwhile, BHP has identified in 2020 nickel, copper, and potash as priority investment sectors, under its “future facing” commodities initiative, as the company shifts away from fossil fuels.
In April 2021, Vale said it is exploring spinning off of its base metals business from the iron ore business to unlock value for its nickel and copper businesses amidst the EV battery value chain boom.
Vale is the largest producer of nickel ore globally and aims to increase copper output in the coming years, with the development of a new deposit (Hu’u) in Indonesia.
Meanwhile, Russian aluminium producer Rusal, the world’s largest aluminium producer outside China, is in the process of demerging its high-carbon smelters and refineries into a new company so that it can focus on the fast-growing market for “green” aluminium.
Vice President Harris has rebounded in recent weeks, regaining her footing with approval ratings that now stand higher than President Biden’s.
Harris got off to a rocky start at the beginning of the administration, including a botched response on why she hadn’t traveled to the Mexican border, when she said she hadn’t been to Europe either.
But her allies say Harris, whose difficult start provoked questions about her ability to be a future presidential candidate for the party, “has found her place” in the White House.
“I think there’s definitely a feeling that things have been smoother,” said one ally. “It seems like they have ironed out some of the initial wrinkles.”
Julian Zelizer, a professor of history and public affairs at Princeton University, said Harris has “started to solidify her position and strengthen the office, gaining a sense — always difficult for a VP — of what her role should be in the administration.”
“The key will be how those numbers hold as policy controversies continue and politics heats up,” he added.
A Gallup poll last week showed 49 percent approved of Harris’s job as vice president, 6 points higher than Biden’s 43 percent approval rating. It’s a significant change for both Biden and Harris. The president fell 6 points since August and 13 points since June. Harris’s current approval rating is the same as Biden’s in 2009, when he served as Barack Obama’s vice president.
The Sept. 22 Gallup poll — conducted earlier in the month — also revealed that the vice president performed better than Biden with independents, a stunning revelation for a man who was catapulted to the White House because of support from that demographic.
It’s unclear why Harris’s numbers have risen higher than Biden’s in some surveys, though Biden in the last two months has gone through the most difficult phase of his presidency so far. Biden has received bipartisan criticism related to the U.S. withdrawal from Afghanistan and has also taken some hits over the prolonged coronavirus pandemic.
The president has also been criticized over his handling of the border and immigration, taking hits from the left and the right over an influx of migrants from Haiti for the last few weeks.
Harris, in contrast, has been more in the background than the foreground on those controversies, though she did win headlines for criticizing the way some Haitian migrants were being treated by border agents.
Most Democratic strategists and observers say Harris hasn’t had a singular moment or two that has boosted her in the public realm.
“Nothing specific,” said Basil Smikle, the Democratic strategist and former executive director of the New York State Democratic Party, when asked if there has been a standout moment for the vice president.
He suggested the White House could actually benefit by doing more with Harris.
Smikle said that while Harris has been accessible, for example by appearing at Howard University’s homecoming, “the White House could bring her in more closely — as other administrations have — but they seem to keep her at a little distance, which may have been helpful to her in the long run.”
Other strategists say Harris has benefitted from Republicans setting their sights on Biden in recent weeks. They have portrayed him as weak on the border and Afghanistan.
“My instinct is to say that so much fire has been aimed at Biden, Harris’s numbers have gone up by sheer virtue of being out of the spotlight,” Democratic strategist Christy Setzer added. “She’s not giving anyone fresh reason to dislike her, so her polling numbers revert to the mean, with the country about evenly divided on the Black woman in the No. 2 spot.”
But Harris has appeared to settle into more of a role in her vice presidency. Last week, she hosted the leaders of Zambia, Ghana, and India separately. On Wednesday, she hosted a meeting with five Latino small-business leaders. Harris has been increasingly active politically too, giving a forceful speech for Calif. Gov. Gavin Newsom (D), fundraising for Virginia Democratic gubernatorial candidate Terry McAuliffe and attending an event at George Mason University for National Voter Registration Day.
To be sure, Harris’s polling numbers are not spectacular. The same Gallup poll that showed her with a 49 percent approval rating showed she had a 49 percent disapproval rating. Other polls in the last month also show her with support in the low or mid-40s, though some polls in August had her hovering in the mid- to high 30s.
Not everything has gone to plan for Harris either. Aides and allies grew frustrated last week after she was scheduled for an in-studio interview on “The View,” but two of the hosts were pulled from the set after they tested positive for COVID-19.
Harris conducted the interview virtually as a precaution, even though she had flown from Washington to New York for the program. The hosts subsequently tested negative, and the tests were ruled a false positive.
The Harris ally called the incident “unfortunate” while saying Harris needs to continue to up her national stature for her own political prospects.
“I think we’re all happy to see her settle into her role and find her bearings, but I think even she knows she has a long way to go,” the ally said
A recent study, comprising of 10,000 young respondents from across 10 countries, has stated that their generation is experiencing “high levels of psychological distress” due to climate change. The government’s inaction has further worsened the growing crisis.
Rising temperatures, intense heat waves, tornadoes, floods, hurricanes, fires, loss of forest, and glaciers, combined with disappearing rivers and desertification can, directly and indirectly, can impact human health and wellbeing. Now, a recent study has stated that the young generation is experiencing “high levels of psychological distress” due to climate change. The government’s inaction has further worsened the growing crisis. In the study, which is being termed as a one-of-its-kind survey, responses from as many as 10,000 young people (between 16-25 years) were recorded. It was led by Bath University in collaboration with five universities, reported BBC.
What Are The Key Findings?
Amongst them, 45 per cent believed that anxiety and stress due to climate change was impacting their daily lives and affecting the proper functioning of normal chores. As part of the survey, 10,000 youths and teenagers were selected by the authors of the study from 10 different countries. India was also selected among the United States, Australia, Nigeria, and the Philippines. After the completion of the study, three-fourth of young adults believed that “Their future is frightening,” and 65 per cent of them believed that their respective governments were not doing their bit to curb such catastrophes exacerbated by climate change.
The countries with the highest proportion of respondents who felt ‘very tensed’ or ‘extremely tensed’ by climate change were the Philippines (84%), followed by India (68%) and Brazil (67%). These countries have been hard-hit by climate change. Portugal — where wildfires are becoming highly severe — had the highest level of very worried or extremely worried respondents (65%) amongst the high-income nations surveyed, which included France, Finland, Australia, and the United States. “A dreadful picture of widespread climate anxiety in our children and young people has come out from this study,” Caroline Hickman, co-lead author of the study stated, according to Nature. Hickman is also a professor and researcher at the University of Bath in the United Kingdom.
Psychological Distress Linked To Government Inaction
Described as the first large-scale study of climate anxiety, it was assisted by human rights activists, academics, and mental health experts, including Dr. Eric Lewandowski, a New York University clinical associate professor. It was funded by AVAAZ, a U.S. nonprofit organisation that promotes global activism, and it is expected to be published in The Lancet Planetary Health. “For the first time, the study has suggested that high levels of psychological distress in the young generation is linked to the government inaction,” Hickman explained, as reported by Nature. When asked about how governments are responding to climate change, 65 per cent of the surveyed adults agreed with the statement that governments are failing the young generation, 64 per cent agreed that they lie about the impact of actions taken by the government and 60 per cent agreed they were dismissing people’s distress. Only 36 per cent agreed that governments are acting appropriately as per science. However, young adults do feel reassured when governments act. “Our children’s anxiety is entirely a rational reaction, given the inadequate responses to climate change they see from governments. What more do the authorities need to hear to take action?”
Experts React To The Study
As climate change contributes to deadly weather events, more organisations are getting active over time to control it. Quill Robinson, vice-president for government affairs of the American Conservation Coalition, a conservative advocacy organisation, tries to prepare young adults around market-based environmental action. “Unfortunately, I am not surprised that the young generation is so worried and scared of climate change,” Robinson said. “Both young as well as old need to tell a factual story about climate change,” he added. The survey comes at a time when the young generation has voiced their thoughts about the issue of climate change. A worldwide youth-led “climate strike,” with rallies planned in thousands of cities, was conducted on Friday, 24th September. “Young people all over the globe are very well aware that the people in power are failing us,” Greta Thunberg, the world-famous teenage climate activist was quoted in the study.
Welcome to #FatBearWeek. Round 1: A matchup of the mammoth mamas. Bear 435 Holly, the Queen of Corpulence, confronts bear 128 Grazer, the dominant doyen of the Falls. Can the bossy babe 128 upset the 2019 chill champion 435? Vote at https://t.co/thJwxp9wuP by 5pm AKDT (9pm EDT). pic.twitter.com/iwxzJATmQY
The political future of the Democratic Party could turn on what liberals and centrists decide next in a battle over President Biden’s spending and infrastructure agenda. Right now, they are pummeling each other.
The infighting continued on Tuesday as progressive members issued another threat in the direction of Democratic leaders to sink a planned Thursday vote on the $1 trillion bipartisan infrastructure bill without assurances from Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) that they will vote for a wide-ranging reconciliation package.
The Hill: Senate Democrats weigh a government funding bill through Dec. 3 delinked from a hike in the debt ceiling.
“If she were to call the bill, it will fail,” Rep. Jan Schakowsky (D-Ill.), an ally of Speaker Nancy Pelosi(D-Calif.), told The Hill on Tuesday. “Not because the [Congressional] Progressive Caucus, people like me, aren’t willing to vote for it. But … we had an agreement that we were going to get these two pieces [together]” (The Hill).
However, there were signs of life for the majority party and its agenda. Biden held separate meetings with Manchin and Sinema at the White House on Tuesday, with the Arizona Democrat taking part in multiple other meetings with White House officials. Additionally, Biden nixed a planned trip to Chicago today to promote vaccinations and mandates in favor of staying in Washington to take part in negotiations (The Hill).
“In meetings and calls over the weekend and through today, President Biden has been engaging with members of Congress on the path forward for the Build Back Better Act and the Bipartisan Infrastructure Deal,” a White House official told The Hill. “He will now remain at the White House tomorrow to continue working on advancing these two pieces of legislation to create jobs, grow the economy, and make investments in families, rather than failed giveaways to the rich and big corporations.”
Despite the liberal uproar, leading Democrats held firm that the vote on the bipartisan proposal will take place on Thursday. Pelosi told reporters that leaders are “making good progress” to break the impasse.
“Everybody has to do what they have to do, and I respect that,” Pelosi said. “We’re doing our work.”
The bottom line: If progressives hold true, there will be no passage of anything this week. The reconciliation bill isn’t ready, and without that, the vote on Thursday will fail. And as Pelosi noted on Sunday, without the votes, there will be no vote.
Oil fell after a U.S. industry report pointed to a build in crude stockpiles, cooling a rally that had pushed benchmark Brent past $80 a barrel.
Brent futures slid back below $79, while West Texas Intermediate also dropped. The American Petroleum Institute reported a 4.13-million-barrel weekly gain in U.S. crude stocks, according to people familiar with the data. That would be the first increase in eight weeks if confirmed by government data later Wednesday.
Oil’s advance earlier this week reflected signs of a tighter global market amid stronger demand and rising natural gas prices. Higher energy costs this month have stoked speculation that the Organization of Petroleum Exporting Countries and its allies may ease supply cuts more quickly. The White House said Tuesday it’s continuing to talk to OPEC and other international partners about the importance of competitive markets and doing more to support the recovery.
“The oil market is coming under further pressure this morning after the API reported an unexpected uptick in U.S. oil stocks last week,” said Stephen Brennock, an analyst at brokerage PVM Oil Associates. “The latest price pullback suggests pockets of worry are still present across the oil market.”
Prices:
Brent for November settlement fell 0.8% to $78.48 a barrel at 10:07 a.m. in London On Tuesday, it rose as high as $80.75 WTI for November delivery also dropped 0.8% to trade at $74.66
Stockpiles in the U.S. expanded across the board last week, including crude at the key storage hub of Cushing, Oklahoma, according to people familiar with the API data. Gasoline holdings climbed for a second week, rising by 3.6 million barrels, while distillates inventories gained 2.5 million barrels.
A shortfall in global energy supplies is spilling into crude markets and could add momentum to this year’s rally in oil prices, investors say.
Even though it ended Tuesday’s session lower, Brent crude, the global gauge of oil prices, is near its highest level in three years and traded above $80 a barrel early in the day. It closed down 0.6% at $79.09 as rising government-bond yields prompted a broad retreat from stocks and commodities but is still up more than 50% in 2021.
U.S. crude ended the day down 0.2% to $75.29 but has also surged recently.
The latest gains for oil prices have come as part of a broader rally in energy markets, with depleted natural gas inventories and resurgent economic activity sparking fierce competition in Europe and Asia for natural gas to feed their power markets.
“Oil’s move is really to do with the global energy crunch coming out of the gas power market,” said Norbert Rücker, head of economics at Swiss private bank Julius Baer. “This is now spilling over into the oil market because of the expectation that this energy scarcity means we’re going to use oil for spillover demand.” In some power plants, oil can be used to generate electricity when gas prices surge.
A global natural-gas production deficit, depleted inventories and a push from the Chinese government to slash emissions—switching out coal for gas—have all played a role in pushing gas prices higher. That comes as the Northern Hemisphere heads into the winter indoor heating months. The supply crunch has already put several retail energy providers in the U.K. out of business.
Record-high gas prices in parts of the world have exacerbated the oil market’s already tight supply-and-demand balance. Cumulative losses in U.S. Gulf of Mexico production following the impact of Hurricane Ida last month have reached more than 30 million barrels and could hit more than 55 million barrels before all production is restored, according to Helge André Martinsen, senior oil market analyst at DNB Markets.
Those dynamics have prompted analysts to raise their oil-price forecasts. Goldman Sachs increased its Brent price forecast for the end of 2021 by $10 to $90 a barrel on Monday, with head of energy research Damien Courvalin citing both Hurricane Ida and the likelihood that “the global gas shortage will increase oil-fired power generation.”
Power plants are already starting to switch from using natural gas to using oil in Asia, says Claudio Galimberti, senior vice president of oil markets at energy consulting firm Ryst
Asia’s power generation sector currently uses around 900,000 barrels of oil a day and has around 550,000 barrels of unused oil-burning capacity, largely in Japan. Mr. Galimberti says he expects Asian power sector demand for oil to increase by 400,000 barrels a day in the coming six months, meaning “utilization of the oil-burning infrastructure will surge.”
Futures for U.S. natural gas ended Tuesday’s session up 2.4% at $5.841 per million British thermal units after climbing above $6 early in the session. They are up some 130% this year.
European natural-gas prices have more than quadrupled this year and the rally is unlikely to relent soon, according to Georgi Slavov, head of fundamental research at brokerage Marex Spectron. Weather forecasts point to a chilly November and December in Europe, which would bolster gas demand, Mr. Slavov added.
Coal and carbon-permit prices initially headed higher, too, adding to the strain on energy-hungry companies and industries in Europe, before handing back most of their gains as broader markets turned lower.
The producer nations of the Organization of the Petroleum Exporting Countries are a wild card in the oil-price mix. They continue to hold back barrels from the market to keep prices high enough to profit. But they have a history of releasing more supply into the market to avoid high prices from stifling demand.
OPEC, which released its long-term energy forecasts Tuesday, is already in the process of relaxing production cuts that underpinned oil prices during the pandemic. It meets next week to discuss possible further production increases.
“OPEC is still ramping up production and [the market is] getting frothy but by next year we have confidence that we see much lower prices,” said Julius Baer’s Mr. Rücker.
Nova Minerals Ltd. Sept. 20 announced that its 2021 reconnaissance exploration has discovered an extensive gold, silver, and copper mineralized zone between the Korbel gold deposit and RPM target on the company’s Estelle property in Alaska.
While investigating what appeared to be high-grade mineralization at the Stoney vein, a color anomaly at what is now referred to as the Rainy Day vein, and determine the source of the magnetic anomaly at the T5 prospect, Nova Minerals geologists have begun to uncover what appears to be a large polymetallic system that extends for at least 3,800 meters.
With thicknesses ranging from three to ten meters and a vertical relief of 300 meters, Nova says the massive to semi-massive sulfide vein at Stoney is quite extensive and initial sampling results look promising. Stoney strikes roughly to the south and dips steeply to the west.
T5 is a magnetic anomaly thought to be associated with Stoney, however, small outcrops beneath a rock glacier revealed a strongly magnetic mafic dike and intermediate intrusive with little to no mineralization.
While working in the vicinity of Stoney, crews discovered the Rainy Day vein, another massive polymetallic vein to the northwest of the main Stoney occurrence. This vein is similar in nature to Stoney with massive pyrrhotite, chalcopyrite, and arsenopyrite, which Nova says is likely a splay off of the main Stoney Vein.
The Rainy Day vein is about two to five meters thick, with at least ten meters of vertical relief and 100 meters of strike length exposed. A representative chip sample across this vein averaged 8.12 grams per metric ton gold and 1.7% copper over three meters. A select outcrop sample ran 5.39 g/t gold and 0.5% copper.
Highlights from an additional 26 rock samples collected at Stoney, T5, and Rainy Day include:
• 2.04 g/t gold, 513 g/t silver, and 0.77% copper.
• 0.63 g/t gold, 2,720 g/t silver, and 1.1% copper.
• 0.17 g/t gold, 435 g/t silver, and 2.4% copper.
• 48.4 g/t gold, 16 g/t silver, and 0.36% copper.
• 8.12 g/t gold, 62 g/t silver, and 1.7% copper.
“These rock chip sample results, which include high-grade silver, copper, as well as gold, open up another dimension for Estelle with the discovery of an extensive polymetallic vein system,” said Nova Minerals CEO Christopher Gerteisen. “This now unlocks three priority deposits, which are all company makers on their own, within the Estelle District. The Korbel Main deposit with a resource that continues to advance in both size and confidence on the path to production, the RPM deposit with a maiden resource coming soon. In addition, the 2021 recon exploration field program has identified further prospects with promising geology also observed.”
The company says geophysical programs will be planned to better define the extent of Stoney and nearby splays, as Stoney warrants drilling in 2022.
Results from sampling of other prospects on the Estelle property are pending.
Assays are also pending from more than 10,000 meters of drilling completed at the 4.7-million-ounce Korbel gold deposit and emerging RPM gold deposit.
Gov. Mike Dunleavy has postponed the start of the Alaska Legislature’s next special session to Monday. The session was originally scheduled to begin Friday, but legislators had asked for a small delay.
Senate President Peter Micciche, R-Soldotna, said legislators were grateful for the change — some are in training with national organizations like the Council of State Governments and the National Conference of State Legislatures. In addition, many lawmakers fly from Juneau to their home districts on weekends, and he said a Friday start could have caused some members to fly to Juneau, attend for the day, then leave again.
“If we’re going to go down (to Juneau), I would like for it to be productive,” Micciche said. “Monday made more sense. The governor agreed, then there we are: Oct. 4.”
Dunleavy signed a new special session proclamation at 4 p.m. Tuesday.
Among other items, it says the Legislature will take up “an act making appropriations for a supplemental 2021 Permanent Fund dividend” in the fourth special session.
The state is scheduled to pay an $1,100 dividend starting Oct. 11. Dunleavy has supported a $2,350 payment and a new formula for paying future dividends.
The proclamation calls for the Legislature to discuss that new formula or a similar one.
The governor’s proposal hasn’t advanced this year because of its cost, and Speaker of the House Louise Stutes, R-Kodiak, said changing the result will require additional action.
“If he wants a larger PFD, he’s going to have to come to the table and put some kind of revenue measure out there and support it. Because with his plan, as is, it’s pretty clear, that it leaves pretty near a doggone billion-dollar hole in the budget,” Stutes said.
The adjusted proclamation calls for the Legislature to consider “an act or acts relating to measures to increase state revenues,” but it wasn’t immediately clear whether the governor would propose those, or whether he would rely on ideas from legislators.
Dunleavy held a cabinet meeting in Soldotna on Tuesday. Talking to localreporters at the meeting, the governor said he intends to offer legislation to support a fiscal plan proposed by a bipartisan, bicameral working group earlier this year.
That group said the Legislature should work toward a dividend similar to the one proposed by Dunleavy.
Lucid Group says production of its new electric luxury sedans has begun and it will start delivering cars to customers by the end of October.
Why it matters: The Lucid Air, starting at $77,400, is among a slew of plug-in models like the Mercedes Benz EQS, Porsche Taycan and Audi e-tron all hoping to challenge Tesla’s control of the EV market.
Lucid’s first car, the Air Dream Edition, is a $169,000 special edition with a Tesla-beating range of up to 520 miles.
Driving the news: Lucid, founded by former Tesla engineer Peter Rawlinson, had its official coming out party on Tuesday.
The company invited media, investors and customers for a behind-the-scenes look at its powertrain and assembly plants in Casa Grande, Arizona, as the first customer-ready models rolled off the line.
Lucid said it has 13,000 Air reservations so far and is striving to produce 520 of the Dream Edition models this year, with production of less expensive versions ramping up next year to 30,000 vehicles.
Between the lines: Lucid’s secret sauce is proprietary EV technology that packs more energy into a smaller package.
That translates into a lighter, more efficient, and less expensive EV, the company explained.
Bonus: After the factory tour, Lucid let select reporters drive the Air for the first time.
I drove the Dream Edition R, which maximizes the driving range over performance, leaving me with a mere 933 horsepower to overtake ordinary gasoline cars on the highway.
A key takeaway of my (brief) time behind the wheel: The Lucid Air is two cars in one. It’s both a sublime luxury sedan and a powerful, thrilling sports car.
State-owned Qatar Petroleum has entered into a 15-year sale and purchase agreement (SPA) with a subsidiary of China National Offshore Oil Corporation (CNOOC) for the supply of 3.5 million tonnes per annum (mpta) of LNG.#QatarPetroleum#LNG#CNOOChttps://t.co/aS6NYRdus4
Global oil consumption is expected to return to pre-pandemic levels in the third quarter of 2022, with Asia continuing as the center for oil-product demand growth, according to BP Plc.
Oil demand in 2022 is expected to see an average gain of 3.8 million barrels a day year-on-year, easing from growth of 5.4 million barrels a day in 2021, the President of BP Singapore Eugene Leong said in an email interview. Stockpiles of crude and most products returned to normal levels by June following supply restraint from OPEC+ and an economic recovery, he added.
“We have seen oil demand recover from the lows witnessed in the second quarter of 2020, but it has not rebounded to the same levels as before,” Leong, who is also BP’s chief executive officer of trading and shipping for the Asia-Pacific and Middle East, said on the sidelines of Platts APPEC 2021. “Oil demand recovery is expected to continue into the rest of this year and 2022.”
Oil prices and consumption have rapidly rebounded in 2021 as Covid-19 vaccination rates accelerated and restrictions on movement have been eased. Goldman Sachs Group Inc. sees continuing strength in the market and has boosted its year-end price forecast, while Vitol Group is predicting a slightly earlier return to pre-virus demand levels — by mid-2022.
Chinese oil demand this year is expected to advance at a similar rate to 2020, which was about 1.8%, according to Leong. The nation’s consumption of crude will continue to grow over the next few years, with more refining capacity expected to come online through early 2022, he said.
Still, global oil output growth will probably outpace consumption next year as OPEC+ and U.S. producers add more supply, leading to a surplus of 700,000 barrels a day, said Leong. That compares with an estimated draw of 1.6 million barrels a day in the second half of 2021, he added, citing market consensus.
“The world’s energy needs are evolving dramatically, and the uncertainty around how and when the pandemic will end will certainly impact the market dynamics,” Leong said.
Crude oil futures were higher in mid-morning trade in Asia Sept. 28 amid bullish fundamentals and supply restrictions.
At 10:20 am Singapore time (0220 GMT), the ICE November Brent futures contract was up 22 cents/b (0.28%) from the previous close at $79.75/b, while the NYMEX November light sweet crude contract was 25 cents/b (0.33%) higher at $75.70/b.
“The catalyst driving oil prices strength continues to be the bullish demand outlook and near-term constrained supply, leading to a greater-than-expected drawdowns in crude inventories over the past two weeks,” IG Market Strategist, Yeap Jun Rong told S&P Global Platts on Sept 28.
Brent prices have also seen to be surging towards the $80/b mark. ING research analysts have said in a research note on Sept. 28 that given the strength across the energy complex, it is probably only a matter of time before Brent finally breaches $80/b.
The last time front-month ICE Brent crossed $80/b intraday was on Oct. 23, 2018, and Brent last settled above that level on Oct. 17, 2018.
Sharing similar sentiment, several analysts have also noted that the global energy crisis could see demand for crude increase if the northern hemisphere experiences a cold winter, with many countries not equipped to cope.
The record level of natural gas prices and insufficient gas reserves in Europe have offered a significant boost on the demand side, leaving oil as a potentially attractive alternative.
“Natural-gas futures rallied back to levels not seen since February 2014 on Sept. 27 on signs that supply is rapidly tightening amid a global energy crunch with UK and China in the news as gas stations across London turned customers away due to no supplies,” said UOB market research on Sept. 28.
Amid the bullish demand outlook, restrictions on the supply side is also providing additional support to the oil complex.
Global supply outlooks have come under pressure as extended production outages in the US Gulf of Mexico have sent US crude inventories sharply lower in recent weeks.
Inventory withdrawals have also been strong across the US, with oil inventories falling to a three-year low of 414,000 barrels. Fuel shortages are widening, putting upward pressure on oil prices, added ANZ research analysts.
Meanwhile, all eyes will be on the upcoming OPEC+ meeting, which is scheduled on Oct. 4 to discuss about the strength in energy markets.
ING research analysts said that the scale of the deficit for the remainder of the year means that the market can absorb more than the currently planned 400,000 b/d increase per month, however, added that the group will also want to ensure that the market continues to draw inventories.
Project was halted due to ‘legal and regulatory obstacles’
Decision adds to a series of pipeline projects being scrapped
A $1 billion project to haul natural gas from Pennsylvania to New Jersey has become the latest casualty of opposition to pipelines across the U.S.
PennEast Pipeline Co., a joint venture of five companies including Southern Co. and Enbridge Inc., halted development on the proposed 116-mile (187-kilometer) conduit after failing to receive water-quality certification and other wetland permits for the New Jersey section.
“The PennEast partners, following extensive evaluation and discussion, recently determined further development of the project no longer is supported,” PennEast said in an emailed statement. “Accordingly, PennEast has ceased all further development of the project.”
The decision adds to a series of gas-pipeline projects scrapped amid fierce opposition from environmental groups pushing for a faster transition away from fossil fuels and an increasingly burdensome approval process. It also comes amid growing concerns about energy reliability, with prices for natural gas surging because of tighter supplies.
In 2020 alone, Dominion Energy Inc. and Duke Energy Corp. scrapped an $8 billion Atlantic Coast gas project, and Williams Cos. abandoned its Constitution gas pipeline and its Northeast Supply Enhancement plan. Completion of the Mountain Valley Pipeline, a 303-mile conduit spanning from northwestern West Virginia to southern Virginia, has been pushed into 2022 due to permitting delays.
Limited pipeline capacity makes it harder to bring gas from shale fields in Appalachia, where producers including EQT Corp. are forced to sell supplies at a discount. Meanwhile, costumers in places such as New England pay stiff premiums for gas because only limited supplies can reach the region.
The inability to build new pipelines will slow down the energy transition and leave costumers with higher energy bills, the Interstate Natural Gas Association of America said in a statement. Consumer Energy Alliance said the pipeline cancellation will force New Jersey consumers to “find another source of affordable energy or otherwise face reliability problems and price-hiking shortages.”
The decision on PennEast comes despite a June Supreme Court ruling that gas pipeline projects with federal approval can seize state-owned land, and support from the Federal Energy Regulatory Commission. The pipeline would have carried as much as 1.1 billion cubic feet of the fuel a day, enough to serve 4.7 million homes, from northeastern Pennsylvania to a Transco pipeline interconnection in New Jersey.
The project has “encountered significant legal and regulatory obstacles and we no longer believe the project can be efficiently completed,” Enbridge said in a separate emailed statement, adding the project was designed to help deliver “much-needed” gas in New Jersey and Pennsylvania.
A labor shortage and reluctance to open new mines has left U.S. coal companies struggling to keep up with surging global demand.
“It’s very difficult for the coal industry to increase production,” Xcoal Energy & Resources LLC Chief Executive Officer Ernie Thrasher said Monday in a phone interview. “Everyone is working within the limits they have.”
Coal prices are booming around the globe as a global recovery from the economic impacts of the pandemic drives up demand for power. Prices for coal in China are up 40% this month. In Europe, they’ve almost tripled since the start of the year.
As demand surges, some of Xcoal’s current deliveries running two to four weeks late. Thrasher, however, said the disruptions are “nothing out of the ordinary” and represent less than 5% of the company’s total shipments. The closely held coal miner hasn’t declared force majeure for any contracted shipment, he said.
While high prices are good for producers, Thrasher doesn’t know how long that’ll last — making strategic planning difficult. The Latrobe, Pennsylvania-based company expects to deliver about 16 million tons this year. Xcoal produces coal for power plants and steel companies, and demand for both is booming.
“I’m glad coal is still supplying energy to people who need it,” Thrasher said.
Centrist Sen. Joe Manchin (D-W.Va.) on Monday raised a red flag over his Democratic colleagues’ push to include a carbon tax in the reconciliation package they will need his vote to pass later this year.
A plan to tax carbon as a way to combat climate change and raise revenue for the reconciliation package is gaining momentum, and some Senate Democrats think that Sen. Kyrsten Sinema (D-Ariz.) is open to the idea after she raised global warming as a key concern during an interview with the Arizona Republic last week.
But Manchin, who represents coal-rich West Virginia, is not a fan of the idea.
I just heard about that,” he told reporters Monday when asked about the new push for the carbon tax. “Any type of a tax is going to be passed on to the people.”
“Now if a tax is going to be beneficial to help something and give us more research and development and innovation and technology, it’s something to look at,” he said.
But Manchin said he doesn’t believe that would be the case for the carbon tax under discussion, at least as it’s been explained to him so far.
Manchin made a similar argument against a carbon tax in April when he criticized the idea during a virtual conversation with the National Press Club in Washington. He argued at the time that it wouldn’t create significant incentives for the development of new technologies but instead would likely be used to eliminate jobs in fossil fuel industries.
Whitehouse says a carbon polluter fee would add as much as $1 trillion, and he wants it in the package.
Sen. Chris Coons (D-Del.) and Rep. Scott Peters (D-Calif.) introduced legislation in July to create a border carbon adjustment fee on the import of products that emit a lot of carbon to produce. It would direct revenue to the development of emissions reducing technology.
Sinema, a fellow Senate centrist, is said to be open to the idea of a carbon tax, and last week she told The Arizona Republic, “We know that a changing climate costs Arizonans. And right now, we have the opportunity to pass smart policies to address it — looking forward to that.”
A Democratic aide familiar with Sinema’s thinking, however, said she is not actively pushing the idea.
“Sen. Sinema is not pushing or proposing a carbon tax,” the source said.
Ford Motor Company’s new $11 billion manufacturing plan, the biggest component of which will sit just outside Memphis, is part of a much bigger effort to put the U.S. at the center of the electric vehicle revolution, executive chairman Bill Ford says.
The big picture: Ford’s plans — for enormous facilities in both Tennessee and Kentucky, employing a combined 11,000 workers — are ambitious manufacturing efforts designed to minimize their environmental impact.
But Ford says these investments will also help the U.S. build its own supply chain for batteries, rather than continuing to import them from Asia — providing economic security, insulation from supply chain disruptions and ultimately bringing down the price of EVs.
“We need to, as a country, decide — do we want to have a domestic battery industry? And that’s something that’s kind of starting tomorrow,” Ford said in an interview conducted Monday before the company publicly announced its new manufacturing plants.
Details: The company is building two battery manufacturing plants in Kentucky, as well as an enormous new complex near Memphis that will include both battery manufacturing and vehicle assembly for electric F-series pickup trucks.
Long-term, the plan is to perpetually recycle EV batteries in the U.S., and end imports of batteries made with precious metals like nickel, lithium, cobalt, and copper from foreign mines.
“We’ll be importing a lot of these batteries initially, but then they stay within our country and start to be remade into American batteries, if you will,” Ford told me.
Ultimately, he said, a more robust U.S. supply chain will help bring down the cost of EVs.
“That does require us to completely remake our company in many, many ways. And we’re in the process of doing that,” said Ford, who is the great-grandson of Henry Ford.
The bottom line: “My great-grandfather was the ultimate sort of disruptor,” Ford said. “And I think if he looked at what we’re announcing … he might just say, what took you so long? And he’d be right.”
Reclamation is more than a regulatory requirement for Usibelli Coal Mine Inc., a family-owned company that began restoring the natural landscape at its Interior Alaska coal mining operation before there were federal laws requiring it.
Now that there are reclamation regulations in place, mining companies must post a bond that ensures the land gets restored – either by the company that will get the money back upon successful completion or a third party that will use the bond money to finish the job.
Before Usibelli began mining coal in the Poker Flats area just outside the Interior Alaska town of Healy nearly 40 years ago, the company promised one day to restore the land to near pre-mining conditions and backed that pledge with a $2.5 million bond.
The Alaska Department of Natural Resources has verified that the reclamation at Poker Flats has been completed to standards that exceed the requirements for phase III bond release, which means the restoration has been fully completed. As such, DNR has released $411,000 of the Poker Flats phase III bond.
“In successfully achieving phase III bond release, Usibelli has demonstrated the fundamental strength of our state’s mineral development system,” said DNR Commissioner Corri Feige. “We can develop our land to produce resources to meet the state’s energy and economic needs, then restore the land to provide healthy habitat for people and wildlife, in perpetuity. This Alaska company continues to set a great standard for responsible mining, and they deserve congratulations on achieving this important milestone.”
Alaska coal mining laws and regulations establish a three-phase process for releasing reclamation bonds after mining operations have been completed. Once the mined land has been backfilled and reshaped back to roughly the original contours, the mining company is eligible to have 60% of its bond released. Another 20% is released once phase II requirements are met, which involves the establishment of vegetative cover over the reshaped land.
Achieving phase III reclamation bond release in Alaska, however, takes a bit more patience.
After waiting for around 10 years for grass, shrubs, trees, or other vegetation to become reestablished, the mine must hire an independent contractor to perform extensive inspections and recommend phase III bond release to DNR, which must then verify the contractor’s work.
DNR conducted its own final inspections in June, drawing on data from satellite sensing, unmanned aerial vehicle surveys, and on-the-ground observations to verify the evaluation work by Alaska environmental services firm ABR, Inc.
In a report published on Sept. 17, DNR recommended phase III bond release for 367 acres at the Poker Flats site. However, additional minor reclamation of the remaining mining acres, including removal of shops, offices, and roads, will be necessary before the rest of the land will be eligible for phase III bond release.
Russ Kirkham, a senior DNR geologist and member of the agency’s reclamation inspection team, said Usibelli has worked diligently with DNR and University of Alaska officials to design an effective approach revegetating the land and returning it to nature after producing more than 25 million tons of coal over its operating life.
“Usibelli Coal Mine has worked very hard and waited patiently to achieve this recognition,” Kirkham said. “For this bond release, they met the requirements of very stringent state oversight for the permit, and the results of their work went beyond what was required.”
This is not a surprise for a company owned by a family that has called this area home for more than 75 years and has pioneered mine restoration in Alaska.
Usibelli begins reclamation before it ever starts mining – taking inventory of the variety and abundance of natural vegetation found in the proposed mining area and the conditions necessary for its growth.
When mining is done, and the land recontoured, the company seeds the area with a carefully researched mixture of grasses and several plants indigenous to northern regions. Since 1970, the mine has reclaimed more than 5,500 acres and planted more than 500,000 seedlings. Over a period of years, native Alaskan vegetation invades the area, returning the mined land to its natural appearance.
Many species of Alaskan wildlife, such as Dall sheep, moose, and caribou, feed on revegetated areas throughout the mine where heavy equipment once operated.
The abundance of wildlife on Usibelli reclaimed lands is something DNR inspectors are all too familiar with.
“They did a real good job at reclaiming this land,” said Kirkham. “Now, DNR inspectors won’t go into the area without carrying bear spray. There’s lots of good browse and habitat that attracts moose, bears and other wildlife – pretty soon you’d be hard-pressed to tell there ever was mining here.”
The Poker Flats area is only the second mining area in Alaska to achieve phase III bond release. The first was the Gold Run Pass coal mine, another Usibelli operation.
The world faces higher oil and gas prices this winter and beyond as supply struggles to catch up with fast-rising demand, according to Trafigura Group, one of the world’s largest commodity trading houses.
“We’re going to see higher oil prices,” Ben Luckock, Trafigura’s co-head of oil trading said in an interview.
Luckock said the market was mis-pricing forward oil contracts for the next couple of years because traders hadn’t yet woken up to the fact the supply-demand balance will remain tight for some time.
“Deferred crude, particularly for December 2022 and 2023, is cheap,” he said. Brent crude for delivery in December 2022 is currently changing hands at around $70 a barrel, but Lukic said it wouldn’t be surprised if Brent has risen to about $100 a barrel by then.
“I struggle to see anything but higher prices going forward in the next two years,” he said.
On Monday, Brent crude for immediate delivery surged toward $80 a barrel, setting its highest price in nearly three years.
Trafigura is the world’s second-largest independent oil trader, behind industry leader Vitol Group, giving the company a privileged view of global energy flows.
On natural gas, he said prices could shoot up sharply this winter if cold weather forces demand higher in Europe and Asia.
The bullish outlook comes as oil demand fast recovers toward its pre-pandemic level, with most traders expecting that consumption will reach the 2019 by early-to-mid 2022. As demand rebounds, supply has struggled to keep up: U.S. shale companies have kept a lid on spending, preferring to pay dividends to shareholders. With U.S. shale reacting slowly to higher prices, the OPEC+ oil cartel has been able to keep control of the market.
“The U.S. shale industry is showing very strong discipline. Oil prices are roughly double what they were a year ago and despite that we’re not seeing a huge increase in drilling,” Luckock said.
Luckock said that it was difficult to see lower natural gas prices this winter in Europe, despite the commodity trading at a record high already.
“If it’s a cold winter in Europe or Asia, we have a big problem,” he said. “If it’s cold, and on top, it isn’t windy, then we have a much bigger problem. We will face shortages.”
Natural gas prices in Europe have surged past $25 per million British thermal unit, more than 400% higher than the 2010-2020 average, and significantly higher than in the U.S., where the commodity trades at around $5 per million Btu. In Asia, liquefied natural gas has recently changed hands at around $27 per million Btu, a seasonal record high.
“If the weather is normal, prices could drop a bit lower; if the weather is bad, prices will rise a lot higher,” Luckock said.
Luckock said he was skeptical that Russia, the biggest gas supplier to Europe, was intentionally tightening the market for political gain, suggesting that Moscow was already pumping as much gas as it could right now.
“It’s easy to say that’s politically motivated, but I think it’s simpler than that: Russia is facing maintenance in many gas fields, very low domestic inventories, substantially increased flows to Turkey, and Gazprom is struggling to increase production,” he said.
The British government is temporarily suspending competition law and considering sending in the army to help supply gas stations amid a nationwide fuel shortage, per the BBC.
Why it matters: Petrol Retailers Association chair Brian Madderson told Sky News on Monday that two-thirds of its roughly 5,500 independent gas stations had ran out of fuel, with the remainder “partly dry and running out soon.”
BP, the second-largest fuel retailer in the United Kingdom, said Sunday that nearly a third of its gas stations had run out of main grades, citing panic buying as a cause for the shortage.
The big picture: Gas prices have surged globally, but the U.K. also faces a shortage of truck drivers, which the Conservative government has sought to blame on a “manufactured situation” and panic-buying.
Prime Minister Boris Johnson said Saturday the government would issue short-term work visas for foreign truck drivers and poultry workers to help firms address staffing shortages, which Bloomberg noted were “exacerbated by the post-Brexit clampdown on immigration from the European Union.”
Elizabeth de Jong, director of policy for Logistics U.K., said the country had “lost 72,000 drivers between the second quarter of 2019 and the same period in 2021,” in part because of workers returning to EU countries after Brexit, per the BBC.
China is planning to create two rare earth mining giants in an effort to gain better pricing power in global markets, according to people familiar with the matter.
The government is aiming to eventually consolidate all its rare earth miners and processors into the two huge firms, one in the north and one in the south, the people said, asking not to be identified discussing a private matter.
The one in southern China will oversee medium-to-heavy rare earths, and the other in the north will control all light rare earths, the people said. It’s unclear when the merger will be completed.
Beijing has been restructuring the industry for years into six large state-controlled groups. By consolidating, it hopes to maintain its dominance in the production of the strategic metals, of which it controls 70%, as the U.S. and Europe look to develop their own production and supply chains and diversify away from China.
Several state-owned miners, including Aluminum Corp. of China, will restructure their assets, China Minmetals Corp.’s rare earth unit said in a filing to the Shenzhen Stock Exchange on Thursday evening. That’s the first step toward the consolidation into two giant entities, the people said.
The State-owned Assets Supervision and Administration Commission of the State Council, which oversees some of the miners, didn’t respond to a fax seeking comment. Questions faxed to the Ministry of Industry and Information Technology, which is in charge of rare earths management, also went unanswered.
While details of the first stage in the restructure are scant, the parties involved own stakes in four out of the six dominant rare-earths producers. The importance of the materials, ubiquitous across a range of applications from consumer goods to military gear, was thrust into the spotlight in 2019 as China mulled whether to use its position as the world’s dominant supplier as a counter in its trade war with Washington.
Beijing’s decision almost 30 years ago to make rare earths a strategic material and ban foreigners from mining them helped pave the way for China to elbow aside the U.S. as the world’s leading producer. The minerals’ biggest usage is in permanent magnets, which include the NdFeB variety, found in everything from phones to computers to cars.
Demand for rare earths — a broad group of 17 elements — is rising, driven by growing need for permanent magnets. Prices of neodymium and praseodymium, — or NdPr, two of the 17 rare earth elements that are used in NdFeB magnets — surged to the highest in a decade this summer.
Carbon-cutting pledges of many of the world’s largest companies would together take a big bite out of global greenhouse gas output, a new tally shows.
Driving the news: BloombergNEF analyzed the pledges of 111 companies with net-zero targets on the “focus” list of companies held by Climate Action 100+, an investor network that pushes corporations on climate.
Why it matters: Through August, 111 companies of the 167 companies on the list had targets that would cut 9.8 billion metric tons of CO2 equivalent by 2050, or roughly one-fourth of global emissions today.
Yes, but: While ambitious long-term pledges have become the coin of the realm in big companies’ boardrooms, the degree of tangible steps that follow these targets is uncertain.
“As more net-zero targets are set by corporations, the conversation will change from one focused on quantity to one around quality,” said Kyle Harrison, BloombergNEF’s head of sustainability research.
We're next… if the current administration's anti-oil policies continue to destroy domestic production – Panic buying leaves up to 90% of fuel pumps dry in major British cities https://t.co/lKkH6cLLmD
Interior: Court order prohibits further delay in lease sales Heather Richards, GREENWIRE, September 23, 2021
The Interior Department will not further delay the Biden administration’s first oil and gas lease sales, despite pleas from environmental groups requesting more time for reviews.
The administration froze new leasing shortly after President Biden took office, but a federal judge this summer ordered the White House to resume auctions while the legality of a moratorium moved through the courts.
In a letter to green groups yesterday, Laura Daniel-Davis, Interior’s principal deputy assistant secretary for land and minerals management, said that court order is why the department won’t extend a period of public input on the first onshore lease sales.
“We are subject to an injunction in Louisiana v. Biden case, and we are making every effort to comply with the court order,” she said in a letter to WildEarth Guardians yesterday, acknowledging “challenges” posed by the timeline.
Fifty-three green organizations had said the Oct. 1 deadline for initial public input should be moved into next year (Greenwire, Sept. 14).
The additional time, they said, was needed for groups to assess environmental impacts on the 750,000 acres proposed for auctions in Wyoming, New Mexico, and other states.
The onshore auctions are still in their preliminary planning, in which federal officials and the public review lands proposed by the oil and gas industry for lease.
Jeremy Nichols, climate, and energy program director for WildEarth Guardians, said Interior’s response was “extremely disappointing” and argued that officials are neglecting their authority to hold lease sales at their discretion.
“Nothing in the ruling says the Interior Department has to turn its back on meaningful public involvement in their environmental reviews,” he said.
Leasing has become a focal point for the Biden administration’s climate agenda on public lands.
The White House froze new sales shortly after taking office and ordered Interior to conduct a comprehensive review of the federal oil and gas program. That review is expected to result in reforms and a potential increase in royalty rates.
Meanwhile, the freeze was supposed to stay in place until that review was finished. It was a concession to environmental advocates, many of whom want oil and gas activity to be retired on public lands in line with Biden’s campaign promises, due to both local environmental impacts and larger climate concerns.
But the oil and gas industry and its political allies have mounted a public defense and pressed the administration to resume sales. That has resulted in several lawsuits, including the ongoing Louisiana case that temporarily blocked the moratorium.
The Department of Justice has appealed the temporary injunction blocking the moratorium.
Oil groups have also chided the administration for its much-delayed interim report on the oil review. It was originally promised for early summer.
Kathleen Sgamma, president of the Western Energy Alliance, said in a statement that the leasing ban has been “in vain.”
“Our president is lobbying Russia and OPEC to boost production while hindering American production,” she said, “He’d rather import energy from countries with weak environmental regulations than enable American companies to increase production and help bring down prices.”
Repsol starts building LNG bunkering facility in Bilbao – https://t.co/il8hMkyeMz – NGW News & Insight
